§ '(1) This section applies where, on a material disposal, a body (in this section referred to as "the acquiring authority") acquire an interest in any land (in this subsection referred to as "the acquired land") and within the period of five years ending on the date of the material disposal,—
- (a) an indication was given, as mentioned in subsection (3) below, of an intention to take into public ownership land which is or includes the whole or any part of the acquired land; or
- (b) planning permission was granted with respect to land which is or includes the whole or any part of the acquired land and that permission was suspended under section
1462 21 of the Community Land Act 1975 (suspension of planning permission for development which, at the time of the permission, is designated under section 18 of that Act);
§ (2) If on a disposal (in this section referred to as "the private disposal") occurring after the giving of the indication or grant of the planning permission referred to in paragraph (a) or paragraph (b) of subsection (1) above but before the date of the material disposal the chargeable person has become liable for an amount of development land tax (in this section referred to as "the previous tax") and the private disposal—
- (a) was a disposal of an interest in the designated land or any part of it (with or without other land), and
- (b) was neither a deemed disposal nor a material disposal,
§ (3) For the purposes of this section, any indication of an intention to take any land into public ownership is given when—
- (a) a compulsory purchase order is made authorising the acquisition of that land by the acquiring authority or by another body on behalf of the acquiring authority; or
- (b) a notice stating that the acquiring authority intend to acquire that land is served under paragraph 4 or paragraph 5 of Schedule 7 to the Community Land Act 1975 (notices relating to land affected by planning permission to which section 19 or section 20 of that Act applies); or
- (c) a counter-notice stating that the acquiring authority propose to purchase that land is served under section 23(7) of the Community Land Act 1975 (disposal notification areas: response to a notice of a proposal to dispose of a material interest);
§ (4) In any case where—
- (a) the interest which was acquired on the private disposal does not extend beyond the designated land, and
- (b) on the material disposal the acquiring authority acquire the interest referred to in paragraph (a) above or an interest of which that interest is a part for the purposes of Part I of Schedule 2 to this Act,
§ (5) If, immediately before the material disposal referred to in subsection (1) above, any part of the previous tax remains to be paid then, up to the relevant amount, any amount paid after that disposal in respect of that tax shall be payable by the Board to the acquiring authority; and subsection (7) of section 39 above shall apply to any amount payable by the Board by virtue of this subsection as it applies to any amount payable by them by virtue of subsection (6) of that section.
§ (6) In any case where—
- (a) at the time of the material disposal the whole of the previous tax has been paid, or
- (b) the relevant amount exceeds the part of the previous tax which, immediately before the material disposal referred to in subsection (1) above, remains to be paid,
§ (7) The reference in subsection (2)(b) above to the development land tax for which a person became liable on the private disposal includes a reference to any interest payable on that tax under section 86A of the Taxes Management Act 1970.
§ (8) In this section "material disposal" has the same meaning as in section 39 above.
§ (9) In the application of this section to Northern Ireland—
- (a) subsection (1) above shall have effect with the omission of paragraph (b); and
- (b) in subsection (3), for paragraphs (a) to (c) and the concluding words there shall be substituted the words "in pursuance of any enactment there is published either a notice of an application for a vesting order relating to that land or a notice of intention to make such an order".—[Mr. Denzil Davies.]
§ Brought up, and read the First time.
§ Mr. Denzil DaviesI beg to move, That the clause be read a Second Time.
This clause was touched upon earlier during the debate on the Money Resolution. I explained that its purpose was to cover the case in which a local authority had given notice of intention to acquire land, as set out in subsection (3) of the new clause, and the owner then sold to a private individual, with the result that when the local authority bought from the purchaser there would be no benefit to it because there would be a high base value and no development land tax could be deducted.
There might be a few such forestalling cases. We do not think there will be many. It is an artificial situation. Under the new clause, the Inland Revenue will be able to reimburse the local authority the tax which would have been payable if it had bought from the original owner. The Money Resolution will enable the Inland Revenue to pay money to local authorities rather than into the Consolidated Fund. This will not operate where there has been no conditional contract to sell the land.
Subsection (3) sets out the various conditions of intention which have to be fulfilled before local authorities can benefit from the new clause. Those conditions are the making of a compulsory purchase order, the issue of a notice of intended acquisition under the Community Land Act 1975, or the service of a counter-notice under the Act.
If an authority intends to purchase land after the owner has given notice of 1465 intention to dispose of a material interest in the land in a disposal notification area, it will be fairly closely circumscribed. It is not merely a question of a council indicating in an off-hand way that it intends to buy land. There have to be definite indications as set out in subsection 3. If that happens and the owner sells before there is a conditional contract, the new clause will operate and tax will be payable to the Revenue.
This will apply to only the very few transactions where there is an attempt to prevent local authorities getting tax which they would otherwise have received.
§ Mr. Graham PageThis new clause did not appear on the Order Paper until a very late stage, and there will be no further opportunity to get it right. We have had very little time to consider it since it first appeared on Friday or Monday. It is constitutionally very important because it introduces the concept of alotting certain taxes for certain purposes. We seem to be going back to the 1920s and the road tax. There are strong objections to this principle.
We know what is intended on the apportionment of development land tax between local authorities and the Exchequer, but here we have local authorities and the Board of Inland Revenue jumping the gun on the division of taxes between the Exchequer and local authorities. If a transaction takes place directly between the owner of land and an exempted body, that body can estimate the current use value of the land and from that it can apply a formula and refrain from paying to the vendor the full purchase price by pocketing a certain sum for itself.
We object to the principle of allocating revenue for a particular purpose without the Board of Inland Revenue going to the Exchequer for it and instead of the Exchequer allotting money as the Government see fit to assist local authorities.
The procedure under Clause 39 of the Bill, together with the administrative action outlined in Schedule 7, results in the tax being deducted from the purchase money when a local authority or other exempted body purchases a property and is called upon to pay the purchase price. The tax will then be based upon the 1466 development value, which is the difference between the cost of buying the land originally and the consideration for the sale.
If the sale to the local authority takes place shortly after the land has been purchased by the vendor, there will be little development in value upon which the tax can be assessed. In those circumstances, it has been thought—I guess at the last moment—that the local authority might be deprived of pocketing the development tax and might have to share the general pool of tax collected by the Exchequer. Frankly, I do not see why not in those circumstances.
8.30 p.m.
If we apply the proposals in New Clause 2, we get to such a complicated state of calculation that it is not worthwhile. I think that the Minister indicated in the debate on the Money Resolution that there would not be many cases of this sort. Is it worth while to undergo all the complications of the new clause so as to pick up a little bit of tax to hand over to the exempt body—the local authority or one of the other public bodies listed in Clause 12?
The complications of the new clause are frightening. If an owner of land sells his land to a private person—in other words, if there is an ordinary conveyance between vendor and purchaser—and the property is subject to some indication from a local authority, or other exempt body, that it wishes to buy the land, and the indication has been made as long ago as five years before, any tax paid by the vendor based on the development value at the time of that sale and purchase will be handed over to the local authority by the Board of Inland Revenue.
It is necessary to study the clause to see what is meant by an indication within the past five years of an intention by a local authority or other public body to acquire the property. If a compulsory purchase order is made in relation to the property, the authority will have given an indication that it intends or wishes to acquire the property. I presume that it is a compulsory purchase order which has or has not been confirmed. It may merely have been made by the local authority and not confirmed by the Secretary of State at the time of the sale and purchase between the private individuals.
1467 There are two other indications which relate especially to the Community Land Act. The notice stating that the acquiring authority intends to acquire—as specified in Schedule 7 to the Community Land Act—and the counter-notice under the disposal notification arise from a procedure under the Act to which, I recollect, my right hon. and hon. Friends objected strongly when they were considering that measure.
I am sure that the Minister will have noted the misprint in subsection (3)(c) as printed, where reference was made to a
counter-notice station that the acquiring authority propose to purchase".Obviously it should be a counter-notice "stating". I know that a number of my amendments contain misprints, but the misprint to which I have drawn attention shows, I believe, the haste with which the new clause was put on the Notice Paper and the lack of opportunity that my hon. Friends have had to study it carefully. We managed to put down a few starred amendments, but because they were starred they were not selected. To have to study a clause which, at a late stage, brings in an entirely new procedure based on an entirely new principle is unfair not only to the Opposition but to those who have to put the procedure into practice.I appreciate what the Minister said in the debate on the Money Resolution—namely, that this procedure will not affect transactions between private individuals and that it will affect only claims by local authorities or other exempt bodies to payment of the tax from the Board of Inland Revenue. Nevertheless, local authorities and their officials will have to consider the application of the clause. It may be that, without an opportunity for us to have expert advice from outside, errors will occur in the clause and will cause great trouble. It is not for nothing that we normally have the procedure of Second Reading, Standing Committee. Report and Third Reading in both Houses when dealing with technical matters of this kind. We have that procedure to try to get our legislation right and not to have to resort to litigation to understand what it means.
It has been difficult for us to study the clause with the care with which it should 1468 be studied. It changes our whole principle of taxation. Tax having been collected by the Inland Revenue, we from this House, by means of the clause, will be instructing the Board of Inland Revenue to pay out that money to these exempt bodies. Not only local authorities, but other exempt bodies which carry out particular functions in the service of the public, are concerned.
The Minister said that the new clause did not apply to unconditional contracts for sale. I am not quite sure what he intended by that phrase. It may be that I have not read the clause thoroughly enough line by line, but I do not find that mentioned in the clause. I do not know at what date or time within the five years, or whatever it may be, the unconditional contract for sale can be entered into to avoid the effect of the clause. If the Minister would explain that matter further in reply, we might at least hope to understand the clause a little better.
The clause arises from the process of embarking on the extraordinary procedure of net-of-tax purchase by public bodies. That is a procedure whereby the vendor will not be properly assessed by the Inland Revenue for the amount of tax for which he is liable. That is what we would like done—that the tax be paid to the Board of Inland Revenue, that the board accounts for it to the Exchequer and that so much of that money as the Government may decide should be paid to the local authorities. I have no objection to local authorities having the proceeds of the tax. In fact, I should like to see it go into their hands rather than be disbursed in other ways. But the distribution of that money should not be haphazard—a bit acquired by deduction from purchase money due and owing from local authorities and a bit given back to them when they are too slow to act when there is a transaction between private individuals. That is not the way in which to keep a check on local authority expenditure.
This subject has recently been much debated in Parliament. How on earth shall we be able to make an estimate or forecast of the revenue and expenditure of local authorities when side payments will be made to local authorities when they purchase property, and when they may say "Someone jumped the gun and sold his property when we indicated 1469 that we wanted it. Therefore we must have the tax which arises from that sale."? This is a thoroughly bad clause. The procedure of net-of-tax purchase by local authorities is thoroughly bad.
§ Mr. FairbairnI am in a difficulty over the clause. Incomprehensible and lengthy as it is, I assumed that it meant what it said. I have been trying to work out, with some difficulty, and with reference to the Community Land Act 1975, what is a counter notice station. It did not occur to me that it meant anything else. I did not hear the correct words that my right hon. Friend the Member for Crosby (Mr. Page) used when he said what he assumed it meant. I assumed that the expression "counter-notice station" was a term of art, which even those who did not have the benefit or boredom of having discussed the Community Land Act in Committee would comprehend.
Under this Bill it is intended to give back to the community the wealth that the community creates. There are always members of the community at large who listen to debates in the House. If they read the reports of the debates, I should like to ask them whether they understood what the clause was about. I doubt whether members of the Government understand it. They may have had more chance to do so if they were present. I doubt whether members of the Liberal Party understand it. They might also have had more chance if they were present. I doubt whether any Members of the Scottish National Party understand or bother to understand what it is about. After all, it affects Scotland, and those Members represent the public interest when it comes to tax.
We start with an extremely dangerous and wide proposition. The clause reads:
(1) This section applies where, on a material disposal, a body (in this section referred to as "the acquiring authority)"—I should have thought that it might have said merely "the acquiring authority"—acquire an interest in any land".I think "an interest" is an extremely dangerous expression.We may obtain an interest in any land as a result of the slightest act. It need be only the smallest right or the smallest servitude. It may be anything. It may 1470 be the right to walk one yard or the right to place one post. This clause covers "an interest". The right to put up a signpost on the land would be sufficient. There would then follow the procedure of compulsory purchase of the place in which we put the post. That would be sufficient to make the section immediately operative.
8.45 p.m.
We must consider the width of this incomprehensible section. I refer to the words:
within the period of five years ending on the date of the material disposal—".If such act is done within five years, the land is caught.Then we have the concept of the indication of an
intention to take into public ownership land which is or includes the whole or any part of the acquired land".It is important to look then at subsection (3)(b) to understand that an indication has to be given only of an intent to take land into public ownership. In other words, if a local authority wants to obtain the benefit of this tax, all it needs to do for the purpose of this provision is to give an indication that it intends to take into public ownership the whole of my constituency.We then see the words in subsection (3):
any indication of an intention to take any land into public ownership is given when a compulsory purchase order is made authorising acquisition of that land.…In other words, a local authority does not need to acquire it or have it confirmed. It can require it, forget it, or tear up the application.Under the saving clause, paragraph (a) is not covered, but only paragraph (b):
… if, in a case falling within paragraph (b) above, the acquiring authority have, before the date of the material disposal served notice … that they have decided not to acquire any land",it would then be known that that did not apply to paragraphs (a) and (c).All the local authority needs to do to obtain this facility is to give notice of an intention to acquire, even though it never intends to carry it out, but it will be able to obtain the benefit if there is any sale of that land between private persons.
1471 The provision goes on to refer to a private disposal of an interest in the designated land or any part of it. That covers anything. It covers rights of way, the granting of rights to pick fruit, and indeed any right. Thus, a local authority, if it wishes to acquire land, can say merely that it wants to acquire land, whether it really requires to do so or not, and any transfer of interest in that land from one individual to another would be caught under the provision.
That is a wide and absurd provision and was surely never intended by the Government when they hurriedly framed this clause—a clause that even contains a number of substantial misprints that misled me if not others. I find the clause almost incomprehensible but, when one is driven to try to discover a meaning in these terms of art, with all the misprints, the task becomes even more difficult.
What happens under subsection (3) if the local authority acquires any interest or acquires under compulsory purchase, or under any other of the bases, and then sells again? Supposing the local authority acquires land and then sells to a private individual, or acquires it and sells to a statutory authority; what happens then? Can it use that procedure merely to obtain tax from central Government funds? It seems to me that it can. There is no provision that the local authority can first cancel any intention to acquire and, secondly, when it has acquired immediately resell property or the interest or an option to any other authority, private or public, and then merely claim the tax.
We then come to the grand injustice of this noble situation whereby the Treasury is said to be going to give to the local authority what it so clearly deserves. The clause says:
… the relevant amount shall be equal to the whole of the previous tax; and in any other case the relevant amount shall be equal to such proportion (which may be the whole) of the previous tax as appears to the Board to be just and reasonable.I do not know whether that is intended to mean anything. The definition of a "reasonable man" in English law is the man on the top of the Clapham omnibus. The definition of a "reasonable man" in Scottish law is not limited. We are all reasonable men in Scotland. Those of 1472 us who are unreasonable are absent as usual—the Members of the Scottish National Party, many of whom, oddly enough are Englishmen but not Welshmen, I hasten to add to the Minister.That the board should decide what proportion is "just and reasonable" is inequitable and reverts to the Money Resolution. Upon what basis will it do so? Will it be upon the amount originally claimed, or upon the amount that it was originally worth? It goes back five years. If the tax five years ago was £100, it would now be worth £50. What is "just and reasonable"? What are the guidelines and what is the basis on which this grandiloquent gesture is to be made?
Subsection (5) reads:
If, immediately before the material disposal referred to in subsection (1) above, any part of the previous tax remains to be paid then, up to the relevant amount, any paid after that disposal in respect of that tax shall be payable by the Board to the acquiring authority; and subsection (7) of section 39 above shall apply to any amount payable by the Board by virtue of this subsection as it applies to any amount payable by them by virtue of subsection (6) of that section.That is a lovely subsection. I do not know what is means and I do not know whether the Minister knows what it means. Why include such a subsection at all? I shall be more than comforted if the Minister understands more than one line in 10 of the new clause.Subsection (6), to which subsection (5) applies under reservation of Clause 39(7), says:
the relevant amount exceeds the part of the previous tax"—"previous tax" is not defined—which, immediately before the material disposal referred to in subsection (1) above, remains to be paid, the Board shall pay to the acquiring authority a sum equal to the relevant amount or, as the case may require,That is a lovely piece of tight definition behind which the Minister sheltered on the previous debate. What is the meaning ofa sum equal to the relevant amount or, as the case may require"?Does it mean anything? Does it mean that the board will give what it wants, that it will apportion a sum and say "That is your bit, little boy" and explain that that is the "relevant amount" and must be accepted?1473 The drafting is extremely sloppy and complicated. It is duplistic in its meaning, meaningless in its intention, and I am disturbed that a new clause of such complexity and so loosely drafted should be forced upon the House, which has no other remedy at this stage in the proceedings.
§ Mr. SainsburyI strongly support my right hon. Friend the Member for Crosby (Mr. Page) and my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) in what they have said about the appearance of a new clause at such a late stage. I have spent a fair number of hours in the past few months contemplating the various aspects of the Bill and I suppose, not being a lawyer or an accountant, that I can claim some basic knowledge of the objectives and methods in the Bill. I had to read the clause several times before I began to think that perhaps I had some understanding not only of what it was about, but how it was meant to carry out its intention.
One of the disadvantages of the clause appearing so late was that we had to hurry to put down amendments to it as we saw it. My first sight of it was yesterday, when I hastened to table an amendment, which, like the counter-notice "station" instead of "stating" in the clause was misprinted. That amendment is Amendment (c), which should be to leave out "five" instead of to leave out "give". The amendment, which is starred has not been selected.
My hon. Friend the Member for Melton (Mr. Latham) will no doubt seek to say something about the provision in the clause to which his amendments refer. All these matters are relevant. We must get the clause right now, because there is no other chance.
The Minister said that the clause would apply on only a few occasions. If he had turned over the page and seen all the other bits, he might have decided that it was better to withdraw it. It is extraordinary that we must have such a lengthy and complicated clause to deal with a matter that will arise on only a few occasions and that affects only local authorities and the Board of Inland Revenue.
1474 Under the clause, if a local authority or other acquiring authority has given notice some time in the past five years of its intention to acquire a bit of land, and if before it acts on that intention the owner disposes of it to a third party, with the result that development land tax is paid to the Inland Revenue, the local authority will be entitled on acquiring the land to claim from the DLT office at Middlesbrough the tax that it would have been able to claim if it had bought the land from the original owner at the price paid by the third party. If that will happen only on a number of occasions, and if it involves only the transfer of money from the Inland Revenue to local authorities, one doubts not only the merits of so long and complicated a clause but the merits of incurring the cost of preparing it.
We have already heard of some of the apparent weaknesses in the drafting of the clause. No fewer than six times we find in it the dreaded words "in this section" or "in this subsection". In line 1 we read:
This section applies where, on a material disposal, a body (in this section referred to as the acquiring authority').My hon. and learned Friend inquired with admirable restraint why we could not have the words "an acquiring authority" instead ofa body (in this section referred to as the acquiring authority')".Anyone who has the good fortune, or the misfortune, to while away an occasional hour studying the Bill in full will find numerous other examples of this kind of phraseology.
§ Mr. Deputy Speaker (Sir Myer Galpern)I shall reserve that special pleasure for the Summer Recess.
§ 9.0 p.m.
§ Mr. SainsburyThank you, Mr. Deputy Speaker, and I wish you a very happy recess. But this clause cannot be allowed to wait. In subsection (1) we find the words:
a body (in this section referred to as 'the acquiring authority')and in the very next line are the words:referred to as the acquired land".Why have the reference to acquiring an interest in any land? Why cannot we speak of acquiring an interest in the relevant land? Why must we have these 1475 special definitions applying only within this new clause?
§ Mr. FairbairnIt is perfectly possible to acquire an interest in land without acquiring any land. Therefore, it is quite impossible to describe acquiring an interest in any land as "acquiring land".
§ Mr. SainsburyI am grateful to my hon. and learned Friend for that important explanation about the nature of interest in land. It is a substantial matter to which I shall return. We have something referred to as "designated land" and then in subsection (2) there are the words:
if on a disposal (in this section referred to as the private disposal')".At the end of the same subsection are the words:an amount of development land tax (in this section referred to as the previous tax')".Later are the words:an amount (in this section referred to as 'the relevant amount')".This goes on all the time. We need a bibliography or lexicon for every clause saying:In this section the following terms shall have the following meaning".It seems to me that very often the meanings are of a rather special nature.My hon. and learned Friend the Member for Kinross and West Perthshire raised an important point which I must admit had not occurred to me in my first several readings of this new clause when he referred to acquiring an interest in any land. As he rightly pointed out, an interest can be a small matter, for example, wayleave permitting the posting of a sign, which was the example he cited. The acquisition of this kind of wayleave is common. In my constituency in one area there are many scheduled and listed buildings. The lighting system is somewhat old-fashioned necessitating the fixing of lights to the actual wall of the buildings because the streets are rather narrow. So the local authority acquires wayleave for signs and street lights for many of them. It is quite usual and in the normal course of events for the authority to wish on occasion to change the rights and acquire fresh interests.
1476 I am sure that the Minister will reply to the point that my hon. and learned Friend has made. I ask him also to look at the conflict between subsections (1) and (3), because it seems to me that the natural way in which to read subsection (3), which speaks of taking any land into public ownership and refers to a notice stating that the acquiring authority intends to acquire that land, is not entirely compatible with the wording in subsection (1) where we have the phrase:
an interest in any land".Again, in subsection (3) we have a reference to the actual acquisition of land whereas in subsection (1) we have a reference to the acquisition of any interest in land. There seems to be considerable conflict between these two parts of the clause.
§ Mr. FairbairnThe Bill is so badly drafted that one of the idiotic descriptions in parenthesis that my hon. Friend describes equates the acquisition of land with the acquisition of an interest in land.
§ Mr. SainsburyI am grateful to my hon. and learned Friend for that comment but I was not sure whether that acquisition—if I may use that word—would apply in this subsection and right the way through. If that is so, we run into another problem, because a local authority cannot issue a compulsory purchase order to acquire a wayleave or leasehold interest. My right hon. Friend the Member for Crosby is the leading authority in the House on these matters, but my impression is that it is not possible to issue a compulsory purchase order to acquire a leasehold interest. The land is either acquired or it is not. A leasehold interest, which would be an interest in land, cannot be acquired.
These arguments emphasise that we have a clause which not only came in late, but may have come in untidily when we had no opportunity to discuss it. But I ask the Minister whether it is worth all the complications that will be involved. There will be a great many occasions when local authorities, acquiring authorities or bodies in this section referred to as acquiring authorities, will acquire land which has changed hands in the last few years where there is, 1477 therefore, a high base value and where the authority will not benefit from the net of tax acquisition. It will have to acquire it at a reasonably high figure, and there will be no kick-back of tax to it from the DLT office, because there will not have been a previous notice.
§ Mr. Denzil DaviesI am sure that it is irregular to intervene at this stage in the hon. Gentleman's speech. However, I have been considering what has been said in this debate. Bearing in mind that the new clause was tabled very late—and I accept that it has been difficult for the Opposition to consider it properly or to put down amendments—I have it in mind, with the permission of the House, to withdraw the clause and to reintroduce it in next year's Finance Bill when it can be debated as part of that Bill in Committee and on the Floor of the House. I also give notice of the fact that it will be reintroduced in next year's Finance Bill so that, if there are any collusive deals meantime, no doubt poeple who enter into them will take that factor into account.
The clause is necessary, but I accept that it is unsatisfactory that the Opposition have had no opportunity to consider it properly or to table amendments. It is also unsatisfactory when the Opposition put down new clauses on Report, when it is equally difficult for the Government to amend them. But, in view of that, I am minded, with the leave of the House, not to press the clause now, but to reintroduce it in next year's Finance Bill. I propose to take similar action with regard to New Clause 3, which in part follows on from New Clause 2. They will be brought back in next year's Finance Bill, when the House will have more opportunity to consider them and to seek to amend them. But I make it clear to those who wish to enter into certain transactions that we shall be reintroducing them in next year's Finance Bill, and no doubt they will take account of that before entering into collusive transactions.
§ Mr. SainsburyI am sure that my right hon. and hon. Friends will welcome what the Minister of State said. I wish that I could pass to him the remainder of my note. The last words in my notes are "Withdraw: reintroduce next Finance 1478 Bill." That was the suggestion that I intended to make to the hon. Gentleman.
§ Mr. FairbairnI hope that before my hon. Friend finishes reading his notes he will stress to the Minister that at the end of them are the words "and next time get it right.".
§ Mr. SainsburyI trust that that implication was written into what we have said already.
This is a matter of transferring tax back to acquiring authorities. The Minister referred to forestalling provisions, as though there were individuals who would go around trying to do things to their advantage. In New Clause 2 we are talking not of individuals doing things for their advantage, but of individuals carrying out transactions that could perhaps be to the disadvantage of an acquiring authority in due course.
Will the Minister consider whether the amount of administrative time and organisation and the number of extra employees who will be required in the DLT office will make this worth while, particularly in view of the length of time involved? If local authorities dilly dally for five years before making the acquisition, that shows that they do not deserve the DLT back.
§ Mr. Deputy SpeakerDoes the House wish to pursue this matter?
§ Mr. Michael LathamI do, Mr. Deputy Speaker.
First, the Minister has not formally withdrawn the new clause.
§ Mr. Deputy SpeakerI am waiting to give the Minister an opportunity to do that. If the debate has been concluded, he will formally do so.
§ Mr. LathamWith great respect, Mr. Deputy Speaker, the Minister has given a threat that he will introduce retrospective legislation in next year's Finance Bill. He specifically said that people should bear in mind what he said if they are to undertake colusive deals between now and then. That is a state of affairs that needs further exploration before the House leaves the matter. The Minister's announcement of his decision to withdraw the new clause has made the considerable discussion in the House today a complete waste of time, including 1479 all the discussion on the Money Resolution.
§ Mr. Denzil DaviesI thought that that was what the hon. Gentleman wanted.
§ Mr. LathamI do not know why the non. Gentleman should think that I wanted that at all. If he will wait a moment until I have developed my argument, he may be surprised.
Line 29 of the new clause refers to a compulsory purchase order being made. We are now told that there is to be legislation in the next Finance Bill that will catch deals done between now and then. It will necessarily, therefore, have retrospective effect, and it will also catch the cases where there has been a sale subsequent to the making of a compulsory purchase order which might not subsequently be confirmed.
If that is to be the case, that is a most unusual use of ministerial power. The whole point of the Town and Country Planning Acts—
§ Mr. Denzil DaviesIt is not a question of the use of ministerial power. After considering some of the points that have been made, we have decided that the new clause will be reintroduced in next year's Finance Bill. It will then be open to hon. Members to debate it on Second Reading, in Committee and on the Floor of the House, and to consider all those points.
I thought that I was being helpful to Opposition Members, who quite fairly and correctly, said that the new clause should not have been tabled as a new clause on Report. The hon. Member for Melton (Mr. Latham) himself made the point in a previous debate. He said that it was very unfair to the Opposition that the Government had put down these new clauses on Report as there was then no chance to amend them. I am meeting very valid argument made by the Opposition. If Labour Members were in opposition, we should no doubt make the same valid argument. I am meeting it and withdrawing the new clause, but I am saying that it is necessary to reintroduce it in next year's Finance Bill, which will give ample opportunity to discuss all the matters that hon. Members have been raising.
1480 I concede that it is unfair to discuss these matters now as the new clause was put down at a rather late stage. I am sorry that the hon. Member for Melton is being rather churlish in not accepting that I have met a fair point made by the Opposition.
§ Mr. LathamI am not disputing the Minister's right to withdraw the new clause if he so wishes. All I am querying is the wording that he has used. This is putting people who choose to undertake collusive deals between now and next year's Finance Bill under notice. I do not knew what he means by that. What will happen to people who sell buildings between now and then? Will they be retrospectively taxed?
§ Mr. Denzil DaviesThe hon. Gentleman has misunderstood the new clause. It does not tax any individual. It merely enables the Inland Revenue to pay money to the local authority. The new clause does not affect private interests in any way. I made that clear in the debate on the Money Resolution. Any private deal or sales entered into would not be affected. We are concerned only with the machinery of whether the tax should stay in the Consolidated Fund or go to the local authority. It does not affect private interests, and any reintroduction in next year's Finance Bill would again not affect any private interests.
§ 9.15 p.m.
§ Mr. Graham PageI thank the Minister for reconsidering this. The arguments we deployed earlier on the Money Resolution and later in this debate seem to have convinced the Government that this new clause ought not to have been introduced at this stage. The one thing which worried me when the Minister introduced the new clause was that he used the phrase "if there are no collusive transactions". If the clause is introduced next Session on the same basis as this new clause and, indeed, New Clause 3, there can be no question about collusive transactions between individuals. If those transactions occur, they will give rise to dealings between the Board of Inland Revenue and the local authority, but individuals can continue to make contracts as they please because it is only when they have paid over the tax to the board that the board accounts to the 1481 local authority instead of to the Exchequer.
I hope the hon. Gentleman will agree that there will be nothing retrospective that will affect individuals. It may be retrospective in respect of the board and the local authority, but not in respect of an individual's transactions. I do not want to labour the point.
§ Mr. Deputy SpeakerOrder. I take it the right hon. Gentleman is finishing his remarks.
§ Mr. PageI am just finishing, Mr. Deputy Speaker. I am grateful to the Minister. I think we should accept what he has said, and I am sure that my right hon. and hon. Friends will do so.
§ Mr. Denzil DaviesI beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.