HC Deb 22 July 1970 vol 804 cc548-55
The Minister of Housing and Local Government (Mr. Peter Walker)

With permission, I will make a statement about the Land Commission.

As announced in the Queen's Speech, a Bill will be introduced during the present Session to abolish the Land Commission. The Bill will provide for the abolition of the betterment levy. Provision will be made, either in the same Bill or in later legislation this Session, for development value realised from future land transactions to be dealt with through the normal system of taxation of profits and capital gains.

Betterment levy will not be payable in respect of chargeable acts or events taking place after today. This means, for example, that a sale of land which is completed tomorrow, or a development project which is started tomorrow, will be free of levy. Where completion follows a contract which was made today or earlier, provision will be made to ensure that the full amount of the gain is charged to tax.

These proposals do not disturb the existing exemption of owner-occupiers of houses from capital gains tax.

The present law about betterment levy will continue to apply to chargeable acts or events that have already taken place. Levy will still be payable on assessments already made and to be made under the existing law.

The Commission's programme of land acquisition has been brought to a halt. Proposals for land acquisition which have not yet reached an advanced stage are being withdrawn; and the Land Commission is already informing the people affected. Proposals which have reached an advanced stage are being reviewed as a matter of urgency, and decisions will be made known to those concerned as soon as possible. Arrangements are being made for the orderly disposal of the land in the Commission's possession. Provision will be made in the legislation for the transfer to an appropriate public body of the assets and liabilities remaining on the dissolution of the Commission.

The Commission's staff of about 1,000 will be dispersed progressively over the coming months. The arrangements will be fully discussed with the national and departmental staff sides.

The availability of land for development is essential to the stability of land prices and to the revival of the house-building programme. The Land Commission has failed either to stabilise land prices or to make a worthwhile contribution to the release of land in the areas of acute land shortage. I am discussing with local authorities how they can best help with these problems through the release of more land and in other ways. I am confident that the measures we are taking will result in an increase in the volume of land coming forward for development and will be of real benefit to the housing programme.

Mr. Crosland

I have three questions. First, is the right hon. Gentleman aware that the House will watch with great anxiety over the months ahead to see whether this decision leads to an increase and not a decrease in the amount of land coming forward for development, particularly in areas where the shortage of land in the right places is inhibiting the housing programme.

Secondly, does not the right hon. Gentleman realise that an increase in land values is not on all fours with, for example, capital gains made on Stock Exchange securities? Does this represent the end of efforts by successive Governments to secure for the community as a whole a proper share of betterment?

Thirdly, have not the Government learnt the lesson of the last three weeks, that every attempt at instant government which they have made has led only to chaos and confusion?

Mr. Walker

On the first question about land release, our view is that abolition of the Land Commission will help to solve the problem. It is reasonable that the Opposition should want to watch the situation. But the right hon. Gentleman will be aware that the Land Commission has not been very successful in obtaining land in places where there is considerable pressure on land. We believe that the betterment levy has added to the cost of land. Certainly land prices have risen very considerably during the period of the Land Commission. We think that the correct way of dealing with the matter is through the present frame work of taxation, which will have the added attraction of being much more simple for people to comprehend and for the Government to administer.

In answer to the right hon. Gentleman's third question, this is an action which should be taken swiftly.

Mr. Murton

May I be the first to congratulate my right hon. Friend on his magnificent statement? Can he give an assurance that it will be possible to collect development value without any increase in the staff of the Inland Revenue?

Mr. Walker

Yes. Not only will there be a saving of staff on the Land Commission side, but the complications of the Land Commission were such that the removal of the betterment levy will also help to reduce pressure on the staff of the Inland Revenue.

Mr. Bagier

Under the right hon. Gentleman's legislation, how will he provide protection against the increased prices that will have to be paid by local authorities? What recourse will they have for recompensing themselves against these increased prices if the betterment does not go to the community as a whole? With the displacement of the Land Commission headquarters, what steps will the Minister take to replace the important employment which it provides in my region? Does he envisage, for example, replacing it with an investigation team to look after land racketeers who will make hay out of what he has said?

Mr. Walker

During the period of the Land Commission and the betterment levy, land prices have risen to both local authorities and private people. The Commission has not succeeded in reducing land prices but, in my opinion, has added to them. About one-quarter of the staff of the Land Commission—just over 200 people—are employed in the Newcastle area. We are, obviously, having discussions with the staff there and I hope that ways can be found of ensuring that the staff are fully utilised in or near the area.

Mr. Rossi

My right hon. Friend's announcement will indeed bring the greatest satisfaction not only to those of us on this side who have opposed the Land Commission and the betterment levy since their inception, but also to people throughout the country who have suffered from the levy. Will my right hon. Friend kindly add to their delight and satisfaction by making the abolition of the incidence of the levy retrospective to a date which coincides with the change of Government policy and which will not cause him complications with capital gains tax, which must be one of the factors in his mind—namely, 18th June?

Mr. Walker

I am pleased that we have brought some delight, but we cannot bring complete delight and we are not going in for retrospective legislation.

Mr. Alexander W. Lyon

What powers does the Minister have to say that he will no longer charge development levy upon transactions which take place between this date and the passing into law of any amending legislation?

Mr. Walker

The same right as the Chancellor of the Exchequer with the Budget.

Mr. Fletcher-Cooke

Does my right hon. Friend recall that one of the great arguments for the measure which he has announced was that there should be a net reduction—I emphasise "net reduction"—in the size of the bureaucracy? What sort of net reduction has he in mind?

Mr. Walker

Certainly, over a period of time, the staff of the Land Commission will be completely dispersed and this will bring a reduction of 1,000. I believe that there will also be a reduction in the staff of the Inland Revenue who are working on these matters. I might add, too, that there should be a considerable reduction in the staff of offices outside the Government who have had to deal with this complicated legislation.

Mr. Ashton

Will the Minister guarantee that none of the land which has been acquired by the Commission will be sold to public speculators for a price less than was paid for it originally?

Mr. Walker

Certainly, the Government intend to dispose of the land in a proper way at the best possible price which can be obtained.

Mr. Evelyn King

While welcoming the abolition of the Land Commission, may I ask whether my right hon. Friend is aware that there is a real problem as regards bringing more land on to the market for development purposes and that he has it in his power, by using the appeal machinery against unreasonable decisions by local planning authorities, to solve that problem'? Will he undertake to exercise a much stronger influence in that sense?

Mr. Walker

I believe that the release of land by local authorities is almost the most important task in terms of the whole housing programme. We are urgently discussing with local authorities, particularly in areas with serious housing problems, ways in which we can increase the flow of the release of land. On some occasions the difficulty is due to delays in waiting for various decisions outside the control of the local authorities concerned. I am trying to hasten those decisions so that there is no proper excuse for delay in the release of land. I would urge all local authorities to go in for a long-term programme of land release instead of releasing an acre at a time and thereby putting up land prices.

Mr. Blenkinsop

Will the Minister realise that this action may well destroy the hopes that we had of effective joint development of separate parcels of land, which is extremely urgent from a planning point of view?

Mr. Walker

I believe that there is plenty of power in the hands of local authorities to see that that is done.

Sir F. Bennett

My right hon. Friend has fairly recognised that any change in the law must mean anomalies as to timing; these are unavoidable. I should like my right hon. Friend to clarify one point. What will be the position of those whose transactions were completed before today's date but on whom no assessment has yet been either made or served—in other words, they have as yet had no notification? Will they receive a subsequent notification or will it go by the board?

Mr. Walker

If it is a chargeable act to which betterment levy should have applied before today's date they will be charged for betterment levy.

Mr. Bob Brown

Since my constituency interests are severely affected, I should have thought that the Minister or his Department would have been courteous enough to inform me of his intended statement. [Interruption.] If hon. Members opposite are not interested in their constituents, I am certainly interested in mine. Over 220 of my constituents are affected by the Minister's statement—

Mr. Speaker

Order. The hon. Member must put a question. He can put what he is saying in question form.

Mr. Brown

Will the Minister note that it would have been much better for him to have been able to embody in his statement that discussions have already taken place with the staff involved and to indicate what their future will be? The right hon. Gentleman has suggested that the operation of the Land Commission has increased the price of land. Does he consider that as a result of the abolition of the Commission there will be a reduction in the price of land for building?

Mr. Walker

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. Besides Newcastle, there are 20 or 30 towns where a quite substantial number of staff are employed by the Land Commission. I think that, on reflection, the hon. Member will agree that in a matter like this it would have been unreasonable to inform every hon. Member with a constituency interest that the statement was being made; and the details of the statement could not possibly be made available. As to the staff in Newcastle, I have already said that we are having talks with the Chairman of the Land Commission. As a former Minister, the hon. Member will know that any Government will take the greatest care in the way that staff are handled.

Mr. Tugendhat

As my right hon. Friend is well aware, one of the most disagreeable and surprising aspects of the Land Commission's activity was that when large property companies wished to put pressure on owners of small freehold plots of land to sell they invoked the assistance of the Land Commission which would write letters which, although they had no statutory authority, certainly put the fear of God into small freeholders. Will my right hon. Friend assure the House that neither his Ministry nor any other Department of the present Government will intervene in private transactions in that disagreeable fashion?

Mr. Walker

I will do all in my power to see that there is not a repetition of the considerable amount of human misery which has been caused by the operation of the Act.

Mr. Ross

The right hon. Gentleman said that it was impossible to tell everyone concerned about the statement which he intended to make. Did he tell the Scottish Office? As he knows, more than one Minister is involved. The Secretary of State for Scotland has direct involvement. Is there a representative of the Scottish Office present? Has the Minister discussed the problem of those employed in Cumbernauld? How will they be re-employed in that area?

Mr. Walker

All questions of staff are being discussed at Departmental and national level, and these discussions will look after these matters in detail. As for consultations with the Scottish Office, yes, they did take place.

Mr. Ross

Where are the Scottish Ministers?

Mr. Sandys

Would my right hon. Friend assure us that releasing land will not involve any undue encroachment on the Green Belt?

Mr. Walker

Yes.

Several Hon. Members

rose—

Mr. Speaker

rose—

Mr. Onslow

On a point of order. May I remind you, Mr. Speaker, that I have on three occasions at Business Questions sought to have this statement made which particularly closely concerns my constituents and upon which I sought to ask a Question of the Minister now? May I crave your indulgence to put a question now to him?

Mr. Speaker

Many hon. Members for many good reasons wanted to ask questions on this statement, and on the point of order we discussed before, and on the statement which has yet to come, and after that we are to discuss a very important matter. We must move on.

Mr. William Hamilton

On a point of order. You will recall, Mr. Speaker, that the Leader of the House on an earlier day this week said he would make sure that Ministers who were likely to be engaged in a particular statement or debate in the House would be in attendance on the House. Clearly, the Scottish Office is involved in this matter and in this decision which the right hon. Gentleman has just made about the abolition of the Land Commission, and yet there is not a single Scottish Minister on the Government Front Bench. This is the second day in succession when a Minister responsible for answering a debate, or upon a statement, has been absent. I would like the Leader of the House to take it up with the Scottish Office, and to point out that it is the Scottish Ministers' duty and responsibility to be here to listen and to answer, if need be to debate, questions specifically relating to the problem in Scotland.

Mr. Speaker

The point which the hon. Member has made will have been duly noted. We must move on. Lord Balniel.