New Clause 1 (Hansard, 17 July 1972)

§ Sir Brandon Rhys Williams (Kensington, South)
I beg to move, That the Clause be read a Second time.
The Clause is lifted verbatim from a Bill which I introduced on 26th April under the Ten Minutes Rule under the name Development of Property. I said at that time a few words of explanation and I do not think it necessary for me to detain the House at great length in explaining the point once again.
This is a matter of very considerable importance, certainly in the borough which I have the honour to represent and I believe also in certain other inner London areas and possibly in the centre of some of our other great conurbations.
The explanation of the Clause can be given in a few sentences. Under the original planning law at the end of the war it was decided that it would be a matter of convenience for all concerned if a simple rule of thumb were included that developments which did not require an extension of the cubic area of the property concerned by more than 10 per cent, could be permitted without the necessity for further formality.
As an extension of that, it was provided that, where a building was in multiple occupation such as a block of flats, it would be the normal practice for planning permission to be granted where extensions were proposed which did not exceed 10 per cent. of the original volume.
337 With the passage of time, it has been accepted that if the local authority decided to intervene where blocks of flats were concerned to prevent the development from taking place compensation should be paid for the loss of the facility in the hands of the developer.
This is becoming a serious matter in Kensington. My local authority advises me that there have been five cases at least in the last six months of large Victorian mansion blocks where the owners have made applications for extentions within the 10 per cent. envelope. The local authority has been in the dilemma that, if it refuses permission, it may be obliged to pass on to ratepayers the burden of very considerable compensation. In one case the figure of approximately £50,000 has been calculated.
Recognising that these cases are arising all the time, I think that my right hon. Friend will accept that the possible burden on the ratepayers of refusing these applications all along the line could be intolerable.
The proposal in the Clause is simply that such compensation should not be payable in cases where the application under the 10 per cent. rule would take the building outside the plot ratio or other limitation in the local planning authority's development plan. It is reasonable that local authorities should not be put in the dilemma that they either have to accept a development which is fundamentally out of order in the district where it is proposed or place on the ratepayers the necessity to find a very large sum of money.
I do not like to enter too deeply into the deliberations of the planning authority in the Royal Borough, but inevitably the fact that it has been inclined to give permission for these developments notwithstanding the very great inconvenience to those already living in the blocks and the fact that the areas concerned may be already congested and, indeed, overcrowded reflect the pressure to which the authority is subject as a result of the operation of the 10 per cent. rule.
I recognise that it could be argued that a latent entitlement runs with the property and that, if the owners are deprived of it, that constitutes a sort of retrospec- 338 tive fine, in that something which they may have expected as part of the asset when they acquired the property is being taken from them by retrospective legislation. But if the facility to expand by 10 per cent. is not claimed for over 20 years since it was conferred, it can reasonably be considered to have expired through lapse of time.
Those who are acquiring property from today in the hope of exploiting the 10 per cent. rule would be well advised to take note of the suggestion I am making, which I know is widely supported in the Royal Borough and, I believe, by right hon. and hon. Members on both sides of the House who have given this matter close consideration.
Parliament should no longer be content that the inhabitants of substantial blocks should be inconvenienced and ratepayers blackmailed by blatant exploitation of an obsolete Act. I therefore express the hope that my right hon. Friend, if he is not able to accept the wording which I have devised in the Clause, will at any rate recognise that the point I am making is a substantial one which requires to be dealt with by the Government.

§ Mr. Graham Page
This Clause, as my hon. Friend has explained, seeks to limit the right to claim compensation under Section 169 of the Town and Country Planning Act, 1971 for the refusal of planning permission or the imposition of conditions restricting the development of property so that it would be payable only where the development consisted, as appears in the Clause, of enlargement, improvement or other alteration of a building which was within the plot ratio or other limitation laid down in the local planning authority's development plan for the area… Under the provisions of Section 169 and the Eighth Schedule of the Town and Country Planning Act, 1971, compensation is payable if permission is refused for extensions to existing buildings, provided that the cubic capacity of the original building is not exceeded by 10 per cent or in the case of a dwelling house by 10 per cent or 1,750 cubic feet whichever is the greater, and provided that the original floor space is not exceeded by more than 10 per cent.
339 The second limitation was brought in by the Town and Country Planning Act, 1963, because modern building methods had made it possible for developers to get more floor space within a given building cube so that a 10 per cent. addition to the cubic content could give an increase in floor space of as much as 40 per cent. thus producing a corresponding increase in the compensation payable for refusal of a 10 per cent. addition to the cubic capacity. My hon. Friend is not so much concerned with the increase of the interior capacity as with the increase in the whole of the building by this matter of 10 per cent.
The underlying principle of this compensation provision is that limited extensions will not in general be open to serious planning objections. My hon. Friend said that there are objections to this in his constituency and he pointed out that authorities are afraid to refuse planning permission even for quite substantial extensions to blocks of flats still within the 10 per cent. because of the compensation which might become payable. I might point out that no compensation arises under Section 169 unless the Secretary of State has given the decision, although of course the compensation has then to be paid by the authority.
I am afraid that my hon. Friend's new Clause is unacceptable from two points of view—first, because of the conditions which he puts in it; and secondly, because of a matter of principle. On the first point, the policies for development plans are drawn up as broad principles to be applied to development over a wide area. The application of those principles to a particular case has to be considered on the merits of the case.
My hon. Friend mentions plot ratio in the Clause. Plot ratio is a policy of that kind, applied to a particular case but being a broad conception of policy. It is a broad indication of the amount of the development potential of the area as a whole which might be taken up on a particular area of land. Where redevelopment is proposed, the indicated plot ratio is a useful guide to a developer and to the planning authority, but it cannot be applied as a rigid yardstick on which one could pay or deprive a developer of compensation. It has little value in rela- 340 tion to the control of extensions to existing buildings, many of which, of course, were erected before planning control, and it is quite inappropriate as a yardstick for compensation purposes.
Second, under this head, the reference to "other limitations" laid down in the development plan is still more unsatisfactory as a basis for compensation. It is not clear what other limitations my hon. Friend has in mind.
Those are what I call the partially drafting objections, though, as I say, they go a little beyond mere drafting questions in that they import criteria which could not be regarded as satisfactory as a basis for the calculation of compensation. But in any case the new Clause is objectionable in principle as it stands.
It would be most unsatisfactory for compensation provisions in planning legislation to be amended piecemeal in this way, and especially in this Bill. The Bill is not designed to cover matters of compensation. It is purely a town and country planning Bill dealing with certain specific points.
There has been no pressure from the local authority associations on this subject. Only so far as my hon. Friend's own local authority and constituents are concerned has anyone wished to make inroads into the compensation payable on extensions of up to 10 per cent. This has long been a basic figure in the compensation code.
It may well be that my hon. Friend can make out a good case in respect of Kensington, that in the over-built-up areas of Kensington to add another 10 per cent. to a block of flats may be oppressive to the dwellings round about. But this is a major matter of compensation law which, if it were put into a Bill of this kind, would affect the whole country.
We are reviewing the compensation code. I hope that we shall shortly put before the House a White Paper on that review, followed by legislation as soon as possible, in the next Session, I hope. If any matter of compensation is to be dealt with by legislation, it ought to be done not piecemeal in the present Bill but in the compensation Bill which we have in preparation. If at that stage my hon. Friend could make out a case to show that the hardships which his local 341 authority and its residents are suffering in Kensington might well apply throughout the rest of the country, I should ask him to make his case on that compensation Bill and not now. I shall have to resist his new Clause.

§ Sir B. Rhys Williams
I quite understand what my right hon. Friend says, particularly in regard to the criteria selected in the new Clause. The object of my Ten-Minute Rule Bill was to attract attention to the subject rather than seriously to propose legislation, but I found that there was a Bill going through which had a Long Title which permitted me to transfer from one to the other, and this I did. I do not think that I can be blamed for that, in view of the extent of the concern and indignation which is being caused in my constituency by the exploitation of this loophole.
I am much encouraged by what my right hon. Friend said about the Government's intention to produce a White Paper. I am sure that it will not be difficult to show that legislation is needed, and I look forward to proving my case. In the meantime, I beg to ask leave to withdraw the Motion.