HL Deb 24 March 1953 vol 181 cc247-70

2.50 p.m.

Order of the Day for the Second Reading read.

LORD MANCROFT

My Lords, it has fallen to my lot in the course of the last few months to address you on subjects of progressive dullness and complexity, and I am afraid that to-day the progress is clearly going to be maintained. I am credibly informed by those who understand this subject that there are many occasions upon which town and country planning nearly reaches the unplumbable depths of incomprehensibility, and I think my task is a little more difficult to-day in view of the fact that I am to be followed (though, I hope, not opposed) by the noble Lord, Lord Silkin, who has forgotten more about town and country planning than I am ever likely to know. He is, I believe on reliable authority, known as the only man in England who really understands the whole of the Town and Country Planning Act, 1947, whereas my knowledge of that Act of Parliament could be put into a nutshell, still leaving ample room for the nut.

I think that it will be for the convenience of the House if, in this debate, we consider not only the Bill which is now before us but also the proposals set out in the White Paper (Cmd. 8699) which the Government published last November. The Bill, after all, is only a prelude to the main legislation—it clears the ground. Because of shortage of time, the positive work of building the new system must be left until next Session. We can, therefore, consider the Bill properly only in the light of the Government's proposals, and for that reason I make no apology for devoting the greater part of my speech to these proposals.

As I understand it, the problem is the old one of the effect of planning control on land values. The problem as I understand it is a simple one but the solution is highly complex and sometimes contentious. So long as planning confined itself to what I may call glorified estate development—to laying down building lines and road widths, to regulating the density of buildings and to segregating uses—the problem was not acute. But as, gradually, the modern conception of planning grew up, as planning came to be concerned with deciding what land should be built on, what reserved for agriculture or set aside for mineral working, it soon became clear that the effectiveness of planning depended largely on a solution being found to the problem of compensation. The 1932 Act gave local authorities wide powers to regulate the use of land: but if land was restricted against development by a planning scheme the responsible authority were liable to compensate the owners affected for any depreciation in the value of their land. In theory this expenditure could be offset by the recovery of betterment: local authorities were empowered to recover 75 per cent. of any increase in the value of land due to the coming into force of a planning scheme or to the carrying out of any public works under it. Unfortunately, in practice these provisions proved abortive. What actually happened, in a large number of cases, was that the fear of compensation proved sufficient to prevent land with any building value from being restricted against development.

The Uthwatt Committee, appointed in 1941 to examine the problem of compensation and betterment, made an analysis which has governed all subsequent Thought on the subject, even though the significance of the various factors may have changed in the very different post-war world. The Uthwatt Committee pointed out that development value—the additional value which some land possesses, owing to the prospect of its being used for some purpose other than the present one—commonly attaches to far more land than will, in fact, ever be developed, because no one can predict exactly where development will take place. Thus, all the land on the periphery of a large town is likely to possess development value, though perhaps only a quarter of it will ever be built on: and the aggregate of these several values will be artificially inflated by the fact that no one can tell whose land will be chosen. Further, if an embargo is placed on the development of one part of this land and compensation paid, the demand for land for development and the development value created by that demand are not extinguished: the value merely shifts to some other piece of land. The effect of these two factors of floating and shifting value was that if compensation is assessed piecemeal the aggregate paid will greatly exceed the true loss incurred. On the other hand, all past attempts at the direct recovery of betterment had been defeated by the sheer impossibility of distinguishing increases in value due to planning or public improvements from increases due to other causes. The Committee's recommendations were not accepted, but their analysis formed the foundation, first of the Coalition White Paper of 1944 and then of the 1947 Act—the Act of the noble Lord, Lord Silkin. Both these documents envisage some form of global assessment of compensation as a means of eliminating "float" and "shift." I apologise for using this language, but the jargon of town and country planning is inescapable. Both seek to evade the difficulty of identifying betterment by taking an arbitrary percentage of the total increase in development value, whatever the cause. In fact, the basic thinking of both these systems is very similar; and there is very little in this that can be called a Party matter. We are all in it together.

It may, I think help the House if at this stage, with a wary eye on Lord Silkin, I summarise the main fundamental provisions of the Act of 1947: that will serve to make clear both what we intend to change and what we propose to leave untouched. But before I do so I want to make it clear beyond all doubt that in amending the financial provisions we are determined not to weaken the efficiency of planning control. It is surely common ground between us all that in an island as densely populated as this we have no choice but to plan for the whole. Planning is not just a matter of preserving amenity, of preventing the spoliation of coast and of the countryside, or even of improving living conditions, important though those things are. It is the technique of making the best use of our natural resources, our farmland and our mineral deposits, and of resolving, as far as may be, the competing claims on our limited acres. The fundamental doctrine of the 1947 Act was that, with certain exceptions, the rights of development in all land in the country were to be transferred to the State the interest of the individual owner was restricted to the value of the land for its existing use. The system had three main features. First, no development of the land was to be carried out without planning permission, and if permission was granted a development charge was to be paid to the State based on the difference between the value of the land with the permission to develop and its value when restricted to its existing use. In other words, the development charge aimed at bridging the gap between the value of the land for agriculture and for building or between its value for houses and for shops.

The second main feature of the system was for the £300 million fund. This was, in effect, the compensation payable to the owners for the loss of their development rights, for the fact that they were no longer free to develop their land without first securing planning permission and paying a development charge. It was to be a once-and-for-all payment, distributed among those owning land when the Act came into force on the basis of the claims which they were invited to make; and no compensation would be paid, generally speaking, in respect of any subsequent refusal of planning permission. The owners had, in theory, lost all financial interest in the development value of their land. The third feature of the scheme was that land required for public purposes would be acquired on the basis of its value for its existing use, payment for development value being already dealt with by the £300 million fund.

Viewed as a theoretical exercise in the higher realms of planning fancy, without over-fussy attention to the facts of life, this was nothing less than a masterpiece. It avoided quite successfully the rival claims of floating and shifting value by bringing all development value into a common pool. It solved the problem of identifying betterment by claiming for the community a fixed slice of the total increase in value due to the grant of planning permission, irrespective of origin. On both points the resemblance to the Coalition White Paper is close. Although a number of points—notably the arbitrary fixing of the amount of the compensation fund—were hotly contested, I think it is fair to say that the underlying conception was accepted by both Parties.

What went wrong? I should be here all night if I went into the details of what went wrong. Perhaps the most serious defect—and this applies in particular to development charge—was a complete failure to get the Act across, to impress upon people what it was that the originators were seeking to achieve. In theory, the development charge was part of the purchase price of the land. The man who wanted to build himself a house in a field bought the existing use value, the agricultural value of the land, from the owner, and the development value from the State in the form of a development charge. The owner was expected cheerfully to sell the land at its agricultural value and to look to his claim on the £300 million fund to recompense him for the development value. Naturally enough, as it now seems, this seldom happened. For one thing, it costs money to sell land: the owner has to have to mark it out, advertise, and pay various experts to disagree with each other and the rest. Therefore, to sell the land at its value as farmland would leave the owner out of pocket; he would do better perhaps to keep his land—and many did. Moreover, the sum total of claims, it was generally thought, would amount to a great deal more than the £300 million fund. In fact, this turned out to be a misapprehension: the effect of "floating value" in inflating claims had been grossly over-estimated: but the damage seems to have been done. Owners could hardly be expected to sell at a price excluding all development value when they had been assured that they could expect to receive only a fraction of that value from the £300 million fund.

The result was that a good deal of land was taken off the market, and that what sales there were took place, for the most part, at a figure intermediate between the existing use value and the full value of the land. Purchasers were willing to pay these prices, partly because of the substantial scarcity value attaching to a building licence, but more particularly because most people completely failed to grasp the separation of development value from the land, which was absolutely fundamental to the Act. To the ordinary man a good site is a good site, and he thinks it reasonable to pay a good price for it; and having paid it, he views the Central Land Board not as an owner with something to sell but as a blood-sucking tax-gatherer battening on his enterprise. Those who were able, because of the Act, to buy cheaply—a few land owners sold at or near existing use value—merely thought that they had made a good bargain and, if anything, resented development charge the more. Because the theory of development charge was not properly understood, it came to be viewed as a tax; and, because the method of assessment was not understood either, as an arbitrary tax into the bargain. To that must be added the fact that, in so far as developers had to pay twice for the development value of the land they needed—once to the owner and once to the Central Land Board—development charge represented an increase in the already high costs of development. As we move gradually into a freer economy this position becomes all the more serious.

I want now to turn for a moment to the £300 million fund. The general belief was that this would prove totally inadequate to meet the claims made on it, but this idea was exploded in February of last year, when my right honourable friend the Chancellor of the Exchequer announced that the sum total of those claims would be only in the region of £350 million.

I hope that I am not letting common sense run away with me but it does seem to me that to pay a sum of that size, even in stock, could not but have an inflationary effect, particularly as seven-eighths of the claims by number, and over one-half by value, were for amounts of less than £1,000. And it was clear that much of the money would go to people who had not, in fact, suffered any real damage as the result of the Act, to people who had no intention of developing or even had bought land for the express purpose of preserving it against development. We all know examples of this: they range from the landed gentry—that almost extinct class—sitting in their parks, to the householder who has bought the plot next to his house for the purpose of knocking down the fence and throwing it into his garden. That was the situation with which the Government found themselves faced: on the one hand a development charge which was likely to act increasingly as a brake on the enterprise which they were anxious to encourage, and on which as a nation we depend for our survival, and, on the other, an obligation to distribute this enormous sum of £300 million by the middle of this year, not only among those whose fortunes have been damaged—we do not question for a moment that they should be paid—but also among everyone who conceivably might be damaged in the near or remote future. To some of us, that seems planning run riot.

The first step was to make a careful and thorough examination of all the suggestions for modification of the Act made in a variety of quarters over the past few years. Three suggestions, in particular, engaged the Government's attention: first, the deferment of payments from the £300 million fund: second, a restriction in the range of development liable to development charge: and, third, a general reduction in the rate of development charge. For reasons which are summarised in the White Paper they concluded that none of those modifications—nor, indeed, any combination of them—could produce a satisfactory system under which development and enterprise could flourish, and that therefore more drastic alterations were necessary. The main outlines of the Government's proposals will by now, I think, be familiar to your Lordships. In framing them the Government have sought to preserve what was good in the 1947 Act—and let me say here and now that much of the 1947 Act was good—and to produce a stable foundation on which the planning provisions of the Act could continue to function. We must never lose sight of the fact that the financial provisions are not an end in themselves but a means to the efficient planning of the nation's land in the national interest. And, as I have said, we are all at one in accepting planning as an indispensable instrument if we are to make the most of our limited land resources.

The changes which the Government propose to make may be grouped under three heads. First, development charge is to be abolished. Second, the £300 million fund will not be distributed, but compensation will be paid (subject to certain exceptions) as and when the development of land is prevented or severely restricted. Third, the claims ranking for payment from the £330 million fund will set the upper limit of compensation payable for loss of development value, whether on the imposition of planning restrictions or on the compulsory acquisition of land. The passing of development charge has, I suspect, attracted few mourners—and those who are mourning are not really crying very bitterly. It seems to be generally accepted that the idea, however promising in theory, does not work in practice. In so far as there has been criticism, it has been that the Government are abolishing this charge without making any alternative provision for the collection of betterment. That raises a big subject, but I must content myself with making one or two brief points. The first is that there is no real and necessary connection between compensation and betterment, except in so far as the proceeds of the one can conveniently be applied towards the payment of the other. Some settlement of the compensation problem you must have if you are to be able to plan; but whether or not you collect betterment is a taxation question, to be decided in the light of revenue considerations.

My second point is that in considering the recovery of betterment you must not ignore the effect of other taxation. In- come tax, surtax and death duties recover for the nation a great part of the increment from this, as from any other source: the whole background to the question has changed since the early days of this century. And it is perhaps worth pointing out that the effect of public action on values is by no means always for the better. If we are to be scrupulous in the pursuit of betterment, on what principle do we exclude the payment of "worsenment"? Finally—and to this point I will return—the effect of the Government's proposals will be that owners of land will not be able to profit by future increases in land value at the expense of the community. It is only where there is no prior public claim—where in fact it is in the public interest to encourage private development—that the owner will derive any benefit from this source.

It has also been said that in abolishing development charge we shall bring about a rise in land prices, with little or no benefit to the developer. Some rise, is of course, to be expected: the owner selling land for development can no longer expect anything from the £300 million fund and must recover the development value from the purchaser. But the Government are confident that purchasers will not normally have to pay so much as they would otherwise have paid by way of purchase price and development charge combined. Indeed, when the market settles down the sale of land may easily prove to be highly competitive, as more land comes to be offered for sale. With the present high cost of servicing land, and of building, there is little scope for the large speculative profits which were once made. The Government will, however, watch the position with care and will look to local authorities to use their powers of compulsory purchase to make land available if there is any sign of development being impeded by the asking of exorbitant prices. Should these powers prove inadequate, the Government will not hesitate to strengthen them.

The second main proposition of the Government—that there should be no general pay-out of the £300 million fund—has, I think, commanded general acceptance. The Government recognise that this will bear hardly on many owners of land—and owners of land are by no means all millionaires—particularly those who have had their land acquired by a public authority at existing use value or who have been restricted in the enjoyment of their land and have been counting on payment of their claims on the £300 million fund being made this summer. It would have been a happy solution had it been possible to provide for early payment in urgent cases, but the changes which the Government are introducing are so far-reaching that it would be quite impossible to make any payments until the main scheme has been enacted. For Parliamentary and other reasons well known to your Lordships, that cannot be until next Session. I can therefore only ask for the patience of those concerned and hope that it may be some consolation that the limit for payment under the Government's scheme will be the full agreed value of the claim, or appropriate part of the claim, and not some arbitrary percentage.

Some good friends of planning have expressed the fear that the effect of paying compensation as and when permission to develop land is refused will be to centralise all decisions in Whitehall and to hamstring planning by making it the servant of the purse. The Government certainly intend that the financial consequences of a decision should take their proper place in influencing that decision. It is a legitimate criticism of the 1947 Act that it encouraged irresponsibility and waste of land by taking values out of planning. But the Government have no intention of changing the whole approach to planning and making Exchequer liability the dominant consideration. Those who fear this should remember that planning is not something concerned merely with "amenity frills" but is the instrument on which we rely to conserve our agricultural land and other resources. The broad pattern of land use will be set by the development plans which are prepared by the local planning authorities and approved by the Ministers concerned.

Before I leave this point, I want to draw your Lordships' attention to a feature of the Government's proposals which represents an attempt to build on the practice of the 1932 and earlier Planning Acts. It is proposed that some forms of planning restriction should not qualify for compensation at all—for example restrictions on the size and design of buildings and on the use to which existing buildings should be put. The principle underlying these exclusions from compensation is that an owner is not entitled as of right to exploit his land to the full, irrespective of the effect on his neighbours or the community, and that there is some degree of restriction to which he may reasonably be subjected without compensation. It may be said that any restriction may prove unreasonable in some circumstances. True: but the remedy for an unreasonable restriction is to remove it, not to compensate for it.

The third, and probably the most controversial, feature of the Government's scheme is the proposal to use the claims admitted for payment from the £300 million fund to set a limit to the compensation payable in respect of development value, whether on a refusal of planning permission or on the compulsory purchase of the land. The Government are adhering to the principle on which the 1947 Act was founded: that compensation should be paid for loss of development value which accrued before that Act became effective, but not for loss of any development value which might accrue in the future. This is essential if effective control over the use of land is to be maintained, because if compensation had always to be paid at the peak value the cost would be absolutely crippling. I have already drawn attention to the floating character of development value, and to the fact that if the prospect of development on one piece of land is extinguished, it merely bobs up elsewhere. Some will say that, even though the compensation payable in respect of planning restrictions is to be limited in this way, compensation in respect of the acquisition of land should none the less be assessed on the basis of current market value. I would agree at once that this question of what compensation should be paid on a compulsory acquisition is in some ways the most difficult of all the problems we have to face; and it is a matter to which the Government have given long and careful consideration.

There are, in effect, only two possible solutions: compensation on the basis of market value, and compensation on the basis of the current value of the land for its existing use, together with the relevant claim on the £300 million fund. Both have their strong points and, unfortunately, their weak. The attractions of payment on the basis of market value are obvious. Technically, it is very much more simple to apply. But we are entering into a time in which the whole country will be covered by a series of published plans, which will show the broad pattern of land use which is proposed. We have yet to see the effect of these plans on values, but obviously it will be profound. Where the plan reveals a prospect of profitable development—where land is reserved for shops or factories—values will tend to rise. Where land is earmarked for less profitable purposes or for public development, values will tend to fall. Payment on the basis of market value would, therefore, be fair neither to the owner nor to the acquiring authority. It would also expose local authorities to the risk of paying for values created by their own improvements—their own roads, sewers and open spaces. Acquisition on the basis proposed by the Government avoids these difficulties. I admit at once that it means that in some cases the owner who is free to sell privately will fare better than the owner whose land is required for some public purpose. But I do not consider it unreasonable that an owner's freedom to make the most of his land should be subject to there being no prior public claim. It is not, I think, saying too much to say that some measure of inequality is the price of getting rid of this hated development it charge, though the equality of the 1947 Act was, I should have thought, theoretical rather than real.

My Lords, at long list I come now to the Bill to which this House is asked to give a Second Reading. I apologise for having dallied so long by the wayside, but I am sure that your Lordships will agree that it is only against the background of the Government's proposals that we can give the Bill proper scrutiny. The Bill itself which, I may here remark, applies to Scotland as well as to England and Wales, is a modest affair. It has two main purposes. The first is to abolish development charge; the second is to remove the obligation to distribute the £300 million fund by the end of next June. The remaining provisions are, in a broad sense of the term, consequential in character, but I should like to say a brief word on the two main points.

Clause 1 proposes to abolish development charge in respect of all schemes of development commenced on or after November 18 last, when the Bill was introduced in another place. It has, of course, no effect unless and until it is passed, but in the meantime arrangements have been made whereby the Central Land Board will give their consent to development proceeding without the development charge having been paid or security given. The Government have taken this step to prevent the risk of a general hold-up in development pending the passing of the Bill. The effect of the clause is that if a determination of development charge has been made before November 18, and any part of the development has been started before that date, the whole of the development covered by that determination will remain liable to development charge. Where no determination of development charge has been made but application has been made for a determination, the whole of the development covered by the application will be treated as a unit in the same way. This gives a clear line and is as fair, I think, as in the circumstances it is possible to be. It avoids the difficulty—in some cases one might almost say the impossibility—of trying to apportion the charge between that part of the development carried out before November 18, and that remaining to be done between, it may well be, the walls of a house and the roof. This principle will need some modification in the field of mineral working where development charge is commonly paid by royalties: otherwise, in some cases it might leave a liability stretching into the 1970s. The Government are proposing to meet this difficulty in next Session's legislation by limiting the liability to a set term of years.

Clause 2 cancels the pay-out of the £300 million fund, but provides that claims on the fund shall be satisfied as may be determined afterwards by Act of Parliament. As I have explained, these claims will form the basis of the new compensation scheme. The Government recognise their obligations to those whose land has been acquired by local planning authorities or restricted against development, although it will, regrettably, not be possible to pay them until the main legislation has been passed next Session. With that explanation I commend the Bill to your Lordships. I apologise for having taken such an unconscionable time in doing so. I am sure that there is much which I have left dark, but I am confident and happy in the knowledge that the noble and learned Lord who sits on the Woolsack will be winding up this debate. All further inquiries should be addressed to him. I am confident that even in the Bill, and I hope in my explanation, there is sufficient to convince your Lordships that this is a very important topic, and that the measure is, in fact, a vitally important and necessary Bill. It is certainly one which, with confidence, I commend to your Lordships. I beg to move that the Bill be now read a second time.

Moved, That the Bill be now read 2a.—(Lord Mancroft.)

3.23 p.m.

LORD SILKIN

My Lords, the noble Lord, in concluding his remarks, referred to this Bill as a vitally important and necessary Bill. I would agree that it is an important Bill; but I would not agree about the other two adjectives. At the outset of his remarks, the noble Lord disclaimed any knowledge or great understanding of what was involved in this matter. I do not complain at all; but what he told us was very much what was in the White Paper, and very little else. I agree, of course, that the White Paper is the basis of the Bill. There is little to be said upon the Bill; it is the White Paper which is the foundation of the Bill and which is necessary for its understanding, and it is right that the noble Lord should have devoted most of his speech to explaining the White Paper. The White Paper was not born in 1941. It did not even originate with the Uthwatt Report. Ever since we have been concerned with planning, we have found that there were serious deterrents to the carrying out of effective planning in this country. Before the war, the Barlow Commission was set up in order to find out what was wrong with planning and why it was not working.

I think most of us who have been interested in this subject have understood what we meant when we talked about planning not working. We have only to go to the outskirts of some of our large towns in order to be made to realise what is meant by the failure of planning to work. We see miles of ribbon development, great numbers of areas which have been taken from agriculture and built on, and large towns that have gradually become bigger and bigger. We see how access to the countryside has become more and more difficult, and how areas which should have been dedicated for the purpose of open spaces in the populated and congested parts of towns have been built upon. All these things have happened because planning—however well-intentioned it may have been and however much legislation has been passed—has failed to work. And it failed to work in the end—and this is a matter of general agreement—because we did not solve the twin problems of compensation and betterment. Naturally, and, I think, rightly, there was art obligation on the part of local planning authorities to compensate owners of land when, as a result of planning requirements, they were not allowed to build on their land and to develop it as they would wish. On the other hand, when, as a result of the activity of the community, the value of land appreciated, there was no effective way by which the community were enabled to get the benefit of that increase in value. It is that problem which has occupied the minds of a great many people for a great many years—the problem not necessarily of how we can equate these factors but of how we can, on the one hand, limit compensation to what is reasonable and, on the other hand, secure for the community some part, at any rate, of the value of the efforts of the community which have been expended in connection with the creation of these values.

One of the most remarkable things in the war, in my opinion, was the amount of time which men in high positions devoted, at the height of our peril and in the darkest days, to considering this problem. The House is glad to see the noble Lord, Lord Woolton, back here again, apparently—and I hope very much that it is the case—in perfect health once more. He knows about this subject, because he was Chairman of a Committee which gave a great deal of time to studying the problem during the war. The matter would not have taken up the time of the noble Lord and of eminent mem- bers of the Government like the late Mr. Ernest Bevin and the noble Lord, Lord Beaverbrook, who were also on a Committee to study the problem, if it had not been regarded as of vital importance. Right through the war this question of compensation and betterment was kept in mind. We had the Barlow Report, the Uthwatt Report and the Scott Report taking up the attention of important members of the Government. It was a great act of faith; it showed immense confidence in our future. But it was also an indication of how important it was regarded to ensure that in the years after the war we did not return to the same kind of conditions as had existed before the war; that we did not allow what was left of our beautiful country to be destroyed, and large areas of open spaces to be taken up again for building purposes. It was an indication of our keen desire to ensure that in the future building development should take place in the right places in the right conditions.

We were fortunate in having the benefit of the Uthwatt Report, which I fear the noble Lord, Lord Mancroft, rather wrote down as an academic exercise. It was not. We have only to look at the names of the members of the Uthwatt Committee, which were set up as a body of experts. There was the honourable Mr. Justice Uthwatt himself; Mr. James Barr, a Vice-President of the Royal Institution of Chartered Surveyors; Mr. C. Gerald Eve, a past President of the Royal Institution of Chartered Surveyors, Mr. Raymond Ever shed, K.C., and Mr. James Wylie, barrister-at-law. The names of these men are the guarantee that the Committee were not indulging in a purely academic exercise.

LORD MANCROFT

My Lords, may I interrupt the noble Lord? I do not think I used the word "academic." If did so, it was not meant and I should like to apologise. I never intended to cast aspersions on the Uthwatt Report and only suggested that some of the factors governing their considerations then are now a little out of date.

LORD SILKIN

The noble Lord did not say so in terms, but I got the impression that he regarded the Report of the Uthwatt Committee to-day as somewhat academic—something which was all right at the time but which just has not worked. I think it right to give the names of the Committee's eminent members to establish that they were practical people with a considerable understanding of these problems, who devoted a large amount of time to a study of them and produced a Report which, whatever may be the position to-day, was at the time generally accepted, as the noble Lord said. The Coalition Government produced a White Paper on the Uthwatt Report—and I am afraid that there are going to be a large number of White Papers published before this problem is settled. The present White Paper will certainly not be the last one. The Government of 1944 published a White Paper in which they set out their solution to the problem. I am not going to take the House through the White Paper, but it is interesting to note that where it differed substantially from the Uthwatt Report it agreed with the Bill which was put forward by the Labour Government in 1947. There were minor differences, but the major difference between the Uthwatt Report and the Coalition Government's White Paper was that the Uthwatt Report distinguished between urban and rural land and tried to deal with the two types of land in two different ways, while the Coalition Government came to the conclusion that that was not practicable. The Labour Government came to the same conclusion and dealt with both types of land in exactly the same way.

There was this other difference between the Uthwatt Report and the Coalition White Paper. All Parties agreed that compensation for loss of development value had to be paid, but there was a difference in the method of arriving at the amount of compensation. The Uthwatt Committee recommended the payment of a global sum. The Coalition Government did not favour a global sum. They came to the conclusion that it was wrong to fix any sum at the time and thought we ought to wait five years, by which time experience would have been gained of the way in which the Bill was working and the Government could then decide what was the right method of dealing with compensation. The 1947 Bill came back to the idea of a global sum. I cannot help feeling slightly triumphant about this global sum, because the Uthwatt Committee, making an intelligent guess, thought that £400 million would be about right, but only for the development value of rural land; they left out altogether the development value of urban land, so that if the two had been taken together the amount would have been much greater. We came to the conclusion that that sum was too high. At the time we were told that our figure was not even an intelligent guess, but I can assure your Lordships that it was a little more than a guess. We came to the conclusion that £300 million for the whole of the compensation was about right, and we were not far out.

Although there were differences in certain respects and resemblances in others, by and large the three schemes set out in the Uthwatt Report, the Coalition White Paper and the 1947 Bill were not very different. They represented—and I want to emphasise this—the results of many years consideration by some of the best and most qualified brains in the country, and it was thought that a settlement of this question had been arrived at. It necessitates very strong reasons indeed to set aside such a settlement. The noble Lord, Lord Mancroft, was quite right in saying that there were criticisms of the 1947 Bill as it passed through Parliament; there were criticisms of the global sum, but it was an agreed measure. There was very little dispute about the planning provisions and there was not so much dispute as I had anticipated upon the financial provisions, especially having regard to the fact that the Bill had to be carried through another place under the guillotine. I think I can say that so far as a measure of this kind can be an agreed measure and so far as a policy can be generally accepted in this country of intense political controversy, town planning had been taken out of the field of political controversy. Therefore it requires very strong reasons to depart from this agreed settlement.

I listened to the noble Lord to hear his reasons for departing from this agreement, and I have read the White Paper. The noble Lord gave the reasons stated in the White Paper and I did not expect him to do otherwise; but when one comes to look at these reasons and see why the Government are throwing the whole of the problem into the melting pot once more—because that is what they are doing—one cannot help feeling that the reasons are singularly inadequate and certainly uncompelling. I can see the reason why the Government dislikes the issue of £300 million of stock at any one time, and I can even understand the argument about inflation, although I do not accept the view that it would have had an inflationary effect. It would have had an inflationary effect only if people had taken the script and tried to use it for the purpose of increasing their personal expenditure; therefore the only way in which more money could have been spent by them would be by other people, who already had the cash, buying the script. It would not have increased the amount of cash available for expenditure. The script could have been transferred only from one person to another. Therefore I do not think there is anything in the point about inflation.

The noble Lord also pointed out, as, indeed, is mentioned in the White Paper, that a number of undeserving or unnecessary claims have been passed, and so people have been receiving an unexpected bonus for which they have not asked. I do not believe that is true. I have seen something of the working of the assessment of these claims, and I can assure your Lordships that, where there was no desire on the part of the owner to develop his land, few claims passed through the district valuers. There was, of course, Section 63 of the Act, containing the de minimis provisions, which in any case wiped out large numbers of claims where the development value was less than a certain amount an acre, or represented less than 10 per cent. of the value of the land. All that went out automatically. These claims were assessed by the district valuer with a fine toothcomb, and I think it will be found that few which were actually passed through were accepted. There is, for instance, the type of claim in which an owner of land alleges that his land has developed in value, but where in all probability he would not have developed his land for many years. The district valuers introduced a term known as the deferment factor. They took the view that, if land was not going to be developed for twenty years, then the current development value had to be discounted by this deferment factor; and in many cases, as a result of the operation of the deferment factor, the actual amount of the claim vanished almost to zero. All kinds of means were adopted by the district valuers to keep the claims down. I doubt very much whether many people obtained claims which were not justified.

The noble Lord may have forgotten that there is a prevision in the Act under which the Treasury were required, in the last year before payment out, to make a scheme for the payment out of the £300 million. In that scheme they could, if they had so chosen, have eliminated the undeserving people: the owners of golf courses—they are always quoted as the least deserving—or those people who bought land in order to preserve their garden. The scheme could have provided that such cases should not participate in the £300 million. If the Government, as a result of that, had come to the conclusion that £300 million was too much, nobody would have seriously complained if they had brought in a two or three clause measure, such as they are doing now, for the reduction of the £300 million. But I submit that no reason has been shown for throwing the whole thing overboard

We now come to the development charge. I am not going to examine the White Paper meticulously on the question of the effects of claims for compensation, the development value, and so on. I am not going to try to establish that there will be great anomalies as between one type of person and another. From the White Paper as it stands there will be; but I recognise that one of the objects of this debate is to discuss the White Paper and to point out such anomalies as will exist, in order to help the Government to deal with them in their Bill. I should prefer, therefore, to reserve my detailed criticisms of the White Paper until I see what the actual proposals are. As the White Paper stands, on the question of compensation it is full of anomalies as between me land-owner and another. For instance, the land-owner whose land has been taken over by the local authority will get the existing use value, plus the amount of his claim, based on 1947 values. The land-owner whose land is not taken over is free to sell his land at the market price. The probabilities are that the market price will be considerably higher than the 1947 development value plus the existing use. There- fore, possibly as between two adjoining land-owners, the one whose land is, quite fortuitously, perhaps, chosen as land to be acquired for public purposes, is going to suffer considerably.

There is a further point that I should like to mention on this aspect of the question before I leave it. The noble Lord, Lord Mancroft—and it is clear from the White Paper that it is the intention—rather pinned his hope on the fact that a settlement had been made, once and for all, on the amount of development value, based upon 1947 values; that the Government were never going to pay more than the 1947 development value by way of compensation, whenever compensation fell due to be paid. If an owner of land desired to develop in ten, fifteen or twenty years' time, and he was refused, and it was not a case of unneighbourly development, then there it was, all ticketed up, and he would get his 1947 development value as compensation. Of course, that was made the basis of the argument that here was a ceiling and it could never cost the community more than the £350 million, which is the aggregate of all the development claims. But does the noble Lord really believe that in ten or fifteen years' time, or perhaps even in five years' time, you will be able to hold the 1947 values?

The noble Lord, Lord Woolton, will remember that an attempt was made in the Coalition White Paper, and by the Labour Government, to hold values down to 1939 values. We did not get very far with that. There was such an outcry against the 1939 values, even with the addition of 40 per cent. and 60 per cent.—and quite rightly—that in the 1947 Bill we had to abandon 1939 values. The same sort of arguments will arise about the 1947 development claims. If the local authority sought to acquire land compulsorily, and to pay compensation in part on the basis of 1947 values, the owner could quite legitimately argue: "This is all very fine, but what am I to do with the money? I want enough money to enable me to buy a similar piece of land elsewhere, and I shall have to pay the market value for it. You ought to compensate me on the market value." Therefore, the Government seem to me to be living in a fool's paradise in imagining that they can hold compensation down for all time, or even in the relatively near future, to 1947 values.

Now I wish to say a word or two about the development charge. I think the Government have been rather hasty in abandoning this very valuable weapon. I admit that the public relations of the Labour Government might not have been all that they should have been; they were not as good at blowing their trumpets as they might have been or in explaining the effects of the 1947 Act as well as they could. Perhaps they had a very bad exponent of the Act. It may be that the present Government will find themselves in much the same difficulty in trying to explain the transport levy. I wonder whether the "C" licence holders will be very impressed with the reasons that will be given for their having to pay a levy in respect of vehicles which they have always had and which they have now. There is no change at all in their circumstances, but they are being charged the levy. These things do not affect the rightness of the question, and the noble Lord, Lord Mancroft, would be the last to say that because a thing is difficult to explain, therefore it must be abandoned. I wish I had thought of that argument in connection with the levy on the "C" licence holders.

But the question is: Is a development charge right, and is it the solution to the problem? For many years all Parties thought that it was. I admit that it is an unpopular charge—all charges are unpopular. I do not know that it is any more unpopular than the levy on companies among people who have to pay it—of course, it is only unpopular among people who pay it—or whether it is more unpopular than the surtax. No charge is a popular charge, and one cannot settle these things on the basis of whether they are clearly explained, as I think they should be, or whether they are popular. The question is: Is a development charge a solution to the problem, and is it right? Over and over again members of the Government have said that they accept the principle as right. They said so in the 1944 White Paper. They accepted the principle, and thought it was right that people should contribute towards the increases in the value of their land brought about by public improvements. The Government have to explain why they have departed from what they thought for many years was the right principle. Frankly, what I fear is that there will be nothing to put in the place of the development charge (because, however much the noble Lord may say that the two are not connected, there is a very close connection between income and expenditure; if one balances the other it has a very good effect) with the result that, as time goes on, all Governments, and not necessarily the present one, will become increasingly reluctant to pay compensation without getting anything in return.

This compensation may amount to big figures. I believe the noble Lord and the Government are fooling themselves if they think that they are going to get away with small figures by way of compensation. I believe they are going to be fairly substantial, and this Bill and the Bill that is coming next Session will be a direct incitement to people to put in claims for development which they might not otherwise have done, and which it will be very difficult to resist. Then, I fear, the Treasury will take a hand. The Treasury has not changed its characteristics since this White Paper was introduced. The business of the Treasury—and I do not complain—is to see that expenditure is reduced as much as possible. It is not going to give the local planning authorities anything like a free hand in deciding upon whether development is desirable or not merely from the point of view of the public interest as they see it. There will be pressure put upon the local planning authorities; they will be given instructions how to act, and when there is a particularly costly piece of development which they want to turn down they will be told that they have to take into consideration the fact that this places a burden upon the Exchequer.

What is going to be the result? Take the areas around the large towns. A person may want to develop land in an area which the local planning authority desire to preserve as a green belt. The local planning authority may be disposed to reject the application. I fear that they will have pressure put upon them to allow it. I fear that, if the developer appeals, the question of compensation will become an important factor in the decision on the appeal. It will not be decided purely on planning grounds, and we shall get an accentuation of the bad development which we saw in the inter-war years to a constantly growing extent. We shall find our green belts going; we shall not be able to preserve open spaces, and generally we shall have the negation of planning which existed before. In any case, I believe it is a bad system that one authority should be responsible for making a decision without any financial responsibility for that decision. In any case it is bad from an administrative point of view. I remember the days during the war when local authorities were in certain instances given a 100 per cent. grant. One saw a certain amount of irresponsibility when the local authority had no financial responsibility for its actions. The Exchequer footed the bill, and I fear that this is going to be much the same thing and that we shall find to an increasing extent that the Treasury are going to be the masters of planning and decide it.

I apologise for the amount of time that I have taken. I am afraid that I have not anything like covered the White Paper, but noble Lords will have gathered from what I save said that I do not like it. I think it is unnecessary. I do not consider that the Government have given the Act a fair trial. Many of the defects which they allege exist could have been cured by administration or by a certain amount of legislation. I think the unevenness—which I do not dispute—in the administration of the assessment of development charge could have been cured by giving developers an appeal against the amount of development charge. One might have reduced the percentile to 80 per cent., as the Coalition White Paper recommended. One could have done a great many things before abandoning the structure. It is because I believe the Government have been hasty and premature in abandoning this great structure, which has grown up as the result of an immerse amount of good will and hard work and thought, that I feel the Government are making a very great mistake. I believe that this is by no means the last word that will be said on this subject. We have not by any means settled the question by issuing a White Paper; and I am afraid that this House will be troubled frequently in the future with an endeavour to find an answer to this problem until eventually we arrive at a satisfactory solution.