HL Deb 20 July 1949 vol 164 cc187-9

2.35 p.m.


My Lords, I beg to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask His Majesty's Government whether a non-profit making public organisation, recognised as a charity for purposes of taxation, which has been ejected from its present premises by one of the newly nationalised industries who are its landlords, is liable to pay the full development charges in respect of other property necessarily acquired to carry on its work.]


My Lords, I am advised, and the noble Viscount is no doubt aware, that if an organisation acquires land after July 1, 1948, and obtains planning permission to build on it or materially to change its use, then under the terms of Section 69 of the Town and Country Planning Act, 1947, development charge is payable if the permission adds to the value of the land.

Under Section 85 of the Town and Country Planning Act, 1947, land held on July 1, 1948, by a charity for the purposes of a charity is exempt from development charge if it is used in any manner for or in connection with the purposes of charity.

Land acquired by a charity after July 1, 1948, however, is not, as charitable land, in any way exempt from development charge and if, therefore, the charity carry out a material change of use of the land even although the use is for charitable purposes the question of development charge arises.

I understand from the memorandum which the noble Viscount so kindly sent along that the case he has in mind relates to the lease by the United Nations Association, since July 1, 1948, of two houses in the West End in connection with which they obtained from the London County Council a planning permission.

It is understood that the Association asked the district valuer at rather short notice to give them an informal opinion as to what the amount of the development charge was likely to be. He told them that it would be in the region of £10,000 to £15,000. When giving this opinion he assumed that the planning permission that the Association would obtain would be a planning permission which authorised the use of the premises as offices by anyone for the full period of the lease (thirty years) and that it would be subject to no conditions. One thing at least is clear about the actual planning permission, and that is that the very stringent restrictions contained in it must have the effect of considerably reducing the charge that would otherwise be payable.

The Association have applied recently to the Central Land Board for determination of the charge but the Central Land Board tell me, and I think the noble Viscount will agree, that the valuation of planning permission owing to the terms accepted by the Association is not by any means a simple matter. The Central Land Board have under consideration and will, in negotiation with the Association, determine the amount of the charge as soon as they can.


My Lords, arising out of that rather complicated answer, may I ask whether it is the policy of His Majesty's Government that a tax should be indirectly placed upon a charitable organisation which is free from taxation? If not, it is clearly wrong that they should have to pay any development charge, which is merely a tax under another name.


My Lords, the noble Viscount will have noticed that in the second and third paragraphs of the answer which I have just given to him the question of charities is dealt with. May I repeat the opening part of the third paragraph: Land acquired by a charity after July 1, 1948, is not, as charitable land, in any way exempt from development charge. Therefore the answer is that charities coming in that category are not relieved of development charge.


Why not? What is the question of principle involved in the date? If they are exempt before a certain date, why not after?


The answer is because, at the moment, it happens to be so under an Act of Parliament.


Then the result is that if there are two charities precisely similar, one which was there on June 30, 1948, would not have to pay tax, while if the other was there on July 2, 1948, it would have to pay tax. Do the Government really think that that is a serious form of taxation?


My Lords, so long as a differentiation remains the law of the land, the Government have no option but to carry it out.


My Lords, the House will remember that this provision came in a Bill the purpose of which was town and country planning. As I understand it, in this particular case there is no intention of altering the external structure; it is merely a matter of a change, for charitable purposes, of the use of rooms from one purpose to another. Can it really be considered as a question of planning? I am afraid we can almost draw the conclusion that this is only one of many cases, and a particularly deplorable one. Your Lordships will remember that when the Bill was before the House, we said that development charge had nothing whatever to do with planning. It is merely a particularly vicious form of indirect taxation, and in this case used only for hampering the activities of an organisation of which the Prime Minister and Mr. Churchill are Presidents and which has an object common to us all.