HC Deb 24 June 1976 vol 913 cc1912-22
Mr. Graham Page

I beg to move Amendment No. 150, in page 105, line 25 leave out 'ten' and insert 'forty'.

Mr. Deputy Speaker

With this we may discuss Amendment No. 151, in page 105, line 36 leave out 'three' and insert 'six'.

Mr. Page

Amendment No. 150 relates to the paragraph setting out the activities which constitute development, but not material development for the purposes of the Act. Part of the list refers to the carrying out of works for the rebuilding, as' often as occasion may require, of any building which was in existence at the relevant time, or of any building which was in existence in the period of ten years immediately preceding the day on which that time falls but was destroyed or demolished before the relevant time, so long as (in either case) the cubic content of the original building is not exceeded by more than one-tenth". This is a familiar situation in planning. If one is exceeding the size of the original building by only one-tenth, it is not treated as development. But the period of destruction of buildings provided for is only 10 years. The rebuilding plus one-tenth provisions were introduced shortly after the war to deal with the problem of buildings destroyed in the war. In many big cities, such buildings have not yet been rebuilt.

If we restrict the period to 10 years, we are saying that if a building were destroyed only 11 years ago, the rebuilding, even if it keeps within the one-tenth provision, may be treated as material development. We ought to give relief for buildings destroyed as long as 40 years ago.

A later part of the schedule deals with car parks and refers to the carrying out of operations for, or the use of land for, car parking, provided that such use shall not exceed three years". I am not sure why the period of three years was chosen. A longer time would be appropriate.

The Bill provides that it shall not constitute material development if the period for which land is used for car parking does not exceed three years. That is a very short period. Six years would be much more reasonable.

Our amendments are not an attack on the principle of the Bill. They are sensible and reasonable and will make these matters more practical for those involved in development.

Mr. Michael Spicer

My right hon. Friend the Member for Crosby (Mr. Page) has raised the question of temporary planning permission in connection wth car parking and is trying to extend the exemptions.

This subject was aired in Committee. The whole subject of temporary permission is bady treated in the Bill. It relates not just to car parks but also, for instance, to caravan sites, and a number of operators will be badly hit when short-term planning permission lapses and it has to be recomputed for the assessment of the tax.

In some cases, quite substantial amounts of tax will have to be paid and this is unfair.

Mr. Denzil Davies

Amendment No. 150 seeks an extension from 10 years to 40 years. Any Minister soon learns that whenever a period of years is mentioned in legislation, he is asked to justify it and the justification is usually that there has to be a period and that the one in the Bill is the best the Government can devise. I shall use a similar argument tonight, although I can at least say that 10 years was chosen for the development gains charge. The fact that it applies to one tax does not mean that it is good for another, but it indicates that this is not an arbitrary figure that we have just plucked out of the air. Ten years was thought to be a good figure for the development gains charge and there have been no representations or complaints about it. The charge is levied on gains in a different way but at the same rates of tax.

I am advised by those well versed in planning that a lengthening of the time limit would have another implication. The present rule is an incentive to developers to proceed with redevelopment to clear sites reasonably quickly and helps to discourage arbitrary demolition.

Mr. Graham Page

Of course that is so, if the people concerned can get planning permission, but many are unable to develop because they cannot get the permission.

Mr. Davies

That may be so, but no doubt there are also many cases where they can get planning permission. I do not know the reasons for these decisions.

The 10-year period is an encouragement to redevelopment which would be reduced if we accepted the Opposition's suggested 40-year period.

Amendment No. 151 relates to car parking. We had a moderately long debate in Committee on the subject Car parking, like partnerships and options, seems to have exercised the Committee for a considerable time. I do not have strong views about car parking, and I do not think that the three-year provision we have included in the Bill makes very much difference, but as the right hon. Member for Crosby (Mr. Page) has spoken so cogently on the amendment, as he always does, I am prepared to accept it.

I remind the hon. Member for Worcestershire, South (Mr. Spicer) that I wrote to him about temporary permission.

Amendment negatived.

Amendment made: No. 151, in page 105, line 36, leave out 'three' and insert `six'.—[Mr. Graham Page.]

Amendment made: No. 153, in page 106, line 50, at end insert— 'and (d) lifts and staircases'.—[Mr. Denzil Davies.]

8.0 p.m.

Mr. Ian Stewart

I beg to move Amendment No. 241, in page 106, line 50, at end insert 'and (d) canopies'.

Although we did not discuss the merits of Government Amendment No. 153 relating to lifts and staircases, it appeared to us during our deliberations in Committee that there might be some other categories that should be included in the schedule that do not constitute a material development. I shall explain as briefly as possible why we feel that canopies should be included as an additional item.

The question which arises is the effect of development land tax as regards the conversion of existing garage premises to self-service filling stations. There is a significant change within the motor trade to self-service filling stations to cut operating costs and to give a better service to the public. However, when an existing garage goes self-service, the cubic content of the buildings comprised in the self-service development is almost always less than the cubic content of the buildings demolished. It follows that in the majority of cases such conversions are unlikely to be subject to development land tax. Most of them will fall at the very least within the 10 per cent. tolerance that is permitted under Schedule 4.

The question arises whether a canopy counts as a building for development land tax purpose. A canopy is standard to the self-service development schemes of many oil companies. They would normally be situated immediately over the petrol self-service area. The canopy would not be part of or joined to the control building where the customer pays for the petrol, except for perhaps a link between the two for electric cables or other services. The control building is usually to the side or rear of the self-service area. The canopy would probably be supported by a single perpendicular girder, or perhaps more than one, which would be sited on the pump island.

The canopy is normally one-dimentional other than the girder. Its sole purpose is to keep rain off customers during the self-service operation and to provide adequate lighting underneath. Would such a canopy count as a building? The point is unclear in Clause 47(1). The expression "building" is defined specifically as including any structure or erection, and any part of a building, as so defined, but does not include plant or machinery comprised in a building. I understand that in a recent tax case it was held that a canopy should not be regarded as plant or machinery. Therefore, the Revenue might well feel obliged to argue that the definition of a building in Clause 47(1) includes any structure or erection and includes a canopy. On the authority of that tax case, that might be the interpretation within the definition of a building for development land tax.

We felt it necessary to table the amendment to clarify the matter. If it is not settled, we hope to persuade the Government that canopies, along with lifts and staircases, should be included.

If a canopy is to be taken into account in the calculation of cubic content following the redevelopment of a petrol station to operate as a self-service station, it could be outside the 10 per cent. tolerance that means development land tax assessment. That hardly seems to be the intention of Parliament.

At present many garage owners are finding it difficult, for a number of reasons, to continue in business profitably. Many factors operate against their profit margins. We feel that one route towards greater efficiency on the forecourts is the move towards self-service arrangements where the increase in volume justifies the cost. It would be in the interests of garage owners that canopies should clearly be excluded from material development for the purpose of development land tax. I hope that the amendment will find favour with the Government.

Mr. Denzil Davies

The hon. Member for Hitchin (Mr. Stewart) has moved an interesting amendment. Perhaps at this stage I should read some of my brief. I sometimes enjoy doing so, much to the amusement of the Inland Revenue. My brief states: It is not known what is intended to be covered by the word 'canopy'. The Concise Oxford English Dictionary gives a range of definitions including, roof-like projection over niche, etc.'. Planning legislation recognises 'porches' but not 'canopies'. The definition of this term would therefore present difficulties". The problem, as the hon. Gentleman recognises, is that "canopy" is a word which does not have a very exact meaning in planning legislation. Bearing in mind what the hon. Gentleman said about the tax case, the word does not seem to have an exact meaning in relation to fiscal legislation. I do not think that the hon. Gentleman expects me to accept the amendment.

The hon. Gentleman referred to the rebuilding of petrol filling stations, and my brief touches upon that matter. In some cases there might be some difficulty, but the amendment goes much wider and covers canopies in general. I cannot accept the amendment. One reason that I am unable to do so is because of the imprecise nature of the word and the meaning that would be given to it. That is why I cannot introduce it into legislation.

Mr. Ian Stewart

I am not entirely surprised by the reaction of the Minister of State. However, I hope he will accept that the amendment has raised a potentially important point. Even if it cannot be resolved by his accepting the amendment, I hope that the Government will give further consideration to the matter. I hope that they will do something if, on reflection, it appears that the Bill could catch canopies, as erected by petrol stations, for development land tax. If that is not the Government's intention, I hope that they will do something about it.

It would be helpful to have a statement from the Government that it is not their basic intention to include canopies in this context. I hope that at least they will be able to reconsider the matter.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 154 in page 107, line 1, leave out 1st July 1948' and insert '12th September 1974'.—[Mr. Denzil Davies.]

Mrs. Lynda Chalker (Wallasey)

I beg to move Amendment No. 156, in page 107, line 41, at end insert— '(c) docks or other transport purposes.'. It may be somewhat surprising to those awaiting social security legislation to see me on my feet on such a Bill as this. However, I am concerned, because throughout the Committee stage of the Bill it seems that the Committee did not look at the situation in respect to docks. As a member of the parliamentary panel of the British Ports Association, I am concerned about the situation that docks face.

Many docks are in a period of great change, particularly in Liverpool. Old facilities are being contracted and new deep-water facilities are being required in their place. The ports are most concerned about the way in which the existing use value of an obsolescent or obsolete dock would be assessed in accordance with the terms of the Bill as now drawn.

The effect of the amendment when read in conjunction with paragraph 5(1)(f) is to enable the current use value of an obsolete or obsolescent dock to be assessed on the basis that it could be used for "other transport purposes".

We all know that recent developments have regrettably resulted in considerable areas of "operational land" becoming surplus to dock requirements, with all the other problems that that involves. That is particularly true of the South Dock area in Liverpool. But these areas of dock land have been "operational land", as I understand it, as defined for Town and Country Planning Act purposes, and have been the subject of deemed planning permissions under class xviii B of the Town and Country Planning General Development Order 1973.

If these white lands, as they are now known—areas for dock use—remain on that basis, we suspect that problems could arise under the proposed legislation relating to the dock land that becomes surplus to operational requirements. It seems that in almost every case alternative development or use requires planning permission. Therefore, I should be grateful if the Minister could make clear to me the basis of the assessment of current use value in this situation, both in relation to land currently surplus to operational requirements and to the operating docks which will be used for a while but face eventual closure. Following the 1974 White Paper on land, we had hoped that this position might be clarified, but it seems that it is still in some dispute.

Although Schedule 4 refers to the five main use classes, it does not cover the statutory undertaker's port land because it is not there specified. As far as I can see from reading the definitions in the Bill, it does not fall at present under non-operational dock land, perhaps as it could do at an earlier stage of Schedule 4. As far as I can see, land and buildings within the dock estate may fall within Class D of paragraph 7 of Schedule 4, but in that case the only use that will rank as nonmaterial development and that may be taken into account in arriving at the current use value is dock purposes, or, presumably, something that is considered a comparatively small number of alternative specialist uses.

This is obviously not clear from the schedule as it is now written. The value for dock purposes of a dock which has recently been closed because it is no longer viable would on this basis be quite nominal and so come within the intentions covered by paragraph 33 of the 1974 White Paper on land. This, in turn, would place dock and other transport undertakings in an extremely difficult position and would create immediate difficulties in respect of the valuation of their land for annual accounts at year end.

The amendment to add docks or other transport purposes to the schedule would enable the current use value to take account of buildings, including transit sheds, on the land, and would therefore enable redevelopment as for industrial purposes under sub—paragraph (a) or (b) of Class E to take place.

I hope that the Minister can either reassure me that all these matters are considered elsewhere in the Bill or, preferably, make the situation clear by accepting the amendment. This is a situation that faces not only Liverpool but also the Port of London and a number of other ports as our trading changes over the coming years.

8.15 p.m.

Mr. Michael Spicer

I support the amendment moved by my hon. Friend the Member for Wallasey (Mrs. Chalker). It was remiss of us to miss this point in Committee. As she rightly says, obsolete or obsolescent docks are likely to have a very low current use value. Anything that inhibits development must be bad. I do not know Liverpool, but I know the Port of London. One of the great sadnesses of this metropolis—this great port town as it used to be—is that, unlike every other city that now has changed the use of its docks, London remains an eyesore to a large extent in relation to the old docks. My hon. Friend has raised a matter of great importance.

Although I can understand that the purpose of the Bill is to prevent large amounts of money being made by changes of use occurring, and the Minister will probably argue, in terms of his own philosophy, quite strongly against that, I hope that in some way he can meet my hon. Friend's general point that we face this dock development problem in Britain, and in this city above all. We must be very wary of doing anything which makes London the only major old port city that remains an eyesore. The situation that exists in Hamburg, for instance, is totally different from that in London. It would be a great shame if, through the operation of the Bill when it is enacted, London were prohibited from developing in the way my hon. Friend has suggested. I hope that the Minister will look at this matter sympathetically, although I do not wish to cause him difficulties.

Mr. Denzil Davies

The hon. Gentleman is quite right. This matter causes me some difficulties. The hon. Lady moved her amendment very moderately and put her points very clearly. There are one or two technical points that she mentioned and technical questions that she asked which I cannot answer. However, I shall endeavour to let her have answers to those points. It would not be fair to try to answer them now, because any answers that I gave would not be adequate.

The hon. Lady's main point was that we must uplift in some way the current use value of these dock lands in order to give them a higher base value, which would mean, presumably, that the owners could sell them off at a higher price and thereby there would be redevelopment.

As the hon. Gentleman recognised, that is in conflict to a considerable extent with some of the purposes behind our land policy. We feel that it would not be right artificially in some cases to raise the current use value in order to create a profit for someone merely by doing so. If local authorities wanted to develop an area for housing, for instance, it would make it much more expensive for them to purchase the land in question. Therefore, there is a conflict.

Mr. Michael Spicer

I do not want to delay proceedings at this late stage but, surely, ultimately there have to be objectives higher than that of simply preventing profits. I am sure that the present Government share with my hon. Friend the Member for Wallasey (Mrs. Chalker) and myself the desire to see an improved environment, for instance, in the Port of London. I am sure that the Minister believes that to be a higher objective than that of simply clobbering profits. One accepts that he will want to tax some element of the benefit here, but surely he can find some way of meeting my hon. Friend's point of increasing the base value in some way.

Mr. Davies

The hon. Gentleman is not correct when he says that I am merely saying "Let us clobber profit." We must try to keep a balance between ensuring a proper return from development and ensuring that the community has some control over the way in which disused land in docks and cities is developed. We must try to balance the needs of the community with those of the individual. This is not the right way to deal with the problem.

The problem of the valuation of disused land was raised several times in Committee. We looked into it during the preparation of the Bill but we felt that the best way to deal with those problems was not in a fiscal measure. It would be better to deal with it in the context of planning permissions rather than try to create an artificial current use value.

The Department of the Environment is examining the problem of disused land in general, and no doubt the problem of the rundown of docks in the cities will be invesetigated. It is a planning matter, because the whole of the development and the regeneration of the inner cities is involved. It would be wrong to try to go some way to solve that problem by creating an artificial current use value which would produce a greater return to the property owners. There might be a conflict between the community and the individual, but we must solve the problem in a wider concept.

I am grateful to the hon. Member for Wallasey (Mrs. Chalker) for raising the subject. No doubt her remarks will be studied by the Inland Revenue and the Department of the Environment in the context of the problem of inner city areas, disused land and dockland areas in general. We are concerned about the problem, but I cannot accept the amendment, because tax legislation is not the right place to deal with it.

Mrs. Chalker

Although I thank the Minister for his reply, I am still concerned that, without an alteration to the Bill, the development of dock areas will be hindered. Land will be withheld when it should be used for redevelopment, simply on the basis of the valuation. If the Minister is unprepared to move, I beg to ask leave to withdraw the amendment and await a Statutory Instrument to put the matter right at some time in the future.

Amendment, by leave, withdrawn.

Amendment made, No. 157 in page 107, line 46, leave out '1st July 1948' and insert 12th September 1974'.—[Mr. Denzil Davies.]

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