MINOR AMENDMENTS

HC Deb 17 July 1969 vol 787 cc1040-7

Mr. Graham Page (Crosby)

I beg to move Amendment No. 270, in page 63, line 13, at beginning insert:

(1) At the end of section 44 of the Land Commission Act 1967 (Notice of Assessment of Levy) add— '(5) In any case where after notification of a chargeable act or event it appears to the commission that no levy is payable as a result thereof, the commission shall serve upon the person on whom a notice of assessment of levy would be served under this section if levy were payable a notice that no levy is payable'. This certainly is not just a drafting Amendment, as the three previous ones have been. It has a great deal of substance. It deals with the question of the person who sells, rents or develops his property and, as a result, may become liable to betterment levy. The Amendment is designed to put him out of his agony.

In some parts of the Land Commission Act of 1967, the Commission has six years in which to decide whether or not the vendor, the lessor or the developer of property is liable to betterment levy. This is framed as an Amendment to Section 44 of the Land Commission Act, which is one of those Sections so frequently found in connection with the collection of taxes, which thinks only of the tax collector and not of the victim of the tax. It seems in Section 44 as if there is a horrible delight in the hue and cry after the victim of the levy, with no thought of releasing him when it is known that he is not liable to levy.

But to get behind the statutory jargon of Section 44, the circumstances of a case are that someone has sold, let or developed property. Under the present provisions, the Land Commission is directed to serve him with a notice of assessment if it thinks that he is liable to levy. Then, all that procedure starts as a result of that notice. But if the Commission decides that he is not liable, it can just keep silent and for six years he may have the sword of Damocles over his head and wonder whether he is liable to levy.

In those circumstances, it is difficult to deal with any trust estates. How can one deal with a trust estate which has a contingent liability to levy? It is almost impossible to wind up the estate of a deceased person who happened to sell property recently before he died. It is almost impossible to wind up a bankrupt's estate if the bankrupt sold property before he died—all because one never has any sort of clearance from the Land Commission that levy is not payable.

10.30 p.m.

This will become particularly important under the reforms in this Measure, for the Government have seen what was wrong in at least five cases under the Land Commission Act and have reformed the law in connection with those cases. It becomes even more important that the potential levy-payer should know whether or not he is free from levy. The Land Commission will be quick enough to come down on him if he is liable to levy.

Under Section 44 of the Act he receives a notice of assessment and the procedure starts. The Land Commission receives a P.D. form—particulars delivered—which is filed with the Stamp Duty Office when a conveyance is completed. By merely looking at that form the Land Commission knows whether the case comes within any of the concessions granted under this Measure. If it does and if the Commission decides that the vendor, lessor or developer will not have to pay any levy, the Commission should say so immediately. At present, there is no provision to oblige it to do so. The Amendment seeks to put some obligation on the Commission to put the man out of his agony and tell him that no levy need be paid.

Mr. K. Robinson

The hon. Member for Crosby (Mr. Graham Page) made it clear that the Amendment seeks to require the Land Commission to serve a notice saying that no levy is payable on anybody who would have been chargeable to levy in any trarsaction of which the Commission had been notified had a liability to levy arisen. I will explain why this is not acceptable.

As the hon. Gentleman will appreciate, every sale of land constitutes a chargeable act or event under the Land Commission Act. There are over 1 million such sales each year and every one of them is notified to the Land Commission when the purchaser, or usually the purchaser's solicitor, sends particulars of the sale to the Inland Revenue Stamp Office.

The Betterment Levy (Notification) Regulations provide that this constitutes notification to the Land Commission. The vast majority of these transactions, of which a clear example is the sale of a house without any question of the land being developed, give rise to no liability to levy. That this is so is clear to both parties and their advisers, and I am satisfied that nobody is uneasy about the incidence of betterment levy in such cases.

Only one case in every 20 notified is even investigated as showing a potential liability to levy. The Opposition are surely not suggesting that the Land Commission should solemnly send out 1 million negative notices a year, mainly to people who never imagined that they would be liable, anyway.

Mr. Graham Page

The right hon. Gentleman and I know the technicalities of this legislation, but we cannot expect the layman to know them. He gives the particulars of his transaction to the Commission. How is he to know that he is not liable to levy when he does not know the technicalities of this almost unintelligible Bill?

Mr. Robinson

The hon. Gentleman is constanly making this point, usually in different though equally picturesque phraseology. Nevertheless, he is asking for notification to be given in every case, including the hundreds of thousands of cases of people who probably do not even know that notification of their cases is virtually automatic. The result would be the Land Commission sending out about 1 million notices a year to people who, for the most part, would be staggered to get them.

I appreciate the hon. Gentleman's argument that it is not always apparent whether or not levy will be chargeable. I appreciate that this is so even in the case of houses where there is no immediate prospect of development, particularly if they stand in grounds which possibly invite future development. In these circumstances, it is always open to the vendor to inquire at the appropriate offices of the Land Commission about the prospect of levy being charged. They will inform him whether, on the facts before them, levy appears to be payable.

The Opposition are asking for more than this. There are at present three circumstances in which the Commission notify prospective levy payers that no levy will be payable: first, as I have said, when it is asked to do so; second, in Case C where the prospective levy payer himself notifies his project of material development; and third, where, following the sale of land and notification by the purchaser, the Commission has made inquiries of the vendor.

The hon. Gentleman appears to be suggesting in his Amendment that instead of the qualified advice which the Commission gives it should make a positive declaration that no levy is payable where this appears to be the case. But the Commission has power under Section 55 of the Act to serve a further notice of assessment on the discovery of any fact which was not known to the Commission when the first notice was served. This is all that the Commission's present qualified advice preserves for itself. I cannot believe that even hon. Members opposite would regard that as an unreasonable precaution on the part of the Commission.

The hon. Gentleman made some play with the fact that the Commission has six years in which to make up its mind whether or not to assess levy, but if the full facts of a transaction are disclosed when it is being investigated it is of little significance, because the Commission will be able to give an answer as soon as the investigation is complete. If, on the other hand, the facts are not known, it is perfectly normal to have a six-year period over which past transactions can be reopened. It is not even clear that the Amendment would encroach on that limit, but it is not the Government's intention to do so.

As this is the last of the betterment levy Amendments, perhaps I can, as a somewhat fleeting member of the Government's Finance Bill team, pay my tribute to the way in which the Opposition have dealt with Amendments both in the Standing Committee and on the Floor of the House. Despite the differences that we may have had on the existence of the Land Commission itself and the nature of retrospection, generally speaking, I think that their contributions have been helpful and constructive.

Mr. Graham Page

I am grateful to the Minister for the kind words he has said about the Opposition team dealing with betterment levy. The team has tried to be constructive, and to assist the Government in the sort of concession they have decided to make in the Bill.

I was interested to hear of the occasions when the Land Commission is prepared to notify a potential levy payer that he is not liable for the levy. I do not think that this is generally known. It is valuable that the right hon. Gentleman has put it on the record that those who have estates to wind up, particularly, will be able to ask the Commission for a clearance that they are no longer liable to levy. But these things are only a slight veneer, as it were, on the hateful levy itself, and the abominable Commission, which, we hope, will be abolished very soon.

Mr. Robert Cooke (Bristol, West)

I cannot entirely go along with my hon. Friend the Member for Crosby (Mr. Graham Page) in thanking the Minister, or in any way endorsing what the Minister has said in this cosy little exchange—

Mr. Graham Page

Not cosy.

Mr. Cooke

I am glad to hear my hon. Friend say that it has not been cosy. The point is that my hon. Friend and the Minister will still appear to be on speaking terms, and that shows considerable restraint on the part of my hon. Friend, because there has been a good deal of provocation.

I am not entirely convinced by what the Minister said. He said that those concerned would be staggered to get a notice from the Commission saying that no betterment levy was involved. People have been staggered to have letters quite out of the blue saying that levy was involved. I am not sure that they would mind being staggered by being told that they were clear once and for all and discovering exactly where they stood.

What the Minister said did not satisfy me, because he said that the matter could still be open, that a new fact might come to light which would mean that levy could be charged: there might be a purely fortuitous change in planning; the village might suddenly be zoned differently and, far from being protected from development, it might be changed into an expansion point, and then the State might be forced to regard it as being capable of development and tax could be recovered. We just do not know where we are with this Government. Even in death there is no escape. The Land Commission will pursue assets beyond the grave. Even the two square yards in which one might hope to find one's final resting place could no doubt, in certain circumstances, be liable for betterment levy. There will be a tax on tombstones next.

Sir E. Errington

I want, not to use honeyed words of the type that have just fallen from the lips of my hon. Friend the Member for Crosby (Mr. Graham Page), but to seek a little information from the Minister. The point is important, because it might happen to anybody who is concerned with land. A small portion of a large house was sold to an electricity board to enable it to erect a substation. The owners were assessed by the Commission to the extent of about £10. Subsequently, the matter was discussed and I was informed—I hope that this is accurate—that what had happened was that the creation of this small building as a substation did not require any levy to be paid on it because of the injurious effect to the larger house. This is a rather extraordinary position, which was brought about only as the result of considerable effort—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. On this Amendment the hon. Gentleman cannot discuss the operation of the Land Commission. He must direct his remarks to the Amendment.

Sir E. Errington

That is what I am seeking to do, Mr. Deputy Speaker. I am trying to discover what information would be given in the circumstances that I have indicated. If a statement is made, as is suggested by the Amendment, that no levy is payable, I can see considerable difficulties when it is a question of levy, instead of being payable, being credited to the person who might otherwise have had to pay a levy. This point arises clearly and definitely on the Amendment.

Mr. K. Robinson

The hon. Gentleman is really asking on an Amendment dealing with negative notices why a negative notice was sent in this instance. The short answer is that, as betterment levy is payable on development value, the development value was offset by the amount by which the district valuer considered the house had depreciated as a result of the electricity substation. This is a not uncommon factor, and I do not think that it should need any greater effort or investigation to bring it out.

Sir E. Errington

The point I am trying to put is whether a final statement is ever given.

Amendment negatived.