FINANCIAL HARDSHIP TRIBUNALS (Hansard, 14 October 1975)

§ Mr. Michael Morris
I beg to move Amendment No. 383, in page 26, line 25, leave out from beginning to 'is' in line 32 and insert: 'conferring on the Lands Tribunal the duty of discharging such functions as may be specified in the regulations and the Lands Tribunal in carrying out such functions'.

§ Mr. Speaker
With that amendment we may take Amendment No. 384, in line 34, leave out from beginning to end of line 2 on page 27.

§ Mr. Morris
The amendment concerns the financial hardship tribunals and in particular their constitution. It is for the purpose of simplification and for bringing in the specific responsibility of the Lands Tribunal.
I am conscious that we had some deliberations early this morning on the rôle of such a tribunal and its attitude to the Bill. It seems right to us that the rôle of the tribunal should be written into the Bill in this clause.

§ Mr. Michael Latham
I hope that the right hon. Gentleman will find it possible to accept the amendment or at least to make a concession. As I said in Committee, I cannot understand what other tribunals he can have in mind under the present drafting of the clause. The only tribunals which possibly come to mind are the local valuation panels. However, such panels are not properly constituted to deal with complex matters. The Lands Tribunal is manifestly the right body for this sort of work. I would have thought acceptance of the amendment to be a good idea.

§ Mr. John Silkin
I do not want to accept the amendment and I shall explain why. It is not that I am without some sympathy for the amendment. As I think the hon. Member for Melton (Mr. Latham) will remember, I was not totally without sympathy with the point in Committee. I do not want to close options on this matter. There are good arguments in support of the amendment and I thank the hon. Member for Melton for not putting them at great length this evening. He adduced those arguments extremely effectively in Committee.
I accept that there are good reasons for choosing the Lands Tribunal. It has authority and a deal of history. One reason for my being against it is that although it sits district by district, and will sit in the district where the land is concerned, it is a national body. I cannot help feeling that there may be advantage in a much more informal tribunal which is related to the area in which the land is situated right from the beginning, and 1218 not merely as a branch from a central organisation.
Equally, much as I love my profession—and I am delighted to be able to further its advancement on any occasion—the kind of tribunal I had in mind originally was one having a rather more lay approach. It would deal with cases in which the compensation would be cut and dried and agreed, but if there were a sympathetic tribunal the ordinary citizen could approach it, saying "Can you help me? These are my circumstances." The sort of tribunal I had in mind would sit on that sort of basis and would not have the wig-and-gown attitude to compensation.
I accept that this is a matter of balance. It may be that because the Lands Tribunal is already set up—and I take into accounts its experience—the hon. Member for Northampton, South (Mr. Morris) and the hon. Member for Melton are right. It may be that what they put forward is the right way in which to proceed. I would not like to close my eyes or those of any successor of mine to the idea that we might be able to produce much more local and informal tribunals. That is my only reason for resisting the amendment. I understand the amendment and I accept that in many ways it is sensible, but it represents only one approach. This is a subject that I would prefer to be considered much more carefully before we get to the second appointed day. I should like the advantages and disadvantages to be more carefully weighed.

§ Mr. Michael Morris
When the right hon. Gentleman is weighing up these factors I hope that he will take into consideration the need for some conformity of approach to these problems. It seems that one of the problem areas is that in different localities there are varying reactions to these situations. I think that when it comes to dealing with hardship there needs to be some conformity throughout the country. That is why I welcome the idea of the Lands Tribunal.

§ Mr. Graham Page
The Minister has been very forthcoming and has demonstrated that he has an open mind. However, I must press him a little further. He must realise that when the financial hardship tribunals were first mentioned, hope came in the breasts of 1219 all of us that there was to be some compassion for those who would suffer under the Bill. We were disappointed when we saw that the clause provided only that such tribunals may be set up. When we heard the presentation of the clause by the Minister we were further disappointed because it appeared that he was not intending to set up the hardship tribunals for many years. We thought that they were to come in at the outset to help the unfortunate who suffers under the Bill.
The right hon. Gentleman has said that he has in mind informal tribunals. I do not necessarily go along with him on that. If I were given the choice I would rather have experience than informality. The tribunal with the experience is the Lands Tribunal. I am sure that the right hon. Gentleman will recollect that when we were dealing with the Land Compensation Bill we were endeavouring to set up smaller tribunals within the Lands Tribunal. In the county courts we knew that there were the registrars' courts. I used that phrase in the hope that the then Lord Chancellor would see that we had the, registrars' courts as well as the Lands Tribunal—namely, small courts for the sort of compensation claims which were bound to arise under the Bill when it became the 1973 Act.
If we are progressing along the lines of small courts within the Lands Tribunal, it must be possible for such courts to be approached rapidly and for there to be no very great procedure. They should be able to deal with small cases. They should be able to hear people in person if they want to appear in person or to hear their representations from their legal representatives.
I do not want to set up new tribunals. We already have the Lands Tribunal. We have its experience in valuation and in understanding hardship as well as in assessing compensation. I ask the Minister to consider the development of the Lands Tribunal along the lines of being an approachable tribunal that can undertake different sizes of hearings so that it can deal with the small cases as well as the large, with the layman's case as well as the professional's case. That would 1220 provide the tribunal which the right hon. Gentleman appears to have in mind.
I am hesitant about setting up new courts or new tribunals. If we do so, I think we are only looking for trouble. We shall not get the value out of them that we shall get out of the experience of the Lands Tribunal.

§ Mr. John Silkin
I was impressed by what the hon. Member for Northampton, South (Mr. Morris) said about uniformity. I agree that there is something in that point. The right hon. Member for Crosby (Mr. Page) spoke with considerable authority. I am bound to say that I found what he said attractive.
I give an assurance that I shall consider this matter at leisure. I shall consider what may be the best way of proceeding in the light of what has been said by the right hon. Gentleman and his hon. Friends. I still do not want to close my mind to an alternative to the Lands Tribunal although I must say that I found much of what has been said by the right hon. Gentleman and his hon. Friends to be most persuasive.

§ Mr. Budgen
I realise that I am not expected to intervene in this part of the debate. I do so because I am appalled that the Minister gives the impression that he meets the idea that there should be uniformity in the law as though it were a fresh idea he had not previously considered in relation to hardship tribunals. I would have thought that any qualified lawyer would come to the belief at an early stage in his professional career, if not whilst taking his examinations, that certainty in the law was one of the law's most important characteristics. The idea that we should have what are called sympathetic tribunals acting on quixotic, varied and subjective judgments is plainly alien to all ideas of law.
One of the most important things about the law is that it should be uniform and should be known to everybody without the necessity for immediate recourse to litigation. To talk about setting up informal tribunals which will be sympathetic when dishing out taxpayers' money may be agreeable to those who possibly are concerned about the effects of legislation, but it is wholly alien to the idea of certainty and the concept of the rule of law.

§ Mr. John Silkin
I am grateful to the hon Member for Wolverhampton, South-West (Mr. Budgen) for his little lecture on the law. I wish that I had had the hon. Gentleman by my side when I was taking my solicitor's final examination 30 years ago. By some curious chance, I succeeded in passing. I maintain that in those days the examination was tougher than is the present piece-by-piece examination. On this occasion, we are not dealing with purely undiluted law, if such a creature exists. We are dealing with hardship, and the situation may differ from individual to individual.
The hon. Member for Northampton, South (Mr. Morris) appeared to be offering something related to the district, such as the registrar's court in the county court—in other words, a body which is related to the district but which, nevertheless, has the compassion to deal with hardship cases. Of course, in law compensation must be uniform. We need to look subjectively at the citizen, and it would be a good thing if we could lay down solid guidelines for such institutions. All this simply proves what I have been saying—namely, that we should wait and see and choose the best possible means we can. My argument amounts to saying that the amendment should be withdrawn.

§ Mr. W. R. Rees-Davies (Thanet, West)
I do not think that the matter should be left as it is. I first wish to apologise for having come late into the debate. I had intended to stay throughout because we are dealing with matters of some importance.
I begin by agreeing with the Minister that we are dealing here not with a strictly judicial tribunal but with an administrative tribunal. Obviously hardship is a matter largely at the court's discretion. People may take a different view on these matters, but certain grave difficulties arise. Clause 29 (10) deals with the regulations and involves the establishment of a financial hardship tribunal. It also involves the conferring of functions, which is a simple matter, but then there is reference to prescribing the criteria by reference to which a financial hardship tribunal is to decide questions arising in relation to any application … 1222 It will be difficult to decide which criteria should be laid down in the regulations and it will involve an Affirmative Resolution of this House.
I was involved in the original preparation of the report which later led to the system—a system which was violently opposed by the then Minister—related to inspectors' reports and the criteria which they should follow in deciding questions of fact. First, there are the broad criteria involving discretion of the tribunal and, ultimately, there is the decision. The Minister is entitled to disagree with the tribunal's opinion, but he must not assail the findings of fact.
The wider aspects of the Bill worry me since we appear to be moving away from successful past practice. I take some pride in the fact that we produced a report relating to the activities of inspectors and, despite the opposition of Mr. Duncan Sandys, as he then was, that system was successful. Therefore, I hope that in laying down criteria care will be taken to ensure that the tribunal in its duty to determine the facts on the question of hardship will make the situation clear and will report upon it. I hope that on those facts, properly stated, the decision will be made.
What often happens is that the facts go wrong. That is why we as politicians face difficulties in considering the cases that come before us in our Saturday surgeries. Time and again we find that our constituents have got the position wrong because they have their facts wrong, or perhaps the civil servant concerned has got his facts wrong. If the facts are right, the Ministry or the body concerned can come to a correct decision.
I hope that the Minister will not break with the tradition that has been built up and will look carefully to ensure that, however far down the path of Socialism we are moving in this Bill, we shall not be so unwise as to lay aside the excellent administrative code of practice which has been built up over many years. We must preserve the system that a tribunal must determine and publish the statement of facts so that those facts are able to be challenged in a court of law if they are wrong or if the Minister totally disregards them. We must look carefully at this provision and its application.

§ Mr. John Silkin
The hon. and learned Member for Thanet, West (Mr. Rees-Davies) has given yet another reason for the fact that we should examine these matters together. There should not be any party political difference on this matter. We should all decide what is the best way of giving effect to what we all want to achieve. Therefore, I hope that in the light of my assurance that I shall study the matter, the amendment will be withdrawn.

§ Mr. Graham Page
Will the Minister give an assurance that when he thinks about the matter, he will take the extraordinary course of consulting Members of this House? That is never done by a Minister. He consults associations of local authorities and other bodies outside the House, but he never asks any hon. Member, however informed that hon. Member may be, for his view. I know that we can all call in at the Ministry if we so wish, but we would be most happy if there were to be some form of consultation, under the chairmanship of the Minister, among those of us who are concerned with these matters.

§ Mr. Michael Morris
I thank the Minister for his sympathetic and generous response. I believe that this is one of the most important elements in the Bill because hardship hits individuals and we should carefully examine its effects. I beg to ask leave to withdraw the amendment.

§ Mr. Oakes
I beg to move Amendment No. 210, in page 27, line 18, leave out 'authority' and insert 'person'.

§ Mr. Deputy Speaker
With the amendment we shall take Government Amendment No. 211.

§ Mr. Oakes
The amendments will ensure that a more satisfactory definition is given in subsections (6) and (7) of those liable to pay the compensation and therefore responsible for paying the additional payments ordered by the tribunals.
These are very technical amendments. The reference to "authority" is incomplete because, in cases of compensation for compulsory purchase, the order may have been made by a statutory undertaker which is not an authority defined in Clause 1. We are therefore substituting 1224 the word "person", where the definition is from Section 13 of the Interpretation Act 1889.

§ Mr. Budgen
I beg to move Amendment No. 212, in page 27, line 40, at end insert: '(d) stipulate that the right to make a claim or the benefit of any claim which has been made shall pass with or without express assignment to the personal representatives of any person entitled to make or having made a claim'. The object of this, I hope, only technical amendment is to allow the right of appeal to a hardship tribunal to be transmitted after the death of the person owning the plot or other area of land affected by the action of Clause 27 of the Bill.
It is plain that a plot may be not just an asset of an individual land owner but something which is really the asset of the whole family. If an individual person has a right of appeal to a hardship tribunal, it is plainly wrong that that right should end at his death. This small technical amendment allows it to be passed on to his personal representatives to the benefit of those who benefit either under his will or under his intestacy.

§ Mr. Oakes
We have every sympathy with the amendment moved by the hon. Member for Wolverhampton, South-West (Mr. Budgen). A similar amendment was moved in Committee and I said then that we would look at it sympathetically.
It was thought originally that this would be dealt with by process of general law, but the hon. Member has put down his amendment and there is no reason why it should not go into the Bill for greater clarity. The wording of the amendment is not quite right but I give the hon. Member an undertaking that in another place the full intention of this amendment will be placed in the Act.

§ Mr. Budgen
I am very grateful to the Minister for his assurance. I therefore beg to ask leave to withdraw the amendment.

§ Mr. Sainsbury
I beg to move Amendment No. 382, in page 27, leave out lines 41 to 44.

§ Mr. Deputy Speaker
With the amendment, we may take Amendment No. 400 in page 27, line 43, leave out '£50,000' and insert '£500,000'.

§ Mr. Sainsbury
I do not wish to go through the discussion which took place in Committee on this point. Amendment No. 382 seeks to remove the limitation, which was increased from £25,000 to £50,000. The alternative amendment, No. 400, which is obviously less satisfactory, seeks to increase the limit from £50,000 to £500,000.
These points were previously discussed in Committee, and I find it interesting that the right hon. Gentleman, in discussing the points raised, did not merely use the argument that it was wrong. He used the argument that it was open-ended expenditure and that the Treasury would say that they could not afford it. I can think of some other reasons why the Treasury might say that they could not afford it, but the right hon. Gentleman has particularly fastened on this one, which seems to be a rather weak argument.
If financial hardship of a substantial kind has been incurred by a large public company, as opposed to an individual, it is equally entitled to compensation, particularly when we realise that a recent survey of some 10 property companies showed that 86.5 per cent. of their equity and issued capital was owned by institutions, in addition to which there was another 3.5 per cent., bringing it up to 90 per cent. owned by small shareholders, in sums of £1,000 or so. Therefore, 90 per cent. of the people who suffer from pension funds being put to financial hardship are persons of very limited means. Pension funds are equally at risk under the provisions of this Bill.
I ask the right hon. Gentleman to think again about these two amendments, particularly in the light of his Treasury-oriented answer in the Committee.

§ Mr. Rees-Davies
In the earlier debate, I could not understand why any figure at all was placed in line 43. It seemed to me that the financial hardship tribunal would award such sum as it felt proper 1226 in all the circumstances. The figures would be a few hundred pounds in many cases, but in the case of a property company the figure might be large. Had the Minister indicated earlier any valid reason for putting a figure in to determine what is far better left to the tribunal?

§ Mr. Burden
Might I, on behalf of my hon. Friend the Member for Hove (Mr. Sainsbury), answer the question put by my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies)? If he looks at Clause 29 he will see that the hardship tribunal pays out its awards in relation to subsection (4), which refers back to Clause 27. Clause 27 is a confiscatory clause which lays down that confiscation shall take place because the land owner will be compensated not at the development value but at the current use value, and therefore the Minister is right in saying that by his arguments there has to be some sort of limit.
If one is confiscating the development value of a whole area, such as Wolverhampton, for example, the amount by which land owners are deprived of their property may be enormous, and the cost to the taxpayer of compensating those land owners may be enormous. Indeed, the proposals of the financial hardship tribunal bring forward a totally new concept in land compensation for all previous measures of land compensation have been based on the proposition that each individual land owner receives compensation upon the same basis. If, for the sake of argument, Grannie Smith in my constituency loses a plot of land, and in another area the Duke of Devonshire, the friend of the hon. Member for Bolsover (Mr. Skinner), loses a similar plot, each of them receives compensation on the same basis, and plainly, that conforms to the basic concept of English law that there should be equality under the law as between rich and poor alike. Perhaps one of the most important trends of recent law has been an attempt to make sure that the poor receive the same good law and the same properly administered law as the rich.
But the proposals with regard to the hardship tribunal lay down a wholly new concept. They attempt to give the poor an advantage under the law which the rich do not enjoy. They say to the poor, 1227 "You may have lost exactly the same as a rich person, but, because you are poor, you may have a right to refer your case to a hardship tribunal." In effect, they are saying to these people, "You have no need to appeal to the Sun newspaper or to the Daily Mail in the way in which many people who were adversely affected by the old Land Commission appealed to the popular newspapers. You will be bought off by the taxpayers' money which is administered by a financial hardship tribunal." It is a wholly new concept of the law.

§ Mr. Rees-Davies
With due respect to my hon. Friend, I cannot share his view. Is it not the magnitude of the building operation—the size of the property company—which will be the difficulty? The case in point may be that of a very large company with great financial hardship, or it may be that of a fairly substantially wealthy land owner running up to about £50,000. Surely it is not the poverty of the individual but the size generally of the operation which will determine these factors.

§ Mr. Budgen
I am grateful to my hon. and learned Friend the Member for Thanet, West. He makes his point again. But if, for the sake of argument, a property company finds its property confiscated under the provisions of Clause 27 and it loses £1 million, the £1 million being the difference between the development value and the current use value, and it can get that £1 million from the hardship tribunal, the effect of Clause 27 has gone and compensation is not at current use value but at development value, which means that the whole effect of the Bill has gone.
We are told repeatedly that the idea behind the Bill is that the community should have the additional value arising as a result of the granting of planning permission and the consequent development. Neither my hon. and learned Friend nor the Minister can have it both ways. So that no matter how these criteria are laid down and no matter how sophisticated they may be, it means that the individual person who has his assets in a single block of land will be able to appeal to the financial hardship tribunal and, because he has his land in one block, he will receive some benefit from the tri- 1228 bunal, but that the person whose assets are vested in a right to a pension invested by a pension fund will find that he cannot be compensated adequately for the diminution in the value of his pension when the pension fund suffers the confiscatory effects of Clause 27.
There is no way round this. The only way round it is for the Minister to abandon his central objective and to say that he will cease his depredation on property held by property companies and landowners and will compensate people properly—that is to say, on market value taking into account potential development value, and not upon current use value.

§ Mr. John Silkin
I am unable to accept the amendments, and I intend to resist them. As the hon. Member for Hove (Mr. Sainsbury) said, the two amendments are contradictory, one giving a totally blank cheque and the other establishing a limit of £500,000.
The basis of the financial hardship tribunal as we envisaged it was simply that it would deal with relatively small cases. The hon. and learned Member for Thanet, West (Mr. Rees-Davies) put his finger on it when he said that the overwhelming majority of such cases would involve sums of £100 or £200. That was one reason why, a couple of years ago, the right hon. Member for Crosby (Mr. Page) was so interested in home loss payments. However, we still get cases in our surgeries which are not covered by that provision. It is that kind of case which will form the majority.
At an earlier stage, we put the limit at £25,000. The hon. Member for Hove is entitled to have his fun at the expense of my views of the Treasury. If ever he occupies my position he will find that he, too, will have to take notice of the Treasury. Any responsible Minister must. That is why it is not possible to have an open-ended cheque, though I agree that it is attractive to be able to say to a body such as the financial hardship tribunal, "You make your own decisions."
Even the limit of £500,000 goes beyond the idea of helping the small man. Very few small men would be liable to be in for £500,000. We thought the figure of £25,000 fairly generous and reasonable.
In Committee, similar amendments were moved by the hon. Member for 1229 Buckingham (Mr. Benyon). They were withdrawn when I accepted an amendment moved by the hon. Member for Isle of Wight (Mr. Ross) suggesting an increase from £25,000 to £50,000. The basis on which I was willing to agree that amendment was that there could be occasions on which a working farmer, even though he would lose nothing in the value of the land, since he would be able to buy an equivalent farm for what he had lost, suffered the inevitable disturbance in terms of the working up which is necessary. I appreciate that a farm is such that a great deal of individual skill goes into it and that is not easily replaced. The hon. Member for Isle of Wight said that there were other cases as well. Therefore I was happy to meet the general views of the Committee.
Having agreed that it was reasonable for the Minister to listen to and to accept arguments advanced in Committee, the official Opposition withdrew their amendment, which I thought was a slightly propagandist exercise of the kind that the hon. Member for Wolverhampton, South-West (Mr. Budgen) made a few moments ago. Whether such propagandism is effective is not for me to say, but that was the exercise, and it remains that today.
The amendments must be resisted. We are talking purely in terms of the small man. He has not suffered and he will never suffer personal hardship to the extent of £500,000 because he will not earn that even during the whole of his working

§ Mr. Sainsbury
I must put right the impression that we are suggesting that individuals would be getting half a million pounds. That is highly unlikely. But companies, behind which lie a large number of what the right hon. Gentleman calls small people, do run the risk of losing that sort of money. Unhappily, we have recently been aware of the consequences of companies making that sort of loss and perhaps going bankrupt. I am delighted to hear of the right hon. Gentleman's responsiveness to the Treasury. In the light of that, perhaps the correct thing to do is to withdraw the whole Bill. In the circumstances, I beg to ask leave to withdraw the amendment.

§ Mr. John Silkin
I beg to move Amendment No. 213, in page 28, line 21 at end insert— '(14) In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified) there shall be inserted at the appropriate place in alphabetical order the entry: A Financial Hardship Tribunal within the meaning of section 29(1) of the Community Land Act 1975. This subsection shall extend to Northern Ireland.'. The House of Commons Disqualification Act 1975 provides that anyone holding offices of profit under the Crown set out in the schedule to that Act shall be disqualified from holding office in the House of Commons. As membership of a hardship tribunal will carry with it the possibility of remuneration from money provided by Parliament it is considered that such tribunals should be added to this schedule and members of them disqualified from the House of Commons.