HL Deb 24 March 1953 vol 181 cc273-97

4.5 p.m.

Debate resumed.

LORD OGMORE

My Lords, the noble Lord, Lord Mancroft went pretty wide in his speech and discussed the White Paper as well as the Bill. In fact, he did not get on to the Bill until a quarter past three. I make no complaint about that, because I think this is a subject which ought to be seen against the background of events as they have occurred in the last few years. The noble Lord, Lord Silkin, in a powerful and valuable speech, delivered with all his great knowledge and experience, also went wide in his consideration of this matter. I hope, therefore, that your Lordships will excuse me if I, too, go a little wide and deal very shortly with a special aspect of the matter—I refer to the effect of this Bill upon blitzed towns.

I have been visiting Swansea and I was asked by responsible people there to bring before your Lordships some of their difficulties—difficulties which have not been altogether met by the legislation now in force and which are likely. I think, to be greatly increased as a result of the legislation now proposed. Your Lordships may know that Swansea was very badly damaged in two air raids that were made in quick succession during the early part of the war. Practically the whole of the central part of the shopping part of the town was destroyed, with the result that merchants and traders had to go to the suburbs, as it were, and take dwelling-houses there in order to carry on their business. Anyone who knew Swansea in the old days and who saw it again after the blitz would be heartbroken at the sight of the great devastation in the town. I was glad to note, on my recent visit, that a good deal of building has now been done and that shops are getting back into business. Business generally is being restored. This business centre is in the heart of a big industrial area and it will again become a busy centre.

Swansea, however, like other blitzed towns, will not only be faced with the difficulties confronting other towns, as instanced so clearly by my noble friend Lord Silkin—that is to say, they will have the common difficulties of development that all towns will have to face—butwill also have all the additional difficulties which blitzed towns will have to face. And perhaps with Swansea the difficulties will be exceptionally great. Quite apart from the loss of life and property, one of the first impacts felt by a town which is blitzed is the loss of its rateable value, in the form of its rate yield. In order to overcome this loss, the Government of the time made cash advances or provided interest-tree loans. In Swansea's case, it was contended, on the cessation of hostilities, that the productivity of the penny rate had restored itself and that the town had not exceeded its balance during the period of war. The whole of the money advanced to the town was therefore reclaimed by the Government, so that, in effect, Swansea received no financial assistance whatsoever. By adopting the yardstick of the productivity of the penny rate, sight is lost of the fact that Swansea's productivity was restored only as a result of a vast outlay of money on housing estates. Whilst the product of the penny rate did, in fact, become greater than that of pre-war days, the cost of the restoration completely outweighed the benefits of the increased productivity.

As your Lordships know, corporation assets are by no means assets without liabilities. They demand new services—roads, sewers, schools, clinics, police and so on; and, on top of that, the corporation are bound to find a subsidy from rates towards the capital cost of the houses. So that housing is only one instance of the additional burdens placed upon a blitzed town such as Swansea, for which no special financial assistance is available. The total loss of rateable value in Swansea cost them about £120,000, and until the recent reconstruction Swansea lost the product of rates varying from 20s. to 23s. in the £ on a rateable value of £120,000 for a period of twelve years. Under the existing Act, the annual grant bears no relation to the needs of the local authority. It is constructed in relation to capital spending on an hypothetical basis. According to public statements made immediately after the war, blitzed towns were to receive 90 per cent. of their expenditure. The regulations have been so framed that in Swansea the total expenditure from April, 1946, to March, 1953, of £99,002 has been met by a grant of £38,135 and rates of £60,867. The debt charges amount to £108,382, and instead of a grant of 90 per cent., the grant received is only £38,135, as I have mentioned.

I do not think there is any need for me to stress this case further. It will be clearly seen that towns such as Swansea are already in considerable difficulties. There is a great burden on their ratepayers to meet the existing requirements, owing to their special position, and I am very much afraid that Swansea will not only have to bear these disabilities, which it has borne courageously all through, but in addition will have to meet the further disabilities so clearly foreseen by my noble friend Lord Silkin this afternoon.

4.12 p.m.

VISCOUNT GAGE

My Lords, I wish to say a few words from the point of view of those who are trying to administer town planning schemes. It is natural for anyone in that position to try to estimate the effect of any new Bill on what they are trying to do. For one reason or another, it has not been easy to carry out even the simplest plans in recent years. Like everybody else, we have suffered from restrictions on building and on capital development. We have to contend with Government Departments who are not under local planning control, who ask for land for every kind of purpose, very often at short notice. Then we have had changes in legislation. The Act of 1947 has itself been changed a good deal since it came into being. It seems to me that planning calls for all those British characteristics of dogged and cheerful perseverance on which we so rightly pride ourselves as a nation.

Without detailed knowledge of the Government's proposals it is difficult to say exactly what the effect of this Bill and White Paper will be. The most obvious query, which has already been mentioned, I might broadly describe as the question of Treasury control. Under the 1932 Act, local authorities had to pay all the compensation themselves, and therefore money became the single most important consideration in planning. We had to cut our coat very much according to our cloth. Then, under the Act of 1947, all that was changed. We were told to plan without any regard to compensation; and that is, indeed, what we did. Now the Government propose a sort of half-way house: we have got to have some regard to compensation costs, but from the White Paper alone it is difficult to see how much. We have, however, been given assurances by the Ministers—I think they were repeated by the noble Lord, Lord Mancroft, to-day—that we shall not have to start all over again with our development plan, and I gather that the economy that we have to effect will be in regard more to detail than to general principle: that is to say, if there is a green belt drawn up in our development plan, that green belt will remain, but there may be some odd corners knocked off. We are grateful for these assurances, which we accept entirely. I cannot quite see how the Minister can bind any other Minister, still less any other Government, but we can hope that by the time our present Minister has finished his term of office the majority of the development plans will have been approved by him and will thereafter be much more difficult to alter.

Another point on which I am somewhat alarmed is the question of procedure, because, however wisely the Minister exercises his discretion, there must be some machinery to exercise it to deal with cases, possibly a large number of cases, coming from all over the country. Let us consider what he has to decide. Is the planning authority right in refusing consent to build? If they are right and if he backs them up, is compensation payable, or is it to be excluded on the grounds of unneighbourliness, or because the application is a bogus application, or because it is a premature application? What is the meaning of the somewhat cryptic proviso to Clause 2 which says that compensation will be payable in such manner, in such cases, to such extent, at such times and with such interest as Parliament may hereafter determine. That seems to me almost a masterpiece of Civil Service self-restraint. I fear we shall have a situation where the Government will be apprehensive about being exploited by unscrupulous owners, and the owners will be equally alarmed at the prospect, if I may put it vulgarly, of "being done out of" their legitimate compensation by a grasping Government. This situation will give great scope for litigation or, at least, argument, with a good deal of expense and delay. As the only non-lawyer who has so far taken part in this discussion, I find that an alarming prospect, though others may not.

I should like to put forward one suggestion which is not my own but is one which I have heard and which seems to me to contain the possibility of reducing the great numbers of cases which I fear will otherwise arise. The suggestion is that if an owner claims compensation, the Government should grant it readily, but on the condition that the owner thereby sells his building right in that land to the State: and if thereafter he wants to develop, he must buy back the building right on the State's own terms. It would really amount to a reintroduction of the development charge, but on an optional or voluntary basis. The owner really would be exercising an option. He would have to decide whether to sell his rights or keep them, knowing that, unless his land was to be sterilised for all time, if he did keep his rights he might at some future date enjoy the full market value. Speaking as an owner myself, I should certainly Clink several times before claiming compensation in such circumstances, except in a very clear-cut case. I would respectfully ask Her Majesty's Government to consider that suggestion.

Now I want to turn to compulsory acquisition, a subject which has been gone into by Lord Silkin and which has been described by my noble friend Lord Mancroft as a very difficult matter. The proposal in the White Paper really amounts to the conclusion that henceforth there are to be two values in land, according to whether it is to be bought by private individuals or by public authorities. I agree with Lord Silkin in thinking that that will lead to some very anomalous situations, because in the course of years A will sell to B and B will sell to C—all quite legitimate transactions at market value; then suddenly, perhaps the British Electricity Authority will decide to establish a transformer station on C's land, and the price they will pay for it may have no relationship whatsoever to what the owner may just have paid. I suppose the price might conceivably be more, but it would much more likely be less; and in the case of land to which there had been attached no claim it would be considerably less.

I know that in general principle the House agrees with town and country planning, but I have noticed that noble Lords are inclined to attribute to planning authorities a good deal of callousness about owners' rights. I myself served on a deputation to the Ministry on this particular point. I can assure your Lordships that most local authorities very much dislike having to single out a particular owner for harsh treatment—in fact, they may easily be tempted to look around for other land, although it might be less suitable, so as to avoid giving rise to these difficulties. I do not see how the development plan can really give a great deal of information to an intending purchaser. A great deal of the development plan, particularly in rural areas, is not sufficiently exact or defined to give that degree of information and, as I said before, Government Departments often act in quite unpredictable ways. Whatever abstract logic there may be behind this suggestion, the Government ought really to think several times before setting off on an entirely new series of anomalies which may seem to the public at large to be ridiculous. It will seem ridiculous to the public if one plot of land is to be sold at possibly one quarter of the value of the next plot of land, by reason of a sort of combination of chances. For other technical reasons I think there is a strong case for asking that all public purchases of land should be at assessed market value. If political expediency does not permit this, I think that local authorities ought to be given some discretion to buy by agreement if they think fit. After all, they are responsible to their own ratepayers for the money they spend.

This leads me to my last point—namely, the prospect of profiteering in land and the Government's proposals to counteract it. Under the plans building will be restricted for a certain number of years to certain areas, but apart from compulsory acquisition prices will be left to the market. Will this tend to put up the price of land? I do not suppose that even the greatest expert would stake his reputation on prophesying exactly what will happen to land values as a result of this Bill; but the Government are clearly nervous about it and, as I understand it, they propose to put local authorities rather in the position of umpires, to see fair play. If there is profiteering in land, the local authorities are to step in and buy compulsorily for resale. I do not believe that this scheme will work any better than a similar scheme worked under the 1947 Act. That Act is now being repealed, one reason for that being that land did not readily change hands. Yet the Central Land Board and the local authorities had a similar power, and were charged to prevent this sort of thing happening, by stepping in and buying if land did not come naturally on to the market. Now the Act is being repealed. But it remains true that the Central Land Board and the local authorities used their powers only in an infinitesimal number of cases—and one wonders why.

This question requires analysing. What is profiteering? It may interest the House to know that, in the eyes of some local authorities, the worst culprits to-day are to be found in the New Towns Corporations. This matter is now under discussion. I have no doubt that the Corporations will be found to have good reasons for charging astronomical amounts for their land—so will a number of other people when it comes to examining the matter. I suggest that for one clear-cut case of profiteering there will be ninety-nine borderline cases. When this difficulty is surmounted, at what price do local authorities sell their land? To whom should they sell it? Will they sell on some selective basis below market value? Will not that give rise to a great deal of suspicion of favouritism and "jiggery-pokery"? Is it suggested that they should sell the land for as much as they can get for it? The latter course may indeed help the rates, but should local authorities be encouraged to speculate in land? I believe there are other reasons why local authorities would be quite as ready as any private individual to profiteer in land. There are many local authorities to-day who are not at all keen on selling land for the purpose of its being developed for small building, in relation to which the owners are likely to take more out of the rates than they put in through their rate contributions. In any case, I do not believe that a policy of vague threats will work. I do not think it would be fair, either to the local authority or to the owner. It may be that the solution will be found in the time programme. If the authorities really feel that the develop- ment is not proceeding according to the programme laid down in their programme maps, they may, under careful safeguard, seek powers to auction the land over the owner's head; but I think that would be conceivable only in very difficult cases—it should be applied only in rare and glaring cases.

In conclusion, may I say that I hope I have not given an impression of hostility or even of undue criticism of this Bill? Candidly, I believe that everyone—including noble Lords opposite—is rather groping in the dark for a solution of this extremely complicated problem. All I have been trying to do is to put a few modest ideas into the pool. It may be that, with all the excellent advice which the Government are receiving—notwithstanding that much of it is in contrary directions—they will be enabled to produce a kind of final Bill, a Bill to end all Bills. I should be very pleased, but also very surprised, if they did.

4.30 p.m.

LORD WISE

My Lords. I am pleased to be able to follow the noble Viscount, Lord Gage who has just sat down, for he has raised several interesting points of which I hope the Government, in their turn, will take cognisance. When we do get to the promised Bill in the autumn, I hope it will deal comprehensively with the subject, and then—as the noble Lord, Lord Silkin, said—we on this side of the House shall be able to examine carefully the proposals which the Government put forward. I now wish to congratulate the noble Lord, Lord Mancroft, on behalf of noble Lords on these Benches, for the interesting speech which he made on what he described as a rather dull and humdrum subject. He kept us fully interested and alive to the difficulties which he had to face. Having an interest in the same county as that in which the noble Lord is also interested. I think it is right that I should congratulate him from this side of the House. He dealt very fairly with the position of the Government, but that position at the moment is, in my view, a rather invidious one. I consider that the Bill is a little slipshod, and that it bears the marks of haste. I think it would have been far better if it had been made possible for us to deal now with the whole subject.

The noble Lord said that the Bill covered three specific points which arose from the operation of the Town and Country Planning Act of 1947. I think that this is—I will not use the word improper, but rather a hasty way of dealing with something which the Government are hoping, perhaps, to put right. I think we shall all agree that some amendments to the Town and Country Planning Act, 1947, are necessary. It is within the knowledge of all of us that complaints have been received that irksome regulations or irksome practices have had to be endured. It is certain, also, as has already been remarked, that the public were not fully alive to the implications of that particular Act. But those matters which called for some alteration could, I think, have been dealt with in company with other matters which the Government might wish to have changed.

The points with which we are to deal this afternoon are important in themselves—I do not hesitate for one moment to say that. But I think it is not irrelevant for me, at this stage, to quote what the Minister said in another place. Speaking during the Second Reading debate he said (OFFICIAL REPORT, Commons, Vol. 508, col. 1124): I must recognise frankly that it is a serious thing for one Government to interfere with the obligations of a former Government. I think that is what the Government are, in fact, trying to do in the Bill which is now before the House. I believe it would have been better for them to come forward with some new legislation if necessary, but not legislation such as we have had to deal with during the last few weeks and are dealing with to-day, legislation designed simply with a view to setting aside something which a former Government brought into operation. I hope, therefore, that this may be an end of what I call piecemeal legislation. Planning is a difficult problem. The noble Viscount who has just sat down has outlined various anomalies which may arise, and I am not at all sure that plans which the Government envisage under the present will work. They may deal with a present emergency, but in the long run I am sure—and in this I am backed up by the opinion of specialists—it will not be possible to operate their plans; for very many reasons they will not work. The noble Lord, Lord Mancroft, has said that the development charge is to go, that the compensation fund is to be operated to present figures, the rest is to remain in abeyance, and that future purchases of land by local authorities will not call for any contribution from the compensation fund unless a claim has already been lodged or unless that land is subject to a claim.

I can foresee that in the future there will be a good deal of unfairness in dealing with the purchase of land, either by the local authorities or by people who are given permission to develop, in regard to the price which is to be paid and on the question of whether or not any compensation is to come from the compensation fund. People who are concerned at that time will think it very unfair—mention has already been made of this—that one person, by being allowed to sell his or her land in an open free market, should be put in a more advantageous position than a person who has suffered restriction of his or her land, or whose land has been purchased by the local authority, either at use value or at that value plus compensation from the fund. The noble Viscount, Lord Gage, was wondering whether the price of land would rise. The belief is widely held that directly this Bill becomes an Act the price of land will automatically rise, and that people will hold out for increased value. That increased value of land will be detrimental to those who wish to develop. I can foresee that those who wish to develop their estates will be at a greater disadvantage through the operation of this Fill, although that perhaps is not within the intention of the Government.

There is another point, touched upon by the noble Viscount, Lord Gage, which I think worthy of consideration—that is, the unfairness which may be created in years to come when new areas are developed for housing and new towns. Some of the land will be purchased at the then use value, which may be the agricultural value. The land around the area which is to be developed will thus acquire a value far in excess of agricultural land; but whereas the land required for development may be purchased at a comparatively low value, the land held by other owners outside the area of development, which eventually would become ripe for development, will have to be purchased at a much higher price. There is also the position of local councils to be taken into consideration. Under this Bill it is within their power to purchase land either for themselves or for anyone else who wishes to develop, to the detriment possibly of owners or sellers of land. I do not think it is the proper province of local corporations to enter into purchases of land which is required either for private small development or private large development. I can foresee that there will be many disputes in local councils about whether land should be purchased or not, and it may be detrimental to the interests of local government if these powers are allowed to operate.

The question of the payment of interest on claims met from the compensation fund has been mentioned, and possibly the noble and learned Lord upon the Woolsack may be able to give me some information about this. I believe it is proposed by the Government that these claims should bear interest at 2½ per cent. from 1948, when the Act came into operation. About five years have passed and the land of the recipients of that interest will have increased in value by one-eighth. I wonder whether the interest will be treated as tax-bearing interest or as capital appreciation. That point was mentioned in another place, but I do not think the Government have made an announcement in that respect. My own view is that the provisions of any planning Act should be fair as between owners and fair as between the State and private owners. I am not at all certain that this Bill in its essence is fair, either as between owners or as between the State and private owners. I want to finish on a point mentioned by the Minister in another place during the debate on the Second Reading of the Bill there. He said (OFFICIAL REPORT. Commons, vol. 508, col. 1116): Now, of course, it might be argued that values should be paid for as they accrue—in other words, compensation should not be fixed to 1947 value. That is a fair point, but there are two answers to that. First, in many cases these values will have to be created by the efforts of the community, and secondly, the land owners have had no expectation of receiving more than the 1947 claim. Certain owners, of course, will receive compensation on the basis of their 1947 claims. But I believe that all values which have been created essentially by the efforts of the community should remain with the community and not be handed over in any form to private owners of land.

4.49 p.m.

LORD LLEWELLIN

My Lords, I do not wish to trouble your Lordships for long this afternoon. I am sorry that the noble Lords, Lord Ogmore and Lord Silkin, are not in the House at the moment, because I was going to make some comments on their speeches, certainly on that of Lord Ogmore. I thought the way he put forward the difficulties of Swansea was delightful but, wide though the subject of town and country planning is, I could not see how Swansea's difficulties either arose under the 1947 Act or would be affected by the Bill we are discussing. I wonder whether it was because he found so little to complain of in the Bill, that he adopted the method of the advocate who has not a good case and talks about something completely outside it. We had interesting speeches from the noble Lords, Lord Silkin and Lord Wise. Lord Silkin spoke in a restrained way, considering that a part of his own particular baby, as it were, is up for slaughter—if you can slaughter part and not the whole of a baby: I am afraid that my metaphor is getting slightly mixed.

Clearly, it would have been difficult for any Chancellor of the Exchequer to produce £300 million, at any rate all in one year, to pay compensation. I have grave doubt whether, if the late Socialist Government had continued in office, they would have found it easy to do that. One of the attributes of the Socialist Government was that they did not mind spending money, and a great many of our difficulties to-day have been caused by that very fact. They did not seem to mind spending money—true, it was other people's money; and the £300 million rather came into that category at that time. I thought it was rather naive of the noble Lord, Lord Silkin, when he said: "Our global estimate, after all, did not prove to be far out." It was £50 million out. Although in these days we are used to talking in millions, to me £50 million still seems quite a substantial sum. The noble Lord, Lord Silkin, also said that he thought the Government had been too hasty in abolishing the development charge, and he felt that it may have been due to the fact that he, or others, had not been very good at publicity. That is not why people disliked the development charge. It was because it was a bad scheme. First of all, it covered far too many kinds of development. In regard to claims, the de minimis claims were cut out, but there was a lot of de minimis about development charge; and development charge was levied on all sorts of small developments, such as changing the front room of a house in a village from a sitting room into a shop. In the case that I have in mind the charge did not alter the size or shape of the house at all, yet a development charge was levied. What people disliked about the development charge was that it has haphazard; that it was decided behind closed doors, and that there was no appeal from the amount decided behind those closed doors. Those were the main reasons why people disliked the development charge, and I must say, quite contrary to the noble Lord, Lord Silkin, that I think it is a good thing that we have largely dispensed with it.

The whole scheme under which the financial parts of the 1947 Act were supposed to work did not work in practice. It was supposed that if the land-owner had been compensated for his development rights, he would ask only for present user value for his land, and would be prepared to sell his land for development at present user value. From the point of view of any land-owner who lives in the neighbourhood of the land he is selling, it is far preferable to have it as agricultural land than to have it built upon. The inducement that some landlords have to develop their land is the additional price they can obtain for it. But if, under the terms of the Act, they have already been paid compensation—the difference between present user and the development value of the land—then there is no inducement for them to sell the land for development when it is preferable to see it either still under grass or used for arable farming, as the case may be. So the incentive for people to sell, unless they had to sell up in the case of bankruptcy, to meet death duties, or something of that sort, had literally gone, and the land was thus entirely withdrawn from the market for development purposes. That is where the scheme, as a scheme, failed.

There is a good deal in what the noble Lord, Lord Silkin, said about Governments being increasingly inclined to avoid paying compensation. That is something which will obviously have to be guarded against under the now scheme that the Government have brought forward. If the Treasury allow, say, only £5 million or £10 million a year, then somebody will have to bring pressure on the planning authority to allow a development to take place, for the simple reason that there will be no funds in the kitty to pay compensation if they stick to their original planning ideas. That is a risk that must be guarded against. The noble Lord, Lord Silkin, also referred to the fact that, unlike the Uthwatt Committee, both the Coalition White Paper on planning and that issued by the Socialist Government before the 1947 Act was brought in, treated urban and rural land differently. I am not sure that those two White Papers are right. I myself should like to see a scheme whereby, even if some form of development charge were retained for rural areas—not including the petty provisions of the old one, but some general form—anybody would be allowed to develop anywhere where there had been a building without any sort of development charge. That would give encouragement to builders to rebuild in built-up areas, to rebuild some of the single-storey slum dwellings, and to get more density per acre by building modern flats in those places. Such flats would be very useful, particularly if provided with lifts, as I think they should be, and they would help to prevent the spread of urban development over a lot of agricultural land.

The noble Lord, Lord Silkin, said that before planning was undertaken there had been a deplorable spread of ribbon development—a statement with which I fully agree—and urban development over some of the best agricultural land. But I cannot free from that accusation some of the new towns of which the noble Lord himself was the founder. They have often been put on sites of good agricultural land when they should have gone on the lighter heath lands, of which we have a great deal in this country. Be that as it may, I think we should try to get some encouragement to redevelop built-up sites and so prevent this large spread of towns. Toe noble Lord, Lord Wise, and I (and he was a very good companion, if I may say so) went on a tour of New Zealand together. They will have exactly the same problem there. They have a very pleasant idea that everybody should have his house in a nice piece of ground which can be cultivated. But the cities of New Zealand are spreading over quite valuable tracts of good agricultural land, and because of this spread, people have to travel further to their work. I should like to see all planning authorities trying to make the best use of land that is already built upon before they stretch it further and grasp more of our agricultural land for building development.

This Bill is, of course, only a temporary measure. It is a measure to save the Treasury from having to put its hand into the till and producing £300 million this year. I fancy that any Chancellor of the Exchequer, when he came to the point, would have put forward, or got his Minister of Town and Country Planning to put forward, a very similar measure. This is the interim measure. Later on in the year we shall have the main one, and I hope that in it we shall have, if possible, some provision to encourage the rebuilding of town areas and the sparing of as much agricultural land as possible.

5.4 p.m.

LORD PETHICK-LAWRENCE

My Lords, I should like to say to the noble Lord who has just spoken, and to whose speech we have listened with great interest, that my noble friend asked me to apologise to him for not being present. As a matter of fact, he rose out of a sick bed to take part in this debate, and he regrets that he was having a little rest and was not actually present to hear the criticism which the noble Lord has just made about his absence.

LORD LLEWELLIN

I am obliged to the noble Lord for saying that. I was not making any personal criticism of the noble Lord. I was only saying that in the course of the debate I was going to comment upon points made by the noble Lord, and I was sorry from my own personal point of view that he was not here. I know how assiduous he is in his attendance at the House but, of course, he had a right to be away.

LORD PETHICK-LAWRENCE

With regard to some of the remarks of the noble Lord, Lord Llewellin, it seemed to me that he was criticising one of my noble friends for not dealing very much with the subject under discussion. He seems to warrant a good deal of criticism himself, because he devoted most of his time to attacking the 1947 Act, and what we are discussing to-day is not the merits of the 1947 Act, but the merits of the Government White Paper and general policy. On that, I am afraid the noble Lord, Lord Llewellin, gave us very little of his wise advice.

In common with the majority of Members of your Lordships' House, I ought first to declare at the outset a direct personal interest in the subject matter of this Bill and the Government White Paper. My interest is exceedingly small, but I have a claim on the compensation fund and I have bought an additional tiny plot of land since the passing of the 1947 Act. In common with noble Lords, I also share the opinion which has been put forward on all sides that this is an exceedingly complicated subject, and I do not think that even the noble Lord, Lord Mancroft, himself would claim that the super-imposition of the Government scheme on the 1947 Act has made the subject simpler and has reduced it to more limited proportions. That is true, whatever view we take of the merits of the Government's scheme. I could not help thinking that on that question of merits, the noble Lord, Lord Mancroft, rather soft pedalled the difference between the 1947 Act and the Government proposal to-day. I think that one who did not understand the subject at all might even have supposed that the Government proposals were merely modifications of the 1947 Act, whereas I should say that, broadly speaking, they throw the baby out with the bath—in the words of the noble Lord, Lord Llewellin—and that what is left is a very small part of the baby when the bathwater and most of the baby has been thrown out.

I suppose we all agree that the 1947 Act has not worked as most people who sponsored it expected it would. Those people, as the noble Lord, Lord Mancroft, has frankly admitted, were not merely the Labour Government; they were people on both sides of politics who were carrying out broadly the proposals of the Uthwatt Committee. Those proposals have not worked for the reasons which have been given on both sides of the House, and on that there is very little divergence of opinion. But whether there should have been, or whether the present Government should have made, certain modifications, or whether it should have taken the drastic course it proposes to take according to the White Paper and according to the accounts of its policy given by the noble Lord who initiated this debate, is really the issue between us at the present time. What are the big changes? They are that it abolishes the compensation fund as such; it abolishes the development charge, and it completely divorces betterment from compensation.

What is the origin of the whole of this matter? I re-state it in only slightly different words from those used already in the course of this debate. For many years people have exercised their minds over certain aspects in which land differs essentially from other forms of property. The four principal differences are these: first, that land partakes of the nature of a monopoly—it can be neither added to nor subtracted from. Secondly, it has use value, positional value, development value and—what I think is often forgotten in this connection or not allowed for—also amenity value. Thirdly, some of these values it acquires quite independently of any action taken by the owner: they arise out of the activities of his neighbours. Fourthly, an arbitrary flat of his local authority or of the Slate itself may greatly enhance these values or seriously diminish them. In consequence of these facts, most fair-minded people have wanted to do something to iron out the inequalities and injustices existing between land-owners and other owners of property and between one land-owner and another. The noble Lord, Lord Mancroft, suggested that there was no direct connection between betterment and compensation. I confess it would seem to me that there are several essential connections, because, first of all, there are two sides of the action of the community on the individual landlord—either to enhance or to diminish his property; and the fact that the local authority, whoever they may be, produce that effect, is surely a reason why the gain and loss should be set against one another, and not the reverse.

Let me give an illustration of this particular process by which gain and loss are set off. The noble Lord will net be ignorant of some of the wise, generous and liberal schemes undertaken in certain parts of the country by big landlords who have sterilised a large part of their property and prevented it from being developed or built over, and who frankly admit that, apart from the public-spirited side of their action, they do not often lose very much in consequence, because the enhancement of the value of that portion of the property which is outside the sterilised area makes up to a large extent for the loss on the portion which they have sterilised. The intention of the land reformers has been that what can be done only by large land-owners in some cases, can be done in some measure by small land-owners through the action of the community. Some of them would benefit and some would lose through a scheme of planning.

Lord Mancroft said that not only was there no connection between compensation and betterment, but that betterment was a question of taxation and that compensation had to be met out of taxation. What the Government scheme really means is this: that all the compensation which has to be paid—and it may be quite considerable: I think it may well reach £50 million to £100 million within the next four or fire years—should fall on the ordinary taxpayer. Therefore the Government proposal really is to compensate the land-owning class out of the pockets of the ordinary taxpayer. It seems to me that if that is seriously the view of the Government—and that is the interpretation which I personally put on the noble Lord's remarks—it is a matter which the direct and indirect taxpayers should have very clearly in their minds. They should realise that by getting rid of the betterment side of the 1947 proposals, what the Government are doing is to throw on the general taxpayer the reimbursing of the landlords in the shape of compensation which was to have been met, by common agreement of both sides of Parliament, from the charges proposed under the development scheme.

I quite understand that the Government want to do something; that they want to avoid having to meet this £300 million. It has been suggested that this is a very prudent provision of the Treasury, because they will avoid having to find such a large amount. The noble Lord, Lord Llewellin, suggested that a Socialist Government did not mind about spending such large sums of money and that the present wise and thrifty Government would be much more careful and would not be prepared to be so large-hearted and generous. But what was really proposed under the 1947 Act—which was largely supported on all sides—was this. Under that scheme the full amount might have fallen due this year, but that provision was an investment which would come back over the years. What are the Government substituting for that? They are substituting a charge which, as I have suggested, may well reach £100 million in four or five years' time. That, it is true, is a much smaller sum. But this is not an investment: there is nothing coming in to repay it. I should have thought that of two schemes, one of £300 million for which you were going to be repaid, and the other for £100 million for which you were not going to be repaid, the former would have been more deserving of praise from a financial point of view.

I do not propose to take up any further time, except to say this. The Government scheme seems to me to fail in four respects. In the first place it has divorced betterment from compensation. In the second place it imposes a new burden on the general taxpayer for which I see no ground, considering that what we were endeavouring to do was to straighten out the difference as between one land-owner and another by the actions of the public authorities. In the third place it recreates unfairness between adjacent landlords, one of whom sells privately at one price while the other is compelled to sell to the local authority at a much lower price. It differentiates, and produces new unfair nesses between different developers according to the date and the circumstances in which they set out to develop their property. Finally, it creates a number of transitional anomalies, which we shall hear more about as the scheme develops. For all these reasons it seems to me the scheme in its present form cannot be the final word in planning. I regard it as financially injurious, placing an entirely new additional burden on the taxpayers of this country. I feel sure that the Government will have to modify it, and that they will have to go on modifying it for many years to come.

5.20 p.m.

THE LORD CHANCELLOR

My Lords, your Lordships heard, I venture to think, a very able speech from my noble friend Lord Mancroft introducing this Bill. He dealt, I will not say exhaustively but quite elaborately, not only with the problem which the White Paper seeks to deal with but also with the smaller immediate aspects of the Bill now before the House. Your Lordships, too, have had the advantage, I am sure, of reading and studying the White Paper, and I think that it would be superfluous for me either to repeat what the noble Lord has said or to remind your Lordships, except perhaps in one or two cases, of what is said in the White Paper. I propose to deal almost entirely with the two broad aspects in this Bill now before the House, which is admittedly nothing but a stop-gap measure and part only of the scheme which Her Majesty's Government will introduce in their endeavour to deal with this baffling problem. I must agree with the noble Lord, Lord Pethick-Lawrence, and with other noble Lords who have spoken, that it is very unlikely that a final solution of this problem will ever be reached. Having said that, may I say to the noble Lord, Lord Silkin, how much I appreciate his being here to-day? He has for this subject an almost pathological affection, and it would have been, I know, a great grief to him not to be here. Nevertheless, I must give him my meed of admiration for the gallantry with which he overcame his physical weakness; not only has he spoken with great cogency to your Lordships, but he has stayed here to hear my feeble words.

The two things which this Bill proposes to do are, first of all, to do away with the payment of £300 million by July 1, and, secondly, to do away with the development charge. Let me deal with the £300 million first, and shortly. The noble Lord, Lord Silkin, said that he agreed with the noble Lord, Lord Mancroft, that the Bill was an important one, but he said that it was not a necessary one. When he said that it was not a necessary one he referred, I think, in particular, to that provision which abolishes the necessity for paying out £300 million; and to my profound astonishment he said that he did not accept the view that the payment of £300 million by July 1 would have an inflationary effect. I am not sure whether the noble Lord, Lord Pethick-Lawrence, was in the house at that moment, but I think, if he had heard that, he would have shuddered; for the sudden creation of £300 million, be it in stock or in any other form, at this moment could not but have a grave inflationary effect. I venture to say that no Chancellor of the Exchequer of any Government. whether a Socialist Government or another, could possibly have faced the evil of the creation of such a vast amount of currency at one blow in July of this year. Therefore, it was not only important but necessary to provide that the £300 million should not be paid.

Then what was to be done? Was it merely to be deferred or what was to be done? Surely the appropriate way of dealing with it is this: not only to say that it shall not be paid by July 1, 1953, but that it shall not be paid at all until the persons who have a claim can satisfy the proper authority that they have suffered a loss of that development value, in respect of which their claim stands. Why should a man be paid before he has suffered a loss? Why should he be paid if he has suffered no loss at all? So the way we deal with the £300 million is to defer payment of it until the particular claimant who alleges that he has a claim satisfies the authority that he has suffered a loss. Why should the man be paid until he has suffered a loss? That is what we have done, and the curious thing is that, although the claims upon the fund are necessarily many and by no means very small ones (the smallest claims were eliminated under the de minims rule), so far as I know, no one has complained of the deferment of the payment of this sum.

There must be many of your Lordships present in this House to-day, certainly many noble Lords, who have large claims which have been deferred, perhaps for all time; yet not a word of dissent has been heard. This first point is most important. I wonder how many noble Lords here present have put in a claim. The noble Lord, Lord Pethick-Lawrence has, and his statement of his personal interest reminds me that I, too, ought to state a personal interest, because I believe that I put in a claim—I really do not know what the result of it was but, at any rate, I certainly did have a claim and I did not dissent from the deferment of payment. The position which I accept is a position which every reasonable-minded man accepts: that the payment of a claim on this fund ought not to be made until the claimant has suffered a loss. That is the first and, I think, essential point. The noble Lord will forgive me if I say that, apart from the noble Lord, Lord Silkin, I have not heard anybody suggest that the £300 million should be paid out by July; and if it cannot be paid out, something must be done. I have heard of no better suggestion than that which is embodied in the present Bill. That is the first point.

The second feature of our Bill is the abolition of the development charge. I see, of course, as any man must, the force of what the noble Lord, Lord Pethick-Lawrence, said about that. In a sense, compensation and betterment are allied, and he speaks of the divorce. But I think, upon examination, it was a very uneasy union, and the relation between the compensation and the betterment was so difficult to determine that I doubt whether any harm comes from a final and absolute divorce.

Another point that I want to make, in particular, because several of your Lordships referred to it, is this. It is not strictly upon the development charge, but I want to mention it because I know that it has affected the minds of some of your Lordships. It is a fear that, as a result of this Bill, Treasury control will be too rigid and tight, and will unnecessarily hamper the development which local authorities would otherwise attempt. With great respect to your Lordships, I do not think that you have any right to make such an assumption. As you know, under the 1947 Act, local authorities are under an obligation, which for the most part they have already satisfied, to produce development schemes which have to be approved by the central authority.

Why should it be assumed that, if a local authority puts forward a scheme to which the Treasury do not assent, there will not be the necessary criticism in this House or in another place? Who can doubt that if some scheme were put forward by, we will say, the local authority of Swansea, some doughty champion such as the noble Lord, Lord Ogmore, would at once rise and say, "Swansea is a fair city. Why should not the development plan proposed by the local authority of Swansea be approved by the Treasury? "So it will be that strong local feeling will, as we believe, be quite adequate to preserve the balance between the natural and proper desire of the Treasury to keep expenditure within proper control and the local patriotism of the local authorities who will naturally desire to effect their development as properly as they can. I venture to think that that is a false point and ought not to weigh with your Lordships.

Now I come to the question of the development charge. As I think Dr. Johnson said of the Excise Tax, this is an odious tax. It does not work. I think that Lord Pethick-Lawrence himself said it had not worked. I ask myself, and I invite your Lordships to ask yourselves, if it has not worked in the five years during which it has been in force, is it likely to work in the future? I say, No. I think it will continue to impede, as it has impeded in the past, the proper processes of development. Is it not quite clear that if a man, having bought a plot of land at what he thinks is a fair price, finds himself then faced with a development charge, he will consider himself to be labouring under a serious grievance? I see that the noble Lord, Lord Pethick-Lawrence, nods his head, and I am very glad to see it. I think this is the common experience of noble Lords on both sides of the House. The White Paper states this point so well that I venture to read the passage. It is as follows: The real effect of development charge on the cost of development varies. As already explained, land for development has not, generally speaking, changed hands at or near its value for its existing use, and to the extent that it does not do so, the charge represents a burden on development. That means that the development charge impedes and is a burden on development unless land changes hands at the so-called existing use value. Does it? It does not; and there is no reason why it should. Unless the last Government had gone so far (of course, they did not) as to say that the land should not change hands except at the existing use value, the development charge was bound to be a grievous imposition upon whomsoever wished to develop. So the development charge must be got rid of, and that is accomplished by Clause 1 of the Bill. That is the other purpose of the Bill, to get rid of the development charge, in order that in due course and in proper process the land may be developed according to the way in which the planing authorities prescribe.

There was some reference to the "baby in the bath" which I did not quite follow. It seems to me that the substantial part of the Act of 1947, for which the noble Lord, Lord Silkin, deserves the greatest credit, remains, and will, I believe, be a boon and a blessing. So that comfort he may take to himself, though he sees this particular baby thrown out of its bath. Something was said about compulsory acquisition, which, I think, amounts to this: that where there is compulsory acquisition there is no doubt that the vendor, the landowner, will get only the existing use value, plus the compensation for the development value as at 1947. I think that the fact that the Conservative Party make themselves responsible for such a measure as that, is, in a way, rather remarkable, for they tell all those landowners, who are supposed to be their pillars of support, that they are to lose all the increment of value resulting from the prospect of development after 1947 where the land is taken by a local authority. I think that is a good compromise. But there is no reason why they should not sell in the market at the full competitive value, in those cases where the local authority does not buy.

I agree, of course, that that means a dual value. The man who sells to a private individual can bargain and get what price he will; the man who sells under compulsion to the local authority will get only the existing use plus the development value at 1947. I do not mind inequality. Inequality runs through life, and particularly in this sort of thing it is absolutely hopeless to try to get complete equality for all persons. Anomalies there are, and anomalies there will be. I myself do not regard it as in any way a defect that there will always be anomalies in any scheme which you choose to adopt dealing with town and country planning. I do not mind. Inequalities and anomalies are inevitable in life. I have already spoken rather longer than I intended. There was one point raised by the noble Lord, Lord Wise, on interest—a purely factual point. I am afraid that I must tell him that the question of interest is still under consideration. I am not in a position to tell him more. If I were, I should.

In the course of this discussion, a good many other points have been raised. Lord Ogmore dealt with the effect on blitzed towns. I must say in his absence, which he was good enough to explain to me, that I did not see exactly what the relevance of that was to the Bill before the House. But I can assure him, in the familiar words, that what he has said will be taken into full consideration by my right honourable friend, The noble Viscount, Lord Gage, made, if I may say so, a most thoughtful and useful speech on this subject. He raised one point in particular which necessarily is causing us a good deal of concern, namely, the possibility of claims being put forward which are really fictitious. The solution which he suggests for that will, together with other solutions, be considered. I would assure him that it is a matter that we have by no means forgotten; it is rather a problem. Other speakers have raised other points. I do not expect that I have covered all the points that have been raised in the short time that I have been speaking. But I think I have dealt with the main points arising from this Bill. With those words I venture to commend the Bill to your Lordships for a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.