§ Order for Second Reading read.
§ 4.57 p.m.
§ The Minister for Local Government and Development (Mr. Graham Page)
I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is put very clearly and succinctly in the Long Title:… to Abolish betterment levy and dissolve the Land Commission …".We on this side of the House, when we were in Opposition, said many times during the passage of the Bill which resulted in the Land Commission Act of 1967 that we would abolish the betterment levy and the Land Commission created by that Bill when we had the opportunity to do so. We said that in Parliament at that time and we said that in the country for the three years or so of the Land Commission's life. We said it in the Conservative manifesto for the last General Election.
There can be no doubt in anyone's mind that we intended, on taking office, to abolish the betterment levy and to abolish the Land Commission, nor can there be any doubt in anyone's mind that we had a mandate from the public to do so. We said in the Conservative Party's manifesto and during the General Election campaign that betterment levy had increased bureaucracy and had increased the price of land. That is exactly what has happened during the three years' life of the Land Commission. We said that we would do away with betterment levy and, so far as it was justifiable, the tax imposed on land, and that we would make them subject to the normal process of capital gains tax, with the principles of income tax applicable to the person called upon to pay, that is to say, the normal allowances which income tax provides.
We said clearly in that manifesto that we would abolish the Land Commission not because we disagreed with the very laudable objects which hon. and right hon. Gentlemen put forward at the time of the Bill—
§ Mr. Page
No, we agree with those very laudable objects of bringing land forward in the right place and at the right time, of making land cheaper and more readily available. But we will abolish the Land Commission because it never achieved those objects. In its struggling to achieve them, it has only brought considerable hardship to many people and certainly confusion in the burden placed upon those who have had to pay.
It was claimed during the process of the Bill which resulted in the Act of 1967 that these twins, betterment levy and the acquisition powers, would make land more readily and cheaply available. In fact, since the Land Commission started its operations, land for house building has become scarcer and more expensive. Over those three years, the price of land has risen by a half.
The Land Commission was to collect a betterment levy and was to have compulsory powers. It was claimed that by these means the right land would be brought forward at the right time and in the right place. However, after three years of effort, the Commission managed to acquire only 2,800 acres and to make available to those who wanted to build on this land only 320 acres. That is the measure of its achievement during its life. What is more, those 320 acres mostly were not where there was a land shortage. It was not in the sort of places where it was hoped that any body of this sort would bring forward land for building purposes.
When right hon. and hon. Gentlemen opposite promoted the Bill which resulted in the 1967 Act, it was claimed that there would be a return to the community of the development value created by the community. But that can be done just as easily and appropriately by capital gains tax, with less hardship to those who suffer, since capital gains tax allows the homes of people to be exempt from the tax and avoids what in many cases is the great hardship of betterment levy in that one has to pay it before receiving the money on which it has to be paid.
§ Mr. Frank Allaun
The hon. Gentleman is saying that the revenue obtained 1385 would be got by means of a capital gains tax. That is not so. If it were so, why does the Financial Memorandum explain that the Revenue will forgo £12 million a year, rising to £31 million a year in 1973, net?
§ Mr. Page
Rising to that, and, in the 4 to 5 years, it would be forgoing about £11 million a year. That £11 million a year is the difference between what could be gained by the betterment levy and what could be gained by capital gains tax. That is the measure of the hardship caused by betterment levy, collecting from those who sell their homes, those who have to pay in advance of receipt of the moneys, and all those cases where time and time again we have complained in this House that hardship has fallen upon the payer.
§ Mr. Frederick Willey (Sunderland, North)
Since it is not clear from the Explanatory Memorandum, will the hon. Gentleman say what is the loss to the Revenue this year? It deals only with next year.
§ Mr. Page
I think that it is on the face of the Memorandum. I have not the figure at my fingertips, I will get it for the right hon. Gentleman during the debate. The Memorandum says in the second line of the paragraph headed, "Financial effect of the Bill":… the Consolidated Fund will forgo revenue of around £12 million next year.I agree that it does not give it for this years.
§ Mr. Willey
We are told that it will rise to £31 million in 1973–74. It is difficult to see how the average of £11 million is arrived at.
§ Mr. Denis Howell (Birmingham, Small Heath)
Are the figures of future savings given in the Explanatory Memorandum based on constant prices, today's prices, or do they take account of inflation such as the 50 per cent. in three years that the hon. Gentleman has just mentioned?
§ Mr. Page
The 50 per cent. that I mentioned referred to the increase in the price of land. These figures are worked 1386 out at constant prices. Again, I will make certain about this. I admit that I have no brilliance when I come to deal with figures. I have to have them before me in black and white before I can relate them to anyone else.
Whereas I admit readily that betterment levy has netted more for the Exchequer than capital gains tax will in future, it is that excess about which we complain. It is the type of unacceptable tax which was imposed by the Land Commission Act 1967.
On 22nd July of this year, only five weeks after the General Election, my right hon. Friend the Secretary of State for the Environment informed the House of the Government's intention to bring in the Bill and to make all property transactions after 22nd July of this year free from betterment levy. My right hon. Friend said that in future, any transaction such as the sale, the lease or the development of land would no longer attract betterment levy, but that in respect of transactions that took place before 23rd July, the levy would continue to be assessed.
On the same day, my right hon. Friend informed the House that in due course we would abolish the Land Commission and with it, eventually, this monstrously complicated, unjust, unfair and unnecessary piece of legislation.
I wish that I could come before the House today with a one-line Bill saying:The Land Commission Act, 1967, is hereby repealed.If I could, I would add to it the words:… as from 1st February, 1967.However, this rotten egg is not so easily unscrambled. There are parts which can be readily repealed en bloc: for example, the strange device of Crownhold, that banner with a strange device to which the previous Government pinned their faith for a reduction in the price of land.
What was to happen was that the Commission would buy large tracts of land and sell them off to owner-occupiers at a very low price on condition that they gave to the Commission any profit made on the sale of them. That was such a cumbersome and unworkable scheme that it was never put into operation. But it was the keynote to the reduction in land 1387 prices which it was claimed that the Act would bring about.
This would be the only way in which the price of land could be brought down. The Commission would buy a large area of land, saturate the market with sales under Crownhold tenure at very low prices, and thereby bring down the price. But it was so wildly impracticable and would have involved such colossal expense, such an immense number of compulsory purchase orders and such planning complications that it was never brought into operation.
The fundamental idea behind all this of being able to bring down the price of land by flooding the market with cheap sales was false. It was based on the belief that speculators were hoarding land and that there was a large amount of land which they could be forced to disgorge by the compulsory powers of the Commission. That myth was exploded very soon by the Commission when it carried out a land availability survey. What came out of that was that there was little evidence of hoarding of land. What the survey did show was that there was a shortage of land with planning permission for development, particularly in those pressure areas such as around London, the West Midlands and possibly the North-West.
So, the Commission had to resort to "Big Brother" tactics, not against the mighty land speculators but against the local planning authorities, by appealing from their decisions, and against the single plot or house owner, to try to accumulate a proper area for development. This attack on planning, this use of compulsory purchase powers on the smaller plots, was a complete admission of the defeat of the system envisaged by the Act. It was an admission by the Land Commission of the misconception of the previous Government as to the way in which land could be made available at reasonable prices.
I will explain the present Government's way of ensuring that the right land is brought to the market at the right time and at a reasonable price. First, we believe that the solution must lie with the local authorities. They must be prepared to release sufficient quantities of land for house building and to release it 1388 in strategic advance of requirements. It is right that I should spell this out in this way because as it is our intention to destroy the Land Commission, created to collect land for development, we ought to say how we propose to make sure that development is facilitated in future.
To release land parsimoniously, acre by acre, in the wake of demand only creates artificial scarcity and fancy prices. It is not an easy judgment for any local authority to make, but I have visited many of the key authorities concerned during the past months, and I have found that they have a lively appreciation of the problems and a readiness to act. To assist them we have this week issued Circular 10/70 which asks first for a reassessment by local authorities of land availability and housing needs in their areas. I have had the assurance from the key authorities that they are undertaking that reassessment energetically.
§ Mr. Page
I ask the House to accept my assurance that there are a number prepared to bring forward land for development. The Circular asks that they should examine the land which they hold and, if they are holding it for use in the far future, that they should consider selling it for development now. It asks them to make a generous and immediate release of land when this can be done without detriment to good planning, safeguarding green belt. It proposes to local planning authorities a continuous monitoring of the balance between house building rates and planning permissions which are granted. Finally, it proposes that there should be wider consultations with the building industry and in this respect it is reasonable to ask local authorities to take an initiative and try to get discussions going between themselves and the building industry.
§ Mr. Page
I have a Minister who represents Scotland sitting beside me and if there are any matters affecting Scotland he will intervene during the debate.
What I have said about the principles embodied in the Circular must be taken in the framework of modern planning. As the House will know, a modem form 1389 of planning was instituted by the Town and Country Planning Act, 1968. Local planning authorities were required to draw up structure plans in the framework of regional strategies. We are proceeding as quickly as possible with those regional strategies so as to give the structure plans of the local planning authorities a sound basis from which to start. I ask the House to look at our proposals for making land available in the framework of that new planning system.
Turning to the levy, we agree that it is right to tax gains from land. We object to the form of taxation by betterment levy because it is a duplication of the system, particularly in its double operation on current use value and development value which both have to be discovered by a separate system, and because of the injustices which have been shown to be inherent in the charge to betterment levy. We will return to one system which gives tax allowances. My hon. Friend the Chief Secretary answered a Question on 2nd December concerning the proposals for the reform of the law, so far as was necessary in connection with capital gains tax.
I find it unfortunate that because of the traditions of Finance Bills and so on it is not possible to amend capital gains tax in this Bill. I should like to have been able to put it all before the House in one Bill, but the provisions for retaining capital gains tax on current use values when the betterment levy was introduced were included in the Finance Bills and it is right that they should be amended in next year's Finance Bill. It has been said in reply to a Question that that will be carried out. I have mentioned that we are foregoing in an ordinary year, after a peak has been reached, some £11 million of betterment levy.
§ Mr. Frank Allaun
If the purchase of land had increased with the years, as it would have done under the Land Commission, the figure would have been greatly in excess of £11 million. Gradually it would have mounted towards £100 million, and it is this sum that the Government are giving away to land owners and speculators.
§ Mr. Page
The hon. Gentleman is not taking account of the fact that capital 1390 gains tax will now cover the whole of the gain. At present it covers the increase in current use value, and betterment levy covers the development value. In future, capital gains tax will cover the whole of that area; the increase in current use value and the development value. It is, however, true that it will start from a different basis, of 1965, and that it will not apply to the sale of all residences, such as the owner-occupied home and a number of cases which were familiar under the 1967 Act. We deliberately intend that it shall not apply in these cases.
When hon. Gentlemen opposite talk about the purchase of land, they tend to forget about the purchase of land by the Land Commission itself. Up to the present the Commission has borrowed £13 million from the Consolidated Fund to enter into purchases of land. That would have gone up to about £40 million within a couple of years.
We are speaking of public money being used for land speculation. [Interruption.] I am sure that in some of the cases the speculation was not as good as it might have been. Indeed, we are finding that there may be losses on the sale of some of this land. It was speculating with public money in land, whatever else hon. Gentlemen opposite might like to call it. [Interruption.] If the Land Commission was carrying out its work, it would have been collecting land which somebody thought was good building land. It may be that that somebody's opinion was wrong and, as I say, there are cases where we shall unfortunately make a loss in the resale.
§ Mr. Willey
The hon. Gentleman is speaking about speculating with public money. Does he intend to prohibit local authorities from, in the same way, speculating with public money?
§ Mr. Page
No. In our view local authorities are better able to deal with this matter because they have a much better idea of what is required in their localities. We had the Land Commission wandering round the country, finding bits of land here and there which it thought might be good for development. It was not in the hands of local authorities which know their districts and the sort of development that is required.
1391 I said that I wished that the Bill could have said "The Land Commission Act, 1967, is repealed as from 7th February, 1967", when the original Measure received its Royal Assent. But that would have meant our giving back to the levy payers all the levy that has been paid in this period. I am sure that the right hon. Member for Deptford (Mr. John Silkin) will not have missed some of my statements on this subject from time to time and will probably quote them against me because in the early stages I was urging, when certain amendments were being made, that the small amount then concerned—it was between £1 million and £2 million—should be given back, as the people were identifiable and the assessments had not fully been made. Naturally, if that were done now, we should be giving back about £47.2 million. This is money already taken into account in public expenditure. Indeed, the previous Government, having collected it, mortgaged it in terms of anticipated expenditure.
This being so, we had to set our face against complete retrospection. We have considered partial retrospection. For example, we asked ourselves: is it possible to give some relief to certain hardship cases? Every case of payment of betterment levy I consider to be a hardship case.
§ Mr. Page
Exactly. Where does one draw the line? It might have been possible to draw the line at 22nd July and say that no more will be collected, leaving aside the £22 million that is owing by those who have been assessed. That would have been unfair on the prompt payers, on those who are still owing money because they, justifiably, have been allowed to pay by instalments, and even on those who are dragging it out by raising points in their assessments. It would, therefore, have been unfair to have said, "We will not collect any of the money that has so far not been collected".
We might have said that we will not assess anybody else, but that would have meant the loss of about £16½ million. We estimate that as the amount which has been unassessed on chargeable acts or events before 23rd July. To have 1392 taken that step would have been applying the sort of principle that every time the rate of income tax is altered, one must assess the fellow who has not paid for last year on the new rate for this year.
I do not think I need deal at length with the content of the Bill. In Clause 1 the date 22nd July is given as the date on whichBetterment levy shall not be charged in respect of any act or event occurring afterthat date. Subsection (2) clearly says:On such day as the Secretary of State may by order … appoint … the Land Commission shall cease to exist".We hope to make that date 1st April, 1971, which would be convenient from the point of view of the financial year. By that time I hope that we will have reduced the staff of the Land Commission from its 1,100 a few weeks ago, because it is continually being reduced, to about the 75 to 100 who will be necessary to keep the process going while betterment levy is being assessed and collected and the land is being sold.
I hope that in the rundown of the Commission we have been able to satisfy every member of its staff in new positions. I believe that we have done this, some in Newcastle, who moved there when the Commission was established and who have so liked the town that they wish to stay there, and some by returning to the South. At the same time, we have, by not renewing staff elsewhere, been able to make an overall reduction in the total number of civil servants employed.
I am pleased that the right hon. Member for Sunderland, North (Mr. Willey) is in his place, because he will remember that in Committee my hon. Friends and I made great play about the little man with thick glasses sitting in an attic in Newcastle making orders which would mean hardship for everyone. In fact, that little man has acted most courteously and efficiently throughout the three years' life of the Land Commission. However much we may hate the betterment levy and the whole process and system of the Land Commission, we cannot but compliment those who have had to operate the system and who have done so with great efficiency and courtesy to the public.
There is no need for me to deal with the Bill Clause by Clause, as the provisions are fairly obvious. All the operations of the Land Commission are to be 1393 handed over to the Secretary of State, who will pay to the Consolidated Fund the money collected by the Commission from the sale of land. There will no longer be a separate fund run by the Commission: it will all be run in future on the basis of the Minister administering this system in order to wind it up.
I again express my sorrow that this is not a one-line Bill, and particularly that it contains a Schedule of many pages—Schedule 2. During the course of the Bill which became the 1967 Act I had some bitter complaint to make about Schedules. Schedule 2 comes about as follows. In the 1968 Town and Country Planning Act we "imported" a Schedule from the Land Commission Act of 1967 which dealt with the general vesting declaration after compulsory purchase orders. This Bill puts those provisions directly into the Town and Country Planning Act, 1968. I know that in Committee it is for the Chair, and in the House it is for Mr. Speaker or Mr. Deputy Speaker to say what is and what is not in order, but I am advised that as this is merely consolidation and does not make any new law I can escape any Amendments to the Schedules. However, we shall see as the Bill progresses—
§ Mr. J. Bruce-Gardyne (South Angus)
I hoped that my hon. Friend would refer to Clause 4, which deals with compensation payable to members of the Land Commission. One does not want to act in any spirit of vindictiveness, but it is the fact that these people were appointed to the Commission in the full knowledge that the lifetime of this body would probably be only that of the last Parliament. That being so, one wonders what justification there is for paying compensation for loss of office.
§ Mr. Page
This is a common form Clause in such a Bill where one is dissolving a public body. It is fair in this case because some members of the Commission were engaged on a three-year contract and it is only right that compensation should be paid on the basis of that contract. I do not wish to discuss here the amounts involved but I can assure my hon. Friend that they will not put a very great burden on the taxpayers. It is right that we should take power to compensate anyone who has lost by entering into a form of contract with the Government for a period of that sort.
1394 If I have spoken with some relish, the House will forgive me: I have never hidden my feelings about the Land Commission and the betterment levy. I hope that the House will give the Bill a Second Reading.
§ 5.34 p.m.
§ Mr. John Silkin (Deptford)
It is rather pleasant in controversial debate of this sort to agree with the hon. Gentleman the Minister for Local Government and Development on one point at least, and that is in his tribute to the work of the individuals of the Land Commission. I am grateful to him for what he said, and I know that my right hon. Friend the Member for Sunderland, North (Mr. Willey) will concur with me.
The Minister started his story with the acknowledged declaration of his party in its election manifesto and, at all times, and in the House, perfectly honestly, that it would if it came back into office abolish the Land Commission. We were all perfectly aware of this, and one cannot complain that when a Conservative Government came into operation they carried out their own ideas to which they had given prominence.
However, I must take up just one point of omission in the Minister's story. He spoke of Conservative philosophy and the Conservative manifesto, and lightly skipped over the events of 22nd July last and then came to the present day. On 22nd July the then Minister of Housing and Local Government, now the Secretary of State for the Environment, made a very important statement to the House. He announced that immediate steps were being taken in this respect.
My right hon. Friend the Member for Grimsby (Mr. Crosland) said quite rightly that every attempt at instant Government had led only to chaos and confusion. The Secretary of State was implacable. He said… this is an action which should be taken swiftly".Swiftly, that is, by administrative action. The fact is that constitutionally and legislatively this House has had to wait five months for a Bill which any schoolboy could have drafted in two weeks.
I remind the Minister that only the other day my right hon. Friend the 1395 Member for Cardiff, South-East (Mr. Callaghan) said that this is not yet the Reichstag but the House of Commons. Action of this sort must be put to the House of Commons, and must be put speedily.
On that earlier occasion my hon. Friend the Member for York (Mr. Alexander W. Lyon) asked the Secretary of State what powers he had to say that he would no longer charge levy upon transactions taking place between 22nd July and the passing of the law of any amending legislation. To that, the Secretary of State replied:The same right as the Chancellor of the Exchequer with the Budget.I can remember delays occurring between Budget Statements and the Finance Bills that followed them. I can remember what I thought was quite a long delay, when my right hon. Friend the Member for Cardiff, South-East was Chancellor of the Exchequer, when there was a gap between March and May, but that was only two months and in between we had a General Election. I think that some apology is due to the House for this enormous delay of five months during which the Government have been acting, much as Charles the First acted, without any parliamentary authority whatsoever.
§ Mr. Graham Page
The right hon. Gentleman will remember that when the Land Commission Bill itself was brought in it was based almost entirely on a White Paper published in September, 1965. The Bill came in in February, 1967, which means a period much longer than five months. The Bill was based on that White Paper and a lot of the law dated back to 1965. There was a period of nearly two years, not five months.
§ Mr. Silkin
The hon. Gentleman's history is a little wrong, because we had the Second Reading within a matter of a relatively few weeks. There was a General Election and I think that I am right in saying that within five or six weeks of the opening of Parliament on 21st April, 1966, we had the Second Reading. The Minister had better look back on his history, because it seems to be as inadequate as his mathematics.
1396 Also on that occasion in July the Secretary of State for the Environment condescended to tell the House of the measures he proposed to take, leaving the legislation to come when it might. My hon. Friend the Member for Basset-law (Mr. Ashton) asked whether the right hon. Gentleman would guarantee that land disposed of would be sold, not cheaply but at a reasonable price. To that, the Secretary of State replied:Certainly, the Government intend to dispose of the land in a proper way at the best possible price which can be obtained."—[OFFICIAL REPORT, 22nd July, 1970; Vol. 804, c. 549–51.]I have checked that the average price of land sold by the Land Commission in the period of Government up to 30th April worked out at about £4,000 an acre. As the Secretary of State has apparently been unwilling to give us this information since, can we now be told what the average price of land per acre sold by the Commission has reached in the months since July?
§ Mr. Idris Owen (Stockport, North)
Is not the right hon. Gentleman aware that the land which was acquired by the Land Commission was the type of land which was not particularly desirable and that many of the acreages which have been acquired are in areas where there is not a great demand for land? I can give the right hon. Gentleman examples if he wants them.
§ Mr. Silkin
I might come to that point later. At the moment I am rather on the point of parliamentary approval. This is a matter on which I feel strongly. I will come to the merits later. I hope that all hon. Members are jealous of the House, of its rights and of its franchises. I have asked a question which I hope that the Minister will answer.
The next point made by the Minister, as he then was, on 22nd July was that his view was that with the abolition of the Land Commission the problem of the amount of land going forward for development would be solved. Is there a difference between the number of outline planning permissions occurring since 22nd July to date this year and those occurring in the comparable period last year?
The Minister for Local Government and Development quoted Circular 10/70, but that Circular was issued only two 1397 or three days ago and from the note of hysteria in its wording it appears that very little is happening. This is what the Minister says in the Circular on 14th December, five months after that celebrated statement which was to solve the question of land available for development:Unless action is taken now shortage of suitable sites could become an increasingly important constraint on the housing programme.In his statement in July, the Secretary of State gave us the impression that he had only to make his statement saying that the Land Commission and betterment levy were dead and there would be an avalanche of suitable land available for development coming into the housing programme. If that is so, it is extraordinary that the Circular has had to be issued five months later, especially when so many of the local authorities concerned are in the hands of the Minister's political friends.
The Secretary of State said this in his Circular:It may be that the extent of the demand has been underestimated or that the pattern of the demand has itself changed …".No, my right hon. Friend the Member for Grimsby was wrong. This was not a case of instant government. This was a case of instant opposition. That is why the Tory Party was caught. That is why on 22nd July, within five weeks of the General Election result, this statement had to be made, and made swiftly, without any possible concept of what was needed to deal with the problem.
The Minister, like myself, must have read the circular of the Secretary of the National Federation of Building Trades Employers. When I was Minister of Works I had a great deal to do with the N.F.B.T.E. as the sponsoring Minister. I hope that the federation will not take it amiss when I say that it was not the best friend that the Labour Government had, and its views on Land Commission were expressed at the time to my right hon. Friend the Member for Sunderland, North. The federation said to my right hon. Friend, as it was perfectly entitled to say, that it did not think that the Land Commission would work.
However, in its circular, which I trust that the Minister has read, the Federation says this in paragraph 6: 1398… it must be frankly said that the Commission made very little progress in achieving the two policy aims referred to in paragraph 4 …".Those are the ones which the Minister briefly touched on and which come from the White Paper. The federation goes on to say this, I think very fairly:It was, perhaps, in existence for too short a time to help in securing that the right land was available at the right time …".If the National Federation of Building Trade Employers can say this, it is something that the Government should have taken into account.
§ The Under-Secretary of State for the Environment (Mr. Michael Heseltine)
As the right hon. Gentleman quotes this document in aid in respect of the first part of his argument, does he think that it is right when it applies to the second part of his argument? Will he read on in the quotation at which he so conveniently stopped?
§ Mr. Silkin
I started the quotation earlier because I wanted to give force to the builders' own criticism of the Land Commission. The federation goes on to talk about betterment. When I deal with the question of the betterment levy then perhaps I will direct myself to that also. I was saying that the federation's point was that it was opposed to the Commission. I did not hide the words that preceded what I have just quoted. I deliberately quoted these words:… it must be frankly said that the Commission made very little progress …I think that the hon. Gentleman will accept that on this issue I have been extremely fair and have not omitted anything.
I have dealt at some length with the question of the statement made on 22nd July, because I regard this as being a question of principle and of great importance to the House, quite apart from the question of the Commission. I hope that we shall have an apology and a full explanation of why the House has been treated in this fashion.
I come now to the purpose of the Commission, as I see it—this instrument which the Minister for Local Government honestly and fairly told us from the start that he hated and which he repeated today that he hated. I believe that the purpose is this. We live in a small and densely populated island. For that reason, 1399 the planning of land is of infinitely more importance to us even than it is to other countries. During the post-war years land planning has come to be regarded as of vital importance throughout the world.
I hope that the House, which has heard me very tolerantly so far, will hear me just a shade more tolerantly when I say that the definition of the purpose of planning which I am about to quote I regard as being the best definition I have ever heard, for two reasons. The first reason is the clarity of the words and the second is the clarity of the speaker. He stated that the purpose of planning wasto secure a proper balance between competing demands for land, so that all the land of the country is used in the best interests of the whole people."—[OFFICIAL REPORT, 29th January, 1947; Vol. 432, c. 947.]That was the then Minister of Town and Country Planning when introducing the Town and Country Planning Bill, 1947.
The first objective of the Commission—the Minister for Local Government and Development accepted that the objective was an honourable one—wasto secure that the right land is available at the right time for the implementation of national, regional and local plans".That is taken from the White Paper "The Land Commission", Cmnd. 2771 of September, 1965.
The hon. Gentleman, when he spoke about the objective of securing the right land, of the right land being available at the right time, did not go on to give the three categories in which the White Paper said this objective should be framed. He talked a great deal by inference of the local situation—to obtain land for local authorities at a price they can afford. That was certainly something that the Land Commission tried to obtain. It was also necessary—indeed, vital—in its overall planning that it should help house builders if possible.
Since the Under-Secretary has asked me to read further in the circular issued by the National Federation of Building Trades Employers, perhaps I should read the whole of paragraph 8 to him because I think it is of some importance:There was, however, one respect in which the Land Commission was helpful to private house builders during its existence. It sometimes happens that a builder buys a parcel of land for development but is unable also to 1400 buy a small appendage to it, either because the owner does not wish to sell or asks too much money for it, or indeed may not be known. Yet that extra piece may be needed to round off the parcel of land and to allow for a harmonious development. There were occasions when the Commission helped house-builders by using its powers or its resources to acquire that extra piece of land. With the abolition of the Commission, cases of difficulty may well arise in the future for house-builders in acquiring the necessary appendages to plots they already own—as is indeed implicit in the provisions of Clause 3(2) of the Bill, which allows the Commission or the Secretary of State to buy such land by agreement.Here is another question to which I should like to direct the Under-Secretary's attention. As I read Clause 3(2), it is governed by the first subsection which says thatno further compulsory purchase order or agreement to acquire land shall be made in exercise of the powers conferred by that section.Therefore, I take it that the only purpose of enabling the Secretary of State to buy bits of land is so that he, and then the Land Commission, may dispose of the land more easily because it might be assisted in the sale if he had owned, say, an odd acre of some other piece of land, and that this was not intended to be permanent. The reason I ask this question is that the unfortunate building trades employers thought that this was going to be the permanent basis of our legislation, but it clearly is not.
§ Mr. James Allason (Hemel Hempstead)
Does the right hon. Gentleman recall that this procedure which he has described was criticised heavily by hon. Members on this side of the House when we were in opposition, in that the Land Commission was threatening to use its compulsory powers on owners of small pieces of land, frightening them into giving up those pieces of land when they did not wish to do so? The Government saw the force of this and instructed the Land Commission to stop doing it.
§ Mr. Silkin
I was quoting what the house builders felt about it. After all, what we are concerned with is the building of houses. What the hon. Gentleman is saying is true of every local authority that exercises compulsory powers in the country.
§ Mr. Graham Page
May I help the hon. Gentleman? Subsection (2) does not give the Secretary of State any power 1401 of compulsory purchase. This is abolished by Clause 3(1). It gives the Secretary of State the right to buy in any small part of land, for access or something of that sort to land which he already holds.
§ Mr. Michael Heseltine
This is a very important point and I would not want any misapprehension to be left. The local authorities have the powers to make the acquisitions of the kind to which the right hon. Gentleman is referring. Therefore, the demise of the Land Commission will not affect the issue.
§ Mr. Silkin
The hon. Gentleman might tell the building trades employers, because I have a feeling that they may well have been aware that such powers existed with the local authorities, but the whole point is that they were never used. The Land Commission did use them. That is why the building trades employers have paid this tribute to the work of the Land Commission.
If I may now return to the White Paper, I have been speaking about the position locally. Now I should like to discuss it regionally and nationally, for this is something with which some institution, some agency, must be able to deal. Local authorities particularly, unreformed as they are at the moment, in small groups, in penny numbers as it were, are naturally jealous, and sometimes but not always zealous, of the housing and land interests in their own area. What they cannot see is the larger picture. I hope that I take the Minister for Local Government and Development with me. The whole history of our island is changing demographically every single day. The population is increasing by 250,000, however, every year. That is the size of a new town.
Of course, it is possible to say that these men, and women who live longer, these children, shall be housed in Coke-town because Coketown has a housing programme, even though it is not necessary and not for the general good of the community that they should be housed there. It is possible to take that view, but I do not think it will be for very much longer. I think the nation will 1402 want to see its land infinitely better and more meticulously planned. A new town—250,000 people a year—is a great number. They have to be housed, given schools, work, hospitals, roads, amenities and facilities for recreation, and all these in the most suitable areas—the right area at the right time. What is meant by the right land being made available at the right time?
May I scratch the Minister's memory a little? I want to take him back to 1963 and 1964 when both of us sat on the back benches opposite one another. At that time the then Conservative Government were boasting that they had increased their housing programme. In fact, large numbers of houses and flats were being built on the south coast of this island, being unlet and unsold for months and years. The reason was that at the price they were being built and offered for sale or to let, the people who would have taken the houses could not afford to do so. By some strange irony of fate it was the Labour Government's introduction of half rating, for totally different reasons, that helped to solve this problem, as I think the hon. Gentleman probably knows.
The fact is this. Here were the local authorities being allowed to say, "Yes, we can grant planning permission; yes, houses and flats can come here." But they were being built in the wrong place. What one has at the moment, and I suspect for the remainder of the century, are great changes of population moving across the island from one area to another. Does the Minister really mean that this can be left entirely to the local authorities? I do not believe it. My hon. Friends do not believe it, and the country, once it is fully aware of the situation, will not believe it either. This can only be planned nationally.
The Minister may say that we now have planning powers, and that is the whole purpose; the 1947 Act gave us planning powers, and that Act followed the New Towns Act of 1946. True, he may add that my hon. Friends did not use the New Towns Act for ten years, but they have been converted and they were using it and would wish to use it. But this is not enough. We need to plan the use of our scarcest commodity in this small island of ours, that is, the land, with the greatest possible care and precision.
1403 That was the basis of the Land Commission. It was able to acquire land in advance of development. I come now to the point raised by the hon. Member for Stockport, North (Mr. Idris Owen). He sees a lot of green fields, apparently, miles from anywhere, and he says that the Land Commission was buying the wrong land. The point is that it was using its facilities to buy land well in advance of development so that, as the years went by, land was available in the right place at the right time and, I add, at the right price.
Here, I come again to what the builders say. The Government are acting too soon. The Commission's life has been too short. The hon. Gentleman and his colleagues have slaughtered this poor little baby before it could grow, but it was growing, and growing at a tremendous rate.
I shall come now to what the Minister said in the last part of his speech on the question of the betterment levy, for otherwise I shall take too much of the time and patience of the House. The White Paper stated that the betterment levy was designed,to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.It is a curious fact that the words "development value" set off a kind of Pavlovian reaction in hon. Members opposite, and the word "betterment" has the whole Tory Party salivating in unison. Four times this century, since 1909, progressive Governments have attempted to deal with the problem of securing for the community the benefit from increases in land values created by the community. In 1909, in the famous Budget debate, Lloyd-George said:The growth in the value, more especially of urban sites, is due to no expenditure of capital or thought on the part of the ground owner, but entirely owing to the energy and the enterprise of a community … It is undoubtedly one of the worst evils of our present system of land tenure that instead of reaping the benefit of the common endeavour of its citizens the community has always to pay a heavy penalty to its ground landlords for putting up the value of their land."—[OFFICIAL REPORT, 29th April, 1909; Vol. IV, c. 532.]Those words are as relevant and as true today as they were 60 years ago.
1404 At that time, the rather complicated and difficult to administer solution introduced by David Lloyd-George was the increment of value duty of 20 per cent. on the increase in the value of land, and it took a Tory Government to repeal it.
In 1931, the short-lived Labour Government set up machinery in the Finance Act to tax land values, and the rather difficult process of recording land values was set in train. But, before the tax could operate, it was repealed by the Conservative Government, by Stanley Baldwin's Government.
The 1947 Act treated the problem in a different way, but with the same basis, by the creation of a development charge. That too, was abolished by the Tory Government of 1951–64.
When the hon. Gentleman tells us that he and his hon. Friends are happy about the second objective, that is news to us, for four times during 60 years the Tories have done their best to stop it. But now, says the Minister, we have the capital gains tax instead. My memory is not all that good, but I seem to recall that, when we debated the capital gains tax on the Finance Bill of 1965, the most zealous advocates of the tax did not come from his benches, and I have yet to believe that, when the time comes, right hon. and hon. Members opposite will leave capital gains tax as it is.
Even if the capital gains tax be left as it is, it does not deal with the main problem. Here, as I see them, are the differences. First, the tax bites only on a capital gain in the value of land. It bites only to the extent of 30 per cent. in the case of a private individual, so it is a differing rate of tax. It does not bite on the difference between a use value and a development value but bites only on the different values of land between April 1965 and the present day. The House will recall the Lavender Hill case. I doubt that that would be covered under the capital gains tax provisions. Indeed, I am fairly certain that it would not.
§ Mr. Graham Page
A Lavender Hill case could not occur now, after the Town and Country Planning Act, 1968, could it?
§ Mr. Silkin
It could have occurred before the 1968 Act and be with us at this moment, could it not? In any event, by analogy, I have no doubt that a similar 1405 case will arise which will not be caught under the capital gains tax but which would have been caught under the betterment levy.
The whole point of the betterment levy—I quote again—wasto secure that a substantial part of the development value created by the community returns to the community".It was not a tax in the normal sense of a tax to provide money. It was simply the expression of a moral truth, that the community creates values—it is the community which builds roads, schools, hospitals and factories, and it is the community which increases the value of land by its efforts—and all that was said was that this is a partnership.
Looking back on it, I confess that my right hon. Friend the Member for Sunderland, North chose a very modest percentage. We said, "Here is a partnership between you, the land owner, and the community, and 60 per cent. of the increase in value will go to you and only 40 per cent. to the partner who made the increase possible". I imagine that my right hon. Friend, when he reflects on it, may be astonished at his own moderation.
I see the main reason why the betterment levy has been changed and why we are now to operate under the capital gains tax as stemming from the difference to which reference is made in the Explanatory Memorandum on the financial effect of the Bill, which, as the hon. Gentleman put it, is to rectify hardship. That is the reason. There is a difference of £12 million next year and £31 million the year following, thereafter levelling out, it is hoped, at £11 million. We do not know about that, so let us take the first two years, a difference of £12 million and £31 million.
Is that all hardship—£43 million worth of hardship—all widows living in small houses? Frankly, we do not believe it; neither, to be fair, does the hon. Gentleman. He believes in a kind of rough justice, but this is not rough justice. It is not justice of any sort. It does not give the community the increase in the value of land that it deserves.
It does something worse. This has to be paid for. How are the £12 million next year and £31 million the year after to be paid? The answer came—and per- 1406 haps this is why the Bill did not come before the House until now—in the statement by the Chancellor of the Exchequer on 27th October. These free bonanzas, with the abolition of the betterment levy of £12 million next year and £31 million the year after, will be paid out of the public purse, and if one wants to put it that way, they will be paid for out of schoolchildren's milk and the increased cost of meals.
§ Mr. Silkin
The hon. Gentleman does not think so, but can he give some alternatives? Something will have to be cut and something will have to be increased in price to make this £43 million available over the next two years.
I have spoken over-long for such a short Bill, but it is a bad Bill. It is a Bill which when we are returned to office, and we shall be, we shall have to think very hard about. [Interruption.] Hon. Gentlemen should wait for it. When the Under-Secretary has been in the House for a few more years, he will have learned patience. Four times the community has tried to enforce a decent system of land value taxing; four times it has been defeated by a Conservative Government. The next time we shall see that the egg which the hon. Gentleman spoke about is not only a good egg, but can never be unscrambled.
§ 6.12 p.m.
§ Mr. R. A. McCrindle (Billericay)
One of the pleasing traditions of a maiden speech is that one makes some reference to one's constituency and to one's predecessor. It would be difficult to choose a subject on which it was easier for me to make a maiden speech.
The right hon. Member for Deptford (Mr. John Silkin) may have thought of the Land Commission up to this moment as a poor little baby, but I assure him that in my area it was seen in a different light. My constituency was as affected as any in the United Kingdom during the short existence of the Land Commission. What is more, the threats of what would have happened had a Conservative Government not been returned and the Bill introduced were considerable. Many inhabitants of the Billericay area disliked the Commission so much, perhaps even irrationally, that they rejoice that the Bill is now before the House.
1407 I readily pay tribute to my predecessor as an active and assiduous constituency man, but he would be the first to recognise that the torrents of reaction from those threatened by the activities of the Commission proved as difficult a task as any he had to face during the four and a half years that he represented the constituency. I am certain that he was frequently torn between the theory which underlay the Labour Government's introduction of the Commission and the practical effect as evidenced by the people who complained to him about its operation.
The other tradition of a maiden speech is that it should be comparatively non-controversial. I had thought that I could go a little beyond the bounds required by saying to the Labour Party that looking back to 1964, and I was a candidate at the election of that year, I can see what the Labour Party was trying to do, and what it was trying to do was largely in tune with what the public was asking.
Without benefit of hindsight, I recall talking to one of my right hon. Friends, who was then a Minister in the Conservative Government, and suggesting that a Measure whereby the public would benefit to some extent from land profits should be introduced into our manifesto. It was not thought right at the time, but, as the House will be aware, a similar scheme was subsequently introduced as Conservative policy in 1965. With an immodesty which ill befits a maiden speaker, may I say that if my right hon. Friend of those days had listened to what I said during the 1964 General Election, the Labour Party might not have been returned to power and the Bill would have been totally unnecessary. As I made a stand of this sort on that occasion, it is right to repeat that stand today.
There is a case for the profits from the ownership of development land being taken care of through the tax system, but the right hon. Member for Deptford will not be surprised if I do not and cannot go as far as he did. That we are wise in abolishing the Land Commission and betterment levy but continuing to take care of these profits, within the philosophy of the Conservative Government, through the normal taxation system is undoubted. 1408 It is something of which I entirely approve.
Equally, the Labour Party will not welcome my telling it where the Labour Government made a mistake in introducing the Land Commission and betterment levy some years ago. I hope that hon. Gentlemen opposite will forgive me if I say that there were two mistakes in using the sledgehammer to crack a nut. First, the Labour Government brought the owner-occupier into the scheme, not because of the additional inflow of money to the coffers of the Treasury but rather in the interests of what they regarded as equity and justice. I understand that and to some extent respect it, but it is one respect in which a mistake was made.
The second was the creation of a large impersonal body which was remote from the people affected and against which there was no redress on such occasions as, for example, municipal elections. I have many examples in my constituency of ordinary people who were intensely and perhaps irrationally resentful of the Commission's operations and resentful of the requirements to move home when they did not want to do so—I hasten to add that none of this happened and it was all just threatened under the activities of the Commission—resentful of the change of compensation as they saw it which was to be their lot and resentful particularly of the betterment levy.
I concede that the Bill will certainly not eliminate the need for compulsory purchase and certainly will not touch compensation, but I qualified my reference to that by saying that no doubt the resentment was irrational. But that there was resentment is undoubted. It had reached the point when people in responsible positions in the community were threatening to lie in front of the first bulldozer to appear in the area as a result of the Commission's activities. No doubt this was an emotional reaction, no doubt it was dramatic and no doubt it was unfair to the Commission. I join my hon. Friend in saying that those officials of the Commission with whom I came into contact were extremely reasonable men. But in the context, whether it was emotional, dramatic and unfair did not matter, for this was a genuine feeling among those concerned.
1409 Some of the difficulty at least arose out of the remoteness of the decision taken. From my area, it was some 60 miles to the nearest location of the Land Commission. The very feeling that the people who were threatening to force one to move against one's wishes were away "up there" somewhere and it was difficult to get into contact with them contributed as much to the resentment as anything else. If my hon. Friend, as a by-product of what I have said, agrees to recollect what I have said when he is discussing the reform of local government, perhaps it will be no bad thing.
On behalf of my constituents, I welcome the abolition of the Land Commission. I welcome particularly the abolition of the betterment levy: first, because, in my view, in an inflationary situation part of the betterment is bogus anyway; secondly, because the existence of the levy has not, as promised, increased the supply of building land; lastly, because it is not necessary to have this levy to ensure that the nation gains some advantage in the shape of profit from development land. I end as I began by saying on behalf of my constituents that I welcome this Bill unreservedly.
§ 6.21 p.m.
§ Mr. Frederick Willey (Sunderland, North)
The whole House will join me in congratulating the hon. Member for Billericay (Mr. McCrindle) on his maiden speech. We thoroughly enjoyed it and look forward to hearing him again. He referred to his predecessor, Mr. Moonman, for whom I had very warm regard and admiration. Party politics aside, I am sure that he will take just as important a part in the proceedings of this House as his predecessor did.
I must, however, correct one thing which the hon. Member for Billericay said. He is in error. He is being far too modest. He was not elected to this House because of the Land Commission, and I will put in a statistical correction. If anyone has attracted criticism over the Land Commission, then no one has attracted it more than I have, but mine was one of the two constituencies at the General Election which showed a swing to Labour.
Of course, we are not surprised by the title of the Bill but we are surprised by its contents. The Minister seems to be 1410 more of a statutory contortionist than a legislator. He explained that the Bill abolishes the betterment levy, but we know that that has already been done by Ministerial diktat. With a Freudian lapse, the Secretary of State thought for a moment that he was the Chancellor of the Exchequer, but he was not. It was a very unconstitutional way in which to behave.
The Bill is not only retrospective; it is a Bill of indemnity. When it comes to the question of ordinary taxation, the Minister told us that we have to look at some Parliamentary Answer to a Parliamentary Question to find out what is happening. We have to await the Finance Bill and then, apparently, we shall again get retrospective legislation. I always thought that the hon. Gentleman and I were both steadfast against retrospective legislation. He knows that I was against it in relation to the Land Commission Act, and he supported me on that occasion.
§ Mr. Graham Page
But the right hon. Gentleman had to do exactly the same thing as I am having to do—leave it to the Finance Bill.
§ Mr. Willey
But the levy and the relevant Finance Bill came into operation on the same day. What I object to is that the Secretary of State's action became effective in July but we have to wait until the next Finance Bill to be certain of what is going to be done then.
Again, the dissolution of the Land Commission is to be done by Statutory Instrument. But, as the Minister has said, he does not dissolve the Land Commission, he becomes the Land Commission. He takes over all its functions laid down by the Act. That is a pretty impertinent personation, but it is worse still in other Clauses of the Bill, where we find that he is being emasculated. He is not retaining one vital power that he should retain if he is to keep to himself the powers and functions of the Land Commission.
Then, as the hon. Gentleman has confessed, although this is a short Bill, he has managed to include three Schedules, with two appendices embodying further Schedules. Schedule 1 provides a few Amendments to the Act, and Schedule 2 repeals a few Sections. So far as one can see, the only reason for these repeals is 1411 the whim of the Minister. But what shocks me is that under Clause 5(1) the Minister can repeal the Act by Statutory Instrument. Can he repeal the Act as a whole or repeal it, against according to whim, Section by Section, as he pleases? This is very important. I am sure that the whole House was surprised to learn that the Minister can come here with a repeal Bill and not even know what is in the Act he is repealing.
The Lavender Hill case has been mentioned. That was a most important case. Land speculators had bought for £7,500 and then sold for £250,000; then they wanted another £150,000 from Enfield Corporation. We dealt with that in the Land Commission Act. Does not the hon. Gentleman know that this provision was not in the Town and Country Planning Act, 1968, but in the Land Commission Act, 1967?
§ Mr. Graham Page
I am grateful to the right hon. Gentleman for his correction. The provision is in Section 86 of the Land Commission Act, 1967, in which the Lavender Hill case was settled once and for all. Such a case could not arise again. I was wrong in quoting the 1968 Act. We are not repealing Section 86 of the Land Commission Act.
§ Mr. Willey
I am rather alarmed by this situation. Civil Servants like to keep Ministers busy. Suppose the Minister has nothing to do. A civil servant mentions that there are two or three Sections of the Land Commission Act which he can repeal. If this matter had not been raised in the House today, in his ignorance the Minister might well have repealed that vital Section of the Act. I emphasise all this because there is no justification for the slipshod haste which the Government have shown over this matter.
My right hon. Friend the Member for Deptford (Mr. John Silkin) referred to the Town and Country Planning Act, 1953. Mr. Harold Macmillan came to the House in 1953 and said that he believed that the current legislation in some respects was defective. He believed that there was a threat of a black market and that development might be paralysed. The Minister cannot say that on this occasion. He cannot say that development is threatened by the Land Com- 1412 mission Act. He cannot say that there is a black market because of it.
The hon. Gentleman should at least be surprised that he cannot say such a thing because, although he is one of the most mild-mannered of men, he joined his colleagues in making, as a principal plank in opposing the Act, the claim that development would be disrupted and held up. He said that there would be "chaos and disorder in building development". That has not happened. But because it has not happened, we might at least have reasonable propriety in dealing with the legislation.
The Conservative Party manifesto claimed that the betterment levy had put up the price of land and houses. If that is true, then the capital gains tax will do exactly the same thing. There is not the slightest reason to think that it would do anything different. But, in fact, it is not true, or, at any rate, it is non-proven. The Land Commission, the repository of information on this question, has stated that the levy has not increased the price of land. The levy itself is pure gain.
Let us take what has been said by the Minister for Local Government and Development. He was asked about this matter the other day at Question Time and said that comprehensive information was not available about prices of land for all purposes. He then said that, although there was no such information available, there was information about the increase in house prices. He thought it was difficult to say how much of the increase was attributable to the activities of the Land Commission and how much to other factors. This is a long way from the dogmatism of the Conservative Party manifesto.
I prefer to take the index of prices of new houses published by the hon. Gentleman's Department. Those figures provide no evidence that prices have been affected by the levy. I take house prices for the very good reason that I feel a good deal of nonsense is spoken on both sides of the House about land prices.
I repeat what I said at the time of the Land Commission White Paper:In the case of housing land it is the price that the houses themselves fetch which primarily determines the price which will be paid for the land on which the houses are put.1413 In short, I said that the high price of land for development is a reflection of its prospective economic use. I said that two consequences followed. If I again may quote myself, I said: first, save by the Land Commission buying or collecting the levy, the price of land is not likely to be reduced unless the price of houses is reduced; secondly, it follows that the argument that levy affects price is a weak argument because in land transactions the price primarily depends on relative strengths of the bargaining position of the landowner in relation to the purchaser for development. The bargaining position of the landowner, of course, is immensely strengthened by the fact that he is sitting on an appreciating asset. I argued from this that the all-important thing was to increase the scale of Land Commission activities as rapidly as possible. The Minister has mentioned local authorities, but the Land Commission can buy land 40 per cent. cheaper than local authorities. The Land Commission bought net after deducting the levy. On the second point, it is obvious that the activities of the Land Commission weaken the bargaining position of the landowner. In fact, many landowners have so complained.
It is not the failure of the levy which has impelled Government action, but its success. Hon. Gentlemen opposite are not able to prove the case that the levy has affected prices. What upsets them is the fact it has succeeded and the fact that smoothly, without any difficulty, the figure rose from £½ million in the first year to £21 million last year. Far more important than the £21 million was the £31 million which was assessed during that year. Even more important still is the revelation in the Explanatory Memorandum that although half of the cases have been excluded from liability to levy and all the small cases have been removed, the Government estimate that the levy in a few years would reach £65 million.
All this has happened against the background of general acceptance of the levy. I feel that it would have been possible, as we said in the White Paper we would do, to increase the levy to 45 per cent. and then to 50 per cent. at reasonably short intervals. I believe that the Land Commission had sufficiently established the betterment levy so as to achieve these 1414 objectives, and personally I regret that this was not done.
Let us take the Conservative position on this question. The Minister for Local Government and Development has referred to the history of the matter. The Conservatives begin not by saying anything about capital gains but by saying "if we accept a levy, it must be moderate". This is why I reminded the Minister of what he has said about chaos and disruption. In the light of what has been achieved, nobody can suggest that the levy was immoderate and excessive. For this reason the Conservatives turned to capital gains.
But I have some doubts about all this. When the Chancellor of the Duchy of Lancaster was leading for the Conservatives on land matters, he said in explaining Conservative policy on land prices and land acquisition that he was against the capital gains tax. He pointed out that it was a very expensive tax and went on to say that he considered capital gains a dud tax. If that is the opinion expressed by the Conservative spokesman at the time, we surely now must be anxious and apprehensive. What are the Government's intentions about capital gains tax as a whole?
In the past the hon. Gentleman and I have argued somewhat tediously about the differences between capital gains tax and betterment levy, and I will not rehearse the argument again. I will put it as succinctly as I can again by quoting myself:We believe development value more than any other value is created by the community rather than by the efforts of the land owner and it is morally unjustifiable that he should be able to profit from it at the expense of the community.That is the difference in approach between the two parties on betterment. But, in fact, this has nothing to do with what is actually happening. The Government had to disguise what they were doing by resorting to the switch from betterment levy to capital gains. They are doing what Conservatives have always done: they are taking money out of a large number of pockets and putting it into remarkably few—and, believe me, they are remarkably few.
The hon. Member knows the total number of assessments. He talks about £11 million and £31 million, but we are 1415 concerned about how many people are receiving this money. It is being received by people who can be counted in thousands, and by them alone. The hon. Member says that he does not know what the figure will be this year—but afterwards it will be £12 million rising to £31 million. The point is that the money is going into very few pockets. This massive pay-off will go to those people who are concerned with large land transactions—the large landowners and the large land speculators.
I do not dispute the estimates made in the Explanatory Memorandum, but I am sure that the amounts will be considerably greater. We shall never know. We knew what the betterment levy produced, but once it is merged with other transactions, and particularly when losses are set off against it, no one will know, not even the Minister, what the return will be on land sales.
§ Mr. Peter Rees (Dover)
Will the right hon. Gentleman explain why he does not agree that the same amount would probably be collected through the existing tax system? I fail to understand his point.
§ Mr. Willey
The hon. and learned Member has failed to read the Explanatory Memorandum, which points out that a sum ranging from £11 million or £12 million to £31 million will be lost to the Revenue. It is clear that the amount will be more, because it is lost in the general capital gains tax and will not be identifiable.
We must examine this matter in the context of the Government's general fiscal policy. Let us consider dental charges. Those who go to the dentist will have to pay £12 million or more as a result of increased charges. Is it any consolation to know that an identical £12 million will go to a few large landowners and speculators? The Minister says that it was a hardship tax. What will the people attending the dentists think?
What about school milk? The Government are taking £6 million away there. What is the Government's first priority in the distribution of money from the Exchequer? They say, "There are some poor, impoverished, large landowners"—they cannot call them small land- 1416 owners, any longer—"and large speculators." Apparently they must receive forthwith—without waiting for legislation—about £11 million this year. The same consideration applies in the case of prescription charges, welfare milk and school meals. This is simply the Tory policy of taking money from the many, and most hardly hit, and distributing it to those who are best off. The landowners and land speculators have a tenacious hold on the Government that must turn the brewers green with envy.
So much for the levy; I now turn to the Land Commission. I am obliged to the hon. Gentleman for what he said about the staff. It seems that, overall, there will be no reduction in staff. The hon. Member cannot say that he is using the Land Commission to reduce the number of civil servants.
§ Mr. Graham Page
I did not say that. I said that there would be an overall reduction by not filling up wastages in other Departments.
§ Mr. Willey
Other Departments will look after that. A special problem arises in Newcastle, which is of considerable importance to the northern development area. I hope that the Government will pay regard to this aspect of the problem and will recognise that the placing of the headquarters in Newcastle was of some significance to the Northern Region. I join the hon. Member in paying tribute to the Commission's staff, but I also pay tribute—and I am surprised that the Minister did not—to the chairmen and members of the Commission. I do not think that I could have appointed a more distinguished or experienced Commission.
That is not unimportant, because after the members of the Commission had been in office for some time they declared their belief that the Commission was the most practical and economical way of achieving the objectives stated in the White Paper. The Minister nodded when I referred to the distinguished character of the members of the Commission and to their unrivalled experience. They were agreed about the objectives. It was this impressive consensus, in the light of their experience, which said that they found that it was the most practical and economical way of achieving the White Paper's objectives.
1417 The objective that we are now concerned with is the objective of bringing the right land forward at the right time. That is of vital importance. For instance, we must remember that 40 per cent. of private enterprise housing is built by builders who employ fewer than 20 men. It is unrealistic to expect firms operating on that scale to carry stocks of land. There is always a state of imminent crisis in the development industry. The Secretary of State is now trying to make planning the main culprit. Incidentally, planning is a field in which he has direct responsibility, so if planning is at fault he had better do something about it.
All that the Minister does is to repeat what his predecessors has said. Within limits he is quite right, but within severe limits. We cannot solve the problem through planning unless we absolutely debase the currency of planning. In any case, this is not a quarrel with the Land Commission. The members of the Commission advised Ministers on this matter, and co-operated with the Department. Indeed, they attracted to themselves some unpopularity when, to help the Minister, they applied for planning consent.
However much we improve the machinery of planning, I believe, as most people do, that we need some agency to help bring forward land for development. The Secretary of State and the Minister concede this. They say that it can be done by local authorities. I pause to ask the hon. Gentleman: why come forward with that proposal at this time? We are awaiting the Secretary of State's proposals for the reorganisation of local government. Everyone is convinced of the inadequacy of local government. If the Secretary of State had come to the House with proposals for the reorganisation of local government and had implemented those proposals, I should be willing to consider whether there was a case for relying upon the local authorities to carry out this function. I am not always in favour of centralisation. To the contrary. However, we know that we have not at present got local authorities which can cope with this problem.
The Minister is doing what his predecessors did. When Mr. Harold Macmillan dissolved the Central Land 1418 Board, what did he say? He said: "The local authorities will do this." They have not done it. We had the right hon. Member for Streatham (Mr. Sandys), in the light of his experience, saying, "We need a land bank." We also had the Secretary of State for Social Services saying, "We need a national agency." Every Minister who has been responsible for local authorities—I am waiting for my right hon. Friend, when he has had time to reflect, to confirm this—has found that local authorities are not capable of performing this function.
I should now like to call in aid the Chancellor of the Duchy of Lancaster. When the right hon. Gentleman was leading for the Conservatives on land and land prices he conceded that the local authorities could not discharge this function, and said: "The trouble is that the local authorities have tried to drive too hard a bargain and buy cheaply and then failed to be ruthless enough about compulsory acquisition." The intriguing footnote on Tory policy is: goodbye lower land prices. It is, therefore, hypocritical to complain of the ruthless powers of the Land Commission when they were prepared to exhort local authorities to behave even more ruthlessly.
But this is not the real trouble. There are other difficulties—financial difficulties. Local authorities find it unacceptable, intolerable, to bear the financial burden for private development. The Secretary of State has recognised this in his circular.
There are many other difficulties. I have rehearsed them before. I need not rehearse them again. The proof is shown by our experience.
I should mention one important matter which has bedevilled the mechanism of promoting better land use. We are desperately short of qualified manpower. We cannot dispose of and deal with land without lawyers, surveyors and valuers—and they are in short supply. When I looked at the problem I thought that it was wasteful to find these highly-skilled people in penny packets all over the country. They are doing an executive job. This is not policy. The local authorities and the Department are responsible for planning and policy. This is the executive arm of planning, the administrative arm.
1419 When I discussed this matter with the leaders of several of the large local authorities they all agreed in principle that this work ought to be rationalised. I suggested that either the Land Commission could act as agent or that, for all I cared, they could act as agents for the Land Commission. But it was wasteful to have duplication of these valuation departments everywhere. Therefore, I should think that one of the attractions of centralising this work is the great shortage of qualified manpower, which has hindered so disastrously the bringing forward of land for development.
The Government's argument is: so be it; if the local authorities have been or will be ineffective, the Land Commission has not been worth while. That is an exaggeration. I concede that the Land Commission ought to have done more. I have explained how important I regarded the activities of the Land Commission concerning land prices and the bringing forward of land for development.
I have told the House previously—this is set out in the first Report of the Land Commission—that I asked the Commission to build up the scale of its acquisition programme within the first two years as rapidly as possible and to concentrate on the needs of house-builders. I also indicated the areas of acute shortage. I regret that was not done.
On prices, I asked the Land Commission to make land available for housing on concessionary terms. I was prepared to give a direction, if necessary, because the Land Commission could have been in difficulties in the early stages. I regret, again, that was not done.
But there is no point in crying over spilt milk. If the Government are anxious about this matter, the remedy surely is not to dissolve the Land Commission but to expedite its work. So we have to ask: as this is such an obvious conclusion, why have the Government not taken this course? Why have they acted so precipitately?
I find that explanation in the last Report of the Land Commission. That report shows that the Land Commission had brought forward and made available for development about 2,000 acres of land. That might be modest, but it was nonetheless a significant contribution to easing 1420 our difficulties. We must realise that the Land Commission has been bringing forward land that was not coming forward in any other way. This was land which otherwise would not have been brought forward. But, far more important—
§ Mr. Michael Heseltine
What possible evidence has the right hon. Gentleman for suggesting that the land would not have been forthcoming in any other way?
§ Mr. Willey
The Land Commission has said time and again that it has not intervened unless the land was not coming forward.
§ Mr. Willey
It has also said that its activities cannot be judged merely by the extent of its own acquisitions, because, in hundreds of cases, it has brought land forward without actually acquiring it itself.
§ Mr. Heseltine
Would it not be some indication of the degree of urgency to explain to the House what proportion of the 2,800 acres had been acquired compulsorily and what proportion had been acquired voluntarily? Perhaps the right hon. Gentleman would like to do that.
The hon. Gentleman has not understood me. He has intervened at a critical point in the light of what I am about to say. This is not related to compulsory purchase or purchase by agreement. It is land which was designated for development but was not coming on the market.
§ Mr. Heseltine
I am sorry to press the point, but it is crucial. If, as is the case, 75 per cent. of the land acquired by the Land Commission was acquired voluntarily, is there not a prima facie case that it would have come on the market in any event?
§ Mr. Willey
It may have come on the market at some time, but it was not being purchased by developers. It was the intervention of the Land Commission which made the land ready and available for development. The hon. Gentleman has not yet had time to learn by experience what he is talking about.
I have mentioned that 40 per cent. of private enterprise building is carried out by firms with fewer than 20 employees. This type of builder very often wants land where the services have already been put 1421 in. This again was a job which the Land Commission was to do.
Far more important than the 2,000 acres which the Land Commission brought forward and made available was the fact that there were more than 9,000 acres valued at £42 million which were approved for acquisition; in other words, in the pipeline. In addition, another 13,500 acres, valued at £68 million were under consideration and were also in the pipeline.
That land was in the process of being brought forward for development and it was at that point that the Secretary of State and the Minister intervened to bring the whole process to a halt. They threw all that away, and already, within a few months, we have the Secretary of State sending out his panic circular because he is afraid of an increasing scarcity of land for development. He would be far better employed if he were to concentrate on helping the Land Commission to provide the staff that it needs to see that that land is brought forward rapidly to the developer.
The Minister is not unintelligent. He knows that if he had accepted this advice, and that if the Land Commission had brought forward that land for development, apart from easing the present land shortage there would have been another result. The right hon. Gentleman and the Minister talk about land prices, but when they do so they exclude the Land Commission. As far as the Land Commission is concerned, there has been a dramatic fall in land prices because it buys its land less levy.
We have talked about the appreciating value of land. When the Land Commission is sitting on the land, it is the Commission which obtains this appreciating value, and the remarkable thing about the figures in the third Report is the wide margin of profit that is made merely by holding land which is going forward for development. If the right hon. Gentleman and the Minister had concentrated on bringing this land forward for development they would not only have alleviated the present land shortage but would have provided the commission with a substantial profit. In fact, they would have been horrified to find that, having carried out these transactions, they had increased the Commission's land fund by about £35 mil- 1422 lion to £45 million. If they had done that they would have demonstrated, as the Commission itself believed, that this was the most economical and efficient way of dealing with land.
With a land fund of £35 million to £40 million the Land Commission's own hopes of dealing with the intractable problem of twilight areas might have been met. With a land fund of £35 million to £45 million, even the right hon. Member for Streatham—who believes in the land bank—and the Civic Trust might have realised that with this fund behind it the Commission might have helped to provide what we desperately need in our urban development, and that is space. I believe that with that sort of backing we could have begun to deal with the problem of mixed development. I believe one of the scars on our urban development is the existence of ghettoes on workingclass housing estates. Last, but not least, with the land fund so augmented the Commission could have made concessionary sales of land for house-building on a large scale.
The Commission is being dissolved not because of its failure but because the Conservatives appreciate the success of the levy. Although the Land Commission was slow in starting, the Conservatives saw the potential of its development in helping land development. I should not be so biased as to allege that the Conservative Government willed Rachmanism, but they followed a rigid, selfish doctrinaire policy which inevitably resulted in Rachmanism. They are now equally following a rigid, doctrinaire policy which will bring about the frustration of decent planning, which will set land speculators deliberately to worsen land scarcity, and which will bring back disturbance and anger at the scandal of land prices.
§ 7.06 p.m.
§ Mr. Idris Owen (Stockport, North)
I cannot hope to compare my effort with that of the more experienced Members of the House. We have had professionalism from my Front Bench and from the right hon. Member for Sunderland, North (Mr. Willey). The debate so far has been conducted in a most generous and, indeed, charming way, and I hope that what I say will not engender too much heat.
I bring to the debate, not the experience of Front Bench debating and the 1423 interplay of drafting procedures, but the practical experience of land development. I should like to express my appreciation of the efforts of the right hon. Member for Sunderland, North and his Government in 1964 in recognising that there was a grave and serious land problem. No one was more critical than I was when, at that time, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), in a public speech in my constituency, failed to recognise that there was a land problem.
However, tonight I am discussing the Land Commission (Dissolution) Bill in no uncertain way, and I say that few will lament the passing of the Commission. As is evidenced by the number of hon. Members on the benches opposite, the hope is that the body will be suitably interred without the usual funeral oration. The high hopes of success for the Land Commission lay only in the hearts and minds of hon. Gentlemen opposite. It was, indeed, a most cumbersome agency, and the problem which existed in 1964 when hon. Gentlemen opposite took office still existed in June, 1970.
Certainly hon. Members on this side of the House could not share the enthusiastic predictions of leading right hon. and hon. Gentlemen opposite, and I support that viewpoint with a few quotations, if I may crave the indulgence of the House to do so. In the 1966 election campaign it was said:Labour's Land Commission will take the excess profits from the land speculator. It will ensure an adequate supply of land to meet Labour's housing targets.The right hon. Gentleman the Leader of the Opposition said in "New Britain" that their land policy would bring land prices down to reasonable levels, and that it would also unfreeze substantial areas of land. Another right hon. Member said in his election address:A racket busting Land Commission is on the way.We have news for them. In a few moments I will offer a few examples of acquisitions in the Manchester conurbation.
Let us recognise the criteria when the Land Commission was established. The right hon. Member for Sunderland, North has made certain statements this evening. Perhaps I might refer to the Second Reading debate, in the course of which 1424 it was said that right hon. and hon. Gentlemen opposite would not be satisfied until they had brought down land prices. They will take some satisfying. They also said that the burden of the cost of land for essential purposes must be reduced, and that, if it was accepted that the state of land prices was wholly indefensible, there was an unanswerable case for the Land Commission.
The whole tenor of their arguments was that land prices must come down and that they must break the racket. I have news for them. They did not break the racket, they got in on it. To use the Americanism, they got a piece of the action.
Let us look at the criteria. Since its inception, did the Commission break the land racket? Did it bring down land prices? Did it help the young couples seeking homes at prices they could afford? Did it release more land for housing? That was the basic criteria in the minds of hon. Gentlemen opposite when they established the Commission.
The right hon. Member for Sunderland, North has said that the Commission was a success. There are diverse opinions in that respect. There is a right hon. Member of the Opposition—he is not here this evening—who has very positive views on the success of the Land Commission. I will quote the right hon. and very respected Member for Coventry, East (Mr. Crossman). On television on 1st October of this year—not three years ago—he said:The Land Commission was a total failure. Quite clearly it was a total failure.What about the emphasis there? He said, "The Land Commission was …" Note the past tense; he has accepted it. He has been at the funeral.
§ Mr. Bob Brown (Newcastle-upon-Tyne, West)
My right hon. Friend may write drivel, but that does not make him right.
§ Mr. Owen
Whether the right hon. Member writes drivel or not, as the hon. Gentleman mentions, he was given a very important position on the then Government's Front Bench and so that is the reward for writing drivel. If hon. Members opposite disagree, they can take it up with him. That is his assessment of the success of the Land Commission. As a newcomer, who am I to argue, when one considers the experience of the right 1425 hon. Member for Coventry, East and the fact that he is a Front Bench speaker and a former Minister.
I ask the House to examine the claims made for the Land Commission, that it would break the land racket and bring land prices down. I speak with some experience, and I should like to explain to the hon. Gentleman that I was one of the deputation from the N.F.B.T. and F.R.H.B. that visited him in Whitehall to discuss the problems. I have been in the land development business—the third generation since 1894. In my constituency, £6,000 per acre was paid in 1965 for a small parcel of land for flat development. Precisely two months ago, within one-third of a mile of that parcel an identical piece was sold across the highway at £20,000 per acre. So much for the right hon. Member's claim that the Land Commission would bring down prices.
Another parcel of two acres in a predominantly working-class area, surrounded by council houses and small pre-war houses, was offered for sale for the small builder—who can build economically—contiguous with a cemetery. It was worth in 1964 approximately £1,500 per acre. It brought £31,200 for two acres.
§ Mr. Frank Allaun
I am sure that everyone in the House agrees with the hon. Gentleman that this is a fantastic exorbitant, extortionate situation. But will it not continue? If the Land Commission is abolished, even greater profits will remain with the sellers of the land.
§ Mr. Owen
I thank the hon. Member for Salford, East (Mr. Frank Allaun). I will draw attention to that matter and try to answer it later. I do not wish to bore the House, because it must be agonising to hear these prices. In Cheadle, a constituency contiguous with mine, land in 1965 was priced at £5,625 per acre, and a parcel of land was sold in 1970 for £50,000 an acre.
§ Mr. Owen
But this is since the establishment of the Land Commission, before the Commission is abolished, under the administration totally of hon. Members opposite. They were the gentlemen who were going to break the land racket. I repeat: they got in on it.
1426 The consequences are most interesting, because this is where the basis of the failure of the Commission lies. As a practical person, I want the theorist to understand the practical point of view. On the prices I have quoted, the levy could be £8,000 per acre. On those high figures, £8,000 could have been and was levied in some instances, that is, 40 per cent. of the difference between the existing use value and the selling price.
Forty per cent., based on a nominal 10 to the acre type of development in the peripheral areas—which all hon. Gentlemen know about, the small detached houses with garages for the young, up-and-coming executive—would mean that the purchaser would have to pay £800 in levy. I ask the hon. Gentleman to take note of that point. Do not have any sympathy for the land developer or the house builder, because he merely passes on his charges to the consuming public. Whatever the developer pays, he will add it on, and a profit on top. The poor consuming public will face this. Someone quoted the former right hon. Member for Caernarvon Boroughs, the then Mr. Lloyd George. I believe that it was in the House that he said:No matter how you legislate, the consumer will pay in the end".Remember that, because it is very important.
Let us see how the consumer paid. In those houses that were purchased at the prices I have indicated, with that sort of levy, on a 20-year mortgage, the levy factor in the house amounted to 32s. 6d. for every week for 20 years. On a 25-year mortgage it was 30s. a week. So much for breaking the racket. That was passed on to the home-hungry, young people in the peripheral districts, the dormitory areas, as a result of the levy they were paying to the Land Commission, because it had been put on the selling price of the house.
§ Mr. Reginald Freeson (Willesden, East)
Are we to take it, then, that on the next slice of land in the hon. Gentleman's constituency or area which is not subject to the levy under the system that we are now to revert to, by the Government's dissolution of the Land Commission, there will be a reduction of £800 per dwelling being sold to the up-and-coming young executive and the young 1427 married couple? Let the hon. Gentleman tell that to the House.
§ Mr. Freeson
The hon. Gentleman appears to have misunderstood my question. He was arguing that £800 was added to the price of a house as a result of the levy. According to his argument, if the levy is removed, do we take it that there will be a reduction of £800 per house in his constituency?
§ Mr. Owen
The levy will be removed as a result of the Bill, but, as my hon. Friend said, it is to be replaced by capital gains tax. In the case of developers, it will be replaced by 42½ per cent. corporation tax.
I know that right hon. and hon. Gentlemen opposite do not like it, but Labour's Land Commission failed to bring down the price of land, and that was the tenor of their argument when they introduced their Bill.
Those were the sorts of prices that the levy created for the owner-occupier—
§ Mr. Owen
We have had the Land Commission three years. I hope that we shall begin to bury it tonight. In three years of operation, the Commission's yield was £23½ million and its administrative charges were £6½ million. That sum represents 27½ per cent. of its transactions, which makes it a fairly expensive agency. If an estate agent charged an hon. Member opposite 27½ per cent., he would be screaming for his blood. But that was the agency fee of the Commission, if I may so describe its administrative costs.
My hon. Friend made the point that it is cheaper ultimately to collect betterment by way of the normal taxation process, either by capital gains tax or corporation tax. There is no doubt in my mind that that will be so ultimately.
We have heard that the Land Commission had one great virtue irrespective of 1428 reducing the price of land. It was said that it would result in forward planning and in bringing forward land for future use. I have more news for right hon. and hon. Gentlemen opposite. This is my own line: I have been searching, too. Very close to my home, the Land Commission acquired 48 acres. I do not know on what basis it bought it, but it did not do its homework. If it had done some market research, it would have found that there was no demand for houses in the area.
§ Mr. Owen
There is in Stockport, but this was somewhere south of Stockport. A number of local builders had acquired small parcels of land, and their houses were not selling. The industrial development in the area did not demand any more housing. The Land Commission's area office has been literally hawking the land about, and it has found no takers. So much for forward planning.
As a result of the Commission's three years of trading, it managed to dispose of 320 acres of land. That represents 100 acres per year, which is not very good.
The Labour Party said:There are thousands of owner-occupiers who have voted Conservative in the past and who have learned their lesson as a result of increased land prices.If that was true, what lesson have they learned as a result of the last five years? If that was true then, certainly they have learned a bitter lesson now.
I would be the first to criticise the Conservative Government who ran our affairs between 1959 and 1964. They failed to recognise our land needs and they paid what amounted sometimes to a sickening lip-service to a property-owning democracy. They wanted people to own their homes. But land was released on a drip-feed principle. The Government were completely in the hands of the planners and, as the right hon. Member for Sunderland, North said, were not prepared to assert themselves in a proper manner. We have now Circular 10/70 which invites but does not direct local planning authorities to review their 1429 land needs on the basis of their planning policies. I have some news for my right hon. and hon. Friends. Local planning authorities will not take the slightest notice. Clearly my right hon. and hon. Friends have more faith in local planning authorities than I have. Some of our local planning offices have become the citadels of restriction and the Shangri-Las of bureaucrats. It is time we did something about it.
I have a certain civic consciousness. I am a member of the National Trust and of a number of civic societies. I would fight to preserve our green belts. But what is meant by "green belt"? Is it every square yard of land which has an amenity value for the man who buys a house and says, "Pull up the ladder, Jack. I'm all right"? There are thousands of acres which are preserved merely for vested interests on the periphery and not for the wellbeing of the nation. It has to stop.
I do not advocate intrusion into green belts. I want to see more green belt for people's enjoyment. But I do not want green belt merely to preserve someone's property value. The electorates in our planning areas are so close to the planners that they exert an undue influence through their elected representatives, and we see vested interest at its worst. I hope that my right hon. and hon. Friends will do more by way of directives to ensure that land is released.
I am satisfied that the people who can build homes most competitively are our small builders. They have no major overheads and they are constantly on the job, turning out homes with the maximum economy. Over the last decade, they have been denied land. They cannot compete with the moguls of the construction and development industries who can use vast sums of public capital to acquire the land that they need. When small builders go to an auction, they resemble a hungry pack of wolves fighting over a meagre carcase. Yet they are the people who are capable of building houses at the kinds of prices that my right hon. and hon. Friends want. The Government have said repeatedly that they want an element of competition in every facet of house building. If our small builders are denied the raw material that they require, this objective will never be achieved.
1430 That is why I welcome Circular 10/70, on the assumption that it is a sincere endeavour to break these citadels of restriction, because that is where the trouble lies. One cannot have a framework for house building with rationing of land on the drip-feed system. There must be much more forward planning. There must be much more land released. If there were a grain famine in Liverpool and grain ships were seen coming down the Mersey, the price of grain would drop. If we would only release more land for which it was beyond the capability of the nation to pay, the price would come down. I am convinced of that, and I know that my hon. Friends are convinced of it. I want them to translate their dreams and aspirations into action.
§ 7.31 p.m.
§ Mr. Michael Stewart (Fulham)
We have listened with interest to the hon. Member for Stockport, North (Mr. Idris Owen), and I am grateful to him for bringing some colour into what could be a technical debate. We have followed him through Shangri-la, from the court of the Grand Mogul, across the battlefield where the wolves were gathering, and we were a little disappointed when we reached the end. He ended by congratulating his right hon. Friends on introducing a Circular the uselessness of which he had clearly demonstrated earlier on.
This frustration was apparent in the hon. Gentleman's whole approach. He demonstrated the terribly high land prices and the need for forward planning; yet the Bill, even if one takes the harshest view of the Land Commission, will destroy the one instrument that we have to meet those two purposes and put nothing whatever in its place.
The hon. Member gave us horrific figures of land prices. This is not a new story to many of us. I understood him to argue that if there had not been the levy these prices would all have been very much less. He regards the levy as simply putting an extra bit on to the price. I do not believe that to be true. I believe the argument of my right hon. Friend—
§ Mr. Idris Owen
It exacerbated a very serious problem by adding 40 per cent. to the market price of land.
§ Mr. Stewart
I am obliged. The hon. Gentleman has confirmed that he did say what I thought—that he regards the levy as a sheer addition to the price. I presume therefore, that he must, if his argument has any logic, take the same view about having to pay capital gains tax on the price of land. If he feels that by abolishing the levy we should wipe out this addition to the price of land, he would presumably want to see capital gains tax wiped out as well.
This is what alarms us. We have the Government, with their half alibi of abolishing the levy, saying that there will still be capital gains tax. We all knew, when we heard that, that it would not be very long before we should be told about the iniquities of capital gains tax and the need to do something about that. We did not except that cry to be raised in the same debate from the Government back benches, but here it is already.
This is, at this time of the year, an extraordinary Bill to bring forward, because it has been clearly demonstrated that it will make a gift of, at a modest estimate, some £11 million a year to people very few of whom are widows and orphans and many of whom are comfortably off. It is considered seemly at Christmas for there to be a whip-round or several whip-rounds among the more fortunate members of the community for the benefit of the less fortunate. What we have here is a sort of "anti-Christmas box", where the public at large have to put into the box and a limited number of quite well-off people will profit. It is as if the poor old man by the forest fence were obliged to take flesh and wine to the court of King Wenceslas for the benefit of the more fortunate people living there.
This problem of the price of land and what to do about increasing land values is and must be a problem as old as civilisation, because once there is an established community with a population growing and with a standard of life rising, there is bound to be an increased demand for land. People rightly want to live more spaciously, not only in their private houses but in their public buildings, and there is a demand for more land.
A community which does nothing about this problem faces two difficulties. 1432 First, it allows the flagrant example of large unearned gains to go into the hands of private people, often in the most arbitrary manner. It is difficult to get social cohesion and what we are taught nowadays is called "one nation" with these flagrant examples of unearned gain.
The other damage that it does the community is that of making the cost of providing decent public services bigger and bigger. The community has to have hospitals, roads, schools and so on. If it does nothing about this problem of the growing price of land, it finds that it has to pay more and more.
There have been many attempts to solve this problem. One of the earliest ways in this country was the feudal device that if one owned more than a certain amount of land one had to do military service. It would, I suppose, be administratively impracticable to introduce that again today, but if we introduced it, it could have one or other, or a bit of two, interesting results.
It might, of course, alleviate the concern of the Secretary of State for Defence about the number of people in the Armed Forces. More likely, so many of those so liable would be so anxious to divest themselves of their liability that a great deal of land would come on the market and a considerable part of the problem of high land prices would be solved. But, having cast a regretful look backwards at that solution, we must accept that it is not administratively practicable today.
But my point is not merely flippant: it is to illustrate that this is an age-old problem, that if one does not and cannot adopt that kind of early solution, one must find another. This has been rubbed into the community by far-sighted people for a long time. One of the minority reports of the Balfour Committee on Industry and Trade, reporting towards the end of the 1920s, drew attention to the fact that it was inevitable that the public would need, for public purposes, in the coming years growing amounts of land, and that the public would be very wise to set to work in good time to buy them up before they became too dear. The nation has paid an enormously heavy price that that advice was never taken, or taken only to a very limited degree and much too late.
Then, of course, there was the wise attempt made to deal with this by the 1433 father of my right hon. Friend the Member for Deptford (Mr. John Silkin), Lord Silkin, when Minister of Town and Country Planning. It was possible to make administrative criticism of his betterment provisions, but what was disastrous was to throw away the whole of that provision for getting the increased value of land into the public purse and put nothing in its place.
That is what gave us the appalling profiteering of the 1950s and 1960s. Beside this problem of trying to get a good chunk of the increased value of land into the public purse, there is also the problem of trying to see that our land is best used. There are both the financial problem and a planning problem, and it seems to me that to deal with them both there must be a national body of some kind.
I will not argue—it is not part of our case—that everything was perfect with the Land Commission, but I am interested to find that the amount of positive evidence advanced against it in this debate has been remarkably thin in view of the generalities of abuse that there had been before. Nearly all the instances of its alleged shortcomings seem to be in places whose names we cannot be told and against persons whose names are obscure. Admittedly, as with all human institutions, one can find fault with it.
We are still left with a considerable problem. Having wiped out the Land Commission, there is no national body either to do the forward planning or to try to see that a good chunk of the increased value of land goes into the public purse. The door is again wide open to the most unlimited profiteering and for a continuation of precisely the evils which were graphically described by the hon. Member for Stockport, North, who made a good case not for abolishing the Land Commission but for improving it. We were disappointed that he stopped at the point when we thought his speech was leading to the conclusion that this should be driven home to his hon. Friends. I stress the importance of ensuring that the increased value of land, which is the community's creation, is not handed over simply for private profiteering.
A few days ago the dispute in the power industry came to an end and the 1434 Government insisted that the words "the national interest" should be included in the terms of reference of the court of inquiry. I have always held strongly that in the determination of any wage, salary, price, rent or anything else it should not be left to the mere bargaining power of the two parties but that the national interest should be there.
If that is true, as the Government assert it is, in the negotiation of wages and incomes from work, it should also be true in any transaction that involves getting wealth from property. It is outrageous that the Government should be insisting on the national interest when it is a question of incomes on one day of the week and a few days later, by this Bill, throwing the national interest out of the window to enable people who have no need for it to collect £11 million, £20 million or perhaps £31 million which must be paid for in ways my hon. Friends have described. That is what we are asked to do in this Measure, and that is why I hope the House will refuse to do it.
§ 7.43 p.m.
§ Mr. James Allason (Hemel Hempstead)
I congratulate the Government on their ingenuity in fulfilling their election pledge to abolish the Land Commission as early as 23rd July. This has been criticised by hon. Gentlemen opposite as being an unnecessarily early step. However, a quick decision was needed simply in order to get planning applications started.
Hon. Gentlemen opposite complain because, they say, a tremendous volume of land has not been coming on the market immediately. I remind them that it is a question of getting planning consents. There are parcels of land all over the country which have been deliberately withheld from the market because of people's dislike of the levy. That land will soon be coming forward. Indeed, planning applications are now being submitted.
The Act had three main things wrong with it. First, it was incomprehensible. I had thought of opening it at any one of its 189 pages to show, by reading an extract, how only the experts can have even an idea of what it means. Secondly, it was unfair in its impact on different people. Thirdly, it was unsuccessful, and 1435 I regard this as being the one that condemns it the most. One might forgive legislation which is incomprehensive and somewhat unfair, but for an enactment to be unsucessful as well damns it out of hand. For these reasons the Land Commission deserves to go.
I agree with the principle of betterment being taxed. In 1964 I, with some of my hon. Friends, urged that this should be done, but my Front Bench did not agree at that time. However, there is intense difficulty in taxing betterment, as the Labour Government found, despite the 189 pages of their Act. Their attempt has not worked.
We must then consider the effect of action of this type on the price of land. The Land Commission in effect put a tax on land, and that resulted in land prices rising even higher. Can anybody deny that taxes increase prices? It might be a sheer coincidence, but it seems remarkable that not only has the price of land increased as a result of this tax but that every commodity, from cigarettes to petrol, increases in price when it is taxed.
§ Mr. Allason
That is a tax on income, which is not a commodity.
What the Government are proposing is a reduction in tax. We do not yet know what the result will be. At least we can be sure that a £15 million reduction in tax will result from the Bill, because we have a saving of £11 million plus the saving of the cost of the Land Commission. I am sure that gradually the price of land to house builders will be reduced, though this will happen indirectly because it will mean a slowing down in the rate of increase of land prices.
I regret that the right hon. Member for Sunderland, North (Mr. Willey) is not in his place, because I wish to rebuke him for calling this a speculator's charter. Language of that type is not necessary in this context. This is not a handout to the rich. How can a reduction in taxation be a handout when it is only a reduction in a deduction from an individual's personal property? All taxes go sky high when Labour is in power, and when we reduce them they take the 1436 scandalous step of calling it a handout to the rich.
They should remember from whom they have been taking the money. The right hon. Member for Sunderland, North implied that very few ordinary people have been paying the levy; but that is not my experience. I do not know of all these gigantic land speculators who pay huge sums in levies, but I have in my constituency a widow who, had her husband lived, would have been allowed to build a house in the garden for the children without attacting levy, because the couple owned the property before the operative date. Because the husband died and the widow inherited after the operative date, she had to pay levy on the project. That kind of hardship was not remedied when some hardships were put right in 1969. It is people like that who will benefit by the removal of the levy.
Powers of land acquisition already existed at the first appointed day for development corporations and local authorities if acquisition was necessary in the public interest. Nevertheless, on the first appointed day the Commission was given similar powers. The result has been the acquisition of 2,800 acres as a result of the administration of 950 civil servants—not much more than two acres acquired for each civil servant engaged. Fewer than 3,000 acres have been acquired in three years when our land needs were 50,000 acres a year. The acreage acquired has been chicken feed, and quite useless as a contribution to our needs.
Things were to become very different after the second appointed day, because then the Commission was to have widespread powers to take almost any land which was available. It meant the virtual nationalisation of building land. The Leader of the Opposition said on 7th March, 1966:We said we would take the urban building lands on which planning permission has been granted into public ownership. That is what the Land Commission will do.It is a good thing that we have not got as far as the second appointed day, and now we never shall, but now that the Commission is being abolished we have the problem of land assembly. We are left at the moment with development corporation and local authority procedures, neither of which is satisfactory. The trouble with the development corporation 1437 procedure is that it is necessary to set up a new corporation in each case. As to local government assembly, there are small authorities which are not very competent in assembling the necessary land, and there are some very large authorities, which are perhaps a great deal too competent.
For instance, the Greater London Council is at present acquiring any small piece of land it can find anywhere in the Home Counties or within the boundaries of London regardless of the wishes of the local authorities or the local people concerned. It has acquired 40 acres in the middle of Tring, in my constituency, which will completely unbalance the situation there. A small rural town of 8,000 people living a very quiet life will suddenly find descending on it 2,000 Londoners who have a rather different demand on life. Such actions are very much resented. A concentrated influx of G.L.C. tenants can completely upset the balance and character of a small town or rural area—
§ Mr. Allason
I say that it is the wrong method of assembling land. There is need for large-scale assembly, but that is not the duty of Government. The trouble with the Commission is that it is a body which knows exactly what is needed, but the truth is that local authorities should judge their own needs, and it is they who should have a satisfactory land assembly system.
The Commission's demerit was that it only assembled land and could not go further. The development corporation system has the demerit that a new body has to be set up on each occasion. I should like to see perhaps a group of local authorities combining to form something which was equivalent to a development corporation but which could not only assemble land but subsequently develop it, probably in conjunction with private enterprise.
§ Mr. Allason
Yes, I fear so, because this group would be equivalent to the development corporation, which must have compulsory powers. I do not like compulsory powers, but in cases like 1438 this they are necessary. Local authorities have the powers already, and they are necessary in the extended system I am suggesting.
§ Mr. Denis Howell
The House is following with great interest what the hon. Member proposes, but would he tell us what, apart from the betterment levy, the difference is between what he proposes and the Commission which is being abolished?
§ Mr. Allason
I am afraid that the hon. Gentleman has not been following me. I have mentioned two differences. The first is that the Commission is a centralised body, while I am speaking of a land assembly organisation based on either a group of local authorities or one large local authority. An area within a county would be satisfactory. Secondly, the Commission had the demerit that it could only assemble land and not process it. My form of development authority, similar to the development corporation but mobile, would be able to process the land as well as assemble it.
I followed the career of the Land Commission from its birth and through the Measure's many stages here, and I am glad to be in at its death as well. The Act was at least well-meaning but was, in fact, a bumbling Socialist plot.
§ 7.59 p.m.
§ Mr. Frank Allaun (Salford, East)
I am amazed at the schizophrenic nature of the hon. Member for Hemel Hempstead (Mr. Allason). He is a most amiable man, and I like him personally but he is a nice man with nasty ideas. I find it difficult to reconcile such a nice person, on the one hand, with such reactionary ideas, on the other. He referred to the case of 2,000 Londoners who must find houses somewhere, but not where the land is best suited for them.
The Government's several proposals in other matters will squeeze ordinary families and squeeze their social services. The Government are to increase charges for prescription, health, spectacles, school meals and school milk. At the same time as saving a few miserable pounds here and there, they are to give away £11 million, £12 million, and £31 million net to the big landowners and the big land speculators. I feel strongly about this outrage.
1439 I was amazed when I heard the hon. Member for Crosby (Mr. Graham Page) use such legalistic terms about something which is a scandal. It is the kind of thing that we read about in the News of the World and the People when smaller men are involved. A huge gift is to be made to the large landowners and speculators. One nation indeed!
§ Mr. Allaun
I will come to the question of the hon. Gentleman's widow. I believe that the amounts which would have accrued for the benefit of the national revenue would have greatly increased as the amount of land purchased was increased. After all, a child of two or three is not expected to have acquired all the power of an adult; nor could the Land Commission be expected to have reached after only two or three years the level of performance which it would have attained if it had been allowed to continue in operation for several years.
When the hon. Member for Crosby was tackled about the net saving, he said, "This is only because of the equivalent hardship." That is not correct. With the exception of one or two rare anomalies, the small man—the owner-occupier—was in 1969 excluded from the ambit of the Commission's operations. Therefore, the hardship excuse does not hold water.
The levy which is being handed back to the large landowners is the amount they would have paid in levy. Even Tory Members have on occasion mentioned the racket and scandal of land prices. One hon. Conservative Member, now retired, told us that he bought 10 acres of land for £36,000. Planning permission to build on the land was given. Within two years—he told us there was nothing dishonest about it—he sold the land for £1 million. I have previously quoted a case from the Lea Valley.
§ Mr. Michael Heseltine
Will the hon. Gentleman tell the House how much the person concerned would have paid on that deal under the present capital gains proposals?
§ Mr. Allaun
He would have paid 30 per cent. Under the Land Commission scheme he would have paid 40 per cent., 1440 then 45 per cent., and as far as I am concerned it could have gone much higher, because that was unearned income—a fortune, gained not through any effort of the owner but through the efforts of the community around that plot of land.
This is what is happening. Once planning permission is granted potato fields become a goldmine overnight. It is antisocial to abolish an attempt to deal with such injustices without putting anything in its place. I am surprised at upright men opposite supporting this action.
I quote now an extract from the book "The Aristocrats" by Roy Perrott, published in 1968. On page 30 these words of Viscount Scarsdale of Kedleston Hall are given:'But with land everything depends on the Government of the day', Lord Scarsdale went on, telling me an anecdote to illustrate the pitfalls of a landowner's life. 'When the Labour Government was in a while ago I had to sell seven acres to the local council to build a school on and they paid me the absurdly low price of £100 an acre. When the Tories got in we saw fair play for a change and the council paid us £38,000 for another seven acres.'
§ Mr. Allason
Does the hon. Gentleman remember the Pilgrim case, which gave rise to the decision to pay fair compensation for compulsory purchase?
§ Mr. Allaun
What is fair to the landowner is usually unfair to the community. I return to the basic principle that if land increases in value through the efforts of the community the increase in value should be returned to the community which created it.
The real fortunes from land speculation were made between 1959 and 1964 following the removal of the last controls on land profiteering which were imposed in 1947 by Lord Silkin, the distinguished father of my right hon. Friend the Member for Deptford (Mr. John Silkin). I do not know how many millionaires were created during that period.
I want now to look at the receiving end. The Greater London Council must pay £1,600 for the land on which it builds one flat—not a block of flats—before a single brick is laid. That adds 30s. to the rent of the council tenant—not for bricks and mortar or for the builder's labour, but for the plot of land on which one flat is built. Even the National Federation of Building Trade 1441 Employers, which as a rule is not exactly pro-Labour, admits in the circular it issued this week the heavy charge that is incurred because of land prices.
The Government are not proposing to put anything in the place of the Land Commission. They are not proposing a new form of control. They are merely removing a control which I believe did not go far enough. Will the price of land stop rising? Everybody here—we are not children; we are sophisticated people—knows that the price of land will now rise higher than ever. The argument that it was the levy that increased the price of land because the levy was added to the price is not valid. Naturally a landowner will secure the maximum price for his land in any case whether there is a levy or not.
The Labour Party stands by its principle on this issue. As a national executive member of the party I can say that we shall consider in the next few weeks and months what to put in place of the Land Commission because we are not prepared or content to let the situation continue as it is without any control or public ownership.
There are several alternatives. We might well decide to return to the proposals made by Lord Silkin. There is much to be said for them. We certainly ought to give the local authorities greater power to acquire land—or perhaps we ought to have straight nationalisation of the land; it is not for me to say. But these things will be discussed. I assure hon. Members opposite that if they think this is the end of the battle, they are very much mistaken.
Let us look briefly at one or two of the arguments that have been used against us tonight. It was said, for example, that there were 1,100 civil servants employed by the Land Commission costing, I think, £2½ million. There were far too many to do far too little. Most of them were probably sitting on their backsides most of the time. I should point out that I am not an anti-civil servant chap. I do not believe in using civil servants as scapegoats. Nevertheless I think that they were under-employed, and they cost £2½ million. Despite that, there was a good saving to the country, rising to at least £31 million by the year 1973–74. Another argument was that the Act 1442 has not helped with the purchase of land, but let me quote from the builders:There were occasions when the Commission helped housebuilders by using its powers or its resources to acquire that extra piece of land. With the abolition of the Commission, cases of difficulty may well arise in the future for housebuilders in acquiring the necessary appendages to plots they already own …I do not pretend that the building employers are defending the Land Commission; they are not. They want to see it abolished because that is part of their ideology. Nevertheless they admit that the Commission was useful to them.
I now deal with this question of the loopholes in the Bill—and there are some. Let me give one startling example. If one developed the land before 6th April, 1967, one escaped the betterment levy. So all over the country in February and March, 1967, there were people digging little trenches across pieces of land—
§ Mr. Allaun
—and they then said it was developed and paid no levy. When one is involved with millions of £s—because these landed estates are of that sort of value—the most expensive, experienced and sophisticated lawyers in the country are employed. We shall accordingly be in difficulty in finding legislation through which they will find it impossible to drive a horse and cart. I am very glad to see from the nods of assent that there are one or two hon. Members opposite who appreciate that fact. But it must be done. Otherwise the community is being held to ransom.
I have only one major criticism of the Land Commission—not that it went too far but that it did not go far or fast enough. Somehow we must devise legislation which will avoid what has happened—the fact that it did not succeed in doing some of the things that many of us here desperately wanted it to do.
I shall keep to my promise and conclude now because no doubt we shall have further opportunities to speak in Standing Committee. This Bill will give freedom—freedom to land speculators to hold the community to ransom.
§ 8.14 p.m.
§ Miss Mary Holt (Preston, North)
I welcome this Bill for the dissolution of 1443 the Land Commission and the abolition of betterment levy, but I must say that I find the subject very complicated, and I shall therefore have to make considerable use of my notes.
My first reason for saying this is that which was advanced by almost every speaker on this side of the House, that the Act, betterment levy and the Land Commission failed to achieve their objects. They failed to stabilise land prices and make land available for building. In fact they had the opposite effect. Every speaker on this side of the House has stressed the way in which betterment levy sent the price of houses soaring. My hon. Friend the Member for Stockport, North (Mr. Idris Owen) gave some specific examples from his constituency. I can quote parallel examples in my area. In 1964 one acre of land was fetching £4,000 and is now bringing anything up to £30,000. In a suburb of a northern industrial town where there is no great pressure of population, half an acre of land sold recently for £15,000.
The house purchaser was the one to suffer from betterment levy, which was designed originally to catch the speculator. In practice it hurt the small man doing a bit of building. Many people with a little capital suddenly found that, having sold a bit of land for building purposes, they had to pay hundreds of pounds. The big builder, by contrast, got away with it because he passed on the levy to the purchaser of the land. So we have a law which was bred out of envy and other people's good fortune, proving to be like the proverbial cobweb where the big flies break through and the lesser ones are caught.
Betterment levy was illogical in the tax system. It hit only increases in development value and not increases in existing use value. A man who bought land for £1,000 which he sold after five years for £10,000 for building had to pay levy of 40 per cent., whereas a man who bought a house for £1,000 which he did not occupy and which he could sell after five years for £10,000 had to pay capital gains tax of 30 per cent. but not betterment levy of 40 per cent. There was an element of unfairness there which made betterment levy undesirable. In my submission, it is far better for those gains 1444 to be taxed through the capital gains system, as will happen under this Bill.
Another aspect of the unfairness of betterment levy was the way in which it was not paid by statutory bodies such as the National Coal Board and other nationalised bodies. In that case, there was a hidden element of subsidy to them, as against commercial undertakings.
This leads me to another reason. The abolition of betterment levy will simplify the tax system because it will reduce the number of taxes with different rules.
It will also reduce the occasions when lawyers and professional men have to waste their time trying to understand the Land Commission Act, which is almost incomprehensible, as a previous speaker on this side of the House has said. It took a year to draft. It will take anyone a year to master its provisions. It has 122 Sections and 15 Schedules. The words and expressions carrying specialised meanings number 188. Some of the meanings are intended just for special parts of the Act. Listen to this. Section 64(1) states:In this Part of this Act 'project of material development' means any project or scheme in pursuance of which any material development is, or is to be, carried out.Sections like this are as clear as mud. Ordinary people never understood either the Land Commission or betterment levy. They had the good sense not to try.
I believe Dr. Johnson once said to somebody who could not follow his argument, "I can give you an explanation, but I cannot give you understanding." It would have been beyond Dr. Johnson's powers to give an explanation, let alone an understanding of the Land Commission Act.
As for the Land Commission itself, I regard it as a body which introduced new and dangerous practices into the normal procedure of compulsory acquisition by Government bodies. Before the Land Commission Act, a Government body which had to acquire land compulsorily was always limited by Act of Parliament to specifying the purpose for which its powers could be used and it was required to show its actions to be in accordance with its powers. Under the Act, after the second appointed day—which is defined in the Act—the Land Commission could compulsorily acquire 1445 land without specifying the purpose or showing that it had acted within its powers. Let no one quote to me Section 7(4), which says that the Commission must give notice of its reasons. Things are quite different when no purposes are laid down. Also, the Minister was empowered to make an order preventing the owners of private property from having the opportunity to make objections.
These were Star Chamber methods. The right hon. Gentleman the Member for Deptford (Mr. John Silkin) described the Land Commission as a "poor little baby". It was a little baby with dragon's teeth. In the interest of individual freedom, I am glad to welcome the Bill to make the Land Commission disappear. I am only sorry that the end of the betterment levy is fixed for 22nd July and not 19th June, the day after the General Election.
I welcome the Bill, and I strongly support it.
§ 8.21 p.m.
§ Mr. Bob Brown (Newcastle-upon-Tyne, West)
I must ask the indulgence of the House, not because I am making a maiden speech but because I feel under the weather. I am running a temperature—and some of the speeches from the benches opposite have not improved my condition—but I felt that I had a duty to my constituents to stay here and say a few words on behalf of Newcastle, West.
My constituents and all of us who live in the area are most anxious about the continuing rape of the North-East under this Government, a practice which is typified by the Bill now before us. I realise that "rape" is an emotive word, and one's reactions to it will depend on whether one is at the receiving end. We are certainly on phe receiving end in the North-East, and we do not like it at all. It is fair to say that what we are witnessing is the continuing butchery of the North-East on the altar of doctrinaire policies, and the proposals in the Bill are only too typical of the policies announced since 18th June, especially those pursued in relation to my area.
No matter what the Minister may say about what consultations there have been on the relocation of staff in other Government Departments, over 200 jobs at Kenton Bar in my constituency have now gone, or will have gone when the Land Commission is wound up.
1446 It is true, as the Minister said, that the Government have a mandate. I do not deny that they have a complete mandate to introduce the Bill at this stage. But this gives all the more reason to ask—I hope that the Under-Secretary of State will deal with this—why, knowing the plight of the North-East and of my constituency in particular, the Government were not decent enough to try to provide alternative employment in Newcastle, West, in other words, to send up to the North-East from the over-crowded Metropolis another Government office offering at least 200 jobs—and probably ten times that—to take over the magnificent building which the Land Commission will be leaving.
Some hon. Members from the "soft underbelly" of the South-East may well ask, "What is he belly-aching about? After all, it is only 200 jobs". That makes me turn to the leading article in this morning's Newcastle Journal:Early last month, Mr. Nicholas Ridley, Under-Secretary of State for Trade and Industry, told Dame Irene Ward, M.P. for Tynemouth, that her hopes for the area would be fulfilled 'beyond her wildest dreams'.But when? At present, the North is enduring a waking nightmare. More than 60,000 are out of work, 800 jobs have been lost in Sunderland in the last three weeks, and the future for many more in shipbuilding and engineering is uncertain, if not bleak.It is no use the hon. Lady the Member for Tynemouth (Dame Irene Ward)—I am sorry she is not here, because I should like to say a lot more—extolling the virtues, to paraphrase her words, of her two lovely friends in the Cabinet who will look after the North-East. She may be thrilled to have two lovely friends in the Cabinet who will, she thinks, look after the North-East, but I am not nearly so thrilled.
If the Industrial Relations Bill was rightly referred to as a lawyer's charter, this Bill must be seen as a speculator's charter. I make no apology for repeating words already used in the debate. No fewer than 22,835 acres of land were under consideration for acquisition, approved for acquisition, or due for completion of purchase at the end of March this year, at a cost of about £162½ million.
Having visited its head office in my constituency and having seen the chaps there at work over several years now, I know that the Land Commission has 1447 really settled down to the job. It has gained the expertise which was needed. But now it is to be dismantled purely in the interests of party politics. There is no other reason but the doctrinaire politics of the party opposite.
There has been much play made—the hon. Member for Hemel Hempstead (Mr. Allason) asked my hon. Friend the Member for Salford, East (Mr. Frank Allaun) to respond about it—of the widow's mite and of the hardship suffered through the impact of the betterment levy and the way which the incidence of development value made levy due. In my constituency, I had the case of one such little widow, whose late husband had purchased a small plot of land about 10 miles outside the city in the immediate pre-war years. The plots were then going for about £5 for something like half an acre. They intended to build their little dream house, but they never got round to it, and about 40 years later he passed on.
That little plot of land, which was purchased for about £5, had increased in value no less than 2,000 times, so that the widow was faced with having to pay betterment levy of £3,000 or £4,000.
I put it to the House that I should dearly like to be subject to that sort of hardship, and I am certain that thousands of my constituents would, too. We should be made financially for life.
The Under-Secretary of State is not in his place at the moment, but I hope that the Minister will pass this question to him. Have land prices risen more steeply since July, since the time of the announcement of the Government's intention, than they did formerly?
It would be a great tragedy if the Commission's very useful powers were to be lost altogether, although they might not have been used as widely or as extensively as I should have liked. I am thinking of, for instance, the power to secure the overall development of an area, particularly when ownership is fragmented so that it would be difficult, if not impossible, to get a comprehensive plan by voluntary agreement, the power to acquire and dispose of land and properties on behalf of local authorities or other bodies which already have C.P.O. powers, particularly necessary when land overlaps local authority boundaries.
1448 If the Tories had not sat on their beams on the Maud Report but had got down to implementing it by introducing bigger local authorities, such as the Greater Tyneside single-tier, all-purpose authority, there would have been no problem, because such an authority would have inherited the job from the Land Commission, but the Conservatives have done nothing about the Maud Report and it will be difficult to resolve this type of problem. Yet this is one of the matters for which some such body is most required.
If ever there was absolute nonsense, it is Circular 10/70. It is meant to be an appeal to local authorities to release land to private builders so that more houses may be built, but the appeal should have been directed in the opposite direction. My constituency is a county borough constituency, but it might be regarded as an illegitimate county borough constituency because it includes a large rural hinterland. Through it is a main road along which a "spec" builder has cornered at least three miles of ribbon development land. If there is any land shortage, it will be the local authority which is in difficulty. This is a major problem in the area.
In view of the time, I will now permit other hon. Members to take part in the debate.
§ 8.30 p.m.
§ Mr. Peter Rees (Dover)
I am grateful for the opportunity to intervene in the debate and I hope to keep my remarks short. For that reason, I hope that the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) will forgive me if I do not comment on his rather specialised observations. However, as a Member for a constituency in the "soft under-belly of the South-East", I should like to point out that we, too, have unemployment problems though we are very conscious of this.
I have had occasion over the past three years for professional reasons to become uncomfortably but closely acquainted with the betterment levy, and I should like to concentrate my remarks on that. The three years' acquaintance I have had with it has not made me particularly fond of it. I listened with great interest to the apologia pro vita sub of the right hon. Member for Sunderland, North (Mr. Willey), but I read with rather more 1449 interest his turnover article in The Times in March, 1969, which suggested that he was not so very fond of the legislative progeny which he had sired. He is entitled to change his mind, but I should have thought, with my hon. Friend the Member for Stockport, North (Mr. Idris Owen), that this was a case for a quick and decent burial and then hurrying off to the wake.
As right hon. and hon. Gentlemen opposite have reminded us, these fiscal corpses tend to be resurrected every generation, and I hope that they will, therefore, allow me to make one or two comments on their last efforts in this respect, because they have reminded us that the problem has long been recognised, and it has been recognised by Conservative Members. Let us accept that there is a problem and that there is a case for taxing development values. I would not have stated the problem in quite such tendentious phrases as those used by Labour Members because I doubt whether those values have been created entirely by the community. They are mostly the result of the distortion of the market caused by planning legislation; but let that pass.
How was that problem faced in the period running up to 1965? There has been much talk about speculators and land developers. The right hon. Member for Deptford (Mr. John Silkin) said that we tended to salivate in Pavlovian terms when we heard the words "development value". Labour Members tend to salivate when they hear "speculator" or "land developer". However, speculators and land developers serve a purpose and let us not treat them too harshly. In any event, the point I want to make is that under the existing fiscal system, even prior to 1964, they could have been taxed. They could be taxed—to go into technical detail—under Case 1 of Schedule D. I put it in that way because the right hon. Gentleman is a member of the legal profession and should recognise it. Beyond that, a Conservative Chancellor of the Exchequer introduced a short-term gains tax. I was not particularly enamoured of that either, but the problem had not passed unrecognised by my right hon. Friends.
Came 1965 and the last Government introduced a very elaborate capital gains tax. It is right to point out that, with 1450 one major exception, capital gains tax would have sufficed to tax most of the transactions that are caught by betterment levy. The solitary major exception is that of a project of material development—in other words, a development by a land owner which is not followed by a sale.
§ Mr. Rees
Yes, it comes under Case C. There is a case for not taxing that kind of transaction because no receipt flows in. I deprecate the tendency to be found in fiscal measures introduced by the last Government to tax transactions which do not result in cash flowing to the taxpayer. One can understand that one may or should tax a taxpayer when he has something on which to pay tax, but to do so on a purely notional gain is a rather harsh procedure. With that one main exception—and I must contradict what the right hon. Gentleman said here—most transactions would have been caught by the existing fiscal system prior to 1967. He was not making a valid point in saying that base values would have been different. It is true that they would have been, but in many cases it would have gone rather more hardly against the taxpayers.
So we reached the position where there was no real fiscal point to the levy from the point of view of raising revenue. I must point out to my hon. Friend the Minister that I treat with considerable reserve the figures of tax forgone appearing in the Explanatory Memorandum. I do not see how they are arrived at It must be a matter of pure speculation as to how much land will come on the market at any given time and at what price. Drawing on my professional experience, I doubt whether in the long run more than a trivial amount will be lost to the Exchequer from the abolition of betterment levy. Starting from that premise, the betterment levy can only be justified as a pure political gesture.
We on this side of the House have learned to live with pure political fiscal gestures from right hon. and hon. Members opposite, but I ask them at what cost this gesture was made. First, they had to call into being a whole new organ of Government. In principle, it must be right to concentrate the administration of 1451 all fiscal measures in two organs of Government—the Commissioners of Inland Revenue and the Commissioners of Customs and Excise. They are highly experienced and long established. There cannot be a case for proliferation of tax-collecting agencies. Then, the last Government had to introduce a Measure of startling complexity. I shall not elaborate on that because my hon. Friend the Member for Preston, North (Miss Holt) dealt with it very adequately. In his leisure moments, the right hon. Gentleman should have another look at the Land Commission Act. It covers 180 pages, with 17 Schedules which are incomprehensible to everyone except Sir Desmond Heap, to whom I am happy to pay a tribute.
§ Mr. Rees
Indeed I have, and I am happy to draw an analogy. The right hon. Lady the Member for Blackburn (Mrs. Castle) characterised that Bill as a lawyer's paradise. That came oddly from the Opposition because if anything was a lawyer's paradise—or perhaps more truthfully a professional man's hell—it was the Land Commission Act. There is nothing comparable in complexity between the two Measures. It may be difficult in practice to work out certain passages in the Industrial Relations Bill—we must wait and see—but for sheer obscurity of language and for sheer ambiguity and difficulty I challenge the right hon. Gentleman to say that the Land Commission Act is preferable.
The right hon. Member for Blackburn—I am sorry she is not here—recommended that my right hon. Friend the Secretary of State for Employment should take Lloyd's List Law Reports to bed with him. If she is in need of stimulation or sedation and gets bored with Lloyd's List, I commend to her the 17 Schedules of the Land Commission Act.
When legislation of such complexity is introduced, it hits not only the speculators and land developers but also small people. Therefore, we must count the cost not only in terms of civil servants, but in terms of the cost of professional advice and time. The hon. Member for Salford, East (Mr. Frank Allaun) made the telling point—I am also sorry that he 1452 is not here at the moment since I agree with some, if not all, of his points—that it is difficult to draw complex legislation in such a way that there will be no loopholes. The well-informed, ingenious person, who is forewarned and forearmed, will be able to drive a horse and cart through involved and complicated legislation of this kind. I could point out some loopholes in this Act, but it is now a matter of legal history—or we hope it soon will be. It is the small people, who are unaware of the complexity of the problem and who fall slap into difficulties about whom we should be worrying.
What is involved is not just the question of civil servants' salaries, but the phenomenal cost of professional services which hon. Gentlemen opposite have imposed on the country by their ill-judged fiscal measures. Their performance has been lamentable over the past six years, and we are all paying for it.
From time to time we are all encouraged to go in for fiscal simplification. We recently had an interesting debate in this House on the Inland Revenue Estimates, and an intriguing speech was made by the hon. and learned Member for Lincoln (Mr. Taverne), who was Financial Secretary to the Treasury in the last Administration. It is a little surprising that he himself should talk about fiscal simplification—and I would inform the House that I warned the hon. and learned Gentleman that I would make this point—when it was the hon. and learned Gentleman himself who was largely responsible for the introduction of measures relating to interest and for considerable elaboration of estate duty. But let that pass, since we are delighted that he has been converted on the road from Somerset House. It is idle to talk about fiscal simplification unless we are prepared to cut out large sectors of the present fiscal system. This is the only way in which we shall make a real impact.
I congratulate my hon. Friend on bringing in this Bill. He has made a bold and genuine attempt to simplify the fiscal system. He has done what we have all been wanting to do for years. He has cut out a whole thicket from the tax jungle in which we all grope. I congratulate him and shall support the Bill with real pleasure.
§ 8.42 p.m.
§ Mr. Michael Cocks (Bristol, South)
I hope the hon. and learned Member for Dover (Mr. Peter Rees) will forgive me if I do not comment on his arguments. Quite apart from his burst of Latin, which frankly was beyond my powers of translation, the fiscal aspects of the Bill are not one on which I am competent to speak.
I should like to say a little about the price of land, about which we have heard a good deal today. We have spoken about the acquisition of land, but I should like to deal with the disposal of land. The hon. Member for Stockport, North (Mr. Idris Owen) spoke with refreshing frankness in this debate, and I welcomed his remarks. The impact of land prices impinges directly on the general public most personally and seriously in relation to the price of an individual's home.
Earlier today I had the privilege of presenting a Ten Minute Rule Bill on rentcharges on freehold land which is a specialised legal problem that besets us in the Bristol area. During my researches one of the most difficult things I tried to discover was whether these rentcharges affect the selling price of a house. As the House will know, there is a tremendous difficulty in comparing house prices. So many factors affect the situation. For example, there is the position of the house, the part of the country in which it is situated, the demand, the customers' needs and idiosyncrasies.
The only specific example of a genuine reduction in the initial capital cost of land was where a development had been carried out by Bristol Corporation in conjunction with a national developer. Here, everybody admitted that since the corporation was involved special factors arose which did not apply in normal circumstances.
What protection has the purchaser in the question of land prices? Little attention has been given to this matter tonight. I have a submission on behalf of the Bristol Law Society on the question of rentcharges. The society says that should rentcharges on freehold property be abolished there would be an increase of leasehold. After that submission, I wrote back and gave an example of a plot of land in Bristol which was sold for £275,000 with permission for the erection of 91 units of housing. I said, "With 1454 this capital cost of over £3,000 per plot, what do you imagine would be the level of ground rent imposed, should this be put out on leasehold?" I received a reply to the effect that this was hypothetical, and that it was not known but there was no doubt that the rentcharge, or the ground rent, would be similar whether it was for freehold or leasehold. That seems astonishing to me. If it is true, the general public are being asked to buy the whole of that land, except for a small proportion, for a small ground rent. That is the sort of thing that should be occupying the Minister's mind.
I am indebted to the Minister for one of the few examples of comparability that I have been able to find. I understand that he served on the Standing Committee on the Leasehold Reform Bill, during the course of which he gave the example of an estate in the Birmingham area where a line was drawn down the middle and on one side the houses were sold freehold and on the other they were sold leasehold. He said that leasehold houses were snapped up like hot cakes. The prices were about £2,500 for the freehold houses and £2,000 for the leasehold houses. There the general public had something that they could get hold of and compare, and see whether they were prepared to take a little less, in terms of tenure, for leasehold, in return for a reduction in price.
The individual is in a terribly weak position when he is buying a house, and that is a serious situation. The most revealing remark that I had from an estate agent during my investigation—he was a sales negotiator for a national organisation—was, "My three years with this organisation as a sales negotiator taught me that prices of property were geared to demand … Generally speaking, it is held in the building industry that if houses sell too readily at a price, then the price for that property is too low, and a price increase is justified." That is what happened in that area. As each phase of the estate was released there was an increase in price. It was simply a question of demand.
Many people can shop around. I have a near relative who spent years—he made a hobby of it—going around looking at houses. He eventually settled on the Sussex coast. He was a bachelor, who had retired, and he could afford to take 1455 his time. Many people have pressing domestic or private or employment reasons which require them to carry out the transaction urgently. They are at the mercy of the market.
In trying to tackle the question of land the community was having some say in what was going on through the Land Commission. At least the community was getting some benefit from increasing values, and at least to some extent it was being protected. I should have thought that with the growing pressure of the population on our resources, and with the rising expectations which people have as to the sort of housing standards they are entitled to expect, the abolition of the Commission was an extremely retrograde step. I should have thought that the Government would think more in terms of how the individual purchaser could be protected rather than dismantling the Commission. Quite frankly, if this was a court of law and we had been weighing up the evidence presented by the other side, I should have said, on what they have told us, that the case had not been made out.
§ 8.50 p.m.
§ Mr. Peter Trew (Dartford)
I shall follow the hon. Member for Bristol, South (Mr. Michael Cocks) on the question of house prices. Before doing so, I must declare an interest. For the past 13 years I have worked in the construction industry, in which I still hold directorships, and for the past six years I have been concerned with housing development.
The speech of the hon. Member for Bristol, South, and, indeed, the speeches of his right hon. and hon. Friends, illustrated that in their aims there is nothing separating the two sides of the House. We all want to see more stable or lower, house prices for purchasers, and we agree that part of the profits arising from development values should accrue to the community. What separates us is the method and the emphasis.
The Labour Party places the emphasis on the taxing of development profits. This was emphasised in its most extreme form by the hon. Member for Salford, East (Mr. Frank Allaun), who I know feels deeply on these matters. We place the emphasis on the release of housing 1456 land for development. To a certain extent the two aims are incompatible, because the more ingenious the schemes which may be devised for taxing development or betterment profits, call it what we will, the more we slow down development.
The hon. Member for Salford, East illustrated this point when he spoke about the large profits on land dealings between 1959 and 1964. Indeed, they were large. But surely the answer is to look not only at that but at the rate of house building from 1959 to 1964 and to compare that with the rate of house building from 1966 to 1970, which was the life-span of the Land Commission.
I believe that the Land Commission contributed to an increase in house prices for two reasons. First, the anticipated development levy was added to the price of houses, but only to a limited extent. This is the lesser of the two reasons. The second reason is that the prices of houses, like the prices of anything else, depend on supply and demand. The more slowly housing land comes on the market, the more slowly houses are developed, the higher the price will be. Undoubtedly, the Land Commission slowed down the rate of development.
My hon. Friends the Members for Preston, North (Miss Holt), Hemel Hempstead (Mr. Allason) and my hon. and learned Friend the Member for Dover (Mr. Peter Rees) referred to the complexity of the Act. Indeed, it created new branches in the professions of law and surveying. It was undoubtedly the most complex piece of legislation ever to come before this House. In virtually every land transaction which has taken place during the past four years the consideration how exactly the levy would affect the transaction took administrative effort, correspondence, and negotiation, which undoubtedly slowed down the rate at which housing land came forward for development.
I welcome the abolition of the Land Commission. I disagree with right hon. and hon. Gentlemen opposite when they say that there is a need for a national agency to buy land. I believe that this is best done by the local authorities, which, assisted by the district valuers, are the best judges of development values in their areas, and, on the private enterprise side, by the developers.
1457 Private developers make mistakes. The right hon. Member for Deptford (Mr. John Silkin) referred to unsold flats on the south coast. Indeed, this was an error of judgment. But the right hon. Gentleman will agree that after the early 1960s not many more flats were built on the south coast. That is because one virtue of private enterprise is that it learns from its mistakes because they are very expensive mistakes. To this extent I still maintain that land-buying decisions are best made by the people on the spot.
I welcome Circular 10/70 because, as I have said before, the only way in which we shall stabilise house prices is by speeding up the release of land for development. A great deal can be done simply by streamlining the planning machinery. I am taken with the Australian method of very much more detailed zoning than we have, whereby the uses to which land can be put are specified in some detail and, provided the planning application complies with that zoning, it is automatically granted, and all that is then required is compliance with the byelaws.
Once we have dealt with the planning procedures—and I hope that we shall—we should speed up the release of more land, but I think that there is a great deal of glib talk about releasing more land. What land? Where is it to come from? One of the necessary attributes of land for residential development is that it should be near a place of employment. People are not prepared to live in the wilds, miles from where they work, and there is a limited amount of land close to places of employment.
If a circle with a 50 mile-radius were drawn round London and round Birmingham, and circles with smaller radii were drawn round other centres of employment, we would end with a fixed amount of land, which could not be increased. Although I welcome all measures to release more land, I think that when we come to weigh up the amount of land that is available for development close to existing areas of employment we find that we are still short of a lot of building land, and for this reason I think that we shall have to look at two other important sources of residential building land, the new towns, and the twilight areas.
1458 I see no reason why land in the new towns should not be available to smaller builders. My hon. Friend the Member for Stockport, North (Mr. Idris Owen) made the point, which I accept wholeheartedly, of the valuable contribution which these small builders make to housing, but I see no rôle for the Land Commission in the allocation of building land in the new towns.
One saving grace which I always thought the Land Commission had was that it might have been of some use in the twilight areas. I believe that we have in these areas a great opportunity, which we may never have again, completely to change the face of some of our major cities. There is undoubtedly scope for joint development between private enterprise and local authorities, and I concede that the Land Commission might have made a contribution towards promoting that, but that in itself is not sufficient reason for the existence of the Land Commission. I believe that the powers of compulsory purchase that might be necessary are there already, and that one does not need a Land Commission to promote co-operation between private enterprise and local authorities.
If it is accepted as a principle that there might be a case for some Exchequer aid to such development, one does not need a Land Commission to produce it. I therefore maintain that there is no justification for the continuing existence of the Land Commission, and I support the Bill to dispose of it.
§ 8.59 p.m.
§ Mr. Denis Howell (Birmingham, Small Heath)
We have had an interesting debate, and my first pleasant duty, although he is not here, is to express words of commendation from this bench to the hon. Member for Billericay (Mr. McCrindle) for his speech. It was a speech of great clarity and, if he will not mind my saying so, a speech of great fairness because, as many others have done, he was trying to grapple with the tremendously important problem presented to us in the whole matter of land speculation and land supply. We look forward to hearing further contributions from him if they are of the same high order.
The Land Commission had to go. As the hon. Gentleman properly told us, it had to go because it was part of the 1459 covenant, the Tory manifesto, and the fact that it was put in with all the prejudice which went with drawing up that manifesto had nothing to do with the merits of the case, as I shall try to demonstrate shortly.
The Land Commission is not going because it is unnecessary or irrelevant to the country's needs in terms of land policy, but it is being abolished to serve the primitive instincts of the Conservative Party and the great emotional fervour which they were able to produce about this subject in the last two or three years. The abolition of the Commission was announced with almost indecent haste, one would have thought, within days of this Parliament assembling—I am glad that I carry hon. Gentlemen opposite with me—before even hon. Gentlemen opposite had looked at the problem and thought of the consequences of abolishing it.
We appreciate that the Government can claim that they have a mandate. The interesting thing today is that we have heard little of the heart-rending cases upon which the campaign against the Commission was mounted two or three years ago. Most of the early anomalies in respect of the Commission were ironed out, first, by the Finance Act, 1969, and then by a series of fresh regulations which I introduced and which were passed by the House early this year.
The question people are asking, the intelligent question, is "When we have got rid of the Commission, what are we to put in its place?" That is the one relevant question facing the House. In fairness to several hon. Gentlemen opposite, it is the question to which they have tried to address themselves, including the hon. Member for Dartford (Mr. Trew). But they got nowhere near providing a satisfactory answer.
How are we to deal with the abuses of land speculation when the Commission has gone? How are we to be certain that we will get building land on to the market so that we can provide houses for the people who need them?
The Commission naturally had a difficult start, mainly caused by the political campaigning of right hon. and hon. Gentlemen opposite. After three years there is now a widespread awareness, even in the most unlikely quarters, that 1460 the Commission was succeeding in the task that it was set. Many times today we have had harsh judgments about the Commission from hon. Gentlemen opposite, who expected it in three years to solve every problem in respect of land that has bedevilled this country for the last 300 years. We have returned time and again over the years, as have our predecessors, to the problem of land speculation at the expense of the community and to shortages of land. Hon. Gentlemen have judged the Commission on what it was able to do in three years. But what can we expect any piece of machinery to achieve in one three-year period?
Just think what had to happen. First, the Commission had to be created, and it had to recruit staff. It had to develop a philosophy. It had to survey land throughout the country, and decide where land was needed. It had to hold endless discussions with local authorities in the conurbations and outside them. Proposals had to be produced, and the Commission had to run the gauntlet of public inquiries. It had to wait months—that point is against us as well as hon. Gentleman opposite—for Ministerial decisions on those public inquiries.
In the light of all that, the time scale of three years is almost insignificant, and it is a nonsense to judge the Commission in a three-year life, as hon. Gentlemen opposite have done. Those are the questions which are now being asked not by doctrinaire Socialists but by hard-headed business men and people in the building industry.
I now turn to the three great issues which the Bill leaves with us. The first is that of betterment. The principle of taxing betterment is now unassailable. Even the Conservative Party accepts it. Earlier today, the hon. Member for Crosby (Mr. Graham Page) said:We agree with the laudable object of bringing land forward.He supports that object. This is the first time that any official speaker on behalf of his party has conceded a single point in favour of the Commission. Today, for the first time, we have it on record that the principle behind one of the tasks of the Land Commission is acceptable to right hon. and hon. Gentlemen opposite. They accept the principle of betterment, too.
§ Mr. Graham Page
We have always said that the objective which the Land Commission set out to achieve was one that we wished to achieve. We want to bring land forward. We said that right hon. and hon. Gentlemen opposite chose the wrong way to do it.
§ Mr. Howell
With respect to the hon. Gentleman, in preparation for this debate I have gone back over all our debates on land policy in the last few years. The hon. Gentleman never said it from this Box when he was in opposition. None of his right hon. and hon. Friends said it. They never said a word about it in their Manifesto. They merely said, "We will abolish the Land Commission". If they believed it, certainly they were misleading the country in their election campaign, because they never stated that the problems that the Commission was set up to deal with would be left to be dealt with when the Commission was abolished.
The same applies to capital gains tax. The Conservative Party now accepts the principle that vast profits from land speculation cannot go untaxed. It accepts in this Bill that the betterment levy of 40 per cent. will be replaced by capital gains tax. Of course, that must be right. My right hon. Friend the Member for Sunderland, North (Mr. Willey) told us with great force the moral principle on which this is based. When land values escalate because of the activity of the community in granting planning permission or creating wealth from building in any part of the country, it cannot be right that the people who happen to own land should get away with tremendous bonanzas in terms of capital gains completely untaxed. No one would seek to defend that principle.
Occasionally, it is worth going back to first principles when we talk about this subject. Land is the one commodity which cannot be manufactured or created. It can be tended and cared for. Most certainly it can be cornered, and a lot of people have been cornering land in recent years. When land is cornered, it is right that the community should have something to say about receiving a fair share of the profit that is made.
The Labour Government fixed the betterment levy at about 40 per cent. If we are to replace it with capital gains tax, there is no argument of principle 1462 about the share of the return which should go to the community. Right hon. Gentlemen opposite believe that the capital gains tax, which stands at about 30 per cent. for surtax payers, is a fair share. In other words, there will be a handout of some 10 per cent. to the land speculators. That will be the immediate result of this Bill.
This is quite clear from the Explanatory and Financial Memorandum to the Bill. In the 15 years that I have been in this House, I know of no other case where an Explanatory and Financial Memorandum has so blatantly explained to the House and the country the financial handout that the Government intend to give to their supporters. On their own showing, it is to be £43 million in the next two years.
What on earth do the Government feel will be the effect of this sort of thing on the economy and on the trade unions? It was in the very same week that this Bill was produced, declaring officially its handout of £43 million in the next two weeks to land speculators, that Sir Jack Scamp had the audacity to announce a settlement for dustmen and road sweepers of 15 per cent., and he was decried in the most violent and hysterical terms by the Prime Minister. There followed a campaign of abuse against him by the Chancellor of the Exchequer and other Ministers such as we have not seen in this country for a long time.
What can one make of this humbug and hypocrisy, where the Government lecture the unions day after day upon the terrible dangers of creating inflation, on the need for strength, on the need for a sense of responsibility, and in the very same week produce a Bill like this with this Explanatory Memorandum? It is unforgivable and indefensible. If we add to that the attacks on the social services which have accompanied this sort of legislation, we get some idea of the magnitude of the nonsensical situation which the Conservative Government have created.
It is a serious question to ask them—how on earth, in the light of these handouts, they can expect anyone in the trade union movement to take their demands seriously. How can they think that they are supporting responsible leadership in the trade union movement, 1463 when they are, by this Bill, completely undermining it?
I am glad to see that the hon. and learned Member for Dover (Mr. Peter Rees) is here because he put this much more clearly than I could. He did not talk about bonanzas and hand-outs to Conservative land voters at the last election. He said, "Let us give the Land Commission a decent burial, and hurry off to the wake." That of course is precisely what right hon. and hon. Gentlemen are hoping to do, in the interests of their friends.
The price of land is another great issue. It came up three times in July, when the Secretary of State made his statement. I regret that he has not found it possible to be in this Chamber for one minute of the debate, having regard to his great responsibilities.
On 22nd July, he said at column 550 that the Land Commission had put up the cost of houses and later said:I believe that the Land Commission has had a detrimental effect on the price of land. That is one of the reasons why we are abolishing it."—[OFFICIAL REPORT, 22nd July, 1970; Vol. 804, c. 553.]The hon. Member for Crosby told us today, "In our election manifesto, we said that betterment had increased the price of land".
This sentiment was echoed by several of his hon. Friends and, in case there is any doubt about it, the circular which the Government sent out only two days ago on the whole of this question refers specifically to the fact that the Land Commission has added to the price of land and, thereby, of houses. This charge has been repeated time and again and there can be no doubt that hon. Gentlemen opposite believe it.
That takes us to a very interesting question. It must follow, ipso facto, that, if the Land Commission has increased the price of land and houses, then, by all laws of logic, when it is abolished, the price of land and houses will come down again. Perhaps we can hear why that law of logic does not apply. We shall see. We shall watch this closely and will return to it again and again. If hon. Gentlemen opposite claim that the Land Commission increased the price of land and houses, we are entitled to expect those prices to come down with the 1464 abolition of the Commission. That is the yardstick by which we will judge this policy of the Government, though we know that it is a nonsensical argument on their part and that nothing of the sort will happen.
The price of land has more to do with scarcity value and the absence of land with planning permission. That is an important determining factor. If one intends to follow a rigid green belt policy—which the Minister and the circular to which I referred tell us will happen—commendable though that is, it causes additional pressures to be placed on land prices. There is nothing in the absence of the Land Commission which will tackle the problem of bringing forward land with planning permission.
Another factor that puts up land prices—some of my hon. Friends think that it is more important than scarcity value—is the law of supply and demand. If houses are in short supply, because land is in short supply, house prices rocket, and we have experienced this on many occasions. We have seen estate agents selling large estates with the first 100 or so houses at a fixed price, so that if they go quickly the prices of the rest are increased immediately. Every time hon. Gentlemen opposite say that the Land Commission has been responsible for increases in house and land prices, they are denying their philosophy of the law of supply and demand.
We come to the question of land planning and supply, a factor of considerable importance. It has been increasingly understood because of the positive rôle which the Land Commission played, there will be no authority on which the Minister can rely to do this job. He cannot do it himself because he must decide on planning appeals. He cannot be both the executive trying to bring forward land and the final arbiter deciding important principles of planning policy.
I was surprised at the wording of the circular because it seemed that the Secretary of State was sailing near the wind when he said that he would consider on their merits planning applications which came before him on appeal for the exercise of his discretion and that he would beprepared to give way to need where it exists for the urgent release of more land for housing.1465 I should have thought that many barristers appearing before planning inquiries might be entitled to argue from that wording that the dice were cast against their clients before the matter reached the Minister. For this reason I suggest that it was unwise for the right hon. Gentleman to have adopted that wording.
One of the great virtues of the Land Commission was the fact that it was outside the immediate Government machine. The Minister could act in his quasi-judicial capacity, because applications for compulsory purchase orders were brought by the Land Commission, with which he was not immediately involved. The Commission was independent so that the right hon. Gentleman could exercise his judgment in an independent way.
It is interesting to note that when we were in Government, eight draft C.P.Os were approved covering 1,375 acres and four were not approved by the then Minister, showing that the standard of impartial judgment in these matters was being maintained. Who will take on the rôle if the Minister cannot take it? As things are the Minister cannot take it. If we had had regional councils it could have been argued that a regional council should look at all of the land in its area, judge the planning, and so on, and then produce proposals which the Minister could independently judge. But we do not have regional councils.
The Minister for Local Government stated this afternoon that the Government put all their faith in local authorities to get people to do what the Commission had been doing in preparing the land and bringing it forward. In this connection, paragraph 4 of the circular is very interesting because it speaks of… local authorities surveying the whole of the housing needs in their area …".Time and again today hon. and right hon. Members opposite have spoken of local authorities solving the problem in their own areas.
The trouble is that the land that has to be found is not situated where the great housing need lies. Birmingham is not in trouble in Birmingham: it must have land in Worcestershire, Gloucestershire and Shropshire. London is not in trouble because it does not have land in the middle of London: it is in the outer metropolitan areas that land has 1466 to be unfrozen. Indeed, the hysterical terms of the Circular very much suggest that even the Secretary of State has the gravest doubts whether it will have any use at all in producing land.
It was, I think, the hon. Member for Stockport, North (Mr. Idris Owen) who put it even more eloquently than I can when he said that it is no use the Secretary of State asking planning officers and planning committees to produce land because they will not take the slightest notice of him. That has been our experience. My former colleague, Kenneth Robinson, when Minister, said that we had to have enough land in the outer metropolitan area to build 35,000 houses a year for seven years, and he got very little sympathy from local authorities.
The hon. Member for Hemel Hempstead (Mr. Allason) has spoken most eloquently of the little village of Tring in his constituency where the Greater London Council proposes to acquire enough land to house 2,000 people. He has told us that the proposal is to be resisted because the people from London would descend on the village. It is a shocking thing for him to say. I know that it would make some difference to his majority if the proposal went through, but I do not take issue with him on that. I merely point out that all of us who feel passionately about the homeless, about the need for a man to house his family in decent and civilised conditions, can only give practical expression to our concern and compassion if we can provide land in Tring and places like it. That is the reality of the policy we must pursue, and this Bill kills one of the means of achieving that end.
We have heard very little today about the Commission's successes, but a large number of builders, especially those in the small and medium brackets, are extremely worried about where they will get the land on which to provide houses, especially for young married couples. Only the other day a builder, who voted Conservative at the last election, said to me: "By the time the Labour Government were ejected some very good work was being done in acquiring large areas of much-needed land for young married people, against the wishes of county and local planning authorities." This is a typical view by a builder who supports the Tory Party.
1467 Increasingly the Land Commission was being invited to deal with cases of multi-ownership of difficult sites which could not be solved in any other way than by bringing in a body like the Commission as an outside agency.
A typical example is a site of 200 acres in 10 different ownerships. The initial cost of providing access and sewage on such a site would be about £½ million. No small or medium-sized builder could finance such an operation, and very few large builders could face it either. Who is to finance such an operation now that the Land Commission is being disbanded?
Let us look at some of the cases with which the Land Commission was dealing, although it is true that it had not acquired all the land. It was not always operating in the teeth of hostile local authorities. The Land Commission was called in by the Kent County Council to deal with a most complicated case.
The Commission was called in by Surrey County Council at Woking to deal with a case of 528 acres desperately needed to house overspill from London—the homeless and people living in London slums. Only the Commission could tackle that one. Even the local authorities on which the Secretary of State is to place all his reliance could not tackle the comprehensive development which was needed.
In Wokingham the Land Commission faced a hostile local authority, one which would do very little to help London deal with its terrible problems. There were 356 acres of land there which, in the face of the anti-social attitude of the local authority at Wokingham, could be dealt with only by an outside body producing a C.P.O. and seeking to get the Minister to approve it. The only body which could do it was the Land Commission.
On Teesside the Land Commission was dealing with 900 acres by means of producing plans for comprehensive development.
At Bridgend, at the invitation of the local authority, 500 acres were in the pipeline.
The Land Commission was dealing with 500 acres at Warwick. This project never got beyond the very early stages. It was the only possible site at Warwick which could provide houses for this 1468 much-needed pressure area of the West Midlands. The land had to be surveyed and acquired. Sewage and roads had to be laid on. A master plan had to be prepared. The cost of the operation would have been phenomenal and quite beyond the powers even of the Warwick local authority, which is why it would have welcomed the Land Commission's activities.
I could quote case after case. A small case at Walsall also illustrated the Commission's virtue.
When Aston University wanted to buy 94 acres of land the only body which could come to its aid and provide the land to enable the university to get off the ground was the Land Commission, for universities have no powers of compulsory purchase.
Hornchurch airfield is yet another example of the Commission's virtue. It took over public land to the extent of 194 acres which must be used in the first place for the extraction of gravel, but, because the Commission owned it, it could let off the lease for the extraction of gravel and then ensure that the land was properly used afterwards for the development of the public good and the greatly enhanced development values were safeguarded for the benefit of the public as a whole.
The longer I spent on the preparation of this speech the more I became impressed with the overwhelming case for the Land Commission or a similar authority. No hon. Member opposite has told us how any of these problems are to be tackled once the Commission ceases to exist. The processes of finding land, packaging land, negotiation and C.P.Os must continue. It is remarkable how in such a short time the Commission was succeeding in its purpose.
This is a Bill to abolish the Land Commission. It is certainly not a Bill to abolish the problems with which the Land Commission was set up to deal. Those problems will remain, whatever attitudes we take on either side of the House. They will remain, only more so. We on this side of the House predict that land speculation will again cause great public concern as a result of the activities of the present Government. Much needed land around our great conurbations will not be forthcoming in any meaningful quantities.
1469 For these reasons we oppose the Bill—a Bill which, in my view, is nothing more nor less than a piece of ritual slaughter to which hon. Gentlemen opposite were committed. During the lifetime of this Parliament we shall unceasingly, at every opportunity, bring before this House for detailed examination the consequences of this thoroughly bad piece of legislation.
§ 9.30 p.m.
§ The Under-Secretary of State for the Environment (Mr. Michael Heseltine)
May I first of all join with all those right hon. and hon. Members who have paid tribute to the staff in Newcastle for the work that they have done in administering the proposals of the Land Commission. They have carried out what has been a difficult job, in contact with the public, often in highly controversial circumstances, and I know that the whole House will be grateful to them for the way in which, with humanity and compassion, they have carried out their job.
I say to the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) that we are appraised of the problem particularly of his area and of the employment situation which arises from this Bill, and I assure him that we shall be looking at the matter with very great care.
I should also like to pay tribute to my hon. Friend the Member for Billericay (Mr. McCrindle). I am sorry that I was not in the Chamber to hear his speech, but I have heard of my hon. Friend's well-balanced and thoughtful contribution, and I hope that I shall personally have an opportunity to listen to him in the not very distant future.
As the House knows, it is a very recent transfer that has brought me into the area of this very complicated subject which we have been discussing today, and so, like the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), I have had to look from the start at this particular problem and it has been a most interesting and complicated exercise.
It is difficult to know quite the background against which one should set out to judge a Bill of this sort. One could take the totally extreme position of going back to its early conception, with the present Leader of the Opposition, who said in Chiswick on 17th March, 1966: 1470We would take the urban building land on which planning permission has been granted into public ownership. That is what the Land Commission will do.That is the extreme doctrinaire approach to this whole problem and one which hon. Members opposite will not wish to deny. Indeed, many wish it had gone even further. That is the background, against which we could judge the Bill.
I think it would serve the purpose of the House and meet the tone of the discussion that we have had today if we were to deal with it more from the approach set out in the previous Government's White Paper that really told us what the purposes of the Land Commission were to be. It was, broadly speaking, set out in paragraph 7:(1) to secure that the right land is available at the right time for the implementation of national, regional and local plans;(2) to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.That is the fairest background against which this exercise should be judged. Those are the objectives, and it is simply against that that I want to make my contribution this evening.
I believe there is in this analysis of the problem a real meeting of the minds on both sides of the House. I have heard many of the speeches today. When we come down to discussing the need for larger planning units, for balancing the population movements and finding homes for people in developing areas, we all accept that the institutions which have grown up in another century are not institutions which were designed for the complicated and large-scale problems in modern communities. I do not believe, therefore, that the problem is: should we do something about it? The issue is much more: how do we deal with, and improve our capability of solving, the existing problems?
We on this side believe that it is fundamentally to misunderstand the way in which the problem can be solved if one tries to set up a conflict between local and national government. Our firm conviction is that this problem, which concerns us all, and concerns the local authorities in many ways more than us, can be dealt with only in partnership and in co-ordination with the local authorities. 1471 This is where the first great division comes between the two sides of the House.
We believe that there is a real need to understand and sympathise with the democratic power in the Provinces, and it is an ill day when a Government deliberately set out to override the wishes of the democratically-elected local authorities by the creation of instruments of policy designed to carry out national policies but often in conflict with the local authorities.
§ Mr. Heseltine
May I continue? I shall refer to the hon. Gentleman's speech a little later, and I could, perhaps, give way to him then.
We have announced in a series of policy statements the way in which we consider it is correct for a Government to go about fulfilling the sort of policy which I have outlined. Our first action was to bring together the three principal Departments affected—Housing and Local Government, Public Building and Works, and Transport—into one unified Department of the Environment so that at least those people seeing the problem on a national scale could work in harmony within one central organised unit. That was a major step forward.
We announced our intention to push ahead with encouraging the acceptance of regional strategy plans. We believe that this also must be done in partnership with the people who live in the areas involved and will have to carry out the regional strategy plans. This is going ahead in one area of the country after another.
Our next step forward was the publication of Circular 10/70, which, as the House knows, was sent out quite recently. The essence of this Circular is to say to the local authorities that they have the backing and encouragement of the Government in implementing the proposals and plans which are necessary to solve the sort of problems which we have been discussing.
The biggest single dilemma facing us all stems from the need to release more land. The Secretary of State, in administering national policies, is aware that local authorities must review the amount of land which they have available and 1472 see wherever they can make a contribution by making more land available for building. This can probably make the greatest single contribution to solve the problem of land prices.
We believe that the balancing of land availability with housing requirements should be the subject of continued monitoring, and we wish to encourage experimental schemes, such as that in the South-East, to spread throughout the country so that local authorities will constantly keep in mind the need to maintain the right balance. We have asked local authorities, where they are holding stocks of land above their urgent requirements, to consider whether land could be released for private development so that this facet of the policy may proceed. We consider that it is necessary also for continual consultation to take place with the building industry, and we have asked the local authorities to see that this is at the essence of their land policy.
Those are the ideas in Circular 10/70, but, of course, it is not the end of the problem. It is not the ultimate solution. It is an indication of the ways in which we believe that progress can be encouraged, and it is backed up by widespread Ministerial visits throughout the country to explain the part which both local and central Government can play.
I come now to an aspect of the matter to which the right hon. Gentleman the Member for Sunderland, North (Mr. Willey) referred; namely, the need to bring about a reorganisation of local government itself.
§ Mr. Heseltine
I note that the former Secretary of State gives encouragement to that now. He did not give the same encouragement when he had an opportunity to do something about it.
My right hon. Friend the Secretary of State has announced that a White Paper on the subject will be published next year. We are as aware as all hon. Members are of the need to see that there are units of local government which can carry out the work on a scale sufficient to deal with the problems which confront us.
§ Mr. Freeson
What the hon. Gentleman has just said links with the point which I wish to put to him. We had a 1473 large-scale reorganisation of local government in the London area several years ago. We have the larger unit, and units below it. Yet Greater London is suffering as much today from a shortage of land being made available in the outer boroughs to solve Inner London's problems as was the case five, six or seven years ago. Will the hon. Gentleman tell the House what he has in mind to do if local authorities do not take up the requests which have been sent out in the circular?
§ Mr. Heseltine
This is the essence of the difference between us. Local authorities are every bit as responsible as hon. Members on the Opposition Front Bench. The sort of results which we all want will never be achieved if it is believed that policies can be rammed down the throats of local authorities. This is absolutely crucial. In London the single most important step forward is the study of the South-East regional strategy, which is well under way, in order to get a feeling of partnership and harmony among the local authorities involved. If that harmony is not established, I assure the Opposition that there will be resentment and destructiveness among local authorities, and that will make it far harder to carry out the policy.
It is the essence of our policy to base it on harmony between the centre and local authorities. In the course of the last six years, in subject after subject Labour Members have gone out of their way to break this sense of trust between these two essential forms of government first, in the establishment of passenger transport authorities, by which they deliberately took power from the democratically-elected local authorities, secondly, by the deliberate intervention with local discretion about education, by saying that local authorities could not do what they were democratically elected to do; and, thirdly, by the establishment of the Land Commission, which was designed to give power to the centre at the expense of the periphery.
That is why when we came into office we found that relations between the Commission and the local authorities were deteriorating—[HON. MEMBERS: "How?] I will spell it out. If hon. Members were to ask local authorities like Buckinghamshire, Berkshire, Hertfordshire, Warwickshire and Worcestershire what 1474 sort of relationship they had with a national body when it came into conflict with the policies which they wanted to pursue, they would find themselves answering for the consequences of the decrease in trust between the centre and the local authorities.
I now move to the second test against which we should judge this policy. The White Paper referred to the availability at the right time of the right land. What has happened over the three years during which the Commission has been in existence? In the total of three years the Commission has bought 2,800 acres against a total requirement for house-building of 90,000 acres. That puts the problem into its setting. Of the 2,800, only 338 have been sold for building.
§ Mr. Denis Howell
The Commission started from scratch and had to build up a machine to go through all the planning procedures. In order fairly to judge the figures which the hon. Gentleman is now giving, may we be told how many acres were in the pipeline for requisition?
§ Mr. Heseltine
What the hon. Gentleman does not appreciate is that the pipeline is a meaningless concept in this case. For example, would he ask me to include a 1,000-acre site about which someone from the Commission telephoned to see whether the Commission could buy it, a request which was refused? There are many possible sites which could or could not have been acquired and for which there might or might not have been planning permission and it is, therefore, impossible to say what might have happened in future. What is certain is that in three years 338 acres of land became available and that is a derisory contribution to a solution of the national housing problem.
It might be of interest to the Opposition at least to know that, in contributing that 338 acres, there was a trading profit of £271,000. One particular site alone made a profit of £17,000 and I am sure that this is welcome to the Opposition. They might pause, however, to wonder whether it was necessary for that site on which £17,000 profit was made to have been transferred from the Ministry of Defence to the Land Commission in order to make a profit which the Ministry of Defence could well have made itself. It might be helpful if we bear in mind that 1475 of the 2,800 acres acquired by the Land Commission, 80 per cent. was acquired by voluntary agreement, and there is at least a prima facie case for saying that this land would have found its way on the home development market of its own accord.
I move now from the global national availability of 338 acres and look at the situation where the pressure on house building is at its most severe. Let us understand what the Land Commission did, first, in London, the South-East and Southern England—an area of the greatest possible difficulties. In the whole of these three areas, the Land Commission acquired 286.12 acres, of which 188 were surplus Government requirements—previously an airfield. The Land Commission turned it into a gravel pit. The contribution in this area of maximum congestion was 100 acres.
The hon. Member for Birmingham, Small Heath, asked what was happening in the West Midlands. I can help him. In this second area of maximum concentration, the total acquisition was 194.29 acres, and the land released was four acres—and all of that was released from a Government Department. If I am to dismiss the argument of the right amount at the right time, I do not need to call on more effective figures than these.
The next point of great moment to the Opposition was to get back the proceeds of the profits at 40 per cent., from those whom they graphically described as having gained the benefit of the community. The hon. Member for Salford, East (Mr. Frank Allaun), in his letter to the Guardian yesterday, and numerous of his colleagues were describing the speculators, the rich and the bloodsuckers who, they said, were latching on to the community and depriving people of homes and forcing up land prices, and all that. In their White Paper, the last Government promised that the Land Commission would keep down the price of land. I want to look at both of these propositions.
First, I deal with the question of bloodsuckers. There have been 47,310 cases producing £74 million, of which the Land Commission collected £47 million. More than 47,000 people were assessed for betterment levy. These are people we must look at in detail to see whether 1476 they match the image of some bloated plutocrat which so conveniently suits the arguments of hon. Members opposite and is so inconveniently denied by the facts which emerge as soon as one studies the record of the Land Commission.
According to the Report of the Land Commission to the end of March, 1970, 37.6 per cent. of all betterment cases were for people who were assessed at under £1,500, while 68.8 per cent. of all cases were for people whose land was assessed at under £5,000. The speculators on assessments of over £50,000 amounted to no more than 2.5 per cent. of the total number of assessments. A total of £4½ million was taken from 12,000 small land owners. I simply cannot understand how it is that hon. Members opposite are prepared to make the sort of hysterical contributions they have made to the debate in total contradiction of the evidence of the Land Commission's Report.
§ Mr. Frank Allaun
The hon. Gentleman knows very well that in 1969 the "little boys", the owner-occupiers, were excluded from levies of this kind. Moreover, he knows very well that the £43 million net which his Government will hand back to the land owners will not go back to those "little boys", but back to the men who are dealing in millions.
§ Mr. Heseltine
It is this refusal to look at the figures which makes it so difficult to argue the case. All the figures I quoted were in respect of cases after the Amendments which were made in 1969. Had I quoted from the report of the previous year, it would have been seen that the figures are even more damaging to the hon. Gentleman's argument. I challenge the hon. Gentleman to say where he gets the information to make the sort of assertion he makes in today's GuardianThis is the levy that large landowners and land speculators would otherwise have had to pay on fortunes made overnight when their land soared in value following the granting of permission to build on it: potato fields into goldmines.
§ Mr. Allaun
Let me tell the hon. Gentleman that the information came from Sir Frank Markham, a former Conservative Member of Parliament—and a very honest one—who told us that he bought 10 acres of land at £30,000 and two years later sold the land for £1 million.
§ Mr. Heseltine
I am grateful to have established one thing at least, and that is that the hon. Gentleman based his assertions in that letter on the hearsay of one former Member of Parliament as opposed to the evidence of 47,000 people.
§ Mr. Michael Stewart
The figures given by the hon. Gentleman so far suggest that a considerable number of people with moderate means are involved, but they also suggest that a limited number of wealthy people will be affected. As for the figure of 2.5 per cent. that he mentioned, how much in total went into the pockets of the wealthy?
§ Mr. Heseltine
I accept that the 2.5 per cent. took a substantial amount of the total. [HON. MEMBERS: "Oh!"] But some of those people would be represented by corporate organisations who will now pay at 42½ per cent. and the rest will pay capital gains tax. Therefore, the amount of flowback is smaller than hon. Gentlemen opposite are trying to make out.
If I may now answer the question which hon. Members opposite have asked in the course of the debate—[HON. MEMBERS: "Try answering this one."]—they asked whether the situation is now acceptable and suggested that it does not matter whether we make the sort of adjustments necessary to follow from the Bill because the hardship has been eliminated. If hon. Gentlemen opposite are to be believed, the people who are now suffering have all been exempted by the 1969 adjustments. I have taken the trouble to go into some of the cases involving a large number of the sort of people who since 1969 have been suffering under the existing levels and conditions of betterment.
There is first somebody who has been assessed at £6,000—not a great deal of money having regard to the current levels of house valuation—who is in her 77th year, a widow in poor health with a mentally retarded son. She bought another property backing on to hers so as to protect her son from the prying eyes of neighbours. Her only income is pension and supplementary benefit. Another case involves a consideration of £1,800, half an acre of land attracting levy of £456. The person who paid the levy is a 55-year-old widow with two children, whose only income is £6 15s. per week widow's pension. In the final example, the con- 1478 sideration involved was £1,925 and the payers of levy were a husband and wife. The man skipped home and the wife is now trying to pay the sums outstanding. The wife's income consists of what she gets from letting rooms. She is being asked to pay £2 a week.
Hon. Members opposite in launching attacks against the Government today cannot ignore the thousands of cases of difficulty and hardship produced by this legislation.
§ Mr. Crosland
The hon. Gentleman has not answered the main question about where the burden of the betterment levy was really felt. He gave figures in terms of the number of cases involved. Will he tell us what proportion of the total betterment levy was paid by the 40 per cent. of small payers and what proportion by the 2.5 per cent. of large payers?
§ Mr. Heseltine
What I fail to understand—[HON. MEMBERS: "Answer!"] What I fail to understand—[Interruption.]
§ Mr. Heseltine
What I fail to understand is how hon. Members opposite can launch that sort of case against us without knowing the answer to a question like that.
This attack from the Opposition—[Interruption.]
§ Mr. Heseltine
Hon. Members opposite have launched this attack with absolutely no regard for the evidence contained in the Land Commission's Reports, which are freely available to all hon. Members opposite. It is apparent that none has taken the trouble to find out what is in them. Therefore, it is quite understandable that a newspaper which nobody will pretend is specially favourable to my party—The Guardian—yesterday reported thatIn its short and unfruitful life the Commission has not won many partisans. In 1479 practice, neither result came near to fulfilment in the Commission's three years of life.It goes on in the same tone. [Interruption.] I am glad that hon. Members have read some of the evidence in this case.
The only other point that I want to make concerns the suggestion that many hon. Members opposite have put forward to the effect that the Land Commission and the betterment levy have not pushed up the price of land. They asserted that time and again in the debate. How can they explain away the fact that in the three years preceding the introduction of the levy land prices rose by 30 per cent., whereas in the three years following its introduction land prices rose by 50 per cent., and that since the announcement that the Land Commission is to come to an end and that betterment levy is no longer to be charged, land prices have stabilised for the first time in four years?
There is not the slightest doubt in my mind that the Commission when first
§ established was conceived as a weapon to empower Central Government to interfere in local matters. There is not the slightest doubt that it has created great personal hardship, that at one time was drawing no fewer than 70 letters a week in protest to Members of Parliament. It has undoubtedly forced up land prices at an escalating rate, which we deeply deplore, and it has gone a long way to exacerbate the deteriorating relations between Central Government and local government, without which the problems that we are concerned with will never be solved.
§ Mr. Francis Pym (Parliamentary Secretary to the Treasury)
rose in his place and claimed to move, That the Question be now put.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly, That the Bill be now read a Second time:—
§ The House divided: Ayes 307, Noes 263.1483
|Division No. 49.]||AYES||[9.59 p.m.|
|Adley, Robert||Channon, Paul||Fletcher-Cooke, Charles|
|Alison, Michael (Barkston Ash)||Chapman, Sydney||Fookes, Miss Janet|
|Allason, James (Hemel Hempstead)||Chataway, Rt. Hn. Christopher||Fortescue, Tim|
|Amery, Rt. Hn. Julian||Chichester-Clark, R.||Foster, Sir John|
|Archer, Jeffrey (Louth)||Churchill, W. S.||Fowler, Norman|
|Astor, John||Clark, William (Surrey, E.)||Fox, Marcus|
|Atkins, Humphrey||Clarke, Kenneth (Rushcliffe)||Fry, Peter|
|Awdry, Daniel||Clegg, Walter||Galbraith, Hn. T. G.|
|Baker, Kenneth (St. Marylebone)||Cockeram, Eric||Gardner, Edward|
|Baker, W. H. K. (Banff)||Cooke, Robert||Gibson-Watt, David|
|Balniel, Lord||Coombs, Derek||Gilmour, Ian (Norfolk, C.)|
|Barber, Rt. Hn. Anthony||Cooper, A. E.||Gilmour, Sir John (Fife, E.)|
|Batsford, Brian||Cordle, John||Glyn, Dr. Alan|
|Beamish, Col. Sir Tufton||Corfield, F. V.||Godber, Rt. Hn. J. B.|
|Bell, Ronald||Cormack, Patrick||Goodhart, Philip|
|Bennett, Sir Frederic (Torquay)||Costain, A. P.||Goodhew, Victor|
|Bennett, Dr. Reginald (Gosport)||Critchley, Julian||Gorst, John|
|Benyon, W.||Crouch, David||Grant, Anthony (Harrow, C.)|
|Berry, Hon. Anthony||Crowder, F. P.||Gray, Hamish|
|Biffen, John||Curran, Charles||Green, Alan|
|Biggs-Davison, John||Dalkeith, Earl of||Grieve, Percy|
|Blaker, Peter||Dance, James||Griffiths, Eldon (Bury St. Edmunds)|
|Boardman, Tom (Leicester, S.W.)||d'Avigdor-Goldsmid, Sir Henry||Grylls, Michael|
|Body, Richard||d'Avigdor-Goldsmid, Maj.-Gen. Jack||Gummer, Selwyn|
|Boscawen, R. T.||Dean, Paul||Gurden, Harold|
|Bossom, Sir Clive||Deedes, Rt. Hn. W. F.||Hall, Miss Joan (Keighley)|
|Bowden, Andrew||Digby, Simon Wingfield||Hall, John (Wycombe)|
|Boyd-Carpenter, Rt. Hn. John||Dixon, Piers||Hall-Davis, A. G. F.|
|Braine, Bernard||Dodds-Parker, Douglas||Hannam, John (Exeter)|
|Bray, Ronald||Drayson, G. B.||Harrison, Brian (Maldon)|
|Brinton, Sir Tatton||du Cann, Rt. Hn. Edward||Harrison, Col. Sir Harwood (Eye)|
|Brocklebank-Fowler, Christopher||Dykes, Hugh||Haselhurst, Alan|
|Bruce-Gardyne, J.||Eden, Sir John||Hastings, Stephen|
|Bryan, Paul||Edwards, Nicholas (Pembroke)||Havers, Michael|
|Buchanan-Smith, Alick(Angus,N&M)||Elliot, Capt. Walter (Carshalton)||Hawkins, Paul|
|Buck, Antony||Elliott, R. W. (N'c'tle-upon-Tyne,N.)||Hay, John|
|Bullus, Sir Eric||Emery, Peter||Hayhoe, Barney|
|Burden, F. A.||Fell, Anthony||Heseltine, Michael|
|Butler, Adam (Bosworth)||Fenner, Mrs. Peggy||Hicks, Robert|
|Campbell,Rt.Hn.G.(Moray&Nairn)||Fidler, Michael||Higgins, Terence L.|
|Carlisle, Mark||Finsberg, Geoffrey (Hampstead)||Hiley, Joseph|
|Carr, Rt. Hn. Robert||Fisher, Nigel (Surbiton)||Hill, John E. B. (Norfolk, S.)|
|Hill, James (Southampton, Test)||Mills, Peter (Torrington)||Scott, Nicholas|
|Holland, Philip||Mills, Stratton (Belfast, N.)||Sharples, Richard|
|Holt, Miss Mary||Miscampbell, Norman||Shaw, Michael (Sc'b'gh & Whitby)|
|Hooson, Emlyn||Mitchell,Lt.-Col.C.(Aberdeenshire,W.)||Shelton, William (Clapham)|
|Hordern, Peter||Mitchell, David (Basingstoke)||Simeons, Charles|
|Hornby, Richard||Moate, Roger||Sinclair, Sir George|
|Hornsby-Smith,Rt.Hn.Dame Patricia||Molyneaux, James||Skeet, T. H. H.|
|Howe, Hn. Sir Geoffrey (Reigate)||Money, Ernie||Smith, Dudley (W'wick & L'mington)|
|Howell, David (Guildford)||Monks, Mrs. Connie||Soref, Harold|
|Howell, Ralph (Norfolk, N.)||Monro, Hector||Speed, Keith|
|Hunt, John||Montgomery, Fergus||Spence, John|
|Hutchison, Michael Clark||Morgan, Geraint (Denbigh)||Sproat, Iain|
|Iremonger, T. L.||Morgan-Giles, Rear-Adm.||Stainton, Keith|
|Irvine, Bryant Godman (Rye)||Morrison, Charles (Devizes)||Stanbrook, Ivor|
|James, David||Mudd, David||Steel, David|
|Jenkin, Patrick (Woodford)||Murton, Oscar||Stewart-Smith, D. G. (Belper)|
|Jennings, J. C. (Burton)||Nabarro, Sir Gerald||Stodart, Anthony (Edinburgh, W.)|
|Jessel, Toby||Neave, Airey||Stoddart-Scott, Col. Sir M.|
|Johnson Smith, G. (E. Grinetead)||Nicholls. Sir Harmar||Stokes, John|
|Johnston, Russell (Inverness)||Noble, Rt Hn Nichael||Stuttaford, Dr. Tom|
|Jones, Arthur (Northants, S.)||Normanton, Tom||Sutcliffe, John|
|Jopling, Michael||Nott, John||Tapsell, Peter|
|Joseph, Rt. Hn. Sir Keith||Onslow, Cranley||Taylor, Frank (Moss Side)|
|Kaberry, Sir Donald||Oppenheim, Mrs. Sally||Taylor, Robert (Croydon, N.W.)|
|Kellett, Mrs. Elaine||Orr, Capt. L.P.S.||Tebbit, Norman|
|Kershaw, Anthony||Osborn, John||Temple, John M.|
|Kilfedder, James||Thatcher, Rt. Hn. Mrs. Margaret|
|Kimball, Marcus||Owen, Idris (Stockport, North)||Thomas, John Stradling (Monmouth)|
|King, Evelyn (Dorset, S.)||Page, Graham (Crosby)||Thomas, Rt. Hn. Peter (Hendon, S.)|
|Kinsey, J. R.||Page, John (Harrow, W.)||Thompson, Sir Richard (Croydon, S.)|
|Kirk, Peter||Paisley, Mr. Ian||Tilney, John|
|Knight, Mrs. Jill||Parkinson, Cecil (Enfield, W.)||Trafford, Dr. Anthony|
|Knox, David||Peel, John||Trew, Peter|
|Lambton, Antony||Percival, Ian||Tugendhat, Christopher|
|Lane, David||Pike, Miss Mervyn||Turton, Rt. Hn. R. H.|
|Langford-Holt, Sir John||Pink, R, Bonner||van Straubenzee, W. R.|
|Legge-Bourke, Sir Harry||Pounder, Rafton||Vaughan, Dr. Gerard|
|Le Marchant, Spencer||Powell, Rt. Hn. J. Enoch||Vickers, Dame Joan|
|Lewis, Kenneth (Rutland)||Price, David (Eastleigh)||Walder, David (Clitheroe)|
|Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)||Prior, Rt. Hn. J. M. L.||Walker, Rt. Hn. Peter (Worcester)|
|Lloyd, Ian (P'tsm'th, Langstone)||Proudfoot, Wilfred||Walker-Smith, Rt. Hn. Sir Derek|
|Longden, Gilbert||Pym, Rt. Hn. Francis||Wall, Patrick|
|Loveridge, John||Quennell, Miss J. M.||Walters, Dennis|
|McAdden, Sir Stephen||Raison, Timothy||Ward, Dame Irene|
|MacArthur, Ian||Ramsden, Rt. Hn. James||Warren, Kenneth|
|McCrindle, R. A.||Rawlinson, Rt. Hn. Sir Peter||Weatherill, Bernard|
|McLaren, Martin||Redmond, Robert||Wells, John (Maidstone)|
|Maclean, Sir Fitzroy||Reed, Laurance (Bolton, East)||White, Roger (Gravesend)|
|McMaster, Stanley||Rees, Peter (Dover)||Whitelaw, Rt. Hn. William|
|Macmillan, Maurice (Farnham)||Rees-Davies, W. R.||Wiggin, Jerry|
|McNair-wilson, Michael||Renton, Rt. Hn. Sir David||Wilkinson, John|
|McNair-Wilson, Patrick (NewForest)||Rhys Williams, Sir Brandon||Wolrige-Gordon, Patrick|
|Maddan, Martin||Ridley, Hn. Nicholas||Wood, Rt. Hn. Richard|
|Madel, David||Ridsdale, Julian||Woodhouse, Hn. Christopher|
|Maginnis, John E.||Roberts, Michael (Cardiff, North)||Woodnutt, Mark|
|Marten, Neil||Roberts, Wyn (Conway)||Worsley, Marcus|
|Mather, Carol||Rodgers, Sir John (Sevenoaks)||Wylie, Rt. Hn. N. R.|
|Maude, Angus||Rossi, Hugh (Hornsey)||Younger, Hn. George|
|Maudling, Rt. Hn. Reginald||Rost, Peter|
|Mawby, Ray||Russell, Sir Ronald||TELLERS FOR THE AYES:|
|Maxwell-Hyslop, R. J.||St. John-Stevas, Norman||Mr. Reginald Eyre and|
|Meyer, Sir Anthony||Sandys, Rt. Hn. D.||Mr. Jasper More.|
|Abse, Leo||Bottomley, Rt. Hn. Arthur||Concannon, J. D.|
|Albu, Austen||Bradley, Tom||Conlan, Bernard|
|Allaun, Frank (Salford, E.)||Broughton, Sir Alfred||Corbet, Mrs. Freda|
|Allen, Scholefield||Brown, Hugh D. (G'gow, Provan)||Cox, Thomas (Wandsworth, C.)|
|Archer, Peter (Rowley Regis)||Brown, Bob (N'c'tle-upon-Tyne,W.)||Cronin, John|
|Ashley, Jack||Buchan, Norman||Crosland, Rt. Hn. Anthony|
|Ashton, Joe||Buchanan, Richard (G'gow, Sp'burn)||Crossman, Rt. Hn. Richard|
|Bagier, Gordon A. T.||Butler, Mrs. Joyce (Wood Green)||Cunningham, G. (Islington, S.W.)|
|Barnes, Michael||Campbell, I. (Dunbartonshire, W.)||Cunningham, Dr. J. A. (Whitehaven)|
|Barnett, Joel||Cant, R. B.||Dalyell, Tam|
|Beaney, Alan||Carmichael, Neil||Darling, Rt. Hn. George|
|Benn, Rt. Hn. Anthony Wedgwood||Carter, Ray (Birmingh'm Northfield)||Davidson, Arthur|
|Bennett, James (Glasgow, Bridgeton)||Carter-Jones, Lewis (Eccles)||Davies, Denzil (Llanelly)|
|Bidwell, Sydney||Castle, Rt. Hn. Barbara||Davies, G. Elfed (Rhondda, E.)|
|Bishop, E. S.||Clark, David (Colne Valley)||Davies, Ifor (Gower)|
|Blenkinsop, Arthur||Cocks, Michael (Bristol, S.)||Davies, S. O. (Merthyr Tydvil)|
|Boardman, H. (Leigh)||Cohen, Stanley||Davis, Clinton (Hackney, Central)|
|Booth, Albert||Coleman, Donald||Deakins, Eric|
|de Freitas, Rt. Hn. Sir Geoffrey||Kaufman, Gerald||Prentice, Rt. Hn. Reg.|
|Delargy, H. J.||Kelley, Richard||Prescott, John|
|Dell, Rt. Hn. Edmund||Kerr, Russell||Price, J. T. (Westhoughton)|
|Dempsey, James||Kinnock, Neil||Probert, Arthur|
|Doig, Peter||Lambie, David||Rankin, John|
|Dormand, J. D.||Lamond, James||Reed, D. (Sedgefield)|
|Douglas, Dick (Stirlingshire, E.)||Latham, Arthur||Rees, Merlyn (Leeds, S.)|
|Douglas-Mann, Bruce||Lawson, George||Rhodes, Geoffrey|
|Driberg, Tom||Leadbitter, Ted||Richard, Ivor|
|Duffy, A. E. P.||Lee, Rt. Hn. Frederick||Roberts, Albert (Normanton)|
|Dunn, James A.||Leonard, Dick||Roberts,Rt.Hn.Goronwy (Caernarvon)|
|Dunnett, Jack||Lestor, Miss Joan||Robertson, John (Paisley)|
|Eadie, Alex||Lever, Rt. Hn. Harold||Roderick, CaerwynE.(Br'c'n&R'dnor)|
|Edelman, Maurice||Lewis, Arthur (W. Ham N.)||Rodgers, William (Stockton-on-Tees)|
|Edwards, Robert (Bilston)||Lewis, Ron (Carlisle)||Roper, John|
|Ellis, Tom||Lipton, Marcus||Rose, Paul B.|
|English, Michael||Lomas, Kenneth||Ross, Rt. Hn. William (Kilmarnock)|
|Evans, Fred||Loughlin, Charles||Sheldon, Robert (Ashton-under-Lyne)|
|Faulds, Andrew||Lyon, Alexander W. (York)||Shore, Rt. Hn. Peter (Stepney)|
|Fernyhough, E.||Lyons, Edward (Bradford, E.)||Short,Rt.Hn.Edward (N'c'tle-u-Tyne)|
|Fisher, Mrs.Doris(B'ham,Ladywood)||Mabon, Dr. J. Dickson||Short, Mrs. Renée (W'hampton,N.E.)|
|Fitch, Alan (Wigan)||McBride, Neil||Silkin, Rt. Hn. John (Deptford)|
|Fletcher, Raymond (Ilkeston)||McCann, John||Silkin, Hn. S. C. (Dulwich)|
|Fletcher, Ted (Darlington)||McCartney, Hugh||Sillars, James|
|Foley, Maurice||MacColl, James||Silverman, Julius|
|Foot, Michael||McElhone, Frank||Skinner, Dennis|
|Ford, Ben||McGuire, Michael||Small, William|
|Forrester, John||Mackenzie, Gregor||Smith, John (Lanarkshire, North)|
|Fraser, John (Norwood)||Mackie, John||Spearing, Nigel|
|Freeson, Reginald||Mackintosh, John P.||Spriggs, Leslie|
|Galpern, Sir Myer||Maclennan, Robert||Stallard, A. W.|
|Garrett, W. E.||McMillan, Tom (Glasgow, C.)||Stewart, Rt. Hn. Michael (Fulham)|
|Gilbert, Dr. John||McNamara, J. Kevin||Stoddart, David (Swindon)|
|Ginsburg, David||MacPherson, Malcolm||Stonehouse, Rt. Hn. John|
|Gordon Walker, Rt. Hn. P. C.||Mallalieu, E. L. (Brigg)||Strang, Gavin|
|Gourlay, Harry||Mallalieu, J. P. W. (Huddersfield,E.)||Strauss, Rt. Hn. G. R.|
|Grant, George (Morpeth)||Marquand, David||Summerskill, Hn. Dr. Shirley|
|Grant, John D. (Islington, E.)||Marsh, Rt. Hn. Richard||Swain, Thomas|
|Griffiths, Eddie (Brightside)||Mason, Rt. Hn. Roy||Taverne, Dick|
|Hamilton, James (Bothwell)||Mayhew, Christopher||Thomas,Rt.Hn.George (Cardiff,W.)|
|Hamilton, William (Fife, W.)||Meacher, Michael||Thomas, Jeffrey (Abertillery)|
|Hamling, William||Mellish, Rt. Hn. Robert||Thomson, Rt. Hn. G. (Dundee, E.)|
|Hardy, Peter||Mendelson, John||Tinn, James|
|Harper, Joseph||Mikardo, Ian||Tomney, Frank|
|Harrison, Walter (Wakefield)||Millan, Bruce||Torney, Tom|
|Hart, Rt. Hn. Judith||Miller, Dr. M. S.||Tuck, Raphael|
|Hattersley, Roy||Milne, Edward (Blyth)||Urwin, T. W.|
|Healey, Rt. Hn. Denis||Morgan, Elystan (Cardiganshire)||Varley, Eric G.|
|Heffer, Eric S.||Morris, Alfred (Wythenshawe)||Wainwright, Edwin|
|Horam, John||Morris, Charles R. (Openshaw)||Walden, Brian (B'm'ham, All Saints)|
|Howell, Denis (Small Heath)||Morris, Rt. Hn. John (Aberavon)||Walker, Harold (Doncaster)|
|Huckfield, Leslie||Moyle, Roland||Wallace, George|
|Hughes, Rt. Hn. Cledwyn (Anglesey)||Mulley, Rt. Hn. Frederick||Watkins, David|
|Hughes, Dr. Mark (Durham)||Murray, Ronald King||Weitzman, David|
|Hughes, Robert (Aberdeen, N.)||O'Halloran, Michael||Wellbeloved, James|
|Hunter, Adam||O'Malley, Brian||Wells, William (Walsall, N.)|
|Irvine,Rt.Hn.SirArthur(Edge Hill)||Oram, Bert||White, James (Glasgow, Pollok)|
|Janner, Greville||Orbach, Maurice||Whitehead, Phillip|
|Jay, Rt. Hn. Douglas||Orme, Stanley||Whitlock, William|
|Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)||Oswald, Thomas||Willey, Rt. Hn. Frederick|
|Jenkins, Hugh (Putney)||Owen, Dr. David (Plymouth, Sutton)||Williams, Alan (Swansea, W.)|
|Jenkins, Rt. Hn. Roy (Stechford)||Padley, Walter||Williams, Mrs. Shirley (Hitchin)|
|John, Brynmor||Paget, R. T.||Williams, W. T. (Warrington)|
|Johnson, Carol (Lewisham, S.)||Palmer, Arthur||Wilson, Alexander (Hamilton)|
|Johnson, James (K'ston-on-Hull, W.)||Pannell, Rt. Hn. Charles||Wilson, Rt. Hn. Harold (Huyton)|
|Johnson, Walter (Derby, S.)||Parker, John (Dagenham)||Wilson, William (Coventry, S.)|
|Jones, Dan (Burnley)||Pavitt, Laurie||Woof, Robert|
|Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)||Peart, Rt. Hn. Fred||TELLERS FOR THE NOES:|
|Jones, Barry (Flint, E.)||Pendry, Tom||Mr. John Golding and|
|Jones, T. Alec (Rhondda, W.)||Pentland, Norman||Mr. Kenneth Marks.|
|Judd, Frank||Perry, Ernest G.|
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).