HC Deb 14 October 1975 vol 897 cc1168-75
Mr. Silkin

I beg to move Amendment No. 308, in page 22, line 7, leave out from 'out' to 'granted' in line 22 and insert: 'any value attributable to the development so carried out shall be ignored. (3) Where any development is carried out without planning permission and planning permission covering that development is subsequently'.

Mr. Deputy Speaker (Mr. George Thomas)

With this we are taking Government Amendments Nos. 309 and 310 and Amendment No. 174, in line 17, at end insert: 'unless the acquiring authority elects to permit the relevant development to remain undisturbed'.

Mr. Silkin

When Clause 24 was debated in Committee, the Opposition sought to amend it so as to provide that where the authority wished to acquire the land and retain the development wrongfully carried out it should pay the full value for the land and for the development upon it. I did not accept that, but I indicated that perhaps the original sanctions in the Bill as then drafted might be a shade too Draconian.

It presents us with the problem that the existing sanction of compensating at current use value, as the Opposition pointed out, could bite on an innocent owner whose land might form part of that which was the subject of the planning permission. That is overcome by removing the current use value sanction, which we do, leaving only the penalty of the value of the development actually carried out. That approach I believe is an advantage in that the amount of the penalty is strictly related to the extent of the contravention and applies only to the person who has contravened.

I agree that that approach does not meet the specific point made by the hon. Member for Melton (Mr. Latham), but the problems of operating on the valuation of land are much greater, and disregarding the value of any development carried out is the only way of providing a realistic penalty which does not run the risk of penalising innocent parties. I hope that I am not misinterpreting the hon. Gentleman. He never misinterprets me an dit is fair that I should get this absolutely right. I think that he felt that there should be a penalty where there was a deliberate contravention, and that is what we have tried to do.

Mr. Rossi

I welcome the Minister's statement. I understand that he seeks to meet an argument put forward in Committee by my right hon. and hon. Friends concerning the innocent breaker of the regulations or conditions laid down by the statute in connection with the carrying out of development where planning permission has been suspended. I am sure he will forgive me if I ask him to relate the general principle he has enunciated to the way in which the change is being carried out by this group of amendments before us. Again, it is a group of amendments that arrived at the eleventh hour.

We have the advantage of the notes on the amendments with which the right hon. Gentleman kindly supplied us. My interpretation of the explanatory note is that the whole of Clause 24 is substantially rejigged, mostly as to wording, to make it tidier, but in the course of that rejigging the concept of current use value is dropped. Although I have looked at it, I did so rather rapidly and I have not quite followed how this is done and where the dropping of the reference to the current use value occurs. I have tried to follow the complicated exercise of taking out 10 or 15 lines and bringing them back in in different places by a series of amendments. I have tried to follow where wording has remained and where it has been taken out, but I have not followed the exercise to the "n"th degree and am therefore still a little bewildered as to how the amendments operate. I ask the right hon. Gentleman to help us in that respect.

The other matter I wish to raise with the right hon. Gentleman relates to the question of principle. When we are dealing with compensation that is to be paid to a person who has carried out a development although he is not entitled to do so because the planning permission has been suspended, we are dealing with three possible values of land. We are dealing with the value of the land as it was before planning permission and before any development is carried out. That, I assume, we should call the current use value.

Secondly, there is what used to be called under planning law hope value, which is the value that is added to the current use value on the assumption that the land will be developed. That is a notional value attached to the land and added to the current use value to achieve the market price of the land being sold for development purposes. Thirdly, there is the value when the development has been carried out. At the end of that exercise the land could be, and invariably is, even more valuable than it was at market price with the hope of development being carried out.

I understand the Minister to be saying that where a development takes place in these circumstances the owner will not be paid the current use value. That concept has gone completely. He will not be paid the market price value, which is the current use value plus the hope value of what the land would be worth with planning permission. What I am unsure of is where we add in the value added to the land by the actual development operation, the building and construction. Will the owner be denied that, or will he be paid it as part of his compensation? Possibly I have oversimplified my questions, but I hope that we shall have the benefit of the Minister's explanation.

Mr. Michael Latham

I greatly welcome the amendments and I am grateful to the right hon. Gentleman for the important concession that he has made. The original proposal—I followed carefully what my hon. Friend the Member for Hornsey (Mr. Rossi) said—would have involved the confiscation of the planning permission—namely, a planning permission which had been suspended and which, as we all agreed in Committee, had been wrongly implemented, thereby going against the suspension. In those circumstances it would be taken to be assumed that there was no planning permission whereas in fact there was.

One matter which concerned me and which formed the substance of Amendment No. 174, which will not now be necessary, was that the land would be acquired at current use value and then the local authority might proceed to implement the suspended planning permission. It would then get the full value that it had previously confiscated from the original owner. That seemed to be unfair and Draconian. The right hon. Gentleman has reasonably accepted that argument.

Having said those nice things about the amendments, I hope that the right hon. Gentleman will forgive me for being slightly churlish as regards drafting points and presentation. Like my hon. Friend the Member for Hornsey, I find the amendments difficult to understand. It might have been better, if only for the Development Land Tax Bill, with which I suspect the right hon. Gentleman will be concerned, although he may not be responsible for it, if when redrafting the whole clause to table an amendment to delete the clause and to substitute a new clause. In that way we should be able to see the whole thing together.

A further point, which I hope is not unreasonably churlish, is that I did not find the Minister's briefing note particularly helpful. I greatly appreciate that he has circulated notes to those who took part in the Committee proceedings, but the second paragraph of the briefing note merely states that the amendments seek to remove the provision that only current use value is to be paid. It then says that the opportunity has been taken to tidy up the general drafting. There then follow administrative and detailed points which do not go to the substance.

Perhaps when yesterday's difficulties have disappeared and when we come to reconsider this procedure, as I hope we shall, we shall receive a fuller and better briefing note than has been supplied on this occasion. I appreciate that the right hon. Gentleman does not want to burden hon. Members unnecessarily with notes. I have made what may seem to be churlish points as regards drafting, but they are important to hon. Members who are trying to discharge their duty.

Mr. John Silkin

I do not think that the hon. Member for Melton (Mr. Latham) was being churlish. The Government amendments were designed to steer the ship between Scylla and Charybdis. That involved a good deal of rejigging and a chain of amendments. I am sorry to awaken the hon. Member for North Fylde (Mr. Clegg) from his reverie. I shall take this matter away following Report so that we can produce more comprehensible drafting in another place, but that may not be possible.

That brings me back to what was asked so reasonably by the hon. Member for Hornsey (Mr. Rossi). The hon. Gentleman said that he could not find where we dropped current use value. I do not blame him for that because I could not find it either. I understand that the answer lies in the removal of the references to assumptions as to planning permissions. That would meet the point.

Secondly, the hon. Gentleman asked about the valuation of the land concerned. The owner will get the value of the land with the value of the planning permission less development land tax before the second appointed day, and less the value of the works he has actually carried out. That will give us the market value less DLT and less works carried out.

Mr. Clegg

I must tell the right hon. Gentleman that I was dreaming that the right hon. Gentleman was addressing the House and trying to explain that the Bill was incomprehensible. I then woke up and found it was a nightmare.

5.15 p.m.

Mr. Rossi

I must press the right hon. Gentleman because now that I have understood his explanation I extend less of a warm welcome to this matter than I did before. As I understand it, the price that will be paid will be the market price of the land less the cost or the value of the works carried out on it, less the value added to it by the planning permission.

Mr. John Silkin

No, less development land tax.

Mr. Rossi

This brings me to inadvertent breaches. The situation can be accepted in which the owner possibly forfeits the right to have the value added to his land by the granting of planning permission, but where he has inadvertently carried out works on that land and spent a great deal of money in building operations it seems hard that he should lose the value of the bricks and mortar and other development work and that such works should go as a free gift to someone else. Surely the loss of the land altogether is a sufficient penalty for anyone. To say that the owner should lose the capital that he has expended in improving the land in circumstances in which he has acted inadvertently seems over-harsh.

Mr. John Silkin

Where the contravention is inadvertent the procedure is not designed to punish the owner because there is nothing to punish him for.

Mr. Graham Page

The right hon. Gentleman's last phrase brought me to my feet. I know that he has said it before. As the amendments stand we find that at line 29 the clause reads: the person granting the permission may, if satisfied that it is reasonable in the circumstances, direct that subsection (2)"— that is the subsection which deprives the developer of the value of his wrong development, his development under suspended planning permission. That person decides whether in the circumstances it is reasonable to wash out subsection (2) altogether. Having done that, we go back to square one. Should the developer then receive the full value of the property, the simple value of it?

At this stage it is perhaps worth while to read the amendments into the Bill. If the amendments are accepted, subsection (2) will provide that if relevant development covered by planning permission is carried out at a time when the planning permission is suspended under the previous clauses, then, in determining for the purpose of compensation the value of the land as at any time after any of the development was carried out, any value attributable to the development so carried out shall be ignored. That is the basis from which we start, but then we come to subsection (3). On taking in Amendment No. 308 the subsection reads: Where any development is carried out without planning permission and planning permission covering that development is subsequently granted …"— I now come to Amendment No. 309— the development shall be treated for purposes of subsection (2) above as carried out after the grant, and while the planning permission is suspended. Subsection (4) in Amendment No. 309 reads: Where planning permission is granted under Section 32 or 88 of the Act of 1971 or Section 29 or 85 of the Scottish Act of 1972". We then carry on with the clause as it stands, but it seems that provided the person granting the permission is satisfied that the development was in advertent—although this is not said in the Bill—and provided he is satisfied that it is reasonable under the circumstances—and now we return to square one—the market value of the property should be received, that is the property as developed. That is taken as being lawfully developed.

Is there any appeal in respect of the grant of permission when a person decides that the circumstances are reasonable or unreasonable? It seems a somewhat dictatorial power to put in the hands of a local authority or of the Secretary of State in these circumstances merely to decide whether it is reasonable—in short, whether there has been inadvertence or a deliberate act. Apparently, there is no appeal. If the right hon. Gentleman is thinking of improving on these amendments, perhaps he would give that matter some thought.

Mr. John Silkin

If the right hon. Gentleman wishes me to do so, I shall be happy to write to him further on this point, but I think that he has misinterpreted it. He rightly quoted subsection (2), but I would remind him of the passage on page 22, in lines 29 to 31: the person granting the permission may, it satisfied that it is reasonable in the circumstances, direct that subsection (2) above shall not apply to the development covered by the permission. The effect of that is that the innocent contravener is not penalised and will get full value.

Amendment agreed to.

Amendments made: No. 309, in page 22, line 28, at end insert: 'the development shall be treated for the purposes of subsection (2) above as carried out after the grant, and while the planning permission is suspended. (4) Where planning permission is granted under section 32 or 88 of the Act of 1971 or section 29 or 85 of the Scottish Act of 1972'.

No. 310, in page 22, leave out lines 32 to 36.

No. 311, in page 22, line 41, leave out from beginning to end of line 6 on page 23 and insert: (7) Section 192(1) of the Act of 1971 and section 181 of the Scottish Act of 1972 (blight notices) shall have effect as if the land specified therein included land in respect of which planning permission for relevant development is suspended under the previous sections.'.

No. 175, in page 23, line 14, leave out 'the operational land of statutory undertakers' and insert: 'land which is operational land of statutory undertakers, or would be such land if it were used or held by statutory undertakers for the purposes covered by the permission.'.

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