CERTAIN DEVELOPMENT GAINS FROM LAND TO BE TAXED AS INCOME

HC Deb 22 July 1974 vol 877 cc1148-88

Mr. Joel Barnett

I beg to move Amendment No. 40, in page 22, line 28, leave out from ' made ' to ' and ' in line 31.

This amendment seeks to delete the 53 per cent. maximum rate for individuals inserted into the Bill by the Opposition in Committee. Perhaps I should amend that and say "by the Conservative Opposition". The Liberal Opposition abstained on that round.

What we seek to do is to revert to the original intention of the Bill, the intention of the former Chancellor of the Exchequer, the right hon. Member for Altrincham and Sale (Mr. Barber), and the intention of the Conservative manifesto of February. I said in Committee that I felt that I had not only to look after the interests of the Labour Party but had to be the guardian of the Conservative manifesto. According to the Conservative manifesto, it was intended that development gains tax should be up to the highest level of income. [Interruption.] It is no use the hon. Member for St. Ives (Mr. Nott) denying that because that is what he said.

Mr. John Nott (St. Ives)

There was no question of the rates having been settled by the Conservatives. That is quite untrue.

Mr. Barnett

As there appears to be some disagreement at least on the part of the hon. Member, perhaps I can quote the manifesto. I thought he would have read it but in case he has not and in case other hon. Gentlemen did not I will read it. The Conservative Party manifesto of 1974 reads: We have announced the severest financial penalties ever on property profiteering, with special reference to empty office buildings. Gains by individuals from the development value of property will now be subject to income tax, up to the top rate … "— that is the top rate as it then was— of 75 per cent.…". I am grateful to the hon. Member for St. Ives for his withdrawal from his intervention.

Mr. Nott

I have not withdrawn. It depends on how up to the top rate… is defined.

Mr. Barnett

The top rate was 75 per cent., and specific reference is made to that figure. The manifesto reads: up to the top rate of 75 per cent. That is instead of the former flat rate of 30 per cent. That is stated specifically in the Conservative Party manifesto.

All I am trying to do is to help right hon. and hon. Members revert to the commitment which they put forward when they fought the General Election in February. They fought the election on the basis that they would tax development gains up to the highest rate of income tax. The amendment seeks to allow them to do precisely that. I feel confident that the right hon. Member for Carshalton (Mr. Carr), having given further thought to the matter, will recognise that the commitment on which he fought the last election should now be fulfilled.

Not only was there that commitment in the Conservative Party's' Manifesto, but, as the House will know, there was a commitment in the statement of the right hon. Member for Altrincham and Sale (Mr. Barber) on 17th December. The right hon. Gentleman recognised the many problems that would apply if this measure were not brought into effect. The right hon. Member for Carshalton justified the departure from his party's manifesto on two grounds. His first ground was the representations that he had received, and his second was the economic situation. I shall deal with both his arguments.

I do not think that any of us will be surprised to know that representations have been made about the new levels of taxation on development gains. Those who are liable to pay that tax will obviously be concerned. It should not surprise us if landowners and others who are likely to be paying tax up to the highest level complain and make representations to the right hon. Gentleman. That is understandable as obviously they would not have been able to make representations if his right hon. Friend the Member for Altrincham and Sale had still been Chancellor. Presumably his right hon. Friend would have wished to carry out the commitment that he told the House he wanted to put into effect. The right hon. Member for Carshalton would have been aware of the contents of his party's manifesto as early as February.

I am sure that Conservative hon. Members had in mind that builders, given the current situation, would complain about being unable to obtain supplies of land. It is true that that is the position, and the right hon. Member for Altrincha.m and Sale recognised precisely that situation. He said that he wanted to tax windfall gains of this description up to the highest level of income tax for the benefit of the community. He was prepared to balance that against the inadequacy of the taxation of development gains.

Despite the problems that landowners, builders and others would put forward in their representations, the Conservative Party still felt that it was vital that something should be done to improve the taxation of development gains. It was felt that the greater part of windfall gains, as they were described by the then Chancellor, the right hon. Member for Altrincham and Sale, should accrue to the community and not to the landowner who made the substantial gain purely and simply because the community decided to give planning permission and, therefore, to bring about an enormously enhanced value.

Mr. Michael Latham (Melton)

Since my right hon. Friend made his statement on 17th December, does the Minister agree that the housing situation has not stayed the same but has deteriorated? Is it not a fact that there has been a deterioration in the housing situation and that that is one reason for the builders' representations being all the more powerful and all the more worthy of acceptance by the House?

Mr. Barnett

I do not dispute that the situation has become worse. The right hon. Member for Altrincham and Sale dealt with precisely that argument. He said that windfall gains received by landowners should not be taxed at only 30 per cent. He felt—in my view rightly—that a higher level of taxation should apply, but apparently the right hon. Member for Carshalton and other Conservative Members now disagree.

Let us remember that the situation was very bad in February, when the Conservative Party went to the country on a manifesto which included a proposal to tax these people up to the highest level of income tax. Hon. Members know that the reason for the trouble lay in the financial policies of the Conservative Government, in competition and credit control, which led to the excessive growth of money supply and, therefore, to the problems of housing and land.

Now the Conservative Party has changed its mind, but without any good reason as far as I can see. I am now trying to enable the Opposition to live up to the manifesto on which they fought the election. They should be grateful to me because in Committee upstairs 19 Conservative Members committed the Conservative Party to a reversal of a major plank in its platform. It was quite disgraceful, and I am now giving the Opposition an opportunity to renounce what the right hon. Member for Carshalton and his colleagues did upstairs on their behalf. I look forward to hearing hon. Members opposite telling us how terrible they feel about this renunciation of a basic part of their election manifesto.

Mr. David Mitchell (Basingstoke)

I was not a member of the Standing Committee and am, therefore, not as familiar with the picture as are other hon. Members. The Chief Secretary says that a 30-plus per cent taxation was unacceptable to the Conservative Party. I, too, find it unacceptable. But I understand that the Government now propose a figure of 53 per cent., which is considerably more. How far do the Government think they can go in taxation without totally inhibiting the availability and supply of the article concerned? Secondly, would this taxation apply at income tax rates or at income tax plus surtax? Does it s apply at unearned income rate, in which case it would go up to 98 per cent?

Mr. Barnett

It is at the earned income rate. I assume that the hon. Gentleman must have dropped off to sleep earlier in my speech—I understand it. I have quoted the Conservative Party manifesto for the last General Election—a manifesto on which the hon. Gentleman himself fought the election. The manifesto proposed that the tax should be not at 53 per cent. but at the highest level of income tax, then 75 per cent. and now 83 per cent.

Mr. David Mitchell

indicated dissent.

Mr. Barnett

I am glad that the hon. Gentleman is nodding. I assume, therefore, that he will support the amendment.

We are discussing a simple point—that any profits from the development gain brought about not by the fact that the owner of the land has done anything to deserve it but because the community, through the local authority, has decided to give that land planning permission should be properly taxed. I believe that it is right, and the Conservative Party believed as recently as February that it was right, that we should impose such tax. I cannot think of what could have happened since February to make the Opposition change their minds. It could be that they have changed their minds because they have lost office and are now in opposition. If that is the reason, they will be sitting in opposition for a long time, because we shall be happy to go to the next election on the issue of whether development gains accruing to landowners should be taxed up to the highest level of income tax or at some rather lower figure. I am happy to rest on that. Indeed, I should have thought that hon. Members opposite would be, but I see that they are not. Nevertheless, I urge my hon. Friends to support the amendment.

8.45 p.m.

Mr. David Mitchell

I am very disturbed by the proposition that the Chief Secretary has put to the House. It is the proposition that any gain made by an individual as the result of disposing of land with an increase in value brought about by a local authority giving planning permission should be fixed at 83 per cent.

My concern is twofold. The first is on behalf of those who wish to become owner-occupiers. The level of land prices, especially in the South of England, because of the imbalance of supply and demand over recent years has been forced up to a point where it is dangerously high, and I use that phrase in terms of the sort of property-owning democracy in which I believe and in which there is an opportunity for people to become owner-occupiers and participate in the wealth of the country by having a stake in it by owning the house in which they live. In the South-East, in my constituency of Basingstoke and in Hampshire, Surrey, Sussex and so on, prices have been forced very high because supply and demand have been out of balance, because there has been more demand than supply.

I put to the Chief Secretary the question that I hope he will have in mind when he replies to the debate, and I put it also to my hon. Friends. What effect will there be on the supply of land if up to 83 per cent. of the gain in the value of land is to accrue to the Chancellor of the Exchequer? I do not think that any dispassionate person considering that proposition would take other than the view that it will reduce the number of people prepared to sell. That will inevitably worsen the supply of land for build- ing and make prices even higher. Therefore, I should have thought that, because of its effect on the supply of land and subsequently on the price of land and therefore the prices of houses, this was a proposition unacceptable to people of common sense.

I turn to the second consideration. I go along with the Chief Secretary in believing that it is wrong that because a local authority has given planning consent, somebody should overnight make a vast fortune. In their posture of their local planning authority, the public have done something to increase the value of land and it is perfectly reasonable that society should "take a cut" of that increase. But there is a vast difference between a cut of 30 per cent. as it was—I would take the view that that was not high enough—or a cut of more than a half, as my hon. Friends inserted in Standing Committee, which seems to be considerable, and a cut of 83 per cent., as the Chief Secretary now proposes. That is so high a cut that one is bound to ask what will be the effect on the individual who sells.

In the South-East the land that is available for housing is not the farmer's field but the large garden of the old Victorian house. If the local authority says that this land should be used for a housing estate, it may put on it a compulsory purchase order. The unfortunate house-owner then finds himself in the wholly disadvantaged position of losing the privacy of his house and garden and of getting precious little of the value of the garden which has been taken away. Further, the value of his house will be substantially reduced, because instead of being surrounded by a delightful garden he will find that there will be a housing estate on what was formerly the garden.

Justice applies to those who are better off as well as to those who are poor. The better-off are entitled to protection in front of the law. They have committed the sin of working hard, saving and buying a property for their retirement, and they are just as entitled to justice in front of the law and of the tax authorities as are those who have not.

If we pass the clause in its present form, the value of that land will be taxed at 83 per cent. and the value of the house will also be depreciated. It is legalised robbery. Therefore, I urge my right hon. Friend and hon. Friends to see that instead of the extortionate rate of 83 per cent. there is inserted a figure of just over half, which is high enough to assure that the State has a fair share of any capital gain without the figure being so high as to be legalised robbery and without preventing people from being willing sellers, thus forcing up land prices.

Mr. Michael Latham

May I first, for the avoidance of doubt, declare that I have no interest in this matter? Before I came to the House I was director of the Householders Federation but I no longer have any interest in the building industry except a purely journalistic one in that I write for building trade magazines and avoid mentioning myself in so doing.

Clause 33 deals with several conflicting strands of thought. The first is the creation of betterment, what the Chief Secretary called the windfall gain. As he says, that is the function of the planning system set up by Parliament. If there was no planning there would be no betterment except in the purely locational sense of one place being nicer than another. The basic principle of the Town and Country Planning Act 1947 is that all development rights in effect belong to the State and that no one can carry out development of his propertly without planning permission. The planning system exists because the peace of mind of everyone requires it to exist, so that developments cannot crop up just anywhere.

The second strand of thought, which is becoming confused with the first strand, is the question of the apportionment of betterment. Here the House has had a uniquely disastrous record since the war. First we had the Town and Country Planning Act 1947 which tried to take all the betterment and was a failure. Secondly we had the Town and Country Planning Act 1954 which took all the public sector betterment but not the private sector betterment, and that was a failure.

We then had the 1959 Act, which took none of the betterment and was a failure in that there followed a substantial increase in land prices. Following that was the 1967 Land Commission Act, which took a figure of 40 per cent. When the Chief Secretary talks about a dis- gracefully low figure of 53 per cent., he should remember that under the Land Commission Act the figure was only 40 per cent. But the figure of 40 per cent. in that Act also was a failure.

A further strand in the expectation of the land vendor relates to the argument whether a rate of tax of 83 per cent. will induce him to sell his land voluntarily for development. In my judgment it will not induce him to sell his land voluntarily, but I feel that a 53 per cent. rate would be fair and reasonable.

The hon. Member for Cornwall, North (Mr. Pardoe) made a thoughtful speech in Committee on this topic. He believes in the neo-Ricardian analysis of land—in other words, that land is a residual matter. He believes that a builder buys land according to what he believes will be the market price of the houses on it. The better the price of the houses, the dearer the price of the land. There is a certain amount of truth in that but, as my hon. Friend for Folkestone and Hythe (Mr. Costain) well knows, one must sort out the different strands of landowner when looking at a figure of 53 per cent. or whatever it might be.

First there is the large landowner, such as the Duke of Omnium, who does not have to sell his land if he does not want to. The cows can graze on it, apple trees can grow there and that situation can go on for ever. Whether the figure is 53, 63 or 83 per cent., it is a residual matter for such a person. But there are other landowners for whom the situation is different. For example, a farmer may not wish to sell a field which may be of assistance in the village plan because he does not want to create death duty problems for his wife. A further example is Mrs. Smith who has a bungalow with a large garden. She does not want to sell that land because she does not want to be troubled by having the builders all over the place.

Those landowners will not follow the market forces in land if they do not choose to do so. Therefore, the residual argument breaks down and it is a matter of judgment for the House to decide whether those people will sell their land in present circumstances. My personal belief is that they will not.

Mr. David Mitchell

Does not my hon. Friend agree that a farmer may not wish to sell not only because of possible estate duty implications but also because of the fact that the removal of one field may lead to the farm becoming uneconomic as a unit, and it will have no higher value for that reason. If the farmer is to be taxed at 83 per cent. on that field, the possibility of his selling land is even less attractive.

Mr. Latham

My hon. Friend is right. That is why it is impossible to lay down general rules on this topic.

On an earlier amendment the Chief Secretary spoke of equity. In any consideration of land and its development, equity and emotion are important. More important, however, is the stability and strength of the housing programme, which is a matter that is strictly germane to this discussion. At present the land market is totally paralysed. Few transactions in land are taking place, partly because of uncertainty over development gains tax, partly because there is little knowledge of what will happen in respect of wealth tax and partly because of the total absence of any Government proposals on land nationalisation—a subject which has been mentioned in general but not spelt out in detail. Nobody at present is making any profit out of land.

9.0 p.m.

I interrupted the Chief Secretary to ask whether the situation today was the same as it was on 17th December. The answer is that it is not the same, because last autumn and during 1972 people were making large profits out of land, whereas at present nobody is making any profit out of land. That fact alone should induce the House to pause in its consideration.

The second thing is that in normal circumstances housing developers buy 80 per cent. of their land not from pension funds, local authorities or other builders but from private individuals, by the normal trading methods in the market. If the housing programme is to be continued properly the people selling land must be willing sellers. Land nationalisation and compulsory purchase are not the answer because they take years and because they are based on the assumption that there are up-to-date structure plans and local plans. That is not a true assumption, because these plans do not exist.

Thirdly, so far from getting better—I made this point when I interrupted the Chief Secretary—the private housing programme is getting worse. In two answers from Ministers today, one from the Minister for Housing and Construction and the other from the Secretary of State for Wales, I learned of the extent of the Government's cash flow programme for the acquisition from developers of dwellings under construction. Up to 11th July only 2,471 houses had been bought. That is peanuts, the situation is getting worse, and there was nothing in the mini-Budget this afternoon to revive the housing programme.

Fourthly, housing starts are falling still further. This year there are likely to be only half the number of starts that there were last year, and the situation is getting worse because of the uncertainties to which I have referred.

The mortgage situation is getting better, and so are other things. There is a need for more confidence by the house purchaser to buy, and for more confidence by builders to start more houses. There will not be that confidence so long as there is an 83 per cent. level of tax, and I hope that the House will see fit to resist the amendment.

Mr. Norman Lamont

The Chief Secretary banged hard on the Dispatch Box—rather harder than at any other stage of the Bill—hut his arguments were as thin as any that we had heard during the debate on the Bill. Both today and in Committee upstairs the Chief Secretary failed to address himself to the effect that this would have on the housing market. We had the same knockabout stuff.

I am pleased to learn that the Chief Secretary is the most careful reader that I have ever met of the Conservative Party manifesto. His entire case seems to rest, first, on our manifesto, and, secondly, on the statement by the then Chancellor of the Exchequer on 17th December, and I shall come to those in a moment. The Chief Secretary ought, on one of the two opportunities that he has had of speaking on this subject, to have said something about the effect of the amendment on the housing market, but he said almost nothing today, and he said nothing about it in Committee.

When my right hon. Friend raised a point about the representations that we had had on the effect of this proposal on, the supply of land, the Chief Secretary said "It is not surprising that you get representations from people who are affected by this measure. It is not surprising that you get representations from the owners of land about the effect that this will have on their personal financial position."

But that is not the point. The representations that we received were not from those who were selling but from those who were building houses and who have to buy the land. They have been making representations to us because they fear the consequences that this rate of tax will have on the supply of land for residential housing.

I think I am right in saying that house builders such as Wimpey and other large firms that are engaged in the construction of private dwellings buy a large part of their housing land from private individual. About 80 per cent. of those who have made representations are worried about the effect of an 83 per cent. rate upon their industry. They have also made representations to the Chancellor of the Exchequer. I happen to have a copy of the Press notice issued by the House-builders Federation about the representations that it made when the development gains tax was first outlined in all its details in the Finance Bill.

We do not know what the Chancellor of the Exchequer said to the federation, or whether he even bothered to reply to it. The Chief Secretary has not given a single argument, either today or in Committee, why the objectives put forward by the federation were likely to prove unfounded. Does he think that the federation was acting out of its own financial self-interest and was making it all up? What does the Chief Secretary think about the argument as it applies to the house building industry? He must address himself to this and not fall back on a few catch phrases from the Conservative Party manifesto or talk about land speculation.

Land speculation has nothing to do with the matter. During the Committee stage upstairs the Chief Secretary admitted, following pressure from our side, that land speculation would continue to be taxed at the same rates as previously. But that situation is not affected by the amendment.

I hope that the Chief Secretary will address himself to the serious points put forward. The Government's proposal will have a severe effect on land supply. There have been discussions, relating to another part of the Bill, about the effect of it on mineral rights. In that respect the Chief Secretary was prepared to make a concession. We were told how Lord Diamond, a Minister in a previous Labour Government, had pointed out that a high rate of marginal taxation giving a small yield—when a person sold land—was likely to have a harmful effect on the supply of land containing mineral rights for public use and exploration. If the principle applies with regard to mineral exploration it should also apply to land for private housing.

It will not do for the Chief Secretary to rest his case on the Press notice of 17th December or on the Conservative Party manifesto. The housing market situation has altered drastically since that time. I understand that it is forecast that the number of housing starts this year will work out at about 120,000 compared with 215,000 for 1973. It is now more important than ever not to do anything which would further undermine confidence in the housing market.

Surely the Chief Secretary can afford to move a little on this point. He says that the Government proposals are in accordance with the Press notice of 17th December, but there is no reason why we should be bound to every letter, every comma and every dot of that Press notice, any more than we should be bound to every detail of the Chancellor of the Exchequer's first announcements about taxation of foreign income.

It is a well-known principle that when new taxation proposals are drawn up there should be maximum public discussion. When representations are made a serious Government bow before them, particularly those which are manifestly in the public interest.

Mr. Brian Sedgemore (Luton, West)

I sat on the Committee which considered the Finance Bill and listened for 27 hours to the assault by members of the Opposition on the development gains tax, a tax which they introduced. At that time most of them—I exempt the hon. Member for Kingston-upon-Thames (Mr. Lamont)—made speeches concerned not with the supply of housing land but with the difficulties which certain property companies were finding themselves in.

I have refreshed my memory on many of the speeches by members of the Opposition, and the gravamen was that since 17th December last year a large number of property companies found themselves in difficulties and it behoved the Government to get them out of those difficulties. I am sure that the House will wish to send its condolences and felicitations to the Lyons and Stern property groups and Guardian Holdings and Mr. Harry Hyams, who last week told a court of law that keeping a building empty was not in his own personal interest but was for the public good.

I am sure that we all accept those arguments and understand why property companies find themselves in difficulties. There have been a rise in interest rates, some reckless borrowing, some strange auditing, dubious connections with dubious secondary banks and some uncertainties created by the actions of this Government.

I understand that the right hon. Member for Finchley (Mrs. Thatcher) put down a Question to the Secretary of State for the Environment about the control of business rents. I subsequently put down a Question to my right hon. Friend the Member for Dulwich (Mr. Silkin). The purport of both answers seemed to be that the control of business rents would be ended by March 1976, but it was not clear and property companies have been worrying. They can rest easy tonight. I have made further inquiries about the Government's intentions. As I understand it, those statements were just a holding operation and the Government are examining the options. One of those options may be to continue the control after March 1976 or there may be a new form of property tax or perhaps we shall indulge in some form of municipal or public ownership.

When the House is considering this tax on property developers, those with investments in property companies, those who are considering investing in them and those property companies which themselves may think that after March 1976 their responsibilities and liabilities will be eased should think again, because it is not happening that way. The whole matter is under active examination by the Government.

The Chief Secretary was right to mention the Press release on 17th December 1973 by the right hon. Member for Altrincham and Sale (Mr. Barber) about the way in which property profiteers would be taxed. He was right to say that in February, just to show that there had been no mistake, the matter was re-emphasised in the Conservative Party manifesto. As he said in Committee, these clauses are carbon copies of the clauses that the Treasury drew up on the instructions of the right hon. Member for Altrincham and Sale.

Some hon. Members have asked how we know that, since no Government are allowed to see the papers of the previous Government. But we have the Chief Secretary's assurance. Whatever his faults, they do not lie in misleading the House. He knows that they are carbon copies of the proposals drawn up on the right hon. Member's instructions.

Mr. Norman Lamont

Would the hon. Gentleman not agree that the Government have already given way on one or two points which were specifically included in the announcement on 17th December 1973? For example, they have given way on the exemption of pension funds from development gains. Does that not at least suggest to the hon. Gentleman that where there is a good case for making some change it should be examined on its merits?

Mr. Sedgemore

One can distinguish between the detail and the principle of the tax. This proposal strikes at the heart of the announcement on 17th December. The exemption of pension funds was given because certain property companies found themselves in difficulties, but it was almost meaningless. The amount that it would have cost pension funds was very limited. It was almost a political amendment for political reasons, so that we could enamour pension funds of our intentions.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Does the hon. Gentleman accept the case made by my hon. Friends that this tax at a rate of 83 per cent. on the individual will result in a drastic fall in land coming on to the market for house building? Does he, therefore, put the supply of houses for people before his prejudice against people making profits, or the other way round?

9.15 p.m.

Mr. Sedgemore

I am coming to that point. It is germane and important to the argument. But it is important to point out that when a political party makes a statement in December, backs it up in February and presents it to 50 million electors, but then turns turtle when it comes to the House, that is the sort of deceit and corruption which has brought British politics into disrepute.

I am asked about the supply of housing land. Not only have I been on the housing committee of a local authority; I have also worked as a civil servant for four years in the Ministry of Housing and Local Government. When hon. Members of the Opposition say that reduced starts in this year's housing programme are due to the supply of land drying up, all that I can say is that they do not know what they are talking about. As evidence that that is a ridiculous statement, not one of them has produced a single figure to show that the supply of land has reduced starts in this country.

I go further. The supply of land as affected by this property tax cannot conceivably affect the number of starts either this year or next year. The important thing for the public to know is that the supply of land will be dealt with after October in the public ownership proposals for development land which will be put forward by the Government. What hon. Members of the Opposition cannot accept is that the present Government have thought out the whole policy towards property companies, land and the housing programme, and it is a consistent and coherent programme.

Mr. Michael Latham

The hon. Gentleman should not fling around these accusations of ignorance. It is not hon. Members of this House but the building industry which has specifically referred to what he has said cannot happen. The building industry has said that the supply of land is being threatened by these proposals and that they have a grave effect on confidence at present.

Mr. Sedgemore

I know of a number of builders just outside my constituency who stand to make a fortune if this amendment is passed. That is one very good reason for resisting it. It certainly affects builders who happen to own green belt land on which they have been speculating, as hon. Members know.

Mr. Ridley

On a point of order, Mr. Deputy Speaker. The amendment deals with private individuals who may or may not wish to sell land. How could it possibly be in order to discuss the question whether builders will make a profit out of the amendment.

Mr. Sedgemore

That is not a point of order, Mr. Deputy Speaker, and the hon. Member well knows it.

Mr. Deputy Speaker

Order. I have yet to rule on the matter. It is, in fact, a matter of debate.

Mr. Sedgemore

The hon. Gentleman well knows that this is quite possible for directors of building firms who own chunks of land in the green belt. The hypocrisy of the argument of Opposition Members is shown by the fact that in Standing/ Committee, they not merely objected to the 75 per cent. and the 100 per cent. details of this tax but voted against the tax altogether. Indeed, there was a split between hon. Members on the Opposition Front Bench—the right hon. Member for Carshalton (Mr. Carr) and the hon. Member for Worthing (Mr. Higgins)—and their back benchers. On the Question "That the clause stand part of the Bill", the vote was 18 to eight. Eight Opposition Members voted against the tax altogether. It was their intention to exempt these people. They did not succeed. The Opposition Front Bench supported the amendment. But they succeeded in ratting on their election manifesto.

Mr. Norman Lamont

On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to give a totally erroneous record of a vote—which I do not think ever occurred?

Mr. Deputy Speaker

I think that that is a matter of debate and of opinion.

Mr. Sedgemore

One of the features of the Standing Committee was the way that the arguments of the right hon. Member for Carshalton were repeatedly ignored by his back benchers. They were ignored not only in the vote but in the argument. Hon. Members who have been in the House longer than I have agree that they have never known a Front Bench spokesman to be so bullied and roughly handled from behind.

It will be a sorry day for politics it all hon. Members opposite collectively rat on their manifesto, and it will be a sorry day for the people if we decide that we can help property developers, the friends of hon. Members opposite, in this respect. Perhaps it was symptomatic that in that discussion the 27 hours of hypocritical foray which these people made against this tax was led by people who were directors of property companies and advise property companies.

Mr. Ian MacArthur (Perth and East Perthshire)

I have not hitherto taken part in the debate on this Finance Bill. I came with joy to listen to the Chief Secretary. I remember the many affable and agreeable speeches he used to make in opposition. I must tell him tonight that behind his cold exterior he hides a heart of stone. I want to bring the hon. Gentleman down to earth, to the real earth of my constituency in Scotland. I will give him a specific example of what his proposal will do to a small community in Perthshire.

I hope that the hon. Gentleman will not laugh any more, because what I am about to say affects a burgh of several thousand people who depend largely on a development which his amendment will frustrate.

All my hon. Friends who have spoken in this debate have suggested that the Government amendment, which seeks to reject the proposal carried successfully by the Opposition in Standing Committee, would dry up the supply of land. Up to this point my hon. Friends have been referring primarily to the supply of land for building. I want to tell the Chief Secretary of a case which has arisen in my constituency in the last few days and of which I think he should have some information.

A farmer owns a small amount of land on the fringe of a small burgh in Perthshire. The burgh is reasonably prosperous but it is badly in need of a small industry which will employ men. There is a shortage of employment for male labour. At last, after a long period of search, a company has been found that wishes to build a factory in this small burgh. The land is available. It is a quite small site. Outline planning permission exists. The town council wants the factory to be built. The owner of this small piece of land wishes to sell his land for this purpose The whole community wants the development to take place.

At this point we come to the second question. Is it worth while for the farmer to sell that small piece of land? The answer is that if he is to be taxed on the proceeds at the rate of 83 per cent. it is simply not worth his while. This gentleman, who is not a constituent of mine but who owns the land in my constituency, has told me that with his accountant he has done some sums. If he sells the land, which is a matter of five or six acres, for this industrial development, he will be left, on the Government's proposals, with 17 per cent. of the proceeds. If he invests that 17 per cent. his return will be considerably less than the return he gets from keeping the land in farming use, because those few acres carry a crop of soft fruit which fetches a large price and has done for a considerable time, taking one year with another.

It would be madness for the farmer to sell that land to retain only 17 per cent. of the proceeds, if he has to give up the profitable enterprise which he conducts and which, so far as one can judge, will continue to be a profitable enterprise for many years to come. It is no wonder that this gentleman said to me that if the rate of tax is 83 per cent. he cannot sell the land because, whatever his affection for the local community, he does not see why he should carry that affection to the point where he loses a very large annual income, as he would if he paid this penal rate of tax.

That is a fact. It is an example of how the tax proposed by the Government would deny a small burgh in Scotland the opportunity of new male employment which it anxiously needs. I hope that the Chief Secretary will stop talking in hypothetical terms and will come down to the real instances, of which this must be only one, in which much-needed development will be frustrated if this crippling rate of tax is accepted by the House.

I hope that the hon. Gentleman will put aside his doctrinaire approach to land matters, will accept that a rate of 53 per cent.—although, my goodness. 53 per cent. seems a bit high to me—is reasonable enough and will drop this crippling rate of taxation which will prevent communities like the one I have mentioned from drawing the benefit of industrial development which they need.

Mr. Graham Page

I have already declared to the House on other occasions that I am one of those villains and am a director of a property holding company, although I have no share in the capital of the company in any way.

The Chief Secretary based a lot of his argument on the Conservative manifesto. It is always good fun to quote from any manifesto issued during a General Election and accuse the party which wrote it of not keeping its promises. But the Government themselves have completely changed the situation. A Conservative Government are not in office, but the top rate of tax has changed. The housing market has changed.

The real change, however, is that the present Government have threatened nationalisation of development land. This is a completely new situation. It is not a situation in which a Government are merely taxing the development gains out of land. As the hon. Member for Luton, West (Mr. Sedgemore) told the House, it was already in draft or in blueprint stage. The Chief Secretary laughs. It has been publicly said that the Government intend to nationalise development land. To that extent they have reduced the value of that land and have produced a completely different picture. By that very fact, I find myself released from anything I may have said about development gains in the manifesto. I am in a completely new situation now.

We have talked so far of the individual who sells the land. I want to mention the shareholder in a close company. The shareholder in a close company will have added on to his income the development gains which are made in that company, even though it may be a first letting and not a sale of the property, and the shareholder will be charged up to the highest rate of income tax on those notional gains which have occurred in a company in which he holds shares. This will be a grievous hardship on many comparatively small shareholders in close companies.

In this amendment we are not talking of the land speculator. The speculator is a dealer in land. One cannot have a speculator in only one piece of land. He is always a dealer in land, and one catches him on the full income tax rate. We are not talking about that man. He already pays and, whatever we decide on this amendment, will continue to pay the full rate of tax.

9.30 p.m.

We are talking here about the casual sale of land, so to speak, about the person who is prepared to make his land available for development and who then finds that he may be taxed at a very high rate on any gain which he makes. In such circumstances he will not bring that land forward. This has already been shown through the threats about the high rate of tax and about land nationalisation.

I hope that the House will respect the decision made in Committee to limit this tax to 53 per cent., which is almost the same as the 52 per cent. corporation tax. I think that that is why we chose that figure in Committee; it is approximately the same as the corporation tax which companies will be paying. I urge the House to hold to that decision of the Committee.

Mr. John Pardoe (Cornwall, North)

This tax gave rise to many interesting debates in Committee. In fact, it is one of the higher lunacies of the age. It is a test-tube baby implanted in the womb of the present Government by the Conservative Government, and it has betrayed its lack of honest parenthood throughout all our debates as they have meandered along their course.

I can understand the Conservative Party's shamefaced approach to its progeny. I should be shamefaced too if I had given parenthood to this thing, because it is a ludicrous instrument for dealing with the land problem. The land problem, as one or two hon. Members have already said, is one of the most formidable and impractical problems which we face in this country today. We are discussing the most important commodity, if commodity it be, with which we can concern ourselves. It has an effect on the cost of housing, because in most cases land makes up one-third of the cost of a roof over a family's head, and in some parts of the country substantially more than that. It is the source of half our food at least. I wish it were more than half.

How did each of us come to the ownership of land? How did ownership come about in the first place? Lloyd George believed that God gave the land to the people. But that does not get us very far. John Locke believed that we came to the ownership of land by mixing our labour with the soil. But that does not get us much further either.

In their latter stages the last Government, faced with this appalling problem, realised that something had to be done. The question was, what? They went to the Treasury. The Treasury dusted off an old brief and handed it out to the right hon. Member for Altrincham and Sale (Mr. Barber). That is what we are now debating—in essence, in almost every detail, what was then handed down from the Treasury shelf and accepted lock, stock and barrel by the Conservative Chancellor not so very long ago.

The result of this tax is entirely predictable. It will be exactly the same on the supply of land and the price of land as the result of the four other attempts this century to deal with the land problem in closely similar ways. There is no need to go through them, but one thinks of the Town and Country Planning Act 1947 and the Land Commission Act. All they did was to dry up the supply of land, and in spite of all the forecasts they increased the price of land as well, especially the price of development land.

There is no getting away from the fact that this tax was invented by a Tory Government. The idea that the idiocies in it have somehow been grafted on by the present Chief Secretary in the intervening months is nonsense. The Conservative Government were committed—the Chief Secretary has quoted the passage in the Tory manifesto—to taxing development gains at the then top rate of income tax, 75 per cent. I have heard nothing tonight to deny that that was the clear and stated intention of the last Government.

What is the purpose of a land policy and, therefore, of a land tax? As I say, this is the most serious subject with which we can concern ourselves. First, we want the best use of land. There is a desperate shortage, and there will remain a shortage in these overcrowded islands. We want the best use for agriculture. We want the best use for building and development.

Second, we want the community to get back the gains in the value of land which the community itself creates. I would leave to the landlord only the gains directly attributable to him and not a penny more. The tax will not recover the gains at whatever rate it is levied. Perhaps it might if it were levied at 99 per cent., but not even the Government are proposing that. Thirdly, the policy should bring far more development land on to the market.

Fourthly, it should aim to overcome a sense of injustice—I accept that it exists, and the right hon. Member for Altrincham and Sale said so in introducing the tax—about high profits from land. Many of these high profits are already taxed, as the right hon. Member for Crosby (Mr. Page) said and as the Chief Secretary pointed out in Committee. Many of these so-called windfall gains would not escape taxation even if we never passed the tax. The tax was introduced primarily for political purposes. It was designed to do something about property profiteers and speculators, but it affords us no real method of dealing with the central problem of land taxation.

I am not sure what the tax is meant to do. I suppose it is meant to hit property speculators, but the Chief Secretary admitted that existing tax laws already cover most types of speculation. If the aim was to get back for the community part of any increase in land values which the community creates, I would have thought that it failed manifestly to do that. A development gains tax taxes only the increase in value on the disposal of land, and that will lead to the withholding of land. That is inevitable. We therefore need to tax land not at its disposal at all. We should tax the annual value of land.

This brings me to the point raised by the hon. Member for Melton (Mr. Latham) about a large landowner such as the Duke of Omnium. It would not matter to such a man whether we had this tax or any of the other four taxes which have been attempted this century if he hung on to it, allowed cows to graze on it or whatever else he did with it. But a tax on the annual value of land would hit the Duke of Omnium, Harry Hyams, the owner of a bungalow with a large garden and the owner of the Victorian house in an inner London suburb. The great thing about the tax on the annual value of land is that it forces those who wish not to develop their land to pay the full price of leaving it fallow and undeveloped.

Mr. Michael Latham

I accept the hon. Member's point about the Duke of Omnium. As he is explaining the Liberal Party's policy of site value rating, will he confirm that the widow with the large garden will pay site value rating?

Mr. Pardoe

It is Liberal Party policy that the widow with the large garden, the owner of the large plot in inner London, the Duke of Omnium et al will pay site value rating on the land. If at the end of the day it was decided to exempt certain categories of land, such as agricultural land—[HON. MEMBERS: "Ah."]—that is a different argument. That is an argument for derating. Whether or not one believes that food should be taxed is an argument which was decided in 1928, and that can of beans has not been opened since. Perhaps it is time that it was, but this is hardly the moment to suggest putting a tax on food.

In my view the community should get back a major part of the increase in the land value. The development gains tax applies only to the increase in value at disposal and it will therefore not achieve that end. All land taxes have dried up the supply of land and raised its price. This tax will do precisely the same thing. I challenge the Chief Secretary to deny that.

It would be interesting to know what the Conservative Party thinks now, having fathered this ghastly bastard of a tax. I understand, reading the speeches in Committee and those made since, that the Conservative Party's view is that something has changed in the land market, something absolutely fundamental which makes this tax totally unnecessary, and it is a terrible shame that the Government have not recognised that things have changed.

The right hon. Member for Crosby (Mr. Page) said that it was the Government's proposal for land nationalisation which changed everything. Others said that it was the fall in the value of land. I say frankly that this is a short-term palliative. That is all it was designed as. It was not sold to us at the time as being a short-term palliative. It was sold to us by the right hon. Member for Altrincham and Sale as a major reform of land taxation designed to tackle the whole long-term land problem. It never will do that, and it never would have done.

Land is unique. The supply cannot be increased. But planning gives it an enhanced value. So we have to tax that value. Whatever the Labour Party says about the nationalisation of development land—I must admit that I am not entirely unsympathetic to proposals in that direction—it will be hideously expensive, and I warn Labour Members that they are being had for suckers. It will always be too expensive for any Labour Government to implement.

Next time, if there is a next time and another Labour Government, with a majority or without it, the Prime Minister will appear before his party conference and say "Look, we introduced this development gains tax. Is it not a splendid thing. It has knocked all those terrible property speculators for six, so we do not need this hideously expensive reform in Labour's manifesto. Anyway it is only in the small print. We will not quarrel with that."Land nationalisation will be left to fester for years. This will be used as the excuse for putting it on the shelf and keeping it well dusted. The only way in which we can advance is to bring in land value taxation.

This brings me to the question of the rate at which it should be levied. This is a bad tax and it is a palliative. I do not think that the rate makes any great difference to its effect. I cannot really accept that the widow with the bungalow with the slightly larger garden than she needs will be encouraged to bring that garden to the market and overcome all her natural inhibitions about having builders trampling over the ground just because the rate is 53 per cent. or 50 per cent. rather than 75 per cent. or even 83 per cent.

Mr. MacArthur

Will the hon. Gentleman take it from me that the farmer I referred to would sell his land for the development we need if the rate were 53 per cent.? He most certainly will not sell if it the rate is 83 per cent.

Mr. Pardoe

There may be one farmer somewhere who may be influenced by the amount. The argument about the rate confuses the whole issue. It is a device to disguise the embarrassment of the Conservative Party at having fathered this appalling tax. I believe that this is a bad tax, but if it is to be introduced it might as well raise some revenue. It might as well be a tough tax. We might as well have it at the top rate. The Chief Secretary knows that I withheld my vote in Committee. If we are to tax capital and development gains it is because we believe they are part of income.

9.45 p.m.

Mr. Ronald Bell (Beaconsfield)

We have heard a remarkable speech from the hon. Member for Cornwall, North (Mr. Pardoe). He finished by saying that capital gains are to be regarded as part of income and should be taxed up to the hilt. It will be interesting to know whether that is the policy of the Liberal Party.

Let us examine the proposition that has been put forward. How are capital gains part of income? When a man earns income by performing services he exerts himself. The energy, whether it be mental or muscular, that he exerts is concluded at the end of the day and he starts another day with a new supply of energy. However, the man who sells his garden or field has parted with an asset, and the morrow will not bring it back. There is a total difference between disposing of a capital asset and disposing of daily labour. Taxation should take that difference into account.

The Chief Secretary is defending a policy which I consider to be insane. If the best thing that he can say in its favour is that it was put forward by my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), I do not regard that as a very good defence. It was always an insane proposal. If it appeared in 50 party manifestos it would not be any better. Had we won the last General Election, as we should have done, and my right hon. Friend had tried to put this policy into effect, I can assure him that I would have opposed it at every stage. The only thing to be said in its favour is that it is a lot better than the policy of taxing site values.

The hon. Member for Luton, West (Mr. Sedgemore) appeared to be under the impression that this was a tax on developers. He said so repeatedly. In fact it has nothing to do with developers. It may be perfectly proper to disclose an absence of interest in stating that one is not a company director of a property company or to declare an interest as such a director, but development companies have nothing to do with this tax. Perhaps it would be proper to declare an interest as the owner of a large garden. That is the sort of person that this tax may affect. The far-aver who has a field might also be affected. It has nothing to do with development.

This tax arose because there was an awful flap and a lot of excitement about people making large profits out of property development. It was a panic reaction to Centre Point. So we in politics generally proposed a tax which has nothing to do with developers. We proposed it—this was even more absurd—when even developers were ceasing to make any profit. Why has there been all this furore about speculative development and speculative profits? Why do people think that it is bad that there should be speculative builders? Do people want all building to be bespoke? They buy motor cars which are made speculatively. Motor car manufacturers have no idea who will buy their products. People buy washing machines that are made by speculators. They buy shirts which are made by speculators. The whole of our standard of living and our civilisation depends on the activities of speculators.

This attack on speculation is absolute rubbish. This is a tax on the person who owns land and decides to sell it. The amendment seeks to reverse an amendment made in Standing Committee. It is directed only at the private individual who has land and decides to sell it. Who is he? He may be the owner of a large garden or he may be a farmer. He is the source of supply of all the development that can rightly be called infilling. It is the policy of both main parties—I do not know about the Liberals—that as much housing development as possible shall be by way of infilling and rounding off and as little as possible by green field development. We have now devised this tax, the effect of which must be to tie up land for infilling and rounding off and to encourage green field development.

It is unrealistic for the hon. Member for Cornwall, North to say that it does not matter what rate the tax is levied at once one has decided on it, that it does not matter whether it is 90 per cent. or 10 per cent. It makes all the difference in the world. A person deciding whether to sell the end of his garden may decide to sell it if he has to pay 10 per cent. and can keep 90 per cent., but if he knows that he will have to pay 90 per cent. to the tax gatherer and keep only 10 per cent. himself he will not sell. Somewhere there is a point at which the matter hangs in the balance. It is a matter of common sense that at 83 per cent. no one is going to sell land except in desperation. There is even a material difference between 25 per cent. and 17 per cent. in this respect. I never thought that 75 per cent. was right. It was far too high. But 83 per cent. is killing the market.

It is right, as the hon. Member for Luton, West said, that at the moment the supply of land is not the operative factor in holding up building. There are very few sellers of land in the market and even fewer buyers because the liquid position of builders and property developers is so bad that they are not in the market. Just at the moment, therefore, the apprehension of the tax is not having a material effect, but the moment the logjam ends and the appalling backlog in house building begins to be taken up, as we all hope it will be, this tax will instantly be a serious impediment to the kind of development we want.

have said that this tax was adopted by the Conservative Government for bad and panic reasons. It is being advocated by the Labour Government for bad reasons, partly on a tit-for-tat basis—" You thought of it and we are carrying it out "—and partly in playing to the gallery, consisting of those who envy other people's windfalls and like their own. It is put forward for bad and unworthy reasons.

I understand that the Chief Secretary cannot now retreat. He cannot consult his senior colleagues and get their permission to be swayed by the debate. But that does not alter the fact that this is a bad tax, and after the next General Election— which, it seems from the Chancellor's statement, we are to have shortly—I hope that whichever party wins will, in the national interest, think about this matter again and do something a lot more sensible about profits from land.

Mr. Ridley

I repeat the remote and distant interest which I declared on these clauses in Committee. I am astonished by what the hon. Member for Cornwall, North (Mr. Pardoe) said. To all the clauses dealing with this tax, the Liberal Shadow Cabinet has appended an amendment to leave them all out, and the whole tenor of the hon. Gentleman's speeches in Committee was to that effect. What he said tonight reinforces his view that the tax is bad and should be omitted. Yet it is now his considered judgment that, bad though the tax is, the rate should be levied at the highest possible amount—a piece of logic that I find hard to follow and which seems to involve a piece of Liberal U-turning.

The hon. Gentleman is right to say that it is a bad tax. Whether we are prepared to accept his alternative of site value rating is a contentious proposition.

Mr. Graham Page

Apparently site value would also be at the highest income tax rate.

Mr. Ridley

Of course we do not know the proposals for site value rating, but I think that the Liberal Party has chosen a particularly unfavourable moment to introduce a proposal for a more vicious form of rates on the eve of the election which we are told may be coming. I wonder how much it will be welcomed by the general public. People are not too happy when they hear the word "rates". That is a slightly sensitive political term, and treating capital as income, as the hon. Member for Cornwall, North described, is a vicious form of rating that may not be the best election platform for him to fight on. With the little persuasion that I can command, I advise the hon. Gentleman to follow his own amendments into the Lobby and to vote against this amendment, just as he is going to vote—and I shall vote with him—to leave out the clauses when that time comes.

Even more ridiculous is the Chief Secretary, who says that this is a Conservative idea and that he commends it to his own side on the basis that it is a good Conservative tax. However, his hon. Friend the Member for Luton, West (Mr. Sedgemore) let him down. The Chief Secretary should never allow the hon. Member to speak, because he always puts both his feet in it when he does.

What the hon. Member for Luton, West said was true. He said that the Labour Party had thought out the problem of land profits and gains and had a perfect blueprint for dealing with the problem, and that if it were not for the tiresome fact that there had to be an election the party would be romping ahead with it already. He said that the Labour Party plan was to nationalise building land. If that is Labour Party policy, why introduce a piece of Conservative legislation in the short interim between now and October when, the Labour Party believes, it will be back with a majority sufficient to institute land nationalisation?

The two conflict. What is the point? There is a point and it is of great interest. If the Labour Party were to win the election and bring in a Bill to nationalise development land, presumably those owning development land would be paid compensation based on the district valuer's valuation. Does anybody deny that the district valuer's valuation would be the basis of fair compensation? No hon. Member on the Government side denies it. That would result in much bigger profits, which would escape the scope of the tax because there would have been no change of use, nothing to trigger off this tax.

Nothing will be paid under this tax, not a penny if the Labour Party wins the election and proceeds with land nationalisation. Therefore, it is futile for the Labour Party to proceed with this tax.

My final point is that the behaviour of a person who has land that he may wish to sell is conditioned by a number of political factors. One must weigh the chance of the hon. Member for Cornwall, North being Chancellor of the Exchequer in October. That is not a political risk, perhaps, that one rates very high when wondering how to deal with one's property. One has to weigh the risk of the hon. Member for Luton, West being Chancellor.

Mr. Sedgemore

That is more likely.

Mr. Ridley

I do not think so. One has to weigh the risk of the hon. Member becoming Chancellor and introducing his land nationalisation proposals. One has to weigh the risk of one of my hon. Friends taking that job and bringing in a provision that says 53 per cent. is the rate at which the individual will pay tax.

One has to weigh whether the whole lot of them will not persist for ever and that there will be somebody who understands the land market and who realises that there is a shortage of land for building, that the whole lot will then be swept away and that perhaps one had better wait and hold one's land off the market until there is a Government who understand how markets work and how supply and demand equate.

10.0 p.m.

All the political threats which have been bandied about in arguing the three policies I have described will cause most people to wait for better things to come. We should be wise to consider carefully whether to have this tax at all. If we are to have it, at least we should have the 53 per cent. rate, which would not have the effect of totally drying up the supply of land and would allow some building to go forward.

I hope, therefore, that my right hon. and hon. Friends will press the Government to leave the Bill as it is and that the hon. Member for Cornwall, North will return to his usual pristine logic and vote against that which he is against rather than seek to make worse a tax which he admits is a bad one.

Mr. Robert Carr (Carshalton)

A long time ago the Chief Secretary moved the amendment in an ebullient mood, which was very enjoyable but did not bring much seriousness to the subject under debate. Since then, apart from the intervention of his hon. Friend the Member for Luton, West (Mr. Sedgemore), we have had a serious debate of high quality.

I felt from time to time that the arguments were widening out from the amendment before us to a fundamental consideration of land policy generally, which gave the hon. Member for Cornwall, North (Mr. Pardoe) the opportunity once again to air his ideas about site value taxation. I will not follow him down that line, except to say that I have never understood how it could apply to my constituency and how my constituents could find the money to pay this annual taxation before they were able to sell the land and raise the money.

Mr. Pardoe

Does the right hon. Gentleman recall that on that point in Committee he invited me to come and speak to his constituents? I have been waiting for a written invitation, but I have not yet received one. Does he intend to issue that invitation?

Mr. Carr

I was tempted on several occasions to invite the hon. Gentleman to come and speak in my constituency. When the Liberal Party appeals to my constituents and tries to entice them from the proper straight and narrow path of voting for me, I feel that it would do my constituents good to find out what the hon. Gentleman believes—which is opposite to the argument used by his party to entice my supporters away from me.

I should be interested to know how my constituents would pay the site value tax with no apparent resources with which to pay it—and apparently being taxed up to the hilt, whether it be on capital or income. I am being led astray into these wider spheres. I will return to the amendment, which I shall deal with briefly.

The Chancellor of the Exchequer made some grossly misleading remarks earlier today and on other occasions both inside and outside the House about the result of the amendment passed in Committee being to pay money to land speculators. We specifically established in Committee that the amendment which we pressed and won, and which the Government are trying to wipe out tonight, in no way reduced the amount of tax which would have to be paid on the fruits of land speculation. The amendment has nothing whatever to do with land speculation, and the Chief Secretary in Committee, admittedly after some pressing, made this absolutely clear in a categorical statement. The fact remains that if our Committee stage amendment remained in the Bill land speculation would still be taxed up to the full rate, possibly up to 98 per cent.

Let us be clear that the amendment has nothing to do with land speculators. What we are dealing with here is land held for investment, but where a windfall profit can be made because of planning decisions in the community's interest we are dealing with a development gains tax—a tax proposed on that windfall. That is a very different matter from land speculation, as the Chief Secretary acknowledged, and indeed as my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), as the then Chancellor of the Exchequer, made clear last December. My right hon. Friend then said that in the then circumstances that was something we would support.

My right hon. Friend in December proposed that when an individual sold land which he held for investment he could be taxed up to a maximum rate of 75 per cent. on the development gain element in his sale. That was a proposal which we repeated in our manifesto. In Committee upstairs we changed that figure of 75 per cent. to 53 per cent. That is not in dispute, and I am not seeking to deny it. I want to make clear that at 53 per cent. we would still be carrying out the basic promise we made in our manifesto—namely, that the development gain should be taxed much more severely than ever before. A figure of 53 per cent. is not far from double the rate of 30 per cent., which was the old capital gains tax rate, and it is much higher than the 40 per cent. proposed by the then Labour Government who introduced the Land Commission scheme. Therefore, the figure of 53 per cent., although lower than the 75 per cent. maximum proposed, is still much more severe than any tax on development gains proposed by any previous Government. This matter must go clearly on the record.

Why did we change from 75 to 53 per cent.? The arguments have been fully put by many of my hon. Friends in this debate. We changed essentially for two reasons. The first is that conditions have wholly changed since the end of last year and the beginning of this year. They have changed for three reasons. Firstly, they have changed because the economic circumstances in the property market have changed dramatically. Secondly, they have changed partly because of the existence of a Government who are committed to land nationalisation, and that situation has basically altered the context in which we were considering the matter. Thirdly, the conditions have changed because the top tax rate under the present Government will no longer be 75 but 83 per cent. In those changing circumstances the representations which weighed with us were not so much the representations made by those who will pay the tax, the sellers of the land, but those made by the potential buyers of the land in order to build houses on that land. In those wholly changed circumstances, the representations from those who need to buy land on which to build houses made sense. That is why we proposed 53 per cent. as the top rate rather than the 75 per cent. which we previously had in mind.

What we have to face in this matter is a choice. We can either, if we are feeling in a generous mood, have the satisfaction of extracting 83 per cent. out of such land sales as are made voluntarily and say that this is a proper sacrifice to the general community conscience and interest, or we can take the view that it is better to lower the level to a maximum at which there is a much better chance of people voluntarily coming forward and selling their land rather than have the long delay that is involved in a whole series of compulsory purchase actions, which is the only alternative.

Our judgment is that the community interest is better served by giving people more encouragement voluntarily to sell their land and thereby bring more land on to the market at a lower price. This will help home building and help potential home owners, which we believe is in the national interest. In these circumstances, we suggest that 53 per cent. is a much better rate than the old maximum of 75 per cent.

We believe that the lower rate will still take a substantial amount of the development gain and return it to the community whose planning decision brought that gain into being. At the same time, it will not be such a high rate as to prevent people from putting land on to the market voluntarily. That is a proper course to adopt because it is in the overall community interest. I hope, therefore, that my hon. Friends will vote to sustain the amendment that we made in Committee.

Mr. Joel Barnett

I have rarely seen the right hon. Member for Carshalton (Mr. Carr) so embarrassed, and one can understand why. He tried very hard to show why he was disagreeing with the former Chancellor of the Exchequer but he failed abysmally. The right hon. Gentleman and many of his hon. Friends have said that their main concern was for the buyer and not for the seller. They are not concerned with the landowner who they agree should pay tax up to the hilt, as the hon. Member for Cornwall, North (Mr. Pardoe) put it.

Opposition Members are concerned about the buyers of land. They want the supply of land to continue. But there is no problem about the supply of land. That is not the cause of the shortfall in housing starts. There are many other reasons for it which Opposition Members would have to admit if they were being honest.

Reference has been made to the small farmer, to the widow, and to the elderly lady of 80 who did not want to sell her piece of land and pay tax at 83 per cent. The fact is that those people would not like to sell their piece of land to be taxed at 53 per cent. either.

Mr. MacArthur

The hon. Gentleman must accept what I said, which is that in Perthshire we are awaiting a new source of employment This is an urgent need, and it will not be met if the Chief Secretary maintains the tax at this crippling rate.

Mr. Barnett

I do not accept that.

Mr. MacArthur

It is true.

Mr. Barnett

The hon. Gentleman should not get so excited. He must control himself. He told us about this constituent of his who is greatly concerned about the community and desperately wants to supply land for the building of a factory. The gentleman concerned would not be prepared to sell the land if he were left with only 17 per cent. more than the current use value. That was what the hon. Gentleman said. It is perfectly true that people will not be prepared to sell their land, whatever the tax rate. The answer will be, first, to have compulsory purchase and, secondly, as my hon. Friend the Member for Luton, West (Mr. Sedgemore) correctly pointed out, to introduce public ownership of development land, which is what we proposed to do.

I do not wish to be churlish, but the hon. Member for Cornwall, North has changed his mind from when he abstained upstairs and allowed his Conservative colleagues to pass an amendment on this matter. But he has always given his Liberal solution of the taxation of site values. I hope that no one in the House or outside will be under any illusion about this matter. I hope indeed that none of the hon. Gentleman's Liberal colleagues will be under any illusion about what they will have to tell their constituents. The hon. Gentleman's solution would mean having to establish a hypothesis for site value rating. It would be necessary to decide who was to bear the rate.

There is one matter here in which I am in agreement with the right hon. Member for Carshalton, in that a situation could arise involving a man who got planning permision to convert his house into, say, a sweets and tobacco shop. It would not be possible to tax him under the site value proposal. It would involve a tremendous administrative task. However, the hon. Gentleman's solution does not matter because his coalition colleagues are not interested in it, and neither are we. It is not, therfore, ever likely to appear on the statute book.

I do not rest my case on the Conservative Party manifesto. I hope that Members of the Opposition might, but I

do not. I rest my case on the need for taxation of windfall gains on land. I do so because windfall gains accrue to the landowner from nothing that he has done. They accrue, as the right hon. Member for Altrincham and Sale (Mr. Barber) said some time ago, from a decision made on behalf of the community. It is right that such a decision should not put excess profit into the landowner's hands. That is the only reason why I am in favour of this tax, as a temporary measure. When we have public ownership of development land in full operation there will not be the extra 17 per cent. accruing to the land owner. He will get current use value, and that is all. That is our policy. I do not apologise for it. I am delighted that it is our policy.

I therefore advise my right hon. and hon. Friends to vote for our amendment. They realise that there should be taxation of windfall gains on land up to the highest rate of income tax. I ask my right hon. and hon. Friends to reverse what the Opposition did upstairs in Committee and put back what the former Chancellor of the Exchequer intended, and what we intend.

Question put, That the amendment be made:—

The House divided: Ayes 279, Noes 260.

Division No. 98.]	AYES	[10.18 p.m.
Allaun, Frank	Carmichael, Neil	Dempsey, James
Archer, Peter	Carter, Ray	Doig, Peter
Armstrong, Ernest	Carter-Jones, Lewis	Douglas-Mann, Bruce
Ashley, Jack	Castle, Rt. Hn. Barbara	Duffy, A. E. P.
Ashton Joe	Clemitson, Ivor	Dunn, James A.
Atkins, Ronald	Cocks, Michael	Dunnett, Jack
Atkinson, Norman	Cohen, Stanley	Dunwoody, Mrs. Gwyneth
Bagier, Gordon, A. T.	Coleman, Donald	Eadie, Alex
Barnett, Guy (Greenwich)	Colquhoun, Mrs. M. N.	Edelman, Maurice
Barnett, Joel (Heywood & Royton)	Concannon, J. D.	Edge, Geoff
Bates, Alf	Conlan, Bernard	Edwards, Robert (W'hampton, S.E.)
Baxter, William	Cook, Robert F. (Edinburgh, C.)	Ellis, John (Brigg & Scunthorpe)
Beith, A. J.	Cox, Thomas	Ellis, Tom (Wrexham)
Benn, Rt- Hn. Anthony Wedgwood	Craigen, J. M. (G'gow, Maryhill)	English, Michael
Bennett, Andrew F. (Stockport, N.)	Cronin, John	Ennals, David
Bidwell, Sydney	Crosland, Rt. Hn. Anthony	Evans, Fred (Caerphilly)
Bishop, E. S.	Cryer, G. R.	Evans, Ioan (Aberdare)
Blenkinsop, Arthur	Cunningham, G. (Isl'ngt'n, S & F'sb'ry)	Faulds, Andrew
Boardman, H.	Cunningham, Dr. John A. (Whiteh 'v' n)	Fernyhough, Rt. Hn. E.
Booth, Albert	Dalyell, Tam	Fitch, Alan (Wigan)
Bottomley, Rt. Hon. Arthur	Davidson, Arthur	Flannery, Martin
Boyden, James (Bishop Auckland)	Davies, Bryan (Enfield, N.)	Fletcher, Ted (Darlington)
Bradley, Tom	Davies, Denzil (Llanelli)	Foot, Rt. Hn. Michael
Broughton, Sir Alfred	Davies, Ifor (Gower)	Ford, Ben
Brown, Hugh D. (Glasgow, Provan)	Davis, Clinton (Hackney, C.)	Forrester, John
Brown, Ronald (H'kney, S. & Sh'ditch)	Deakins, Eric	Fowler, Gerry (The Wrekin)
Buchan, Norman	Dean, Joseph (Leeds, W.)	Fraser, John (Lambeth, Norwood)
Butler, Mrs. Joyce (H' gey, Wood Green)	de Freitas, Rt. Hn. Sir Geoffrey	Freeson, Reginald
Callaghan, Jim (M'dd'ton & Pr'wch)	Delargy, Hugh	Galpern, Sir Myer
Cant, R. B.	Dell, Rt. Hn. Edmund	Garrett, John (Norwich, S.)
Garrett, W. E. (Wallsend)	Mabon, Dr. J. Dickson	Sheldon, Robert (Ashton-under-Lyne)
George, Bruce	McCartney, Hugh	Short, Rt. Hn. E. (N'ctle-u-Tyne)
Gilbert, Dr. John	McElhone, Frank	Silkin, Rt. Hn. John (L'sham, D'ford)
Ginsburg, David	MacFarquhar, Roderick	Sillars, James
Golding, John	McGuire, Michael	Silverman, Julius
Gourlay, Harry	Mackenzie, Gregor	Skinner, Dennis
Graham, Ted	Maclennan, Robert	Small, William
Grant, George (Morpeth)	McMillan, Tom (Glasgow, C.)	Smith, Cyril (Rochdale)
Grant, John (Islington, C.)	McNamara, Kevin	Smith, John (Lanarkshire, N.)
Griffiths, Eddie (Sheffield, Brightside)	Madden, M. O. F.	Snape, Peter
Hamilton, James (Bothwell)	Magee, Bryan	Spearing, Nigel
Hamilton, William (Fife, C.)	Mahon, Simon	Spriggs, Leslie
Hamling, William	Mallalieu, J. P. W.	Stallard, A. W.
Hardy, Peter	Marks, Kenneth	Steel, David
Harrison, Walter (Wakefield)	Marquand, David	Stewart, Rt. Hn. M. (H'eth, Fulh'm)
Hart, Rt. Hn. Judith	Marshall, Dr. Edmund (Goole)	Stoddart, David (Swindon)
Hattertley, Roy	Mayhew, Christopher (G'wh, W'wch, E)	Stonehouse, Rt. Hn. John
Hatton, Frank	Meacher, Michael	Stott, Roger
Healey, Rt. Hn. Denis	Mellish, Rt. Hn. Robert	Strang, Gavin
Heffer, Eric S.	Millan, Bruce	Strauss, Rt. Hn. G. R.
Hooley, Frank	Milne, Edward	Summerskill, Rt. Hn. Shirley
Horam, John	Mitchell, R. C. (S'hampton, Itchen)	Swain, Thomas
Howell, Denis (B'ham, Small Heath)	Molloy, William	Taverne, Dick
Hughes, Rt. Hn. Cledwyn (Anglesey)	Moonman, Eric	Thomas, D. E. (Merioneth)
Hughes, Mark (Durham)	Morris, Alfred (Wythenshawe)	Thomas, Jeffrey (Abertillery)
Hughes, Robert (Aberdeen, North)	Morris, Charles R. (Openshaw)	Thorne, Stan (Preston, S.)
Hughes, Roy (Newport)	Mulley, Rt. Hn. Frederick	Thorpe, Rt. Hn. Jeremy
Hunter, Adam	Murray, Ronald King	Tierney, Sydney
Irvine, Rt. Hn. Sir A. (L'p'I, Edge HI)	Newens, Stanley (Harlow)	Tinn, James
Irving, Rt. Hn. Sydney (Dartford)	Ogden, Eric	Tomney, Frank
Jackson, Colin	O'Halloran, Michael	Torney, Tom
Jay, Rt. Hn. Douglas	O'Malley, Brian	Tuck, Raphael
Jeger, Mrs. Lena	Orbach, Maurice	Tyler, Paul
Jenkins, Hugh (W'worth, Putney)	Ovenden, John	Urwin, T. W.
Jenkins, Rt. Hn. Roy (B'ham, St'fd)	Owen, Dr. David	Varley, Rt. Hn. Eric G.
Johnson, James (K'ston upon Hull, W)	Padley, Walter	Wainwright, Edwin (Dearne Valley)
Johnson, Walter (Derby, S.)	Palmer, Arthur	Wainwright, Richard (Colne Valley)
Johnston, Russell (Inverness)	Pardoe, John	Walden, Brian (B'm'ham, Ladywood)
Jones, Alec (Rhondda)	Park, George (Coventry, N.E.)	Walker, Harold (Doncaster)
Jones, Barry (Flint, E.)	Parker, John (Dagenham)	Walker, Terry (Kingswood)
Jones, Dan (Burnley)	Parry, Robert	Watkins, David
Jones, Gwynoro (Carmarthen)	Pavitt, Laurie	Watt, Hamish
Judd, Frank	Peart, Rt. Hn. Fred	Weitzman, David
Kaufman, Gerald	Pendry, Tom	Wellbeloved, James
Kelley, Richard	Phipps, Dr. Colin	Whitehead, Phillip
Kerr, Russell	Prentice, Rt. Hn. Reg	Whitlock, William
Kilroy-Silk, Robert	Prescott, John	Wigley, Dafydd (Caernarvon)
Kinnock, Neil	Price, Christopher (Lewisham, W.)	Willey, Rt. Hn. Frederick
Lambie, David	Price, William (Rugby)	Williams, Alan (Swansea, W.)
Lamborn, Harry	Radice, Giles	Williams, Alan Lee (Hvrng, Hchurch)
Lamond, James	Richardson, Miss Jo	Williams, Rt. Hn. Shirley (H'f'd & St'ge)
Latham, Arthur (City of W'minster P'ton)	Roberts, Albert (Normanton)	Wilson, Alexander (Hamilton)
Lawson, George (Motherwell & Wishaw)	Roberts, Gwllym (Cannock)	Wilson, Rt. Hn. Harold (Huyton)
Leadbitter, Ted	Robertson, John (Paisley)	Wilson, William (Coventry, S.E.)
Lee, John	Rodgers, George (Chorley)	Winstanley, Dr. Michael
Lestor, Miss Joan (Eton & Slough)	Rodgers, William (Teesside, St'ckton)	Wise, Mrs. Audrey
Lever, Rt. Hn. Harold	Rooker, J. W.	Woodall, Alec
Lewis, Arthur (Newham, N.)	Roper, John	Woof, Robert
Lewis, Ron (Carlisle)	Ross, Stephen (Isle of Wight)	Wrigglesworth, Ian
Lipton, Marcus	Ross, Rt. Hn. William (Kilmarnock)	Young, David (Bolton, E.)
Loughlin, Charles	Rowlands, Edward
Loyden, Eddie	Sandelson, Neville	TELLERS FOR THE AYES:
Lyon, Alexander W. (York)	Sedgemore, Bryan	Mr. Joseph Harper and
Lyons, Edward (Bradford, W.)	Selby, Harry	Mr. J. D. Dormand.
NOES
Adley, Robert	Biggs-Davison, John	Chalker, Mrs. Lynda
Aitken, Jonathan	Blaker, Peter	Channon, Paul
Alison, Michael (Barkston Ash)	Boardman, Tom (Leicester, S.)	Chataway, Rt. Hn. Christopher
Allason, James (Hemel Hempstead)	Body, Richard	Churchill, W. S.
Amery, Rt. Hn. Julian	Boscawen, Hon. Robert	Clark, A. K. M. (Plymouth, Sutton)
Ancram, M.	Bowden, Andrew (Brighton, Kemptown)	Clark, William (Croydon, S.)
Archer, Jeffrey	Braine, Sir Bernard	Clarke, Kenneth (Rushcliffe)
Atkins, Rt. Hn. Humphrey (Spelthorne)	Brewis, John	Clegg, Walter
Awdry, Daniel	Brittan, Leon	Cockcroft, John
Baker, Kenneth	Brocklebank-Fowler, Christopher	Cooke, Robert (Bristol, W.)
Balniel, Rt. Hn. Lord	Bryan, Sir Paul	Cope, John
Banks, Robert	Buchanan-Smith, Alick	Cordie, John
Barber, Rt. Hn. Anthony	Buck, Antony	Cormack, Patrick
Bell, Ronald	Budgen, Nick	Corrie, John
Bennett, Sir Frederic (Torbay)	Bulmer, Esmond	Costain, A. P.
Bennett, Dr. Reginald (Fareham)	Burden, F. A.	Critchley, Julian
Berry, Hon. Anthony	Carlisle, Mark	Crouch, David
Biffen, John	Carr, Rt. Hn. Robert	Crowder, F. P.
Davies, Rt. Hn. John (Knutsford)	Kellett-Bowman, Mrs. Elaine	Rawlinson, Rt. Hn. Sir Peter
d'Avigdor-Goldsmid, Maj.-Gen. James	Kershaw, Anthony	Redmond, Robert
Dean, Paul (Somerset, N.)	Kimball, Marcus	Rees, Peter (Dover & Deal)
Deedes, Rt. Hn. W. F.	King, Evelyn (Dorset, S.)	Rees-Davies, W, R.
Dodds-Parker, Sir Douglas	King, Tom (Bridgwater)	Renton, Rt. Hn. Sir David (H't' gd 'ns' re)
Dodsworth, Geoffrey	Kirk, Peter	Renton, R. T. (Mid-Sussex)
Drayson, Burnaby	Kitson, Sir Timothy	Rhys Williams, Sir Brandon
du Cann, Rt. Hn. Edward	Knight, Mrs. Jill	Ridley, Hn. Nicholas
Durant, Tony	Knox, David	Ridsdale, Julian
Dykes, Hugh	Lamont, Norman	Rifkind, Malcolm
Eden, Rt. Hn. Sir John	Lane, David	Rippon, Rt. Hn. Geoffrey
Edwards, Nicholas (Pembroke)	Latham, Michael (Melton)	Roberts, Michael (Cardiff, N.W.)
Elliott, Sir William	Lawson, Nigel (Blaby)	Roberts, Wyn (Conway)
Emery, Peter	Le Marchant, Spencer	Rodgers, Sir John (Sevenoaks)
Eyre, Reginald	Lester, Jim (Beeston)	Rossi, Hugh (Hornsey)
Fairgrieve, Russell	Lewis, Kenneth (Rtland & Stmford)	Rost, Peter (Derbyshire, S.-E.)
Farr, John	Lloyd, Ian (Havant & Waterloo)	Royle, Sir Anthony
Fell, Anthony	Loveridge, John	Sainsbnry, Tim
Fenner, Mrs. Peggy	Luce, Richard	St. John-Stevas, Norman
Finsberg, Geoffrey	McAdden, Sir Stephen	Scott-Hopkins, James
Fletcher, Alexander (Edinburgh, N.)	MacArthur, Ian	Shaw, Giles (Pudsey)
Fletcher-Cooke, Charles	McCrindle, R. A.	Shaw, Michael (Scarborough)
Fookes, Miss Janet	Macfarlane, Neil	Shelton, William (L'mb'th, Streath'm)
Fowler, Norman (Sutton C'field)	MacGregor, John	Shersby, Michael
Fox, Marcus	McLaren, Martin	Silvester, Fred
Galbraith, Hn. T. G. D.	Macmillan, Rt. Hn. M. (Farnham)	Sims, Roger
Gardiner, George (Reigate & Banstead)	McNair-Wilson, Michael (Newbury)	Sinclair, Sir George
Gardner, Edward (S. Fylde)	McNair-Wilson, Patrick (New Forest)	Skeet, T. H. H.
Gilmour, Sir John (Fife, E.)	Madel, David	Smith, Dudley (W'wich & L'm'ngton)
Glyn, Dr. Alan	Marshall, Michael (Arundel)	Spence, John
Goodhew, Victor	Marten, Neil	Spicer, Jim (Dorset, W.)
Gow, Ian (Eastbourne)	Mather, Carol	Spicer, Michael (Worcestershire, S.)
Gower, Sir Raymond (Barry)	Maude, Angus	Sproat, Iain
Grant, Anthony (Harrow, C.)	Mawby, Ray	Stainton, Keith
Gray, Hamish	Maxwell-Hyslop, R. J.	Stanbrook, Ivor
Grieve, Percy	Mayhew, Patrick (Royal T' bridge Wells)	Stewart, Ian (Hitchin)
Griffiths, Eldon (Bury St. Edmunds)	Meyer, Sir Anthony	Stodart, R. Hn. A. (Edinburgh, W.)
Grist, Ian	Miller, Hal (B'grove & R'ditch)	Stokes, John
Grylls, Michael	Mills, Peter	Stradling Thomas, John
Gurden, Harold	Miscampbell, Norman	Tapsell, Peter
Hall, Sir John	Mitchell, David (Basingstoke)	Taylor, Edward M. (Glgow, C'cart)
Hamilton, Michael (Salisbury)	Moate, Roger	Taylor, Robert (Croydon, N.W.)
Hampson, Dr. Keith	Money, Ernie	Tebbit, Norman
Hannam, John	More, J. E. M. (Croydon, C.)	Temple-Morris, Peter
Harrison, Col. Sir Harwood (Eye)	Morgan, Geraint	Thatcher, Rt. Hn. Margaret
Harvie Anderson, Rt. Hn. Miss	Morgan-Giles, Rear-Adm.	Thomas, Rt. Hn. P. (B'net, H'den S.)
Hastings, Stephen	Morris, Mitchell (Northampton, S.)	Trotter, Neville
Havers, Sir Michael	Morrison, Charles (Devizes)	Tugendhat, Christopher
Hawkins, Paul	Morrison, Peter (City of Chester)	van Straubenzee, W. R.
Hayhoe, Barney	Mudd, David	Vaughan, Dr. Gerard
Heath, Rt. Hn. Edward	Neave, Airey	Viggers, Peter
Henderson, J. S. B. (Dunbartonshire, E.)	Neubert, Michael	Waddington, David
Higgins, Terence	Newton, Tony (Braintree)	Wakeham, John
Hill, James A.	Nicholls, Sir Harmar	Walder, David (Clitheroe)
Holland, Philip	Normanton, Tom	Walker-Smith, Rt. Hn. Sir Derek
Hordern, Peter	Nott, John	Wall, Patrick
Howe, Rt. Hn. Sir Geoffrey (Surrey, E.)	Onslow, Cranley	Walters, Dennis
Howell, David (Guildford)	Oppenheim, Mrs. Sally	Warren, Kenneth
Howell, Ralph (Norfolk, North)	Orr, Capt. L. P. S.	Weatherill, Bernard
[...]nt, John	Osborn, John	Wells, John
Hurd Douglas	Page, Rt. Hn. Graham (Crosby)	Wiggin, Jerry
Hutchison, Michael Clark	Page, John (Harrow, W.)	Winterton, Nicholas
Iremonger, T. L.	Parkinson, Cecil (Hertfordshire, S.)	Wood, Rt. Hn. Richard
Irvine, Bryant Godman (Rye)	Pattie, Geoffrey	Worsley, Sir Marcus
James, David	Percival, Ian	Young, Sir George (Ealing, Acton)
Jenkin, Rt. Hn. P. (R'dge W'std & W'fd)	Perry, Ernest G.
Jessel, Toby	Pink, R. Bonner	TELLERS FOR THE NOES:
Johnson Smith, G. (E. Grinstead)	Price, David (Eastleigh)	Mr. Adam Butler and
Jones, Arthur (Daventry)	Prior, Rt. Hn. James	Mr. A. G. F. Hall-Davis.
Jopling, Michael	Raison, Timothy
Kaberry, Sir Donald	Rathbone, Tim

Question accordingly agreed to.