HC Deb 01 April 1969 vol 781 cc383-92

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

11.40 p.m.

Mr. W. R. van Straubenzee (Wokingham)

I am deeply grateful to you, Mr. Speaker, for the permission which you have now given me for a very short time to raise an individual and detailed matter in connection with the administration of the Land Commission in relation to a special case in my constituency. Although I was fortunate enough to catch your eye on the broad question of the Land Commission seven days ago, on that occasion I carefully avoided any reference to this individual case so as not to be discourteous to the Chair.

The case is that of Mr. Frank Whitfield, who was born in and was the owner, at the time of sale, of No. 1 Hope Cottages at Bracknell, in my constituency. Although he does an extremely good job—he is by trade a window cleaner—I must make the point to the Minister that we are not talking about a great property dealer or property spiv. We are talking about what, in general parlance, is known as a working man.

He received a notice to treat in respect of a compulsory purchase order in connection with the development of Bracknell New Town on 11th October, 1967. In that respect he was not at all exceptional. Many others of my constituents have experienced this treatment, and it is understandable that a certain resentment is caused by the serving of compulsory purchase orders of that nature. We have all accepted, however, that in an overcrowded island, such is necessary if a new town is eventually to expand.

Those acting for Mr. Whitfield negotiated, under all heads of claim, a figure of compensation of £4,372. So that the Minister shall not feel that I am in any sense——

Mr. Speaker

Order. It will help the reporters if the hon. Gentleman speaks up.

Mr. van Straubenzee

That is not a criticism which is usually made of me, but I am obliged to you, Mr. Speaker.

I was saying that under all heads of claim the figure negotiated by those who were advising Mr. Whitfield was £4,372. So that the Minister shall not feel that I have in any sense evaded any part of my case, let me break that down. There was £2,400 for his cottage, £1,800 for the garden attached to it—the land which he knows as his cabbage patch—and the figure for professional fees and disturbances came to £172. The same was completed on 26th February, 1968. In common with a large number of others, Mr. Whitfield found himself faced with the necessity of having to buy a new house. I make no complaint of the way in which Bracknell Development Corporation deal with these matters. It is no part of my case this evening to make any criticism of them.

Mr. Whitfield had to buy a new house, a property in an area known as Faircross, for £3,950. Those are the facts of the situation. The Minister will realise that the balance as between the total sum he received for the house which was compulsorily purchased from him and the sum which he had to pay for his new house, was £422. Out of that £422, however, the Minister will realise that he had first to pay the professional fees both for the sale of his old house and the purchase of the new one. The £422 included a figure for disturbance awarded by the district valuer, and there was expenditure for fixtures, fittings, carpetings, curtains, and so on, which are inseparable from a move of this nature.

Then, out of the blue there arrived for my constituent Mr. Whitfield a claim for a development levy of £446 8s. It is not open to me in this debate to make any argument in relation to amending legislation. I will confine myself strictly to the Minister's administrative powers. I want to try to persuade the Minister that hardship is being caused in these cases, particularly when they involve compulsory purchase, and that it would be appropriate for the Minister, by the powers vested in him in the Act, to look with special administrative sympathy to that class of person who are the subject of compulsory purchase.

The last exchange between us on this matter appears in HANSARD of 25th March. I asked the Minister if he would make special arrangements in respect of those whose property is compulsorily purchased who are charged a development levy. The reply of the Minister was: No. A vendor realises development value when his land is purchased compulsorily just as he does when it is sold by agreement."—[OFFICIAL REPORT, 25th March, 1969; Vol. 780, c. 236.] I accept that the Minister gave that answer in good faith, but that answer reveals clearly that he is not in touch with the realities of the situation.

Those of us who deal with these matters almost daily know that when property today is sold by agreement the vendor of that land who faces the possibility, indeed the certainty, of a development levy increases the price of the land which he is selling in order to reflect the levy. That is the reality of the situation.

The burden of my case to the Minister is that Mr. Frank Whitley had no opportunity to do this because the district valuer is not permitted, as the law at present stands, to reflect in the purchase price the development levy which is subsequently assessed upon my constituent. I submit that in these cases nothing is being done to assist such people as compared to other groups of persons.

Both sides of the House accept, however reluctantly, that in a modern country as grossly overcrowded as this country compulsory purchase powers are necessary. But we should not place those who are subjected to it in a worse position than they would be if they were selling their property voluntarily and give them a lower net price than they would otherwise receive.

I do not know whether it is possible to persuade the Minister that some administrative assistance should be given to my constituent, but that is what I am asking him to consider. Surely it was never intended that the Land Commission Act would have the sort of result that I have outlined, and which I think the Minister will agree I have fairly summarised? This is a man who was unwillingly removed from his house, a man who by no stretch of the imagination can be called a man of substance or of wealth, a man who has been forced to buy another property which by comparison with his previous house has no garage, and which has a much smaller garden, but which at least is still in the same general neighbourhood in which he has spent the entirety of his life, and a man who, as the straight figures show, has no spare cash wherewith to pay the levy. Surely that was not the object of the legislation when it was first introduced.

I am deeply obliged for the opportunity of giving a public airing to an actual case. I have done so, I hope the Minister will agree, briefly. I do not need to elaborate it in any way, but I hope the Minister will understand that ordinary small people, people who are the backbone of this country, who are affected by this sort of thing feel very deeply that they are being robbed. I do not wish to be unduly theatrical about it, but that is what they feel, and it is the duty of hon. Members on both sides of the House to reflect that sense of grievance when, through the courtesy of the Chair, they have an opportunity of doing so, and that is what I am doing tonight.

11.53 p.m.

The Minister for Planning and Land (Mr. Kenneth Robinson)

I agree that the hon. Member for Wokingham (Mr. van Straubenzee) has raised this matter succinctly and on the whole moderately. I intend to reply quite briefly to the case that he has put, because this is the sixth occasion in the last two months on which the betterment levy provisions in Part III of the Land Commission Act have been debated in the House. On each occasion I have had something to say about the philosophy behind betterment levy. I have explained how levy is assessed on the increased value which a grant of, or the prospect of, planning permission brings about—that is on development value.

I have explained how, with the special exception of the interim period, either a cash gain or an increased value in land always accrues to the levy payer before levy is charged. And in my replies I have dealt with the various categories of hardship to which hon. Members have drawn my attention. I do not propose to traverse that ground again tonight. The hon. Member has raised a particuluar case, and I shall direct my reply to the circumstances of that case.

This concerns levy charges on Mr. Frank Whitfield who has been obliged to sell his house to the Bracknell Development Corporation which, as the House knows, is an authority possessing compulsory purchase powers. The price which Mr. Whitfield obtained for his house was £4,250, and, for all that the hon. Member has said about the lack of scope which a person selling under compulsion has in getting a fair price for his land, I think he may agree that had the property not had some potential for development Mr. Whitfield would not have received the price he did. In other words it is not disputed that Mr. Whitfield was paid something for development value. If I am wrong and there is dispute about this, then it is clearly a case in which the Commission's assessment to levy should be taken before the Lands Tribunal.

But the hon. Member's argument is first that the district valuer's valuation gives the vendor a substantially smaller reward than if he were free to negotiate a sale himself, and I recall that in the recent debate on the Consolidated Fund Bill, the hon. Member spoke of the price being "dictated" by the district valuer. This is not at all how the process works. A notice to treat following a compulsory purchase order gives rise to negotiations in which the price proposed by the district valuer is based on his assessment of prevailing market prices. District valuers are fairly knowledgeable about these things in the area in which they operate. If the vendor cannot accept the district valuer's figure, and if the difference between the parties cannot be settled by negotiation, then the vendor's remedy is to refer the matter for settlement to the Lands Tribunal.

In Mr. Whitfield's case I understand that there was no question of any dispute, or of a reference to the Lands Tribunal, because the price which the district valuer agreed was exactly what Mr. Whitfield claimed. Presumably, therefore, Mr. Whitfield's professional advisers thought that £4,250 was the market value of his land. In these circumstances I find it difficult to see how there could have been any question of "dictation" by the district valuer.

Mr. van Straubenzee

May I suggest how this dictation might have arisen? If he were selling voluntarily, he would be free to proceed or not to proceed with his sale; whereas at the receiving end of a compulsory purchase order he is bound to proceed with the sale.

Mr. Robinson

At the same time he is not bound to accept in the first round the assessment of the district valuer, and my information is that his professional advisers agreed that this was a fair figure.

The hon. Member then goes on to argue that because the vendor received a price which he alleges is lower than that available on the open market—which I do not accept—and because he has been forced to sell his house against his will, then he should be exempt from levy on the sum he has received. I do not think the hon. Gentleman will be altogether surprised if I say that I cannot accept that argument, either.

If one thing is clear from an examination of the main provision of Part III of the Land Commission Act it is that it was always intended that levy should be assessed on every realisation of development value, whatever form it took. One only has to look at the six cases of charge to see the whole range of occasions which were covered in the Act. Not only do the first three cases deal with the main events of sales, creation of leases and the carrying out of development, but the remaining three cases embrace much more unusual events such as the granting of an easement, the releasing or modifying of an easement on restrictive right, the extension of a tenancy and the payment of various compensations.

All this shows what the Government's general intention was when the betterment levy proposals were put forward, but my reply to the hon. Member does not rest on the implicit intention of the Government, for the Act itself makes specific provision for the assessment of levy when land is acquired by an authority possessing powers of compulsory purchase. There is a separate Section about this, Section 72, and a separate Schedule, Schedule 9. With special provisions of some detail standing in the Act I am surprised at the hon. Member's diligence in drawing the attention of the House to what must be one of the earliest cases in which they have operated and his optimism in hoping, although he would have been out of order in openly suggesting it, that the provisions would be amended. The suggestion that he half made, that this could be done by Order, is not in question, because an Order cannot contradict so flatly a specific provision in the main Act.

Moreover, these special provisions contain features which make the assessment of levy rather more favourable to the levy payer than a normal assessment on a sale of land would be. It is a long-established practice in compulsory purchase cases for the acquiring authority to pay the vendor's costs. In a normal sale this would be regarded as part of the consideration which the vendor receives, as indeed it is, but the special provisions enable this payment to be ignored in the levy calculation for compulsory purchase. Similarly payment made for injurious affection or for severance are not normally levied, although in a private sale such payments would again usually form part of the consideration.

Whilst I freely acknowledge that the hon. Member has made the best of his exceedingly slender case, the fact that he pursues it at all suggests to me that the true nature of the betterment levy still escapes him. And so perhaps I might be permitted to go back on my opening remarks and deal with the principle of levy to this brief extent. Planning permission or the prospect of it brings an added value to the land. The levy provisions, in the Act and Regulations, say that 40 per cent. of that added value will be returned to the community which created it through the grant of planning permission, and 60 per cent. will stay with the landowner or developer. But more particularly a vendor will not escape levy because he claims that for any one of a variety of reasons, of which compulsory acquisition is only one, he did not wish to sell his property or—although I still maintain that this is not applicable—he was unable to obtain the price for it which he would have liked to get.

I do not know whether the honourable Member has fully thought out the consequences of the course which he is proposing. I presume that he would not wish to see only those cases which actually go to compulsory purchase exempt from levy, for this would make compulsory purchase very popular indeed and would considerably lengthen the time taken to buy land. On the other hand, if all sales to authorities possessing compulsory powers were levy free there would be to say the least a considerable reluctance to sell privately, and we should probably see a two-tier system of land values.

Mr. Whitfield wrote a letter on 22nd February which is being treated as a counternotice and this will in the normal course of events be taken to the Lands Tribunal. If between now and then any further facts are brought forward the Land Commission will of course consider them. But the details of the case are, therefore, in a sense, sub judice and the hon. Member will appreciate that I cannot say more at present.

The debate having been concluded, the Motion for the Adjournment of the House lapsed, without Question put.

Mr. SPEAKER suspended the sitting of the House at four minutes past Twelve o'clock till Ten o'clock this day, pursuant to Standing Order.