§ Where any interest in land is compulsorily acquired or is sold by agreement to a party possessing compulsory purchase powers, and—
- (a) the land is used for the purposes of agriculture within the meaning of the Agricultural Holdings Act 1948 and is so used by way of a trade or business;
- (b) the person carrying on the trade or business is displaced from the land;
- (c) where, apart from this section, compensation would be assessed on the agricultural value of the land;
§ Brought up, and read the First time
§ Mr. Anthony Stodart (Edinburgh, West)
I beg to move, That the Clause be read a Second time.
This new Clause was discussed upstairs and settled by the casting vote of the 333 Chairman. We are grateful to you, Mr. Speaker, for allowing us to discuss it again, because it concerns a matter of considerable and topical importance. As we have seen in the newspapers today, the inquiry into the siting of the new London Airport has opened. Wherever that airport is to be sited, compensation will have to be arrived at for land that will be compulsorily acquired. The bones of the new Clause are to be found in the last two lines:compensation shall be paid by the acquiring party at a level which takes full account of the cost of equivalent re-instatement.At present there are going out of production to housing schemes, motorways and industrial development generally about 50,000 acres every year, the vast bulk of this land being bought by compulsory purchase. Where property is taken for the benefit of the community, it is right that the seller should be paid the full market price and that he should not be unduly out of pocket if he sets himself up again in business.
I shall not make a long speech on this subject. This is an extremely important matter touching on the law and, not being a lawyer, I am quite incapable of making a speech about the law. The position, I understand, is that the value of the land is what is agreed or determined at the time of the notice to treat. The actual payment, however, is rarely made for two or three years, during which time the price of land has, almost inevitably, risen. The rate of increase in the value of agricultural land over the last 15 years has been 10 per cent. per annum. It has its fluctuations, but that is the broad, fairly long period, rate of increase. Until payment is made to the outgoer, it is virtually impracticable for him to fix himself up with another farm. It follows that the cost of equivalent reinstatement is in practice a good deal higher than the compensation which is paid.
Another point of significance is that any available farm of equivalent size will almost certainly be of greater value to the adjoining farm than to an incomer. Because of the capital required to go into farming today, it is almost certain that the owner of an adjoining farm will be able to afford a higher price for it to work with his own land than will an incomer.
334 Reference was made in Committee to a legal case which gives judicial support for the view that compensation should be based on the cost of land at the time not of the actual purchase but of the equivalent reinstatement, that is to say, at the time the person gets the new property rather than at the date of the notice to treat. That case was between West Midland Baptist (Trust) Association and the Birmingham Corporation, and concerned a Baptist Chapel. Notice to treat was served in 1947, but the acquisition did not take place until 1961—a considerable time, caused, presumably, by other priorities in the redevelopment of the City of Birmingham. When I quoted that case to the hon. Gentleman, he founded his objection to the new Clause on two points. The first was a speech made by his right hon. Friend the Minister of Housing and Local Government in which he said that the present basis has stood the test of time. I am not firmly convinced that that is a good reason for rejecting a change, if change is needed. Secondly, the hon. Gentleman said—and he repeated it with some emphasis—that this case was a peculiar one, and that churches are quite different when it comes to compensation. I do not think the hon. Gentleman is right in this. I quote from the All England Law Report of the judgment by Lord Justice Sellers in 1968:Whenever re-building (which is the commonest form of reinstatement) is contemplated to replace a building which is compulsorily acquired, some delay would appear to be unavoidable. A new site has to be obtained, frequently from the acquiring authority in whose control lies the building allocation, plans have to be prepared and approved, authority to build has to be obtained, and ultimately a contract has to be placed for the erection of the substituted building. Under the most favourable conditions there must be some delay, measured normally in years rather than months.Then he went on to sayWhatever may have been the position in 1845 or even in 1919, when a considerable delay between the date of the notice to treat and the final assessment of compensation on a reinstatement basis may not have led to a variation in the amount of assessment, or only relatively small fluctuations up or down whether the calculation was made on the one day or the other, since 1947 the cost of labour and material and the total cost of building has increased so enormously over relatively short periods that compensation fixed at building rates in one year would prove totally inadequate to meet the erection of the same building in the next.335 It was held that the compensation should be determined at the cost of reinstatement when the building work could reasonably have been done and not as at the notice to treat.
I feel that there is a case for our new Clause to be accepted. There is nothing exclusively about churches in the judgment. It applies to industrial property and building property in general. Is there any logical reason why it should not apply to land, particularly when a considerable delay and time-lag takes place and the owner of the land may be considerably out of pocket?
There is no doubt that it might be a substantial help and might be an alternative proposition to the new Clause if compensation or a substantial part of it were paid immediately on proof of title. If that were the case, a man could get busy looking for a new farm before having to get out of the old one. Precedents were created for this in settlements when the M1 was built and about 90 per cent. of compensation was paid then on proof of title. But something requires to be done when land is being compulsorily acquired.
There are good grounds in law for our new Clause. If is not accepted, we feel that it should be given most careful consideration. I hope that the hon. Gentleman will give us a rather more comprehensive reply than he did in Committee. He has had time to think about West Midlands Baptist (Trust) Association v. Birmingham City Corporation in the meantime. No doubt he has taken learned advice and I hope that we shall hear it this evening.
§ Mr. Peter Mills (Torrington)
I should like to support my hon. Friend very strongly on this new Clause. It is both reasonable and sensible and will be needed in the years that lie ahead. It poses a growing problem. It is not a large problem at present, although it assumes large proportions to the individual when it happens. Bearing in mind the tremendous needs of industry, the need for better roads, and so on, more and more good agricultural land will be required. Many of us regret that poorer land cannot be used for these purposes, but unfortunately it is occasionally necessary to use the good agricultural land. 336 Therefore, proper compensation should be given and one should take into account the cost of equivalent reinstatement.
When these schemes impinge on farms, the whole farming activity is put out of gear and is disjointed. It is difficult to compensate that factor by money, when a farm system that has been going on for a number of years is suddenly put out of gear. What the farmer needs is new land and it is very difficult to acquire.
I hope that I shall be allowed to be a little parochial. In the South-West we are experiencing these problems on an increasing scale because of the impact of road schemes, such as the A30 and the A303, for which large chunks of good agricultural land are to be used. This will mean that farmers will be disturbed on a large scale.
In the South-West we also have the problem of reservoirs and again the tendency, if one is not careful, is to use good agricultural land. I am not, of course, against the supply of water in these reservoirs, which is essential, but I am against the use of such land when poorer land could be used. Again, if land is used for reservoirs the farmer should be compensated in such a way that he has enough money to buy suitable land in order to put back his holding into a viable condition.
Also in the South-West the mining of clay again creates a problem. The first part of the new Clause with which we are dealing mentions landsold by agreement to a party possessing compulsory purchase powersMany of the mining companies have those powers and when they are exercised it is not easy for farmers to find suitable land in an area where mining is taking place. I have seen holdings completely split up and it has been difficult for farmers even to continue. If the building of roads and reservoirs and mining operations take place on a large scale this can lead to a reduction in the size of holdings, which is the very thing that we hope will not happen.
I turn to the matter of the rising cost of land. It is an expensive matter when one tries to buy a further 10 acres or so to compensate for land which has been taken away. It is often easier and cheaper to buy a larger home than it is 337 to buy land to compensate for that which has been taken away. It is difficult to purchase and very costly. That again means that the new Clause is right.
Then there is the problem of replacing buildings. I think back 15 years to when I put up a Dutch barn or some other farm building. When I come to replace it today, I find that costs have risen enormously, especially in the last five years. Buildings must be modern and up-to-date and they are extremely costly. Again, I believe that the new Clause is a sensible answer.
I know that it is difficult to decide what is an equivalent to reinstatement, but, as a practical farmer, the Minister must understand the reason why we have moved the Clause. I hope that he will give it real consideration and not brush it aside as he tended to when we considered the last Amendment. It is worthy of consideration, in view of the growing problem of more and more land being used for purposes which are not agricultural. I hope that the hon. Gentleman will look at it carefully and give us his views on what is a very important subject.
§ 8.0 p.m.
§ Sir J. Foster
In the debate on the previous Clause I made a speech lasting about a minute and the Minister was good enough to meet the point. Though his explanation was not entirely satisfactory, what was commendable was that he said it is wrong to have houses empty. I hope that he will be able to start his answer in this case by saying that it is unjust that a person who has compensation fixed in year one should get his money only in year three. In year three, the value of the land will have risen, and the person concerned cannot be reinstated at year one values.
In Committee, the hon. Gentleman said that this has stood the test of time. However, it has only stood the test of time in the sense that it has not been altered. There are many injustices in English law, as there are in compensation, and I hope that he will agree that this is an injustice.
The hon. Gentleman may then say that this is not the place to cure it and that it is a wider question, or that the Government are seized of it and intend to alter it. I hope that he will say that a 338 person who is paid compensation two or three years after the value of the land has been fixed inevitably suffers from an injustice.
The rule that the earth was flat stood the test of time until Galileo. The rule that a personal action disappeared with the death of the person bringing it was terribly unjust, but it stood the test of time until about 1936. There was a rule in English law that persons could not be called as witnesses if they were the passengers in a vehicle when there was an accident. That stood the test of time until about 1860. There are many instances in English law where a principle unfortunately has stood the test of time because legislators, especially Government ones, do not bring their minds to hear first of all on whether it is an injustice.
I ask the hon. Gentleman to disabuse his mind of this ultra-conservative principle of a rule standing the test of time. Every principle should be tested by asking whether it is just. One's basic philosophy should be to inquire whether it is kind. That solves all one's ethical, philosophical and religious difficulties. If a rule is unkind, it should be changed.
A person awarded compensation has to wait an extremely long time before it is paid. I hope that the Minister will say that he is taking steps to see that compensation should be paid when the title has been established. It is very unjust to have to wait until the final stage. It is really dishonest, but dishonest on the part of the legislature. A common dispute is where one person owes another £500. It really comes down to a small dispute about the last £10. How many people say, "I cannot pay you the £500 because the last £10 has not been settled"? The only honest way is to pay the £490 and dispute about the £10.
I think that the hon. Gentleman works from a sound ethical framework. I hope that he will start his speech by saying that it is unjust that a person should not get full compensation. Alternatively, if he thinks that it is just, he ought to give his reasons.
§ Mr. Emlyn Hooson (Montgomery)
I agree with the observations of the hon. and learned Member for Northwich (Sir J. Foster). He said that the Parliamentary 339 Secretary spoke from a sound ethical framework. Certainly the hon. Gentleman speaks from a sound framework. However, it is up to him to establish whether his attitude to the Clause is also ethical.
The proposal in the Clause would establish a more just régime for the assessment of compensation. I illustrate the point by referring to a case which occurred in my constituency. Hon. Members will remember the Clywedog Reservoir Bill which was introduced into another place. It contained compensation clauses which are those at present found in the Water Resources Act. I thought that they were completely inadequate.
The matter was referred to a Select Committee of the House of Lords, the compensation clauses were changed, and they remained in their changed form when the Bill went through this House. The result was that the dispossessed farmers received compensation which was over and above what was normal and would be allowed under the Water Resources Act. They were compensated not only for the value of the land, but for disturbance.
Having made that observation, I come to the point made by the hon. and learned Gentleman. Even though the basis of compensation was so much better than that normally paid, by the time notices to treat were served and the compensation was paid, years had passed. The farmers were all competing for equivalent farms. The result was that they faced not only the normal increase in the value of land—the 10 per cent. which has been referred to—but an additional local increase because they all wanted to stay in the locality. They were competing against each other for the land and, in the event, the generous compensation awarded was just enough to give them the cost of equivalent reinstatement. This is a vitally important matter for the Minister to answer. The justice of the cases met by a Clause of this kind, and certainly I support it.
I come now to another point about rules which have stood the test of time. It is interesting to recall the West Midland Baptist Church case which was referred to so eloquently and with such legal erudition by the hon. Member for Edin- 340 burgh, West (Mr. Stodart). In the Acquisition of Land (Assessment of Compensation) Act, 1919, for many purposes the basis of compensation was the reasonable cost of equivalent reinstatement. What happened in that case was that the learned Lords Justices were interpreting a provision that this House passed in 1919, when the basis of compensation was the reasonable cost of reinstatement. It is the Government who have gone back. We have become more reactionary since 1919, and today the basis is much more unjust than was provided in Rule 5, Section 2, of that Act.
The point that arises which is of great public importance is that here we have somebody whose land is acquired compulsorily. He or she is not therefore a willing seller. Then, the basis of compensation at the moment is assessed simply on the agricultural value of the land. As we know, in an era of inflation when building and other costs are going up, people who have been dispossessed who need to buy an equivalent farm or something of the kind experience delay in compensation and the result is an injustice. I am sure that right hon. and hon. Gentlemen on the Front Bench opposite would agree in their hearts that this should not happen. If they are going to advise rejection of this Clause, we have the right to demand a full explanation.
§ Mr. Paul Hawkins (Norfolk, South-West)
In its effects on people, this new Clause is the most important one. If a farmer has his farm cut about or loses it entirely it affects his family life almost more than anything else in this Bill. More and more farmers over the next few years and as far as one can see into the future will be affected. We are going to have more and more motorways. My hon. Friend the Member for Torrington (Mr. Peter Mills) referred to the widening of the A.303. When I came along there I saw very large acreages of land being taken out of production. Obviously, this meant the splitting up many small farms into pieces incapable of being farmed.
I ask the Government to think very seriously on this matter. We should consider it on the basis that we have a very small minority of people, some 3 to 4 per cent. of this country's population, engaged in farming. Naturally, the rest of the nation, the 97 per cent., must have 341 land on which to put new motorways, new factories, reservoirs and everything else which will enable the standard of living in this country to go on increasing. It is only right that that small minority should be put back at least into the position in which it started. This is all we are asking, and I feel sure that the Parliamentary Secretary and the Minister will consider that this is a fair and just idea.
In Committee, I referred to a particular case of a farm being split into two pieces and some 30 acres were being taken for motorway widening. I now know of another case where only five acres are being taken out of an 80 acre farm, leaving 30 acres on one side and 45 acres on the other. The Parliamentary Secretary was wrong when he corrected himself in referring, in the OFFICIAL REPORT, to four years' compensation, because I believe it is five years.
§ Mr. Mackie
No. As the hon. Gentleman knows well, as he is in the job, normal compensation is one or two years, and then I spoke of the other four; so it could be six years or five years.
§ Mr. Hawkins
I did not read it like that, even after the correction, but I now understand what the hon. Gentleman is referring to. I do not think the number is either one or two, because we altered the legislation two years ago to make it five or six years. I believe the hon. Gentleman will agree with me on that, although it does not matter very much. Supposing the farm was let at £8 an acre. In my estimation, the only compensation that the tenant of this holding will get for having five acres taken out of his farm and having his farm split into two pieces will be five acres at £8 per acre times 5 years' purchase, which comes to £200. Very probably that farmer will have to give up whatever he was then farming, perhaps a dairy herd, and will never receive enough compensation for the splitting of his holding into two pieces. I am satisfied that the Parliamentary Secretary will agree that payment of compensation of that kind is not justifiable. For the owner-occupier there is better compensation, because he will receive the full amount for the land taken, the capital value. He receives compensation for the land split and can be far better compensated for the loss.
342 8.15 p.m.
The other matter which I raised in Committee, which was also raised by the hon. and learned Gentleman the Member for Northwich (Sir J. Foster), is the question of slow payment. Time and time again one finds one's client who has had his land taken, because of the process of government between the legal authorities, the lawyer in the Ministry and his own lawyer, having to wait three years before receiving the money and being in a position to go out and buy another holding. This is a practical point. The process could be speeded up by having payment on exchange of contracts or payment of, say, three quarters of the sum, or something of that nature.
Farmers are in a very small minority. They must provide all the land for the amenities of the nation in the future and in my opinion it is only right that they should be put back into the position where they can earn as much money as they did in their previous situation.
§ Sir David Renton (Huntingdonshire)
Whitehall once used to have a tilting yard, where Henry VIII received a serious injury when jousting. There is no tilting yard there now. Instead—and I am not making a party point—a game is played of "Knock the farmer". Unfortunately, this has been played for some years. One of the ways in which he has been knocked in recent years is through the notional capital gains tax. But for many more years than that the farmer has been knocked by not receiving adequate compensation for compulsory dispossession; and it is because this new Clause will go very far to relieve that injustice that I would like to support it.
I do not need to labour the point, already well made, that the injustice is basically due to the fact that compensation is based simply on the agricultural value of the land which the farmer is leaving, valued at the time at which notice to treat is first served. That is the basic trouble. But it goes further than that in those cases in which there is a delay after notice to treat and and in paying compensation. Experience has shown that in many cases—and there are cases in my own constituency which I have in my mind which followed the 343 building of a reservoir—compensation as paid at present is not sufficient to enable the farmer to take on another farm of equivalent size, producing equivalent income, whether he becomes a tenant or in some other way—even in days of low interest rates with the aid of a bank. That is a most unjust situation.
I know of farmers who have had to give up farming because the compensation was not good enough. I know of another farmer who had to take on as a tenant something like one-eighth of the amount of land he had before and there he went in for intensive farming on a very much smaller scale.
There is a second reason why I think that the new Clause should be supported, and I ask the Government to bear it in mind because it is of great importance for the future. With the large-scale developments required by modern society larger areas of land are being compulsorily purchased all at once or, at any rate, within a shorter time than used to be the case.
Motorways are an obvious example. Fortunately, the acquisition of the land is spread over a long line of country. On the other hand, a reservoir may require several thousand acres to be taken all at once and the farmers in that area have to go scrambling away looking for somewhere else, perhaps in competition with each other. I have seen this happen.
But we have in the offing a far bigger project than any that I have mentioned—the prospect of a third London Airport requiring 100 square miles of land, nearly all of it farm land. That area, 10 miles by 10 miles, will be used partly for runways, but also—pardon the phrase—for the associated conurbation. The prospect of that happening is frightening. It may not frighten the Minister, but it certainly frightens me.
What will happen to the farmers in that 100 square miles of mainly farm land when they go looking for somewhere else to earn their living as farmers, which is generally the only living they know? If they are to be compensated merely on the agricultural use value of the land at the time they receive a notice to treat for compulsory purchase and if there is a delay of some years before the last of 344 them is pushed out, they will not be able to re-establish themselves elsewhere.
I believe that this, or something like this, new Clause which, in a modest way, still leaves a degree of discretion to the authorities and the quasi-judicial bodies which have to consider these matters, will have to come forward if there are to be large-scale dispossessions. That is why I think that my hon. Friends have done a great service not only for farming, but also for the credibility of modern government by putting forward the new Clause. I hope that the Minister will give it a favourable reception.
§ Mr. Peyton
I support every word of the most eloquent speech of my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton). Though he rightly referred to motorways and reservoirs, nevertheless there is the nightmare thought of what will happen to the hundreds of farmers who will be displaced by the construction of a third London Airport. Some of the estimations on the cost of the airport might be quite wrong because of the inadequate compensation allowed to farmers who are dispossessed.
I was greatly moved by the two speeches made by my hon. and learned Friend the Member for Northwich (Sir J. Foster). He made one good speech for himself and the beginning of an even better speech for the Minister. I hope that the Minister in his reply will exercise that virtue of which we know he is capable, but which is rare in Ministers, namely, humility, and take from my hon. and learned Friend the admirable start to his speech with which he was presented.
I should particularly like to echo the words of my hon. Friend the Member for Torrington (Mr. Peter Mills) about the plight of farmers in the South-West. Though we welcome the hard won conversion of the Ministry of Transport to the fact that narrow jungle paths are not adequate highways for the West Country and that progress is now being made towards the construction of adequate roads, certain farmers, merely by chance or perhaps by a lottery, happen to be in the way of these desirable constructions. I hope that the Minister will recognise that the greatest damage is usually done to the farmer with the smaller holding. I 345 know of no provision to compensate him adequately. All I know is that if the holding survives on both sides of a double carriage-way road the enormous addition in cost and the waste time involved is extremely serious.
Recently a man in my constituency asked me for advice on how he should conduct a herd of cows from one side of his farm to the other across a double carriageway road. I do not think that either the Lord Chancellor or any other Minister is capable of giving such a farmer advice on running his holding or of estimating and giving adequate compensation for the damage done to it.
I hope that the justice of this reasonable new Clause will be recognised and that farmers who are displaced by developments urgently required by the community will not be made the victims of public need. No one denies that public need must be met, but it is unjustifiable that individual farmers should be singled out to carry the burden of the public good. We all accept that if there is a requirement for a road, a reservoir or an airport, the burden of providing it should be shared. It should not just land on the unfortunate farmer who, in addition to everything else, will lose his home.
I warmly and enthusiastically support this modest new Clause. I hope that when the Minister replies he will prove to the House and to the country that he is as much moved by the thought of injustice to an individual as by inconvenience to the official Establishment. I do not find official inconvenience as moving a consideration as individual injustice.
§ 8.30 p.m.
§ Mr. W. H. K. Baker (Banff)
I suppose that as recently as 13 days ago there would not have been as many as six hon. Members of this House who could have pointed out on the map a locality called Stake Ness. I certainly could not, although it is within my constituency. Thirteen days ago it was announced that a nuclear power station would be built there in the near future, and the entire area is very grateful that that will be so. It would bring enormous benefit in the shape of development to the area at large.
I support the Clause partially in view of this development because in my view 346 the matter of compensation works most hardly on tenant farmers. This point has already been stressed. In the case of the Stake Ness project there will be about 92 acres of a farm taken away. It will mean the loss of the steading, the house and a large part of the land. The farmer is a tenant farmer. The amounts of compensation have already been referred to. How on earth this man will be able to reinstate himself as a farmer elsewhere given delays, given the difficulties of claims, and all the rest, in a reasonable time and in a reasonable manner on the present level of compensation, I cannot understand. It would be impossible for him to do.
As other of my hon. and right hon. Friends have said, in many cases—and the Stake Ness project is among them—the development which will follow from the acquisition of the land is for the benefit of the whole community. In this case there will be a vast generation of economic electricity. Why on earth should not the entire beneficiaries of that give some better form of compensation, as is outlined in this Clause, to such cases as I have in mind?
The matter goes further than that. Not only will the actual site be necessary but there will be a great deal of extra infrastructure necessary. Not only one farmer will be affected by this but a great many others as well in the vicinity and in the approaches, and there will be the erection of houses, both permanent and temporary, for the construction staff and for the permanent staff who will man the project when it is completed.
I have great faith in the hon. Gentleman who is about to reply. I am quite sure that he understands the difficulties, both as a practical farmer and as a Minister, and I sincerely trust that he will give a favourable reply at this stage. If not, would be give the House an assurance that when the Bill goes to another place he and his right hon. Friend will by then have come to a decision which will be in equity fair to tenant farmers particularly and to all farmers who have to give up their land for the general weal of the country?
§ Mr. Jerry Wiggin (Weston-super-Mare)
I am reluctant to join in this short debate with the firepower of our best legal brains giving their opinions on such an intricate and important matter. 347 But I say humbly as a practising farmer—or until recently one, and one with a substantial connection with the National Farmers Union—that I found this problem to be one of the most difficult and intractible problems of the lot.
The county where I lived—Worcestershire—borders on Birmingham with all its development, and we had this problem possibly more than any other as this great city expanded towards us with its roads, motorways, reservoirs and other development. I think it must be fair to say that compulsory purchase, whether of farmland or of shop frontage or of building, creates a personal and sometimes a financial problem. But in agricultural land we have a very special case.
Agricultural land cannot be created; it cannot be manufactured. It is inevitable that it is the best land that is taken. People do not build motorways deliberately over the mountain tops or put new towns in marginal areas. This is where agriculture must plead a special case.
I do not think that we have perhaps always considered the plight of the tenant in these compensation matters. The owner-occupier may be paid a sum which would enable him to go out and purchase another farm. I accept, and will elaborate on the fact, that this sum is usually inadequate under the present legislation but a tenant is in a special difficulty. Tenancies have been incredibly difficult to obtain. I am sure that the hon. Gentleman will be well aware that some landlords have frequently found 100 or 150 applicants for good land to let. It is this difficulty that the displaced tenant immediately finds himself up against.
My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) mentioned the hon. Gentleman's correction of his own statement. I am sorry but I still cannot make sense of the correction. I appreciate that language may be a difficulty to him in view of his birth place, but it is extremely difficult for us if we cannot even get corrections correct. But that is perhaps typical of the way the Bill has been conducted. Perhaps in his reply the hon. Gentleman will be specific about existing compensation for tenant farmers. I do not believe that 348 the House has yet heard the correct answer.
I mentioned in Committee the rather special cases which arose when the M50 was built across common land on the borders of Worcestershire and Gloucestershire, where the ownership was so indeterminate that the district valuer felt that the best method of compensation was to purchase, no doubt at market price, an equivalent area of land to add to the common land. So the principle of reinstatement which is what the new Clause is about is not wholly without precedent, and my hon. Friend the Member for Yeovil (Mr. Peyton), with his usual perception, mentioned the motorways which are at last coming to the West Country and are, indeed, bisecting almost completely my constituency.
We have on the whole been fortunate over compensation, I believe, in that the district valuer, underpaid, overworked and under-staffed like nearly all district valuers, has done his best. But we have still had these unfortunate cases where small farms have been bisected, with crossing places naturally placed as infrequently as the Ministry can get away with. The consequent damage to the business of a man affected has been irreparable.
In Committee, the Minister stated an argument against the proposal in this new Clause which I find hard to accept. He suggested that if we were to pay higher compensation the extra money placed in the purchasing side of the land market would force the price of land up and would have a snowball effect, as he called it. In making that statement he himself admits the error of the present system. As the hon. and learned Member for Montgomery (Mr. Hooson) stated—and I was contesting the seat at the time that Clywedog was being built—the compensation was one of the most cheerful features of that construction. Even there, by the time the farmers came to replace their land, there was no question of profit. It was merely reinstatement.
There is failure to appreciate that, if one takes 40,000 or 50,000 acres of land a year from a pool which cannot be enlarged, the cost will inevitably go up. My hon. Friend the Member for Yeovil mentioned airports. There is a factor involved in all this which my hon. Friend the Member for North Fylde (Mr. Clegg) tried to deal with in a Private Member's 349 Bill recently—that of worsenment. I believe that farmers suffer from worsenment in their day-to-day lives and in their working places as much as any other section of the community.
One has only to think here of the unfortunate people who attempt to farm around major urban areas or around some of our motorways and new towns to realise what they have to put up with. I cannot see any argument, in all honesty and British justice, against this new Clause. It is only fair that a farmer, whether tenant or owner occupier, deprived for the benefit of the community of the tools of his trade should in all equity be allowed to replace them. I have absolutely no doubt that we must have this Clause if we are not to continue to suffer this injustice.
§ Mr. Mackie
I should first and foremost deal with the point raised by the hon. and learned Member for Northwich (Sir J. Foster), emphasised by the hon. and learned Member for Montgomery (Mr. Hooson), and pinpointed by the hon. Member for Yeovil (Mr. Peyton). Is this an injustice or is it not? Is law that has stood the test of time for 50 years necessarily now good or bad, or is it still effective? I think it was the later Doctor Joad who qualified everything by saying, "It depends what you mean by injustice". It is an unjust world and today, as one hon. Member said, there is an agricultural population of 3 per cent. almost at the mercy of the other 97 per cent. There will be injustices whatever we do. To use a biblical term, it is the Government's task to see that these injustices are leavened—injustices which must exist in an industrial country like ours to an agricultural community. This is what we are trying to do. I do not suppose that will satisfy the legal side, as was well expressed by one hon. Gentleman. I am not a lawyer, but we are doing our best to see that the situation is leavened.
The purpose of the Clause is to see that farmers get fair compensation when their land is taken from them. We all agree on this. The Government are just as keen to see this done as the Opposition. I have some corrections to make. In the debate in Committee I was making a point, mentioned by the hon. Member 350 for Weston-super-Mare (Mr. Wiggin), regarding exactly what happens when farmers are dispossessed. Many Members have emphasised the size of this problem and the fact that it is growing. The right hon. and learned Member for Huntingdonshire (Sir D. Renton) mentioned the number of square miles of aerodrome and new roads. The hon. Member for Banff (Mr. W. H. K. Baker) mentioned power stations in his constituency, and so on.
In the Committee debate I instanced my own parish where I was told by local farmers who were bidding for a 150-acre farm that someone from Milton Keynes had come along and had outbid them. Those who were dealing with the Milton Keynes' issue were anxious that I should not make the point that farmers were too well dealt with. I asked that the matter should be investigated. The farmer did not come from Milton Keynes but another area where he had been taken over by industrial development. It reinforced my point that here was a situation where a farmer came along, having been well compensated in this particular case, and had outbid local farmers. Such farmers have good compensation, better than those coming from an area like Milton Keynes where they would receive the agricultural value for their land rather than the industrial or development value. I made this point because the Farmers' Union did not want me to suggest that Milton Keynes farmers were being overpaid.
The hon. Member for Weston-super-Mare could not understand my correction in col. 1051. It is absolutely straightforward. The word "either" was wrong; it should have read:…under the new legislation—passed two years ago—other four years' compensation or all the rent."—[OFFICIAL REPORT, Standing Committee B, 10th March, 1970; c. 1051]
§ Mr. Wiggin
If the hon. Gentleman would check, he would find that the words are "for all the rent" among other things. I still do not think that that makes sense.
§ 8.45 p.m.
§ Mr. Mackie
Yes, four years' compensation for all the rent and, multiplied, that is how it works out. I admitted that in this Committee we had a lot of corrections and argument. That seems to be 351 quite clear. This compensation, we are all agreed, should be fair and the sponsors of the Clause will agree that the significant words are "the cost of equivalent reinstatement". What we both want to ensure is that a man who is dispossessed should, so far as money can do it, be made neither better nor worse off than if he remained in possession. We are discussing not whether this should be done, but how it should be done.
Should we consider what it actually costs each farmer to set himself up in a new farm? To take the case I mentioned in Committee, supposing a farmer from the Milton Keynes area, or any area which is being compulsorily acquired, came to my parish and said, "This is the same size of farm from which I have been dispossessed, and this is what someone has paid for it and this is what I should be paid." This would be on the reinstatement value, but if that figure were excessive, who would decide? It has been said that district valuers are overworked and sometimes take a long time. This would create further delays in finding what a farmer meant by reinstatement value.
Or should we consider what his old farm would be worth on the open market if it had been sold at his own choice? It has been said that some farmers do not want to sell on compulsory purchase. Should we pay such a farmer that amount plus the incidental cost of having to move? The old law is clear on this point. It has been in force for over 50 years and it was reinforced by my hon. Friend the Minister of State, Ministry of Housing and Local Government, only last month. The proper basis for compensation when land is taken is the open market value of that land, as long as there is a market value which can be ascertained for that class of land.
There are special cases, and one famous one has been quoted. I noticed legal tomes being passed around so that hon. Members could refresh themselves on it. In cases like churches, for example, there is no general market value and one has to resort to some other method of assessment to give much the same result.
This is where the cost of equivalent reinstatement comes in—not because it 352 is thought to be the best way of assessing compensation, but because, in these special cases where there is no ordinary market value, it is the only way available. We discussed this in Standing Committee and the famous case was mentioned of the West Midland Baptist (Trust) Association v. the Birmingham Corporation. This illustrates my point. The property had no general use in the market and the compensation for it had therefore to be assessed on the equivalent reinstatement value of rebuilding the church.
I am amazed that hon. Members do not seem to have taken the point of real importance in this case—that it lay in establishing a new date for the assessment of compensation, that we no longer go back to the date of the notice to treat to establish the value, but take a current date when dispossession takes place, or when the compensation is actually assessed, if that is earlier.
This happens in all cases—not just in special cases like churches. It applies to agricultural land. This answers the question about farmers not being able to go ahead and take land on the basis of the compensation which they would get. It also meets the point about a bridging loan. It also means that in many cases, 90 per cent. can be paid in advance of the figure mentioned by the hon. and learned Member for Northwich. I have had experience of lawyers in this respect, and they are the greatest sinners. If there is an argument about the payment of, say, £500, they will hold back the last £10 or £15. I recall a case in particular, when I said that if they did not "cough up" with the money I would raise the matter in the House.
§ Sir J. Foster
I hope that the Minister's words will be heeded by the Inland Revenue, which always does what he is describing.
§ Mr. Mackie
I assure the hon. and learned Gentleman that I would be one of the first to urge payment of anything that was really owed by them.
§ Mr. Hawkins
The hon. Gentleman said that hon. Members on both sides were agreed over the principle of wishing to put the farmer back into his original position as far as that could be done by money. However, he has not mentioned the tenant farmer. For example, will 353 this £200 compensate him for a split farm and the loss of, say, five acres?
§ Mr. Mackie
I am dealing with the points as they arose in the debate, and I will be coming to that.
I was about to deal with the time-lag and the importance of people being able to lay their hands on money due to them so that they may become reinstated. It was said that I did not give a considered reply on this issue in Committee. While I accept that the length of one's speech does not necessarily mean that one made a good speech, I remind hon. Members that my speech on that occasion occupied seven columns in HANSARD. Whether or not I satisfied hon. Members on this matter, I do not know.
The hon. Member for Torrington (Mr. Peter Mills) and others pinpointed the problem, and I assure the House that we appreciate both the problem and its size. I hope that hon. Gentlemen opposite do not believe that we have brushed the matter aside. The fact that I am giving a considered reply on this occasion shows that we have carefully examined the matter.
Having dealt with the somewhat philosophical argument of the hon. and learned Member for Northwich, I come to the case referred to by the hon. and learned Member for Montgomery, of a reservoir the name of which I undoubtedly cannot pronounce. In that case, of the reservoir at Clywedog, a provision provided for extra payments to be made in certain cases. That is irrelevant to the new Clause, which tries to introduce equivalent reinstatement. However, the compensation is still based on market value. I believe I see the hon. Member for Weston-super-Mare (Mr. Wiggin) smiling, no doubt thinking that, in due course, some corrections will have to appear in HANSARD. He is probably right.
The hon. and learned Member for Montgomery also mentioned that seldom in compulsory purchase issues were there willing sellers. However, a valuation is always taken as between a willing seller and a willing buyer. He also wanted me to keep in mind the question of possible injustice.
A similar aspect was raised by the hon. Member for Norfolk, South-West (Mr. Hawkins)—the hon. Member for Weston-super-Mare and the hon. Member for 354 Banff also spoke on this issue—which is the question of compensation for split farms. This can be given in various ways. A tenant whose farm is being split can get compensation for severance and injurious affection. This is under Section 22 of the Compulsory Purchase Act, 1965. It also provides that a tenant can have reassessment of his rent. Something is also allowed for a farm being split, but that is a different point from the one we are discussing. Advance payments have been and can be made up to 90 per cent.
The right hon. and learned Member for Huntingdonshire (Sir D. Renton) said that he knew farmers who had to give up farming because they could not get farms. What sort of a Clause would we have to put in to pay re-instatement value because a farmer could not find a farm? When a big area is taken over for a reservoir, all the farmers may be scrambling in competition and they put up the market value, but that is the market value of the land which they would be paid but there is not the time lag that there used to be.
The hon. Member for Yeovil spoke about splitting of farms and suggested that the smaller farmer was harder hit, but he can get extra compensation for injurious affection. The hon. Member for Banff and the hon. Member for Norfolk, South-West suggested that tenant farmers are not so well treated, but it is difficult to say whether this is the case. The average rent in the country is very low, under £5 an acre, but in some cases it is higher. In the case of a 200 acre farm with a rent of £8 an acre, which is not a high rent, full compensation for six years amounts to about £10,000. That is in addition to the live and dead stock and tenant right to reinstate the tenant in another farm. It is considerably more than was obtained before and it should be sufficient to reinstate a farmer.
§ Mr. Wiggin
Would not the Parliamentary Secretary agree that if the £10,000 were invested it would have to be an extremely attractive investment to produce what the farm would produce in the first place?
§ Mr. Mackie
I shall not go into arguments about how to invest one's money. It was once said that if I had invested 355 all that I spent on farming in the last 20 years I would be much better off, but I would not be much happier.
We are very conscious of the difficulties and the problems. Although I have been fortunate never to have been compulsorily taken over in any farms that I have farmed, I know that I should not like that to happen. The situation is such in this industrial country that these things would have to take place. We like Ito continue giving compensation in the way it is being done, with the cost of moving and disturbance. To try to do it in any other way would run us into difficulties. I hope that hon. Members are now satisfied in the light of these explanations and replies to the points they have made and that they will not press for this Clause.
§ 9.0 p.m.
§ Mr. Stodart
The Joint Parliamentary Secretary has let us down very badly. My hon. Friends have one after another expressed their faith in him. When we debated the Bill last week I said that we always had faith and hope in him and charity for him. But by merely saying that he is appreciative of the problem and conscious of the difficulties he has not satisfied us.
I did not realise what a torrent of legal expertise and eloquence I would unleash. That, combined with the very sound practical knowledge with which my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) always provides us, gave the Minister a pretty formidable case to answer. In Committee he rested his reply on two points. He said that higher compensation pushes up the price of land and that therefore what we
§ suggest would do no good. I do not agree. What pushes up the price of land is its growing scarcity owing to the 50,000 acres a year going out of production, and not the extra compensation that we suggest.
§ The hon. Gentleman also said that the present system has stood the test of time. That argument was very effectively demolished by my hon. and learned Friend the Member for Northwich (Sir J. Foster), who posed the succinct question whether the present state of affairs was fair and just. He asked whether injustice was being allowed. To that the hon. Gentleman replied that it is an unjust world and that there must be injustice whatever the Government do. All that he suggested was that the Government were dealing with the situation as best they could.
§ The new Clause would lessen the injustices now being perpetrated. One thing that is absolutely certain is that inflation is biting more savagely now than ever before. Therefore, the time lag we have been discussing between the notice to treat and the payment being made is a much more serious issue than it has been.
§ Evehy hon. Member who has spoken has referred to the new Clause as being reasonable. There has been no opposition to it from the Government benches, and we may assume that silence means consent. I hope that my hon. Friends will go into the Division Lobby in favour of the Clause.
§ Question put:—
§ Tile House divided: Ayes 134, Noes 178.359
|Division No. 93.]||AYES||[9.2 p.m.|
|Allason, James (Hemel Hempstead)||Campbell, B. (Oldham, W.)||Fraser, Rt. Hn. Hugh (St'fford & Stone)|
|Archer, Jeffrey (Louth)||Chichester-Clark, R.||Gibson-Watt, David|
|Awdry, Daniel||Clark, Henry||Gilmour, Ian (Norfolk, C.)|
|Baker, W. H. K. (Banff)||Clegg, Walter||Glover, Sir Douglas|
|Bell, Ronald||Craddock, Sir Beresford (Spelthorna)||Goodhart, Philip|
|Bessell, Peter||Crouch, David||Grant-Ferris, Sir Robert|
|Biffen, John||Crowder, F. P.||Gurden, Harold|
|Black, Sir Cyril||Davidson, James (Aberdeenshire, W.)||Hall, John (Wycombe)|
|Boardman, Tom (Leicester, S.W.)||Dean, Paul||Hall-Davis, A. G. F.|
|Body, Richard||Dodds-Parker, Douglas||Hamilton, Michael (Salisbury)|
|Bossom, Sir Clive||Doughty, Charles||Harrison, Brian (Maldon)|
|Boyle, Rt. Hn. Sir Edward||Drayson, G. B.||Harrison, Col. Sir Harwood (Eye)|
|Brewis, John||Eden, Sir John||Harvey, Sir Arthur Vere|
|Brinton, Sir Tatton||Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Hawkins, Paul|
|Brown, Sir Edward (Bath)||Emery, Peter||Heald, Rt. Hn. Sir Lionel|
|Bruce-Gardyne, J.||Errington, Sir Eric||Heseltine, Michael|
|Buchanan-Smith, Alick (Angus, N&M)||Evans, Gwynfor (C'marthen)||Hiley, Joseph|
|Buck, Antony (Colchester)||Fortescue, Tim||Hill, J. E. B.|
|Bullus, Sir Eric||Foster, Sir John||Holland, Philip|
|Hooson, Emlyn||Montgomery, Fergus||Speed, Keith|
|Hunt, John||More, Jasper||Steel, David (Roxburgh)|
|Hutchison, Michael Clark||Morgan, Geraint (Denbigh)||Stodart, Anthony|
|Iremonger, T. L.||Mott-Radclyffe, Sir Charles||Stoddart-Scott, Col. Sir M.|
|Jenkin, Patrick (Woodford)||Murton, Oscar||Summers, Sir Spencer|
|Jennings, J. C. (Burton)||Nabarro, Sir Gerald||Taylor, Frank (Moss Side)|
|Johnston, Russell (Inverness)||Noble, Rt. Hn. Michael||Temple, John M.|
|Jopling, Michael||Nott, John||Tilney, John|
|Kimball, Marcus||Osborn, John (Hallam)||Waddington, David|
|King, Evelyn (Dorset, S.)||Pearson, Sir Frank (Clitheroe)||Wainwright, Richard (Colne Valley)|
|King, Tom||Peel, John||Wall, Patrick|
|Kitson, Timothy||Peyton, John||Walters, Dennis|
|Knight, Mrs. Jill||Pike, Miss Mervyn||Ward, Dame Irene|
|Langford-Holt, Sir John||Pink, R. Bonner||Wiggin, Jerry|
|Legge-Bourke, Sir Harry||Powell, Rt. Hn. J. Enoch||Williams, Donald (Dudley)|
|Lubbock, Eric||Prior, J. M. L.||Wilson, Geoffrey (Truro)|
|MacArthur, Ian||Pym, Francis||Winstanley, Dr. M. P.|
|Mackenzie, Alasdair (Ross&Crom'ty)||Renton, Rt. Hn. Sir David||Wolrige-Gordon, Patrick|
|Maclean, Sir Fitzroy||Rhys Williams, Sir Brandon||Woodnutt, Mark|
|McMaster, Stanley||Ridley, Hn. Nicholas||Worsley, Marcus|
|McNair-Wilson, Michael||Ridsdale, Julian||Wright, Esmond|
|McNair-Wilson, Patrick (NewForest)||Royle, Anthony||Wylie, N. R.|
|Maxwell-Hyslop, R. J.||Scott, Nicholas||Younger, Hn. George|
|Maydon, Lt.-Cmdr. S. L. C.||Scott-Hopkins, James|
|Mills, Peter (Torrington)||Sharples, Richard||TELLERS FOR THE AYES:|
|Miscampbell, Norman||Shaw, Michael (Sc'b'gh & Whitby)||Mr. Anthony Grant and|
|Monro, Hector||Silvester, Frederick||Mr. Humphrey Atkins.|
|Albu, Austen||Forrester, John||Mackie, John|
|Allaun, Frank (Salford, E.)||Fowler, Gerry||McMillan, Tom (Glasgow, C.)|
|Anderson, Donald||Fraser, John (Norwood)||McNamara, J. Kevin|
|Archer, Peter (R'wley Regis & Tipt'n)||Freeson, Reginald||Mahon, Peter (Preston, S.)|
|Armstrong, Ernest||Galpern, Sir Myer||Mahon, Simon (Bootle)|
|Atkins, Ronald (Preston, N.)||Garrett, W. E.||Marks, Kenneth|
|Atkinson, Norman (Tottenham)||Golding, John||Marquand, David|
|Bagier, Gordon A. T.||Gray, Dr. Hugh (Yarmouth)||Mellish, Rt. Hn. Robert|
|Beaney, Alan||Gregory, Arnold||Mendelson, John|
|Bence, Cyril||Griffiths, Eddie (Brightside)||Miller, Dr. M. S.|
|Bidwell, Sydney||Griffiths, Will (Exchange)||Mitchell, R. C. (S'th'pton, Test)|
|Blackburn, F.||Hamilton, James (Bothwell)||Molloy, William|
|Blenkinsop, Arthur||Hamilton, William (Fife, W.)||Morris, Charles R. (Openshaw)|
|Booth, Albert||Hamling, William||Moyle, Roland|
|Boston, Terence||Hannan, William||Mulley, Rt. Hn. Frederick|
|Bray, Dr. Jeremy||Harrison, Walter (Wakefield)||Murray, Albert|
|Brooks, Edwin||Hazell, Bert||Newens, Stan|
|Brown, Rt. Hn. George (Belper)||Henig, Stanley||Noel-Baker, Rt. Hn. Philip|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Herbison, Rt. Hn. Margaret||Norwood, Christopher|
|Buchan, Norman||Hooley, Frank||Ogden, Eric|
|Buchanan, Richard (G'gow, Sp'burn)||Horner, John||O'Halloran, Michael|
|Butler, Herbert (Hackney, C.)||Houghton, Rt. Hn. Douglas||O'Malley, Brian|
|Cant, R. B.||Howell, Denis (Small Heath)||Oram, Bert|
|Coleman, Donald||Hoy, Rt. Hn. James||Orme, Stanley|
|Concannon, J. D.||Huckfield, Leslie||Oswald, Thomas|
|Conlan, Bernard||Hughes, Rt. Hn. Cledwyn (Anglesey)||Page, Derek (King's Lynn)|
|Craddock, George (Bradford, S.)||Hughes, Roy (Newport)||Palmer, Arthur|
|Crawshaw, Richard||Hunter, Adam||Park, Trevor|
|Dalyell, Tam||Hynd, John||Parker, John (Dagenham)|
|Darling, Rt. Hn. George||Irvine, Rt. Hn. Sir Arthur||Parkyn, Brian (Bedford)|
|Davidson, Arthur (Accrington)||Jackson, Colin (B'h'se & Spenb'gh)||Pearson, Arthur (Pontypridd)|
|Davies, E. Hudson (Conway)||Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)||Pentland, Norman|
|Davies, G. Elfed (Rhondda, E.)||Jenkins, Hugh (Putney)||Perry, George H. (Nottingham, S.)|
|Davies, Dr. Ernest (Stretford)||Jones, Dan (Burnley)||Price, Thomas (Westhoughton)|
|Davies, Rt. Hn. Harold (Leek)||Jones, T. Alec (Rhondda, West)||Price, William (Rugby)|
|Davies, Ifor (Gower)||Kelley, Richard||Probert, Arthur|
|Davies, S. o. (Merthyr)||Kenyon, Clifford||Randall, Harry|
|Diamond, Rt. Hn. John||Kerr, Mrs. Anne (R'ter & Chatham)||Rhodes, Geoffrey|
|Dickens, James||Kerr, Russell (Feltham)||Richard, Ivor|
|Doig, Peter||Lawson, George||Roberts, Albert (Normanton)|
|Dunwoody, Dr. John (F'th & C'b'e)||Leadbitter, Ted||Roberts, Rt. Hn. Goronwy|
|Eadie, Alex||Lee, Rt. Hn. Frederick (Newton)||Rodgers, William (Stockton)|
|Edwards, Robert (Bilston)||Lestor, Miss Joan||Rogers, George (Kensington, N.)|
|Edwards, William (Merioneth)||Lewis, Ron (Carlisle)||Rose, Paul|
|Ellis, John||Loughlin, Charles||Rowlands, E.|
|Ennals, David||Lyons, Edward (Bradford, E.)||Shaw, Arnold (Ilford, S.)|
|Evans, Ioan L. (Birm'h'm, Yardley)||Mabon, Dr. J. Dickson||Shore, Rt. Hn. Peter (Stepney)|
|Faulds, Andrew||McCann, John||Short, Mrs. Renée (W'hampton, N. E.)|
|Finch, Harold||MacDermot, Niall||Sillars, J.|
|Fitch, Alan (Wigan)||Macdonald, A. H.||Silverman, Julius|
|Fitt, Gerard (Belfast, W.)||McElhone, Frank||Snow, Julian|
|Fletcher, Ted (Darlington)||McGuire, Michael||Spriggs, Leslie|
|Steele, Thomas (Dunbartonshire, W.)||Wallace, George||Willis, Rt. Hn. George|
|Taverne, Dick||Watkins, David (Consett)||Wilson, William (Coventry, S.)|
|Thornton, Ernest||Watkins, Tudor (Brecon & Radnor)||Woodburn, Rt. Hn. A.|
|Tinn, James||Wellbeloved, James|
|Varley, Eric G.||Whitlock, William||TELLERS FOR THE NOES:|
|Wainwright, Edwin (Dearne Valley)||Willey, Rt. Hn. Frederick||Mr. Joseph Harper and|
|Walker, Harold (Doncaster)||Williams, Alan Lee (Hornchurch)||Mr. R. F. H. Dobson.|