§ In the White Paper on the second stage of the counter-inflation policy (Cmnd. 5205) it was stated that the Government intended, before the next stage of the policy comes into operation, to bring forward proposals concerning building land.
§ Accordingly, my right hon. Friend the Secretary of State for the Environment will be making a full announcement before the end of this month. But there is one important legislative change, the details of which will be in that announcement, which I should outline now.
§ It is generally accepted that the recent increase in the price of land has been due to the failure of supply to catch up with demand. It is also self-evident that there is no point in taking any step which would either lead people to withhold from the market land which would otherwise have been made available or which would lead to an even steeper increase in prices, or both. I have no doubt that—however superficially attractive to deal with an emotive situation—an increase in the capital gains tax on land transactions would do just that.
§ It would put up the price of land, just as the now defunct betterment levy put up the price of land. The hard fact is that additional taxation would simply aggravate the situation. I should mention, incidentally—it is sometimes overlooked—that all gains from speculative land transactions by individuals are already taxed at the full income tax rates ranging up to 75 per cent. from next month, or in the case of companies are subject to corporation tax.268
§ The only effective way, in both the short and the longer term, of tackling the price of housing land is to make more land available for building. A number of steps have already been taken, but it is necessary also to take action to prevent the hoarding of building land, because this contributes directly to increased prices,
§ After consultations have taken place with the local planning authorities, legislation will therefore be introduced to penalise, by a special land hoarding charge, any unjustifiable delay in developing land which is the subject of planning permission for housing.
§ The charge will be levied for failure to complete the permitted development within a specified period appropriate to the land in question. That period will be extended only in special circumstances.
§ The charge will be levied on the full market value of the property as on the day immediately after planning permission was granted or, in the case of land with planning permission granted before my right hon. Friend makes his announcement, on the value on that day.
§ The charge will begin to accrue day by day from the end of the permitted completion period by reference to a fixed percentage of the full market value.
§ The charge will be secured on the land itself and will be collected by the Inland Revenue.