§ 2.46 p.m.
§ Order of the Day for the Second Reading read.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
My Lords, the main purpose of this Bill is to put compensation for compulsory acquisition of land on a market value basis. The Bill will put right what has come to be very widely felt as an injustice—the two-price system; one for private sales, the other for public or compulsory purchases. It will be recalled that the Franks Committee went out of their way to comment on thedissatisfaction with the procedures relating to land which arises from the basis of compensation.Your Lordships will find that in paragraph 278.
This problem ought, however, to be seen in its context. It is not a great grievance, generally speaking, either in the middle of towns or deep in the countryside, because in those places there is not a substantial difference between compulsory purchase price and market value; but it is a real grievance on the fringes of growing towns. Here, the difference can be very great. There is a good deal of variety, but in some cases the market value can be several times the price payable on compulsory purchase. My Lords, this disparity has not only come to be regarded as an injustice: it has actually impeded local authorities in choosing the most appropriate sites for some of their purposes, because they were unwilling to cause injustice. That is one of the reasons why the County Councils Association, for instance, have for some time advocated a return to market value.
If I may say a word or two on the present basis of compensation, I should like to explain that the price paid for land which is compulsorily purchased consists, at present, of two elements: first, the market value of the land restricted to its existing use, commonly known as the "existing use value"; and, second, the 1947 development value, in so far as this has not already been realised by development or as compensation for a planning decision. Noble Lords will recall that that Act did two main things. First, it established for the first time a comprehensive system of planning control, under 579 which nobody could develop land without obtaining planning permission. This system has stood the test of time remarkably well, and after more than ten years is firmly established. It is fitting to pay tribute to Lord Silkin as its author.
Secondly, the 1947 Act set up a new financial system, which was designed to solve once and for all the problems of compensation and betterment that prevented effective planning in the pre-war years. The State took over all development rights. Before anybody could carry out development, he had to buy back the right to develop by paying a development charge. Owners were to be compensated for the loss of the development values existing in 1947 out of a £300 million fund, and machinery was set up for the making and establishment of claims on the fund. It was assumed that, in these circumstances, land would be bought and sold in the market at existing use value. As a logical consequence of this it was provided that compensation for land bought compulsorily should be limited to existing use value.
As is well known, this system did not work well in practice. The public found it difficult to understand and the development charge was regarded simply as a tax on development. The Conservative Government, in the Town and Country Planning Acts of 1953 and 1954, therefore abolished development charge, so leaving owners free to realise the development value of their land, provided that they could get planning permission. It was provided also that owners who had established claims on the £300 million fund would not be paid automatically. Instead, owners who were refused planning permission would receive compensation up to the value of their established claims; and owners whose land was compulsorily purchased would also receive their established claims, in so far as these had not already been realised, in addition to the existing use value of the land, as provided in the 1947 Act.
Those, then, my Lords, are the two elements in the present basis of compensation. In many cases, the present compulsory purchase price is the same as market value. For example, where land has no prospects of development, either because of its situation or because it is already fully developed, the market value is the same as the existing use value. But 580 the compulsory purchase price at present falls short of full market value where the development value of the land has increased since 1947, and this, as I have already mentioned, has occurred mainly on the fringes of growing towns. It is this gap, a gradually widening one, that the Bill will bridge.
The new basis of compensation under the Bill is founded on the principle that the owner of land acquired should receive the value which he could expect to get for his land in a private sale in the open market if there were no proposal by any public authority to buy the land. This principle should be generally acceptable on both sides of the House. But it is apparent from statements made in another place that there is a fear in some minds that the Bill will resurrect the monster of "floating value". which, as the Uthwatt Committee very clearly explained, arose, where, for example, land was being developed on the fringes of a town, because of the fact thatpotential development value created by the expectation of future development is spread over many more acres than are actually required for development in the near future or are ever likely to be developed".It is suggested that compensation on a market value basis will be inflated by this factor.
Those fears, my Lords, are groundless. The circumstances of to-day are radically different from those about which the Uthwatt Committee wrote, mainly because of the system of planning control under the 1947 Act. Development without planning permission is now unlawful; and if permission is refused, compensation is limited to the 1947 development value.
The combination of these factors has largely eliminated floating value. The monster has been killed, or at any rate it has shrunk to the size of a very small mouse. By and large, purchasers of land will not now pay development value unless they are certain that they will be able to develop the land; and they cannot be certain of this unless planning permission has been given. Development values, therefore, depend upon planning permissions.
The Bill does nothing to upset the system of planning control, or the system of compensation for planning restrictions contained in the Town and Country Planning Act, 1954, and the Government do not intend that this should happen. 581 It was suggested during the debates on the 1953 Bill, which abolished development charge and paved the way for the 1954 Act, that the financial basis of planning control was being weakened and that the control must thereby be weakened also. But it has not been weakened. It is as strong to-day as then, and is more widely supported and understood than ever before. The Bill must be judged against this background.
I now come to put briefly before your Lordships the contents of the Bill. Part I deals with compensation for compulsory acquisition of land—that is, with the main subject that I have been putting before your Lordships. Clause 1, which applies the new basis to all cases where notice to treat is served after the date of introduction of the Bill in another place. brings to an end the present system of limited compensation under the 1947 and 1954 Acts, and we are left with the rules for assessment of compensation laid down in 1919 by the Acquisition of Land (Assessment of Compensation) Act of that year. These rules say that the value of land for compensation is to bethe amount which the land, if sold in the open market by a willing seller, might be expected to realise".But nowadays, as I have already explained, the value of land depends very much upon planning permissions. We therefore need to know the answer to the question: "With what planning permissions could the land be expected to be sold in the open market if it were not wanted by a public authority?". Clauses 2-8 seek to provide the answer to this question. In some cases, of course, we shall not need to use these clauses, because the question will be very simply answered by looking at the permissions which have actually been obtained for the land. But the very fact that the land is being compulsorily purchased may have prevented the owner from getting the most advantageous permission that he could otherwise have expected to get. These clauses, therefore, provide for various assumptions as to planning permission to be made in assessing the compensation. A wide variety of cases must be provided for, so that these clauses are necessarily somewhat complicated. Noble Lords will, of course, have an opportunity of discussing them in greater detail at a later stage.
582 I pass now to Clause 9. That clause seeks to protect acquiring authorities from paying for value clearly created by the very scheme for which they are buying the land. It enunciates and extends the well-established principle in compensation that "value due to the scheme" must be ignored. The same clause protects owners whose land is being bought from depreciation caused by the threat of a public acquisition.
Clause 10 and the Second Schedule make a number of changes of detail in the compensation paid under the Housing Acts. They retain the established principle that no more than site value should be paid for a house unfit for human habitation. The Schedule does, however, depart from market value in one important respect. In the past, because of the limitations of the 1947 Act, the value of the site of a slum house has sometimes been merely nominal. The change to market value will ensure that there will be few such cases in future. But it may still occasionally happen, perhaps because there is little demand for housing land in the slum area where the site lies, or because the site is encumbered by rent charges or other liabilities, that the site has practically no value. It seems to the Government unconscionable that the owner-occupier of a house, in which he may have been happily living for years but which has been declared unfit, should be dispossessed of his home and receive in compensation only a few shillings. The Schedule therefore provides that the owner-occupier shall in no case receive less for his house than the gross value for rating purposes.
Clauses 11 and 12 apply the market value principle to war-damaged property and to some other special categories of land. Clauses 14 to 16 deal with the problem of notices to treat which have been outstanding since before the 1947 Act and under which compensation would fall to be assessed in terms of war-time or pre-war prices. Briefly, these clauses give acquiring authorities the choice of either proceeding with these purchases or letting the powers die. If they proceed the owner then has the option of compensation on the 1954 Act basis at 1958 values. Clauses 17 to 19, the last in Part I, deal with the case where, having bought the land, the acquiring authority changes its intention and uses the land for a different and more valuable purpose.
583 There is obviously a strong sense of grievance if land is bought from an owner at a low price for some public purpose and it is then sold at a substantially higher price for a different purpose. This problem of course existed with the two-price system, but the return to market value alone will not remove the source of grievance because fresh planning permissions can entirely alter market values. Briefly, the clauses ensure that if a fresh planning permission, implying a change of intention, is obtained within five years of acquisition and this fresh planning permission, had it existed at the date when the land was acquired, would have resulted in higher compensation being paid, the original owner can claim an additional payment from the acquiring authority so that he will have the same total compensation as he would have had at the start if the fresh permission had been in force at that time.
I now come to Part II of the Bill which has one main purpose that can be quite simply stated. It removes the need for Ministerial consent to a large proportion of local authority land transactions. The transactions concerned are purchases by agreement, appropriations and disposals by sale, lease or exchange, and also the application of capital monies and adjustment of accounts consequent upon these transactions. This further step in the direction of local authority independence and local responsibility is in line with the objectives which lay behind last Session's Local Government Bill—simplifying and reducing Departmental control over local authorities. Representatives of the local authorities and the Government have since then reviewed the control of land transactions in detail and this Part of the Bill is based upon that review.
Part III of the Bill, your Lordships will be glad to hear, gives statutory effect to some further recommendations of the Franks Committee which were not dealt with in the Tribunals and Inquiries Act of last Session because they are more appropriate to a Bill dealing with town and country planning. These two Bills, together with the substantial administrative changes that have already taken place following the Franks Committee Report, will mean, I am glad to say, that action has been taken on nearly all the Franks Committee recommendations within less than two years of the publication of their 584 Report. Clause 27 meets Recommendation 85, thatthe present special form of appeal to the courts in procedures relating to land should be retained and also applied to decisions on planning appeals",and indeed goes further and extends it to all other Ministerial decisions and orders under Part III of the 1947 Act, and to similar provisions in the 1954 Act and under this Bill.
Clause 28 meets Recommendation 91, thatan appeal should lie to the courts on a point of law against a determination by the Minister as to what constitutes development".Clause 29 meets Recommendation 72, thatthe code or codes of procedure for Inquiries should be formulated by the Council on Tribunals and made statutory".It does this by adding a clause to the Tribunals and Inquiries Act giving power to the Lord Chancellor, or to the Lord President of the Court of Session in Scotland, after consulting the Council on Tribunals, to make statutory rules of procedure for statutory Inquiries held by or on behalf of a Minister.
Pausing there for one moment, I would remark that, as your Lordships know, the noble Marquess, Lord Reading, was good enough to accept the Chairmanship of the Council on Tribunals. I had the pleasure of visiting him and his colleagues the other day and I am sure your Lordships will be glad to know that they have already been of great help on certain problems. We hope for great things from the working of the Council.
Clause 30 removes the sole existing restriction on legal representation at Inquiries relating to local government land transactions. Clause 31 amends Section 19 of the 1947 Planning Act, which enables the owner of land which has become incapable of reasonably beneficial use in its existing state and is the subject of an adverse planning decision to serve a "purchase notice" requiring the local authority to buy the land. in part, the amendments are related to Clause 27 of this Bill, but they also simplify the procedure and remove the need for Ministerial consent where owners and local authorities are in agreement.
Clause 32 provides that planning applications for certain kinds of development, to be prescribed by Development 585 Order, must be advertised. The local planning authority is then required to consider representations received about the proposal. It is intended to prescribe only limited classes of development which might be considered bad neighbours. One example which may interest your Lordships of the class of development to be covered is slaughterhouses, and this clause will meet an assurance given in this House during the passage of the Slaughterhouse Act of last Session. Clause 33 meets, so far as is practicable, Franks Committee Recommendation 93 thatowners and others directly interested in the land should be informed of third party planning applications and allowed to state their vews. They should also he informed of the decision of the local planning authority and of the lodging of an appeal".An applicant for planning permission must certify (a) that he is the sole owner, or (b), that he has notified all owners, or that lie has advertised the application. An agricultural tenant must be personally notified every time. There are similar provisions for notification of a planning decision and of an appeal to the Minister. That was a point which several of your Lordships raised during the discussions on various Bills, and I am glad that we have this opportunity of placing it on the Statute Book.
Part IV of the Bill deals with miscellaneous and supplementary matters. The most important clause is Clause 34. This is concerned with what is commonly called "planning blight": that is, the effect on property of proposals implying future acquisition—for example, a scheme for a new road cutting across the property. Many noble Lords will know of cases in which the owner-occupier of a house wishes or needs to move but finds his house unsaleable, or saleable only at a very reduced price, because of a threat of future acquisition. The clause enables such an owner-occupier to require the public authority concerned to buy his house forthwith, at a price unaffected by the scheme. This right is limited to resident owner-occupiers of buildings wholly or partly occupied as private dwellings. The Government recognise that there will be some cases of hardship outside the scope of this clause, though they are confident that 90 per cent. or 95 per cent. of the hard cases will be caught by it. To apply the clause to all classes of property, however, would expose local 586 authorities to unmanageable commitments, and would open the door to cases which might not be genuine ones. In the discussions on the Bill in another place, however, representations were made to extend the provisions of the clause to certain other classes of owner-occupied property. The Government are considering this question which will no doubt come up again in our debates.
Where hardship occurs, but the clause does not apply, the Government will encourage local authorities to help so far as they reasonably can by buying the land voluntarily in advance of requirements. The local authority associations have already indicated that they could deal with the matter on these lines, if loan sanction and any appropriate grants were forthcoming. That will now be the case, and it is the reason for including Clause 39, which will enable the Minister of Transport to pay grant in such cases. For the same reason Clause 38 extends the Minister of Transport's power to buy land in advance of requirements for trunk roads.
So much, my Lords, for a very brief account of the Bill. Some comment is probably necessary on certain matters which are not dealt with in the Bill. First, it has been suggested that the compensation provisions of the Bill should apply not only to cases where notice to treat has been served since October 29, 1958, but to all cases where compensation has not yet been determined. This is a matter which has been debated in another place and to which the Government have given considerable attention. Whatever dividing line is chosen for the application of the new system, there are bound to be anomalies and persons who believe that they have suffered from the proposals. This is inevitable when such a change is made. It has always been the rule that compensation is determined by the circumstances as they exist at the date of notice.to treat. All the evidence which a detailed and thorough review of the situation has disclosed (I can give your Lordships the figures if you ask me, but I shall not trouble your Lordships with them at the moment) demonstrates that a departure from the present provisions of the Bill would lead to even greater anomalies which could not be justified on grounds of principle and reason.
587 Secondly, as I mentioned earlier, the Bill does not alter the basis of compensation for planning restrictions. The Bill relates solely to compensation for acquisition. There is nothing incompatible between the market value basis for compensation when land is acquired and the present basis of compensation for planning restrictions. Private transactions in the open market have taken place without difficulty since the abolition of development charge in November, 1952, and the Bill merely brings compulsory purchase transactions into line with such private transactions. The Government's intention is to maintain and improve planning control, making it more discriminating, more effective—though not more burdensome—and, if possible, a lot quicker. To change the basis of compensation for planning refusals now would be to destroy planning as we have known it since the war. It would bring back all the problems of floating value described by the Uthwatt Report.
The third point which I thought your Lordships ought to have in mind is that the Bill does not contain any comprehensive proposals for recovery of betterment, although, as already mentioned, Clause 9 provides that an acquiring authority shall not pay for betterment directly created by the scheme for which the land is being acquired. There is no logical reason why the changes made by this Bill should be accompanied by a system for the collection of betterment. Owners of land realise unearned increment in their land in private sales. There is therefore at present a distinction between owners who sell land privately and a smaller proportion who sell to public authorities. The Bill merely removes this distinction. If any system were to be introduced for the collection of betterment, it would obviously have to apply to all owners.
It is possible to produce a theoretical case for collecting or taxing unearned betterment—that is, the increase in value of land due to the expenditure or activities of the community. Many attempts have been made to turn this theory into practice. and the Government have reviewed the problem yet once again. They have come to the conclusion that any scheme for the taxing or collection 588 of betterment which was to be free from glaring anomalies, and which would be accepted by the public as just, would be so complicated that the cost of administration would not be justified by the return which would be obtained.
A word or two should perhaps be said about the position of Scotland in relation to this Bill and the course which we are going to take, which I think ultimately will be most helpful to legal practitioners and others in Scotland who have to advise on these matters. For the most part, town and country planning legislation affecting Scotland is contained in separate Statutes which reflect differences in land tenure and local authority administration, although the basic Statute governing the assessment of compensation is a Great Britain Act of 1919. Some of your Lordships may have the most horrific memories of the fact that after I made eighty speeches to your Lordships on the English Town and Country Planning Bill of 1954 I followed that by making fifty speeches on the Scottish Bill shortly after. Therefore I want to explain to your Lordships the procedure which we are taking in this case.
The Acquisition of Land (Assessment of Compensation) Act of 1919 was, as I said, a Great Britain Bill. In relation to the main purpose of this Bill, the return to market value as the basis of compensation, there are no important differences of principle or practice affecting Scotland, and the question is accordingly one that should be debated and settled on a Great Britain basis. A Great Britain Bill provides the best opportunity for such debate. It is, of course, necessary to include in the Bill a few special provisions for Scotland. There is in particular the position of the feudal superior, which is dealt with in the Scottish application of Clauses 7, 8, 17 and 18, and certain differences relating to local authority land transactions covered by the Scottish application provisions in Part II of the Bill.
My right honourable friend the Secretary of State for Scotland in another place frankly admitted that for Scottish users a Bill in this form was in some ways inconvenient. Accordingly the Government have decided, as was announced in another place, to promote a re-enacting Bill for Scotland as soon as this Bill 589 receives the Royal Assent. This re-enacting Bill will contain, in Scottish terms, everything in the principal Act that applies to Scotland. It will effect no further amendment of the law, and both Houses of Parliament will be asked to agree to its being referred for examination to the Joint Committee on Consolidation Bills. As your Lordships know, that does not in any way restrict your Lordships' powers at other stages. The enactment of the Acquisition of Land (Authorisation Procedure) (Scotland) Act. 1947 provides a general precedent for proceeding in this way. I have given great personal attention to this matter, with my right honourable friend the Secretary of State, having specially in mind the position of practitioners and other advisers in Scotland, and I think that settling the principle in this Bill and then putting the Scottish provisions into another Bill which will be re-enacted in that way will be the most convenient method for the Scottish users and practitioners I have mentioned.
The principles incorporated in the Bill have received a widespread welcome, not only from the public but also from the local authority associations, although some local authorities would have liked further Exchequer assistance to meet the added cost. I am afraid your Lordships will have realised that the Bill is inevitably somewhat complicated, but not unnecessarily so. Any Bill dealing with such a highly technical subject as compensation is bound to be intricate, but I am rather relieved by this. The Bill has been studied, since its introduction, by all the professional and other bodies concerned with land transactions, and there has been remarkably little criticism of the detailed contents. A number of technical points which have been made have already been met by amendment of the Bill before it reached this House.
It would perhaps not be inappropriate to quote from a Memorandum on the Bill, prepared by the Incorporated Society of Auctioneers and Landed Property Agents:The legal and Parliamentary Committee of the Society wish to place on record their appreciation of the skill with which the Bill has been drafted.In view of the many hard things that are often said about the drafting of Bills I 590 hope your Lordships will not grudge me that flower in the chaplet of this Bill today. I suggest that it can therefore be commended to your Lordships and I beg to move.
§ Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
§ 3.25 p.m.
§ LORD SILKIN
My Lords, this is the third time that this House has had to consider town and country planning within the lifetime of the present Administration. It is significant that each of the three measures was introduced in another place by a different Minister. The first was introduced by the present Prime Minister; the second by Mr. Sandys, and this Bill was introduced by the present Minister of Housing and Local Government, Mr. Brooke. In this House we have had two Lord Chancellors introducing measures: the present Lord Chancellor and his predecessor, Lord Simonds. As the Bills have proceeded, they have become more and more complex. I pay a tribute to the skill with which the Bills have been prepared—I am perfectly willing to do that; but inevitably, with one Bill on top of another dealing with the same subject, each amending previous provisions, the law itself is bound to become more and more complex. Some evidence of that is the fact that we need a 24-page Memorandum—which is not a great deal shorter than the Bill itself—to explain the Bill. Furthermore, the number of speakers who take part in the debates has become smaller and smaller with the increasing complexity of the Bill.
This Bill has been introduced to abolish anomalies, and, incidentally, to repeal a large part of the 1954 Act. If noble Lords care to refer back to the debates on the 1954 Act and hear the justification for what was done at that time, and listen to what is being said about this Bill, they will find a very remarkable change of heart on the part of the Government. All the dangers that many of us in this House, on both sides, and in another place, saw in the 1954 Act—the dangers of anomalies, of two different standards of value and so on, all of which were foreseen; and the Government were warned about them at the time—have materialized, and the Government have been compelled to change their minds.
591 The noble and learned Viscount says that it is due to the comments of the Franks Committee that they have changed their minds. That is very flattering to the Committee. They certainly made a point of the fact that the basis of compensation for compulsory purchase was inequitable, and that that was partly the cause of so many appeals coming before Tribunals. But that matter was not part of their terms of reference; it was quite incidental. And no one would be more surprised than the members of the Franks Committee themselves to discover that they are being given credit for the authorship of this Bill. The fact is that this Bill has been introduced into Parliament reluctantly, as a result of extreme pressure from Government Back Benchers in another place, as a result of the introduction of a Private Member's Bill for much this purpose which the other place was advised by the Minister of Housing and Local Government to reject. That is the authentic explanation of the authorship of the Bill.
The Bill is virtually a repeal of the main provisions of the 1954 Act. If the noble and learned Viscount will forgive my immodesty in doing so, I should like to quote a sentence or two from what I said on this subject in 1954. I could quote a lot of it which would, I think, be justified to-day, but I should like to quote these words [OFFICIAL REPORT, Vol. 189; col. 469]:I should like to prophesy that in the not-too-far-distant future somebody, possibly the noble and learned Viscount the Lord Chancellor, or possibly his successor, will be standing at that Table introducing a new measure for the repeal of this one, to undo the evil which I think this Bill will do.I need not comment on that statement, for it is exactly what is happening; and I am not in the least surprised. Further, I am quite convinced that the last word has not been said on this question of compensation for the acquisition of land, because from the point of view of the community the present position is intolerable. I am not objecting to doing justice to the local authority; I am not objecting to the removal of anomalies. But I think the public must be considered as a whole.
Although the noble and learned Viscount pointed out that Clause 9, I 592 think, contains provisions to ensure that the individual landowner does not benefit by development schemes which have been introduced by local authorities, the fact remains that a large part of the increase in land values is due to the efforts of the community for which the community pays. It has been the problem for many generations of people who have given consideration to this question, to see how the community can be recouped for the expenditure it has incurred in carrying out developments and thereby increasing the value of land. Every time a local authority builds a housing estate it creates values of which landowners take advantage—I do not say in any improper sense. That is the present position. But the fact remains that when a community is brought into a certain area, with all its activities and all its life, naturally values are increased, and the increase in those land values goes to the owners. I submit that until such time as the community is enabled to recoup itself for the expenditure which it has incurred out of the increase in land values which it has itself created, we shall get no finality in the system of land compensation.
I need not dwell fully on the various efforts that have been made: the noble and learned Viscount referred to them, and I dealt fairly fully with them in the speeches which I made on the Second Reading of the 1953 Bill, and on the Second Reading of the 1954 Bill. The House will remember the various Committees that were set up to consider this particular problem. I would remind the noble and learned Viscount that it was not merely a question of "float" that the Uthwatt Committee was set up to consider, though that was one of the factors; but it was this particular factor of how the community could recoup itself for the values which it had itself created.
The noble and learned Viscount will know better than I do that the principles of the Uthwatt Report were accepted by the Coalition Government; they were accepted by the Labour Government, and they were even accepted by Mr. Macmillan in speeches which he made on the occasion of the 1954 Bill. And the principle has again been accepted, during the discussions on this Bill, at any rate in the speech of the Parliamentary Secretary who introduced the Bill in another place. I agree that it has been said—and the noble and learned Viscount repeated 593 it to-day—that it was so difficult to isolate the increases in land values that the cost of administration would be greater than the actual amount collected. But to be fair to the noble and learned Viscount, he did not himself challenge the principle, as I understood him: his criticism of doing anything was just that it would be difficult to carry out. That was the line that was taken in another place in connection with this Bill.
The Town and Country Planning Act, 1947 was an attempt to carry out this principle. It had its imperfections. May I, in passing, thank the noble and learned Viscount for the tribute which he paid to the planning provisions; it is really a tribute to the whole House at that time, because everybody played a part in making that Bill a better Bill. The financial provisions were an attempt to carry out this principle of recouping the community for increased values. I deny, and I have always denied, that that attempt has failed. It was never given a fair chance, and it was made in conditions which were exceedingly difficult—sat a time of building licences, at a time of shortages, and at the very worst possible time for implementing a policy of that kind. One has to recognise that. As I have said, I recognise that there were defects in the provisions of the 1947 Act. What I say, and have always maintained. is that those defects were capable of being remedied. Many of them could have been remedied without legislation at all, merely by amendment of the regulations; others by simple legislation. It is my criticism of this Government that they never attempted to try to make the provisions work, but took the earliest opportunity of repealing them. I do not want to enlarge on that aspect of the matter, because anyone who is interested can see what I said, at greater length. on the two earlier occasions.
The main purpose of this Bill is to remove the anomaly of the two different bases of valuation, the one for compulsory purchase and the other for a private sale, and to provide that in each case the basis should be the market value basis. But anomalies will still exist. If the object is to remove anomalies this Bill does not remove them—indeed, in some respects it creates them. There is still the one anomaly to which the noble and learned Viscount referred—namely, that compensation for planning refusal is still to be on the old basis, that is, the 1947 594 existing use value plus the additional value of established claims. The other anomaly is the fact that in most cases the new compensation will be based upon what would be allowed by the local authority on a planning application. I submit that this is purely arbitrary—I do not mean arbitrary on the part of the local authority, but that the decision as between two pieces of land is purely arbitrary. It is just a matter of luck whether one particular owner will be allowed to do a particular thing, in which case his compensation will be higher, while another owner will be allowed to do something quite different, whereby his compensation will be less. The amount of compensation does not depend on the intrinsic merit of the land, its intrinsic value or even its position. It is a matter of pure luck whether one owner gets high compensation and another gets low compensation; and there is nothing in this Bill which removes that anomaly. On the contrary, this Bill increases it.
In spite of what the noble and learned Viscount has said, and in spite even of the commendation of the County Councils Association, the increased compensation will, in fact, act as a deterrent to public development and redevelopment. I am not objecting on that account, but I am saying that it is no good blinking the fact that this will mean a higher cost to local authorities who are already hard pressed and who will be deterred from carrying out expensive schemes because of the considerably higher cost that this change will involve. The question arises whether it is proper to put this extra burden on those particular localities where the burden of requiring redevelopment is already great. This burden is not being imposed on those localities that are not in need of development. Those localities do not find it necessary to acquire land to any considerable extent, and therefore there is no burden upon them. And, by and large, they are the wealthiest authorities. It is in the poorer areas, where the greatest amount of redevelopment is necessary, that the burden will be greatest and the increased cost will bear hardest.
Since the noble and learned Viscount has referred to the Auctioneers' Institute as commending the Bill. I should like to refer to the Royal Institute of British Architects, who have put forward a very simple scheme which would, in part, remedy this defect. Their suggestion is 595 that the local planning authority should still be required to be responsible for compensation on the existing (that is, the 1954) basis and that the Government should recoup them for the excess. I hope in due course to put forward their idea by way of an Amendment. If that were done, I believe the burden would fall where it should and the cost of carrying out the redevelopment would be incurred mainly by those local authorities who have to carry out the development; but in so far as this is, generally speaking, a burden on the poorer authorities, the Exchequer would be making a contribution; and that contribution would be the extra cost which was incurred as a result of this Bill.
I want now to refer to one or two clauses in the Bill. The first in order is Clause 10, which provides for additional compensation to owner-occupiers of slum property. It applies in particular to the owner of an individual house on a very small site, or part of it, a site so small that taken by itself it is useless for any purpose. On the present conditions this small man, owner of a small slum house, gets virtually nothing at all by way of compensation. He gets the site value, but it is argued that the value of that site, taken by itself, is nothing at all—which is perfectly true.
I have great sympathy for that type of person. who often has put his life savings into the purchase of a property or sometimes has been compelled to buy a house of this kind because it is cheap and he can find no other accommodation suitable for him at a price that he can afford. I happen to know a considerable number of people who have been forced to buy property of that kind recently as a result of the recent Rent Act. Their rents were increased, sometimes two or three fold, and they found themselves unable to face that new rent and went out to try to find other accommodation. The only other accommodation they could find was property of this kind. When that property conies to be dealt with it will be exceedingly hard on them that they should get nothing for their land, especially when that land has value as part of a larger area. After all, no local authority is going to acquire a tiny piece of land by itself. There may be twenty owner-occupiers of these slum properties, each adjoining, each on a piece of land which individually is of no value. Yet, 596 taking it in the aggregate, the local authority will be acquiring a piece of land which is of considerable value.
I want to submit to the noble and learned Viscount that, generous as Her Majesty's Government feel they are being, I believe they are being miserly in offering the annual value as a maximum—though I am not sure that it is not a minimum. Whether it is the maximum or the minimum it is the same thing, because the assumption is that otherwise they would get nothing and that in being offered the annual value of the land they will get something, which is an increase. Let us consider the type of property we are talking about—the small slum property, possibly with a frontage of 12 ft., so small that taken by itself it is of no value. What would be the annual value of such a property—£10, £12 or £15 a year? I doubt whether it will ever be more, and I would ask the noble and learned Viscount whether he really feels that Her Majesty's Government are being generous in enabling such an owner to obtain £15 for the value of that site, when he himself must have paid at the least several hundred pounds for the house.
I hope to suggest in the form of an Amendment—to which, I know, the noble and learned Viscount will give every sympathy and consideration—that such an owner should be repaid for his land on the basis of the value of the surrounding land; that is to say, if land in that neighbourhood is worth £1,000 an acre and his land represents one-twentieth of an acre he would get £50. That seems to me only fair. It is not as if the local authority are to make the payment on the rent, for they are not. Alternatively, I would suggest, as another basis, giving five times the annual value, not the annual value itself. We shall hear more about this clause when we come to deal with it in Committee.
I should like to compare the treatment meted out to an owner under Clause 17 with the treatment of the slum owner. I do not wish for a moment to suggest that I am holding a brief for such a person, but I am so familiar with the type of case I am speaking about, of the person who has bought the property because he had no choice in the matter. that I do want to help him to the fullest possible extent. Clause 17 is the Clause which provides that where within five 597 years it transpires that the local authority is going to make a more profitable use of the land than, that of the basis on which the owner was compensated, the owner can come back and get the extra value of his land. The basis upon which the owner has been compensated is ex hypothesi the market value of his land. Exactly the same criterion has been applied in deciding upon what compensation he is to get as is applied in the case where he sells it to a person who buys his land privately. In each case the purchaser will take into account the probable use to Which that land is to be put and the local planning authority will permit; and on that basis a bargain is entered into. It is exactly what will happen in the case of compulsory purchase.
But there is this difference. In the case of a private deal the owner, having once made his bargain, cannot afterwards, within five years of the purchase, go back to the purchaser and say, "I find this land is more valuable than I thought it was. I want something extra." Why should he be able to do it in the case of a purchase by a local authority? I think that that is being unduly generous. The Government, having apparently resisted any pressure to introduce this Bill, eventually succumb and now seem to he leaning over backwards to pay an owner even more than he would get if his land were sold privately. I do not want to stress unduly the fact that if it turns out that the land is used for a less profitable purpose there is no going back to the previous owner and asking him to refund something. I do not particularly want to use that argument, because it would conflict with my conception that when a deal is done it is done for better or worse; and I strongly object to the idea that a vendor should he able to come hack because it transpires that his land is being used more profitably.
My Lords, would the noble Lord agree that in those circumstances the land has been bought almost under false pretences? That is a point.
There is a point of the use to which the land is going to he put. If a local authority buy land for one purpose and sell it for another purpose, surely there is a case to be met by 598 the local authority. It seems to me that in those circumstances the land has been bought, not under false circumstances but in different circumstances.
§ LORD SILKIN
My Lords, the noble Lord is himself making the distinction. First he said "false pretences"; and I agree that if anyone buys land under false pretences then it must be put right. But when the noble Lord says "different circumstances", I agree that the circumstances are different—or they may well be. But he is making an assumption which was not warranted. He is assuming that necessarily the planning authority and the purchasing authority are the same body. Generally speaking, they are not. The planning authority is the county and in most cases the purchasing authority would be a district council.
§ LORD SILKIN
Forgive me; I know at least as much about it as the noble Lord does. I agree that where a county borough is involved it is the same body, but in other cases the authorities may be quite different. If we eliminate any idea of false pretences, I still say that we are saying merely that the circumstances have changed. But circumstances may equally change in the case of a private transaction. However, the vendor has no right to go back to the purchaser and say, "You are making much better use of this land than we contemplated when. I sold the land and I want something more." I think that the provision is being unduly generous to the owner of the land.
I want now to deal with Clauses 32 and 33, which I think are very useful provisions. I am very much obliged for them. They provide for an owner of land or for a person making a planning application to give notice to people who may be affected, people of a certain class, so that they may know. There are many cases where people make planning applications in respect of land which they do not own and in which they have no interest whatever, and sometimes they have no immediate prospect of acquiring it. They do it without the knowledge of the owner of the land. and one day the owner of the land finds, sometimes to his horror, that while he is living in a very convenient, comfortable dwelling-house, or carrying on a business in an office, 599 and so on, somebody has obtained planning approval to use his land for, say a garage or something of that sort. I know a recent case where that has happened. This measure provides that the owner should be informed, have notice, and be able to make representations, and it also provides that in certain cases other people who are interested, such as neighbours who may be interested in the character of the neighbourhood, should be informed.
The Bill itself does not make it at all clear how these people who may be affected can make their views known to the local authority. They can write a letter, presumably, and the planning authority is required to take their views into consideration. But all they know eventually is that a decision has been given. They have no means of knowing to what extent their views have been considered, and if they feel aggrieved at the decision they have no right of appeal. I should like the noble and learned Viscount the Lord Chancellor to consider whether such persons (a) should not be given a more definite opportunity of making their representations (that is, either the owner of the property or people in the neighbourhood who may be affected by a planning application); and (b), in the case of their being, aggrieved, should not have the right of appeal.
I come now to Clause 34. That is the last one with which I want to deal. It puts an obligation on the local authority to purchase in the case where the local authority has signified its intention of acquiring the land at some time in the future and thereby makes it difficult or impossible for the owner to sell his land at a reasonable price. I agree that that may involve an owner in considerable hardship. If an intimation is given of an intention to purchase, that intention ought to be carried out, and carried out within a reasonable time. Within my own experience I have known cases where suen information has been given and where, in practice, the local authority has not had the slightest intention of acquiring the land in the foreseeable future. That is very hard on the owner of land. But it is equally hard on an owner of land who is not an owner-occupier of residential premises; it may be equally hard on an owner of a business who may be intending 600 to sell; and it may be equally hard on the owner of a factory. I find it very difficult to understand why this provision should be restricted to owner-occupiers of residential property. The noble and learned Viscount the Lord Chancellor gave as a reason that local authorities would be inundated with requests to purchase, some genuine and some not; but since he himself said that this Bill covered 90 to 95 per cent. of the cases, I cannot see how they would be inundated by another 5 to 10 per cent. of additional cases of that kind.
I would suggest that this is a matter which is worthy of further consideration. I understand that the Government are giving some consideration to widening the scope; but I hope they will not be grudging about it, and will go the whole way. I say that because, if you look at the kind of case that Clause 34 of the Bill has in mind, you will find it difficult to understand how there can be any question of securing a purchase by false pretences. A person has to satisfy the authorities that he has made reasonable endeavours to sell his interest in the hereditament, and also that he has been unable to sell it except at a price substantially lower than that for which it might reasonably have been expected to sell if no part of the hereditament were comprised in land of any of the descriptions set out in the subsection. It is exactly the same criterion as for the residential occupier of a house, and I see no particular difficulty in widening the scope of this clause.
My Lords, those are a few of the criticisms in detail; and I would propose to incorporate the majority of them, and possibly others, in the form of Amendments. I should like, perhaps gently, to make this point. I hope—and I have said this before—that the Amendments which we in this House put forward will be considered as seriously as are Amendments put forward in another place. In this House we do our best to consider the legislation that comes to us and to improve it; and I would respectfully submit that our views are as worthy of consideration as are the views of honourable Members in another place. But we invariably get our legislation at the "fag-end" of a session. We are now told that we must get this Bill through by Whitsun. The other place have had the Bill for 601 many, many months. I have not available at the moment the date on which it was first introduced.
§ LORD SILKIN
If we had that amount of time, we should be enabled to do something with it, but we are told that we have to get it through before Whitsun. In practice, that means that we have to get it through in about a fortnight, because any Amendments that we may make have to go to another place to be agreed. What it all amounts to, therefore, is that we are given one day for the Committee stage; a week later we are given one day for the Report stage, and then we are given some time for a Third Reading. Now this does not give us a proper opportunity of considering the Bill and of putting forward the detailed Amendments which we might want to put forward. Further, it does not give the noble and learned Viscount the Lord Chancellor and his advisers an opportunity of considering these Amendments properly. He is bound to come back and tell us that, for one reason and another, they are not acceptable. He also is governed by the time factor. He must have time to go back to the other place and get the Amendments considered there; and, generally, it is making our work farcical. My Lords, I do not know whether anything can be done in connection with this Bill. It is an important measure, and I hope that the noble and learned Viscount ithe Lord Chancellor will find some way in which this House will be able to discharge its duties effectively and conscientiously, and that we shall not act merely as a rubber stamp to the decisions of another place.
I said earlier that this is not the last Bill of its kind that we shall see, and 1 would make the same prophecy as I made on the occasion of the 1954 Bill. I would prophesy once more that, one day, another Bill will be introduced to deal with the anomalies in this Bill and, I hope, to enable the community to recoup itself for the increases in value which this Bill itself creates. I am going to make this prophecy, also—that it will not be the noble and learned Viscount the Lord Chancellor who will be introducing that Bill. I have taken note of his own 602 prophecy about the hat-trick which he pat forward in Wales—I notice in a not particularly cricketing country. I should also like to lay a small wager with hire that it will not be this Government that will be introducing the Bill to amend this Bill. However, until that is done we shall never be able to deal equitably and satisfactorily with the vast programme of development and redevelopment which lies before us, and which will have to be carried out for as long ahead as any of us in this Chamber can foresee, and possibly for as long ahead as any of us will live. My Lords, this complex problem will therefore be before us again, possibly on more than one occasion; and while we on this side accept this Bill, we are not saying farewell to further debates on this complex subject.
§ 4.9 p.m.
My Lords, from the concluding sentences of the noble Lord's speech I was not entirely clear whether he was for it or against it. but it seemed that he regarded it rather like the curate's egg, that it was good in parts; although I felt that he thought that the bad outweighed the good. I shall not try to argue with him on the subject of the betterment of land values, because I think that in theory this argument is not possible to contradict; but it is a very old argument, and many attempts have been made to collect this betterment. I certainly think that the 1947 Act was the most ingenious and scientific of all those attempts, but it seems to have been proved in every case so far that the remedy has been worse than the disease. The noble Lord rather talked as if the Conservative Government had repealed the development charge on purely Party principles. I do not believe that that was so. I think it was very unpopular. But I believe that the real reason it was repealed was that it took so much land off the market. In view of what the noble Lord has said, I should be interested to know whether, if the Labour Party were to come into power, they would seek to reintroduce the provisions to collect betterment, at least in anything like the form in which they were introduced before.
I think that this Bill does a number of useful things. It attempts to change the anomalous and unfair position under 603 which, in certain areas, a plant may be acquired by the statutory authority at one-tenth, or possibly one-twentieth, of the value at which a comparable plant might change hands in the vicinity. It does something—though some of us may think not quite enough—to deal with the problem of town planning rights, and it makes a number of useful changes in procedure which we all hope will result in more economy, more speed and less red tape. All these reforms are in their nature good. I must confess to some regret that in a general tidying-up Bill of this description one or two rather minor points, on which the law has been obscure and ineffective, have not been dealt with.
There is the question of the control of caravans. I am aware that the Government have set up a Committee, and it may be that they have plans for further legislation when that Committee have reported. I believe that it would be a good thing if new legislation were to be introduced, and possibly the noble and learned Viscount the Lord Chancellor may give your Lordships some indication as to whether that is likely to be the case.
I would agree with the noble Lord, Lord Silkin, from my much smaller experience, that this is not likely to be the last time a planning Bill will be debated in your Lordships' House. It seems to me inevitable that we should have a further Bill, because there is so much to learn yet about the ultimate fate of town planning schemes, and particularly about land values. In the days before town planning the value of land was settled largely by the ordinary law of supply and demand, but now we have the additional complication of development plan and town map. As a result we have a situation, as I know from my own experience, in which land designated for development may change hands at £4,000 to £5.000 an acre in some of the semi-urbanised areas in the South-East England, and a few hundred yards away, because of town planning restrictions, land may change hands at an agricultural value of £100 to £200 per acre.
No doubt that is the reason for the extreme complexity of the provisions in this Bill dealing with the assumptions that have to be made by valuers in assess- 604 ing compensation for the acquisition of uncommitted land. I am glad that these provisions have to be interpreted by official experts, but I am afraid that the the amateur planner—and I am one—will not escape without a number of further "headaches", because I am convinced that where we find great disparities of land values in neighbouring areas great pressure will be exercised to get the authorities to release more land for building. Indeed, I am told that in some places speculators are buying up land at present zoned for agriculture on the assumption that pressure will eventually be successful.
If I may be permitted to digress for one moment from the actual terms of the Bill, I should like to refer briefly to the debate we had a few weeks ago, in which the noble Lord, Lord Beveridge, dwelt at length on the evils of conurbation, and attributed the formation of these great areas of miles of built-up land, where one town merges into another, largely to the machinations of vested interests. We in the counties are trying to cope with this question of unending development in certain areas, and I have no doubt that he was right—always provided that we are agreed about what these vested interests are. The term "vested interests" always conjures up to me a group of sinister, hard-faced men holding the community to ransom. In point of fact, there seem to be a great many other people in the game, as well as the owner of land, however hard or grasping he may be. Of course, owners will try to get out of complying with the planning notices, and that makes one contribution to the pressure to release more land. To take another example, the councils of many small boroughs or urban districts have excellent reasons for wanting to grow bigger. Then we have, within forty miles or so of London, the urbanisation due to the commuter, who, provided that there is a railway station, will live almost anywhere, so long as he can go backwards and forwards to his office. And we have the manufacturers who seem to be attracted to any site within a short haul of the great market of London. So it is not only the cupidity of the owner, but also the exercise of all sorts of other pressures which makes for continuous building near London.
The position is made no less complex when we learn from the Town Planning 605 Institute that the population of London, in the area covered by the regional plan, is increasing. It is difficult to know what we in the county areas can do to institute green belts, and I hope that the Minister will support us in this kind of action. Unless some Government can find a way of discouraging these drifts of population and industries from other parts of England to London and the South-East, unless they can persuade people to stay put, I am afraid that the pressure will continue and will ultimately prevail. If they can find a solution to this difficulty, I believe that half of our problems will disappear, and that a great many other problems, like housing, capital investment and the difficulties of over-employment in some places and under-employment in others, will be met. I apologise for this digression from the actual terms of the Bill, but I submit that it might be a good thing to consider the objects for which all this highly complicated and expensive town planning machinery exists.
The Bill itself, as has been said, deals with many subjects and, I should have said, lends itself more to discussion on the Committee stage than at this juncture. I think that some of my noble friends may find it desirable to put down Amendments, rather in the sense that my noble and learned friend on the Woolsack thought they might, possibly as to the date by which the market value process should come into operation, and almost certainly in regard to Clause 34, which seems to omit the rural, as opposed to the urban, interests. I have been looking through some of the discussions in another place, and I estimate that about 85 per cent. of those discussions was concerned with urban problems. There are, however, acute rural problems, and I feel that they should be further considered in this House. In so far as it goes, I think the Bill does nothing but good, and I support it.
§ 4.21 p.m.
My Lords, I think the Government are to be congratulated on having introduced this Bill, which deals with a difficult subject. Without wishing to belittle the work of the Parliamentary draftsman, I must say that some of the provisions of the Bill are difficult to understand, and I think it would he a kindness on the part of the Lord Chancellor if, at a later date, he could extend his admirable disquisition on this Bill and give 606 us some information on, among other matters, the meaning of some of the Schedules.
I do not propose to cover the whole ground, but rather to concentrate on a few points. First of all, although I am a great admirer of the Government in many respects—though not all—I beg to differ from them as to the date of the notice to treat, which affects the new basis of compensation; in other words, I think that Clause 1 (2) ought to be omitted altogether. There are at the present time many outstanding claims for compensation in respect of the compulsory acquisition of land, many of which are based upon notices to treat which were served months before this Bill was introduced. In my view, in regard to all those claims the owner should have the option of reopening the claim and taking compensation assessed on the new basis. I use the word "option" advisedly, because in a few cases the existing use value, plus the unexpended balance of development value, is greater than the market value. Therefore, I respectfully submit that in every case the owner of such a claim should have the option of taking advantage of the new basis of compensation or not, as he himself may decide.
The next point deals with what is known generally as the basis of compensation for slum property. I must confess that I am not clear as to exactly what the Bill does in this connection. I understand that there has been a last-minute Amendment, as a result of which there has been a bout of Scottish generosity which provides that the minimum amount of compensation payable in such a case shall be the gross value of the house. As the gross value of many of these houses is £10 or £15, I imagine that that gesture will be regarded with no great enthusiasm. The fact of the matter is that to compensate for those houses on the basis of site value is quite unfair. I understand that a house is unfit for human habitation if it does not comply with all the conditions in Section 4 of the Housing Act, 1957. It may interest your Lordships to know that about 50 per cent. of the houses in this country do not comply with all those conditions. However, I think it is quite correct that if a house substantially fails to comply with those conditions, it is in order to designate it as unfit for human habitation.
607 I hold no brief for the very old and dilapidated properties in respect of which the landlord or his predecessor has received the value in rent several times over, and on which properties the landlord has done little by way of repair. But there are a large number of houses which do not comply with Section 4 of the Housing Act, 1957, but which are capable of providing some degree of accommodation for, say, another ten or fifteen years. These properties ought to be acquired and compensation paid on the ordinary market value basis. It is true that on this basis perhaps only £100, or even £50, would be awarded to the house, but that is fairer than to give £1 or £2 on the basis of site value. However, it is not likely that the basis of compensation can be so radically altered in this Bill in regard to houses which are unfit for human habitation.
On the other hand, the site value basis can be made the subject of amendment. Supposing that the site of a demolished house has by itself a frontage of twelve feet, that site appears to-day to be worth only £1 or £2; but if that site were taken in conjunction with the sites of the adjoining houses, so as, notionally speaking, to create a larger area capable of development on a big scale, then that particular land might be worth £8 a foot frontage. If you multiply twelve by eight you get ninety-six, and £96 might be a reasonable figure to give for that site. After all, houses which are unfit for human habitation have an annual value for rates and a value for Schedule A purposes. Why should they suddenly become virtually valueless when it comes to paying compensation for their compulsory acquisition?
The last point to which I wish to refer is that of "planning blight". I may say at once that the "Spaniard who blighted my life" was an amateur in creating horror as compared with the local authority who introduced a plan for building a road right through my dining room at some possible future date. However, apart from that aspect of the matter, I would point out that the Bill, as drafted, will not cover owner-occupiers of farms and market gardeners. The unit of land for the purpose of the Bill is the rateable unit; that is, the house and garden. In the case of a farmhouse, therefore, the 608 owner-occupier will be entitled to require the authority to acquire only the house and garden at market value, but not the farm as a whole. If, for example, it appeared from the development plan that the whole farm would in due course be acquired as the site of a reservoir, all the owner-occupier would be entitled to require the authority to acquire would be the house and garden. On the other hand, if some part of the farm other than the house and garden were designated as the intended site of a new road, playing field or the like, the Bill does not apply, even though the farm as a whole may have been rendered virtually unsaleable, or at any rate substantially reduced in value. I do not like to mention cases without mentioning names, and I do not like to mention names unless I am asked; but I am quite prepared to give all necessary names to the Government Department at a later date should they ask me to do so.
I will give your Lordships a typical example of hardship caused by the present system. A gentleman called Mr. X has a 30-acre fruit farm in a certain county, and since 1949 he has been living under the threat of compulsory acquisition by a certain corporation. Although ten years ago the corporation gave Mr. X notice of intention to acquire the farm for housing development, they have made no positive move, and Mr. X, despairing of improving his fruit farm in those circumstances, has sought, and been refused, permission to develop the land privately. That is indeed a deplorable state of affairs, and I hope that the Bill can be amended so as to give some consideration to the farming community.
§ 4.31 p.m.
My Lords, I do not believe for one moment that this Bill has been introduced simply as a result of what the noble Lord, Lord Silkin, described as the efforts of Back-Benchers in another place and their pressure. This Bill has been introduced because of the pressure of public opinion. Anybody who reads the Press has seen for months and years the constant references to the iniquity of the compulsory purchase procedure. I do not think for one moment that that has anything to do with Back-Benchers in another place or in this House—it is the pressure of public opinion which has forced this matter into the open. I do not propose to follow the 609 noble Lord, Lord Silkin, but I should like to ask him this question. Would he consider that the cumulative effect of income tax, profits tax, surtax and estate duty at the rate of over 50 per cent. mops up any betterment that is received by any individual over the course of a lifetime? I believe it is perfectly simple to demon-state that that happens and, of course, many, of your Lordships in all parts of the House know it to be a fact that the cumulative effect of modern taxation, even with a lower income tax, mops up and disposes of any betterment that is received by any individual during the course of his life-time.
§ LORD SILKIN
My Lords, since the noble Lord has asked me a question, may I answer it? Surely he has heard of capital gains. Most of the people in the South of France are living not on income but on capital gains made out of property. They pay no tax. The answer is, therefore, that a great many people who get capital appreciation of their land are not paying tax of any kind.
I quite agree with the noble Lord. May I turn to the provisions of the Bill? I do not think it has been sufficiently emphasised that this so-called market value is tied absolutely to the provisions of the development plan for the area and with the town map, if it has been produced. In due course town maps will have to be produced for all towns. Therefore it seems to me to be not very helpful to talk about open market value as if there were no conditions attached to it. The conditions, of course, are the development plan and the provisions of that plan. They may, and often do, have considerable effect on the open market value. That has to be tested under the new provisions of this Bill by this procedure whereby one party can ask for a certificate from the local planning authority of what other development would be allowed on the site, if any. Other noble Lords have referred to this point because it will give rise to difficulty in a limited number of cases. The case mentioned by the noble Lord, Lord Silkin, was, I think, that of the county borough which is a planning authority as well as a purchasing authority. What will happen there will be that one of the committees who purchase land—say, the parks committee—and the borough council, who are also the planning authority, 610 will have to give some form of certificate as to what other sources of development will be allowed on that particular site. It would he difficult—I will not say more—for the planning committee or the council to act in a dual capacity.
I had not forgotten the right of appeal. This also applies where delegation takes place on a large scale, which happens in many counties the county council delegate many of their powers to many of the smaller local authorities. There again, there may be a divergence of interest between the acquiring committee and the planning committee.
Part II of the Act is surely a good thing, because it is essential for local government to economise as much as they can in manpower. To-day a great deal of manpower is wasted in sterile correspondence with Government Departments over matters which are really common form. If any reduction in wasted manpower is made, both by local authorities and by the Ministries, then these provisions will be well worth while. The noble and learned Viscount has already dealt with Part III of the Bill. Noble Lords on both sides of the House are greatly in the debt of the noble and learned Viscount for the speed with which he and his colleagues have implemented the recommendations of the Franks Committee. The noble and learned Lord, Lord Denning, was in the House a few moments ago, and one recalls that he referred to the Franks Committee Report in the terms that it might become a second Bill of Rights for the individuals of this country. That I believe to be true, and we are indebted to the Lord Chancellor for the speed with which, over several Bills, he has incorporated the recommendations of the Franks Committee.
I should like to refer to Clause 32 for a moment, because this I believe to have been the result of years of effort on the part of my noble friend Lord Gage to put this matter right. For years it has been possible for anybody without any interest at all in a particular parcel of land to put in a planning application dealing with that land, without notice or consultation with the owner; and that has been felt for 611 many years to be improper. Clause 33 I believe will put that matter right.
In dealing with Part IV and the question of planning blight, I would agree with both the noble Lord, Lord Silkin, and the noble Lord, Lord Meston, in the proposal that the owner-occupier of a small maybe slum property should be compensated on a more generous basis than that proposed in the Bill. I think there are several methods of doing it. The noble Lord, Lord Silkin, has proposed one, which I rather think was followed by the noble Lord, Lord Meston. Obviously these properties are not worth only £1; they are worth more. They are worth more than the gross annual rateable value. What the proper figure is remains to be decided, but I do not believe that the present suggested compensation basis is the right one.
Then we come to this difficult question of blighted land in the countryside. Under the provisions of this Bill the owner-occupier of a farm can require the Government Department to purchase the farmhouse and perhaps the garden, leaving the farm buildings and the farm as it were in the air. The noble Lord, Lord Meston, referred to this matter. That is, I should have said, a very unsatisfactory solution, and I should have thought that the Minister for Agriculture, Fisheries and Food would have had very strong views on the point since it is well known that it is extremely difficult to farm land severed from a farm house; it can be done with modern machinery and modern motor cars and so on, but it is to the detriment of the land that the farmhouse is severed and sold away from the farm. There must be some better solution that it is possible to devise in those circumstances, and we look forward to any proposals the Government may make at a later stage.
On that point I would also agree with the noble Lord, Lord Silkin, that the time limit to which we seem to be working is nothing like sufficient to allow this Bill to be properly examined. I do not believe that that proper examination for which your Lordships' House exists can be exercised within a week or even a fortnight from the date of the Second Reading of a Bill which contains over forty clauses and Schedules beyond number, and which took no fewer than 612 twenty-five meetings of the Standing Committee in another place before it was taken to the Floor of the House.
Before I finish I should like to refer to the question of the owner-occupier of residential property who is being compensated if planning blight should fall upon his house while the owner of the house is not so favoured. It seems to me to be drawing a very fine distinction to say that the owner of a property must suffer blight for many years but if he lives in his own house then he can require it to be purchased by the local authority. It is a distinction, I think, which will set up many anomalies, because there may be some very good reasons why an owner should not be living in that particular house at that particular time. The noble and learned Viscount the Lord Chancellor referred to the fact that the Minister said that there were only 5 or 10 per cent. such cases. But I believe the criterion on which compensation should be paid is the one laid down in the Bill; that is, that the house has been offered for sale and that the owner has been able to obtain no reasonable offer for the property. I believe the noble Lord, Lord Silkin, referred to this matter too. That must be the criterion of the loss, not the occupation. When one is going to compensate people for loss of a material factor such as the value of a house, the occupation of it seems to me to be a secondary matter in such consideration. and not the primary matter. In this Bill as drafted it has been made the primary consideration; and that, I feel, wants further consideration.
I believe, in conclusion, that this Bill will do good. I do not say for one moment that it will cure all anomalies, because those who have experience of administration of planning or in compensation or in the sale and purchase of land surrounding towns must know that there is no fool-proof system. The 1947 Act never created a fool-proof system. I believe it is beyond the wit of a draftsman to envisage all possible sets of circumstances that may surround the purchase and sale of land under the planning Act. Although this Bill may not be perfect and may not cure all anomalies, it cures a very considerable number, and, therefore, as practical administrators, I hope your Lordships will approve the Bill.
§ 4.50 p.m.
My Lords, I do not want to speak on the details of the Bill, though I do want to draw your Lordships' attention and the Government's attention to certain very serious factors which are coming up in the planning situation, and also to challenge some of the things said already in this debate. I have been in this business a very long time. In the years 1910 and 1911 I was a very subordinate member of a team that had to value, for the purposes of Mr. Lloyd George's taxation of land values, all the lands around a thriving and prosperous burgh which were likely to be developed in the next fifty years. You will remember that all the land had to be valued then. Your Lordships may imagine my pride, although I deserved very little of the credit, when the course of the next thirty years justified every one of the values then assigned to the land. But, with that experience behind me, there is one page of the Uthwatt Report which I challenge, and will challenge in the presence of any competent people: namely, that one page which deals with the method of valuation. I cannot imagine how that came to be written by a valuer, unless he put aside his knowledge and skill as a valuer and put down what he thought would secure the assent of the uninstructed public. When you say that the Uthwatt Report gains general approval, please say "except the one page which Lord Saltoun strongly objects to."
The next thing that I want to say leading up to the point that I want to come to is that the noble Lord, Lord Silkin, praised the 1947 Act and said that all the defects could have been amended by regulations. I quite understand his feeling; he played an enormous and most industrious part in bringing in that Act. I must point out one defect which could not have been amended by regulation, something which was pointed out to the Government at the time, though possibly with a feeble voice. It is the practice in many Scottish burghs for those persons who develop land, proprietors or others, to be bound to make up the streets. They make up the streets to the standard required by the local authority, and when they are made up the local authority takes them over. The proprietor or developer is out of the money which those streets cost, and he has to get it back when the land adjoining those 614 streets is sold. That was pointed out at the time of the 1947 Act. One could not obtain repayment for the streets under any clause in the 1947 Act, nor could it have been amended by regulation.
§ LORD SILKIN
My Lords, may I just say that I did not say that all the defects could have been amended by regulation. I said that a good many could, but others would have required legislation.
I believe the noble Lord is right and I am wrong, but it leads me to the point that I want to make in regard to an injustice. I am happy to feel that I have many friends among noble Lords opposite. I have often explained it to them in private conversation. It would not be right for me to. say in this House what people have told me in private conversation, but perhaps your Lordships will allow me to adopt the attitude of the priest in the Titchborne case and to say that I cannot say that any noble Lord said that the provision was just which omitted that matter from the 1947 Act. There is another point about the 1947 Act which perhaps the noble Lord will not think is a serious defect. Only one building site was sold in my neighbourhood under the 1947 Act. It was bought at existing use value and the development charge was put on. I think it is the most expensive piece of land ever to have been sold in that neighbourhood.
But the point that I come to now is a very serious one: namely, that no man now can afford to make roads—I mean streets. In the burgh with which I am concerned, severe unemployment led t3 a great many streets being constructed in advance. That was prior to the institution of unemployment relief. As a matter of fact, those streets were exhausted only a year or two ago, and they were constructed in 1910 and 1911 during those bouts of unemployment. But to-day no developer can really afford to construct streets unless he has sold practically every plot along the streets. It takes a lot of ingenuity to distribute the burden fairly. The result is that local authorities are themselves forced to construct streets. In fact, they accept a lower standard than they would exact from private proprietors. I expect that they would lower the standard for the private proprietor, too. I am not quarrelling with that. The point is that any development is going to be greatly hindered by the cost of streets. This is one bad disadvantage.
615 Then, I want particularly to draw to the attention of the Government the planning of public open places. In 1947 I was faced with a plan concerning an area of seventeen acres with a gate at one end, the whole of which area was surrounded by the backs of houses. The matter formed part of a public inquiry in which a gentleman who gained great distinction as a town planner took part. He was asked if it was not a settled principle of planning that public open spaces should not be surrounded by the backs of houses, but, at any rate to a great extent, by railings and roads, and that they should not have only one gate of access. The matter is not difficult to understand. Beastly and unpleasant things occur in just such a place surrounded by the backs of houses and which has only one small gate as a means of access. That is the kind of thing that everyone wants to avoid. I was able to kill that particular plan at that particular time. But the practice is growing for planning authorities to plan these public open spaces with only one entrance or with two small entrances, and all surrounded by the backs of houses. I say that no question of cheapness can really excuse that—that it is definitely bad planning. This is the sort of thing that can be dealt with by regulation, and a stop ought to be put to that sort of thing.
The only thing that I should like to say briefly on the Bill is in regard to Clause 17 and the five-year period. Planning authorities plan so far ahead now that, supposing a piece of land has been scheduled as a public open space but it proves unsuitable for that purpose and is wanted for building development, such a long view is taken to-day that it is perfectly easy for any local authority to ride out the five-year period and to make the change later on. I think that ten years would be a proper limit. My Lords, that is all I have to say, but I hope that the Government will take note of my suggestions.
§ 4.59 p.m.
§ LORD CHORLEY
My Lords, this is an important measure, much more important than the interest which your Lordships seem to be taking in its Second Reading would indicate. It is a Bill which will obviously have substantial repercussions in many ways, and I think that a number of students of problems of 616 planning, possibly most of them, are disappointed with it. In a small island such as this, over-populated and over-industrialised, it seems that if we are to keep any sort of deceny of amenity and orderliness of progress, we must place great reliance upon planning our arrangements. Indeed, it seems to me that in the wide conspectus of our social problems, the issue of planning takes a very important place indeed.
I am sorry to say that it seems to me Her Majesty's Government, while paying lip service to the importance of planning, are running away from the essential elements of it. I do not say that there are not good points in this Bill. The noble Viscount, Lord Gage said that it was like the curate's egg. I agree with him, but I find that the yolk is bad and that only parts of the white are good.
My Lords, I expressed the view that that was Lord Silkin's appreciation of the Bill. I did not say it was mine.
§ LORD CHORLEY
My Lords, I am rather surprised that the noble Viscount, who has had such experience of planning, does not accept the view of the noble Lord. Lord Silkin, about this matter, for I should have thought that it was obviously right. The only question is, how much of the Bill is bad and how much is good.
I would express my personal appreciation of Clause 32, which now insists that notice shall be given to interested landowners and others in respect of proposed planning development. The noble and learned Viscount will remember that I made strenuous efforts to persuade him to help us at the time of the Franks measure, both in the general debate and in the actual Bill; and he indicated the administrative difficulties in the way and refused to give way about them. I am very pleased that he has now succeeded in getting round these administrative difficulties. This particular clause has been received, I believe, with universal approbation, and I am very pleased that Her Majesty's Government, and particularly the noble and learned Viscount, have been able to find their way to handle the situation so far as these notices are concerned in this way.
Nevertheless, the Bill is essentially a bad Bill. In an interesting article in 617 the Architects' Journal it has been described by a leading student of these problems as an "anti-planning Bill; and I believe that that is a very accurate description of it. The noble Lord, Lord Silkin, referred to the speech he made on the 1954 Bill, and he read from a passage in which he said that in a short time it would be necessary to introduce a Bill "to undo the evils" which were done by that Bill. In my submission this Bill has been introduced to add yet another evil; so that instead of one evil we get two, but, following the well-known adage, two wrongs do not retake a right. I believe this to be a bad Bill because it puts the clock back to 1919. Sir William Holford, perhaps one of the most distinguished living experts on planning problems, uses that expression in his article in the same number of the Architects' Journal. It puts us back to the time before we were making any serious efforts to lay down arrangements for planning in this country and before planning started. That is why Mrs. Ruth Glass, in the article to which I have referred, describes this as an "anti-planning Bill".
Between 1920 and 1947 the problem of compensation and betterment was the bugbear in the history of planning. myself came up against it frequently because of my position in the amenity movement, particularly as honorary secretary of the Council for the Preservation of Rural England. From time to time we sat round a table and discussed methods by which the difficulty could be overcome. Because there was then no method of taking compensation for betterment, and getting into the pool some money which could be used for the satisfaction of the wide-open mouths claiming compensation, the whole thing was continually being held up. It was therefore with great satisfaction that we read the Report of the Uthwatt Committee. We know that in times of war the Government always proceed to dangle a few carrots in front of the willing nation which is expected to pull its weight; and one of the "carrots" dangled was the promise that after the war we should no longer have the chaotic failure to arrange our business such as had characterised the country in the years between the wars, and that we should have a reasonably competent system of planning our arrangements.
618 The Scott, Barlow and, finally, Uthwatt Committees were appointed for the purpose of working out the necessary arrangements. Perhaps the Uthwatt Committee was the most important of all, because it did produce a method of dealing with this intractable problem. That has been criticised by speakers this afternoon, and it is true that the arrangements produced in the 1947 Act did not altogether follow the Uthwatt proposals. I believe that in some ways they were better, though in others they were defective. I do not myself accept the view that they were a failure, a view which has so often been the burden of speeches of Government supporters in regard to this and the earlier Bill.
As the noble Lord, Lord Silkin, has himself pointed out, it was a particularly difficult time to put into force arrangements in connection with development charges, due to all kinds of reasons into which it is not necessary to go this afternoon. I am sure that, if the arrangements could have been modified in the way the noble Lord had himself suggested, as soon as things had settled down they would have been found to work reasonably well. I believe that the principle of the 1947 Act is very well stated by Mrs. Glass in the article to which I have referred. It was this; that the rights and values arising from development should, as from that date, belong to the community rather than to the individual landowner; and as I understood it, the principle stated in that form was accepted just as much by the Conservative Party as by the Labour Party. It seemed a kind of compromise solution. The Labour Party did not go ahead with nationalisation, but produced this scheme—in a sense a halfway house; and it seemed that that principle was accepted by the Conservative Party.
As I understood it, the right honourable gentleman the present Prime Minister, in 1954 himself expressed his adhesion to that particular point of view. He said:There is no doubt whatever about that decision;"—that is, the decision that the Government were committed to the major conception of the 1947 Act:nor do I think that there can be any dispute about it. for it is more necessary now than ever before in our history that the limited acres of this small island should be used to the best national advantage.619 He explained the overwhelming reason for retaining 1947 values as the basis for compensation, because, he said:If compensation had to be paid in future the values as they accrued, unknown and perhaps heavy claims would fall upon the community. Thus the broad principle of the 1947 settlement—no compensation for values which accrue after 1947—has been generally accepted as fair. If that were destroyed, new controversies would arise, and the revival of those controversies, I feel sure, would have been equally injurious to the long-term interests of landowners and those of the general public. When a settlement of this kind … has been reached, … I think it would be dangerous to overthrow the principle on which it is based.I submit that that principle is overthrown by the Bill which is before us this afternoon. It would have been only fair, if Her Majesty's Government were satisfied that the method proposed by the noble Lord, Lord Uthwatt, and his Committee. or the methods of which use was made in the 1947 Act, were impracticable, that they should have appointed the Uthwatt Committee to go into the matter again, in the light of the knowledge and experience gained since that time. Instead, the Government are going to try to make the community put up the money for providing the profits for the landowners. That seems to be perfectly clear on the face of this Bill. In fact, the community will not consent to pay; or, at any rate, they will not consent to pay for very long. The whole of our experience in the years between the wars shows that that is so.
Some noble Lords have spoken this afternoon as if no attempt had been made to plan and make use of planning arrangements in the years between the wars. Of course it was. We had Statutes on the Book which were amended from time to time, and in so far as they failed, they failed over this very matter of compensation and betterment. Is it not perfectly clear that at the present time, when the Government themselves have run away from the percentage system of financing local authorities and have introduced the block grant, we shall be faced with even greater difficulties in getting the necessary compensation money into the hands of the planning authorities in order that they may meet this change? It seems to me that the financial basis of planning is destroyed by the Bill which is before your Lordships' House this afternoon.
620 That is exactly the view which is taken by the editors of the important Architects' Journal, to which I have already referred. In a leading article in the issue of November 13, 1958, they say:The question that has to be faced is this: can effective, positive planning be achieved if its financial basis is destroyed, and the interests of the individual property owner are given more weight than those of the public? It is the provision of public services of all kinds by the public authorities, coupled with the granting of permission to develop or the zoning of land for specific uses, that determines the 'market value' of land. It is not only inequitable, but a formidable barrier in the way of planning, if the new values created by public enterprise and planning decisions are to be appropriated by private individuals, while the public authorities remain responsible for carrying the loss on all the unremunerative services.That seems to me a damning indictment of this Bill, and it is going to be particularly dangerous and particularly pernicious in connection with the great problem of removing the blights of the Industrial Revolution from the centres of our cities and towns, and removing the effects of the blitz which occurred during the war. Very uneven progress indeed has been made in this great task before the community of removing these blights and the effects of the blitz; and these new proposals, in my submission, are going to make it very much more difficult to do so, because the position of the local planning authorities seems to me to be made much more anxious and difficult by the provisions of the present Bill.
It is interesting to observe that the authorities on these problems who were asked by the editors of the Architects' Journal to express their views on this matter, which appear in the particular number of the journal to which I have referred, were pretty unanimous in coming to that conclusion. There is, for example, the article by Mr. Arthur Ling. of Coventry, whose work has been outstanding. I should suggest, in respect of the planning of our very badly bomb-damaged cities. He says that it is arguedthat the local authority wishing to acquire … will benefit financially from a change to current market values but I think this is debatable. What is certain is that authorities reconstructing the commercial centres of cities will he faced with higher prices when they acquire land.And Mr. Brenikov, lecturer of Liverpool University, which has perhaps the oldest 621 and most distinguished faculty in planning of any British university, says:The impact of this extra cost on central area redevelopment and on other schemes involving acquisition such as new towns or town development schemes, could be very considerable, even crippling.Later, he says:The danger is very real, for the principal reason for our failure to do any effective planning between the wars was because of its excessive cost.Mr. Searle, an expert on the problems of valuation involved in these matters at the London College of Estate Management says in his contribution to the same issue:It is essential to remember in this connection that these public authorities are instrumental in the redevelopment of land for those purposes which are unattractive to private capital or are essential to the health and economic well-being of the community.And these purposes are just the ones over which we are to be landed in difficulties as a result of the new proposals in this Bill.
I wish that we were going to divide against this Bill. It seems to me that it is so dangerous that it is a great pity it is being allowed, in effect, to go by default. It seems to me that by this Bill the Government are destroying the very reasonable compromise which was contained in the 1947 Act. The result will be that we in the Labour movement will feel our hands perfectly free to return to the nationalisation of the land. Nationalisation of the land is probably much the most effective way of getting planning properly carried through. The 1947 measure was an attempt to get a halfway compromise. That, I suggest, is repudiated in the provisions of the present Bill, and I wish I could have the opportunity of voting against it.
§ 5.17 p.m.
§ LORD CLITHEROE
My Lords I want to intervene for only two minutes, to make a particular point. I do not want to follow the noble Lord who has just sat down, except to say that I do not share his views. I should like to congratulate the Government on this Bill. The point I wanted to raise was quite a simple one. It is with regard to the acquisition of land for trunk roads. A difficulty has arisen in, practice owing to the fact that when land has to be acquired for a trunk road a great many different owners are 622 concerned. A considerable delay arises not only in the negotiations but in the legal proceedings which take place between the time the land is acquired and the time when the matter is finally settled.
I want to ask the noble and learned Viscount the Lord Chancellor whether, before the Committee stage, some consideration might be given to this point. I do not expect an answer this evening. I suggest that there might be some power to make interim payment to owners of land whose property is taken, because it is very hard for, let us say, a farmer whose farm has been greatly changed by a trunk road coming right through it to have to wait for compensation for perhaps two or three years. That, I think, is a hardship which we might consider at some point during the Committee stage. I am not sure whether there is any clause at present in the Bill which, by amendment, would make that possible; but ask the Government to give the matter some thought.
§ 5.19 p.m.
§ LORD DOUGLAS OF BARLOCH
My Lords, it is certainly significant that the noble and learned Viscount and so many subsequent speakers have devoted attention to the problem of site value or of betterment, and this, I think, is inevitable in considering any legislation dealing with town and country planning, and, indeed, that has been recognised by those who. during the last forty or fifty years or more, have taken part in these discussions. If I understood the noble and learned Viscount the Lord Chancellor aright, he himself admitted the principle which is involved in this; and so, I think, did the noble Viscount, Lord Gage, and other speakers, although some of them found difficulties in the practical methods of dealing with it. It is perfectly true that, as it has hitherto been handled, there are practical difficulties, and the Uthwatt Report is typical of the line of thought which has led to these difficulties. Indeed, it was, I think, inherent in the terms of reference of that Committee; or, at any rate, it was a shackle with which they bound themselves.
It is impossible to deal with this problem from the point of view of trying to attribute to some particular public improvement a certain element in the value of land. It is impossible to distinguish 623 the various factors which have contributed to creating the value of any site: and it is still more difficult to deal with this problem if it is proposed to start out by taking some arbitrary date and calculating increases of site value which have arisen after that point. That is the reason why the measure introduced by Mr. Lloyd George in 1909 broke down in practice; and that is the reason, in my opinion, why the provisions of the 1947 legislation also produced very little result.
But it does not follow from that that the problem is insuperable, or that it is intrinsically of very great difficulty. What is required to be done is to separate this question of site value as an administrative and legislative matter entirely from the question of town and country planning. The site value problem is, in its essence, a fiscal problem, which ought to be dealt with upon fiscal principles: and as in fact site value is entirely a monopoly value—a community value, if you like to put it that way—which is due to the whole environment in which any particular site is situate, it ought all to be made a basis of taxation or of local rating, as the case may be, not attempting to identify some particular slice of it and to make that alone contribute to the public revenue.
I sympathise with what the noble Lord, Lord Hylton, said, up to a point. I do not want to see this made a cumulative measure of taxation, or of local rating, in addition to what already exists: but, at any rate, it is reasonable to propose that, in substitution for some part of the local rates which are levied upon the value of buildings and other improvements to land, there should be levied instead a rate upon the value of sites alone, irrespective of the buildings and improvements placed upon them. That would serve two purposes: it would recover for the community some part of the communal value which the community has created; and it would at the same time help to relieve from the burden of local rates the capital expenditure on improvements which are made to the land in order to render it productive and useful.
It is in that kind of way, and in that way alone, that a solution will be found for this problem, and on a very much more workable and economical basis. After all, it has in practice been proved 624 feasible by communities in many parts of the world—for instance, Australia, New Zealand and Denmark. Parts of Canada and the United States practise it. It is there that we ought to look for a solution, and not encumber measures of town and country planning with something which is a related but really a separate problem.
§ 5.27 p.m.
§ THE LORD CHANCELLOR
My Lords, I think that all your Lordships will agree that the debate has covered a wide and most interesting field, and I shall do my best to reply to the major points that have been raised. Before I pass to them, may I deal with the point that my noble friend Lord Clitheroe raised in his intervention? I should like to inform him that I am seized of that point. I appreciate that there is a difficulty: sometimes it is the investigation of title; sometimes it is the question of compensation and the difficulty of agreeing it. I think he has made a point which does require attention, and I should like to tell him at once that I will communicate with my right honourable friend the Minister of Transport and Civil Aviation; and whether it is a matter of this Bill or not, I hope to be able to convey to the noble Lord some information that will assure him on the point that worries him. I am very glad that he raised it. and I promise that it will be carefully and scrupulously considered.
The noble Lord, Lord Silkin, began with the very happy exordium of quoting himself, and of inferring that he had donned the mantle of Elijah to some purpose five years ago. Now there is only one point which I should like to put to him—and I do this, as he will know, with the best temper in the world. I did introduce the 1954 Act in your Lordships' House and before that, of course, my right honourable friend the Prime Minister dealt with the 1953 legislation. My Lords, the Opposition did not in 1954 propose market value, and it is rather away from the point for the noble Lord, Lord Silkin, to say now: "I prophesied that a new Bill would be necessary". For the purpose of the new Bill is to do something which was really further from the minds of the Opposition than what my right honourable friend the Prime Minister was doing at the time.
625 However, I do not want to leave the matter there, because the noble Lord has raised the point and I think that I ought to say a word upon it. The Government's decision to reject market value for the purpose of the 1954 Act must be looked at in the context of the time, which, as I have said, was the breakdown of the financial part of the 1947 Act. The new system involved the abolition of development charge and provision for compensation on a restricted basis for the refusal of planning permission; and the decision on compensation for compulsory acquisition could not be made in isolation from these other factors. It was recognised that there were disadvantages in either of the alternatives, but on balance the Government decided in favour of the restricted basis—for three reasons. These are not reasons which I am placing before your Lordships for the first time. They were set out in paragraph 30 of the 1952 White Paper as being the reasons for the course taken by the Government. They were, first, that at that time, under the market value system, public authorities would have to pay high prices for land allocated to profitable uses; secondly, that owners would receive low prices where land was requisitioned for unprofitable uses; and thirdly, that public authorities would have to pay prices enhanced by public improvements carried out at public expense. Noble Lords can check these reasons from the White Paper.
Now, of course, circumstances are very different. We have had four years' experience of the work of the 1954 Act system. The dire prophecies of the Opposition that planning control would break down have not been justified. We had just as pessimistic, and just as doleful. orations five years ago as we have had from the noble Lord, Lord Chorley, to-day, and that pessimism has not been justified by the passage of time and by what has taken place. Planning control, with compensation on the restricted basis, is now firmly established, and the question of compensation for compulsory acquisition can therefore be examined by itself. I would take with that (if the noble Lord, Lord Silkin, will bear with me in taking the point in an order different from his, because it seems to fit in more easily, at any rate in my reply, with the first point) what the noble Lord said in the latter part of his speech: that increased compensation would act as 626 a deterrent. I want him to consider this point in relation to the three reasons which I have just given and which motivated my right honourable friend Mr. Macmillan five years ago.
In the first of these, the additional cost of land acquisition by local authorities, is estimated in the Financial Memorandum to the Bill at about 25 per cent., and I ask your Lordships to remember that the cost of land is usually small in relation to the cost of the works to be carried out on the land. When I was a Law Officer of the Crown, I was engaged in many cases of the taxation of what were then called, rather offensively, speculative builders—builders who I think did a great deal of useful building of houses between the wars. Therefore time and again I had to consider the proportion of land cost and works cost, and my experience confirms what I am putting to your Lordships today: that the cost of land is usually small in relation to the cost of works to be carried out.
As regards the other two matters I mentioned, the system of market values set up by the Bill goes far to provide a solution by means of the certificate procedure under Clause 4 and the provision for excluding value due to the scheme in Clause 9. That is the one side. Against that, evidence has steadily accumulated that the restricted system of compensation worked hardly in many cases and that public opinion, as my noble friend Lord Hylton said, simply did not regard it as fair that an owner who was forced to sell land to a public authority should get a price which was less, and it might be much less, than the price he would have got in a private sale on the open market. The disparity between the prices has become more marked since 1954, and this process would undoubtedly continue with the passage of time and changes of circumstance.
I put this point to the noble Lord, Lord Chorley, who, I know, thinks profoundly on matters of good government. Good government requires a true and a fair balance between the position of the State doing its proper work, which is to provide the conditions under which a citizen can lead a good life, and the position of the individual. I would say to him, and ask him to reflect, that if a course is taken which contains manifest injustice and unfairness to the individual, 627 it is bound, in the long run, to react on the happy and successful activity of the State. That happens to be my philosophy in politics, but I do not think that it is any the worse for that.
§ LORD CHORLEY
My Lords, surely the noble and learned Viscount would agree that that situation was created by the Government's measure of 1954.
§ THE LORD CHANCELLOR
My Lords, I do not think that the noble Lord could have been listening to what I have been saying in the last ten minutes. I started with a hypotyposis of 1954 and explained, I hope fairly objectively, how these matters had changed and why it was necessary to take a different line to-day. That is all I have to say on the first two points of the noble Lord. Lord Silkin.
I want next to say a word on the theory that he put forward, that local authorities ought to get more recoupment and that the Government ought to come in more generously. On that point, I should like to follow up what I said a moment ago, that the cost would go up by 25 per cent., although, as I am sure the noble Lord will agree, there would be wide variations from area to area. That means an increase in the gross cost for the whole country of about £8 million a year. The noble Lord will appreciate that the net extra cost falling on local authorities will be a great deal less, because part of the cost will be met out of Exchequer grants. Again, it is right to bear in mind that land acquisition is a relatively small element in local authorities' capital expenditure; that is to say, about 7 per cent. overall. So there are the figures. We start with an estimated increase of 25 per cent., involving £8 million a year, and the land acquisition 7 per cent. of the overall capital expense of local authorities.
§ LORD SILKIN
Would the noble and learned Viscount not agree that that will affect those authorities who have a big programme much more, and that, so far as they are concerned, it may be substantially higher than 7 or 8 per cent.?
§ THE LORD CHANCELLOR
I said that there would he variance. What the noble Lord says follows from every averaging figure. But what I want to indicate a little more, because it is material, is 628 that part of the cost will be met out of Exchequer grants. The grant position is broadly as follows: that where services which count for the general grant have to pay more for land, that was taken into consideration as part of the expenditure on which the total amount of the grant was based. I think that the noble Lords who have been discussing this Bill to-day were almost the same group who were most interested when we discussed the Local Government Bill last Session. So far as that is concerned, the position is as I have stated. If the authorities receiving great deficiency grant pay more for land, that will automatically be aided by that grant; and where services receiving a specific service grant pay more for land, that, too, will be aided by the particular grant according to its terms and conditions. I think we must bear in mind that the local authorities have been benefiting for years by being able to purchase at these lower rates, and for the reasons I gave a moment ago, which are really reasons of justice, I do not think they could expect that that would go on for ever.
I want to turn now to the next point which the noble Lord, Lord Silkin, made, which is really the question of compensation and betterment. That point was developed as part of his argument by the noble Lord, Lord Chorley, and we had a most interesting contribution to the debate by the noble Lord, Lord Douglas of Barloch. I do not think I am differing much from the practical view of the noble Lord, Lord Douglas of Barloch, if I say that there is in theory a case for collecting of taxing unearned betterment, the increase in the value of land due to the extent of the activities of the community. But I repeat what I said in introducing the Bill: that it has never proved possible to devise a successful way of putting that theory into practice. It makes admirable arbitry, as we have heard it this afternoon, but it makes very bad law. It is easy to talk of a capital gains tax, but it is necessary to define the capital gain which is to be taxed; and when that gain is in land values, it is by no means easy.
If your Lordships will bear with me—I promise not to go into detail—I should like to give some examples. Are all increases in value to be taxed, including increases in the existing use value? And if so, what allowance is to be made for 629 changes in value due to the owner's improvement or neglect of maintenance? Then from what date—I think the noble Lord, Lord Douglas of Barloch, if I understood him correctly, mentioned this point specifically—are increases in value to be measured; and how are the initial valuations to be arrived at? A complete valuation of all the land in the country is a formidable task, as was discovered in 1910. Then, should betterment be taxed when it is realised, or should there be a periodic tax, whether it has been realised or not? Development arises when planning permission is granted and disappears when the land is developed. If land is developed before sale, there will be no development value to be taxed in the sale proceeds; the development value has gone, because the land is fully developed. There have been several comprehensive attempts to collect betterment in the past, of which the last was in the 1947 Act. They have all failed because of the failure to provide practical solutions to problems such as those that I have described.
The Government have been concerned in this Bill not only with what is just but with what is reasonably practical. The noble Lord, Lord Charley, by his speech is really cutting the Gordian knot by the most flaming injustice to a section of the population. That shows one—we all know the noble Lord well in this House—that he would never be driven into that position were it not for the fundamental difficulties of which I have given the most glaring examples to-day. As it will not be the last time that we shall discuss the problem, I think the noble Lord. Lord Silkin, is quite right in that, but I felt that I was only right in mentioning it.
The noble Lord, Lord Silkin, said that we still had anomalies left, and he drew attention to the anomaly that he said existed in the fact that we had a different value for compensation for planning restrictions than for compensation for compulsory purchase. Naturally, as the noble Lord as a former Minister knows, that is a point that we considered fully before putting the Bill into its present form. I should like to remind your Lordships of the basis. When planning permission is refused or is granted subject to conditions the landowner can claim compensation if there is an unexpended balance of development value, as established by claim under the 1947 Act, attaching to the land; he can claim the 630 amount of depreciation caused by the adverse decision limited by that claim, and payments are now running at the rate of about £10 million a year. As I said before, when the 1953 Bill was being debated great fears were expressed as to its effect on planning. I think the figure I have just mentioned corroborates my point that those fears were baseless.
I said, and I say again, that it is the Government's intention to maintain and improve planning control with the improvements I have mentioned. I do not know whether the noble Lord, Lord Silkin, was arguing this, or whether he was merely pointing out a discrepancy. Of course. none of my improvements in making planning more discriminating and effective, and less burdensome and more speedy, could be carried out if unlimited compensation were paid. That would be destructive of planning as we have known it since the war, and I think we are all agreed that we cannot afford it.
Let us look at it again, as reasonable men attempting to find a just solution. I believe that there is a great difference between refusing permission for some development which is inexpedient or against the public interest and, on the other side, taking a man's land away from him by compulsion. I think it is not unfair that there should be a different basis of compensation in these cases, the first limited, and the second based on full market value.
The noble Lord, Lord Silkin, has referred to the Uthwatt Committee. That Committee pointed out that for the last 100 years owners of property have been compelled to an increasing extent to comply, without compensation, with certain requirements regarding their property. These requirements, imposed for the well-being of the community, have passed beyond the field of health and safety into that of convenience and amenity. If I may venture to say so to the noble Lord, Lord Silkin, more important even than the statement of the Uthwatt Committee is the opinion of ordinary people as to what is fair; and that accepts the view that planning control, with its limited compensation, has come to stay. Of course, there are grumbles; there always will be grumbles, as every Minister of the Crown knows. But I do not believe for a moment that 631 that is a reason for not doing justice in regard to compensation for compulsory purchase.
On the less important point—I say "less important", because none of the points the noble Lord raised was unimportant—I want to say this. The noble Lord said that, with regard to paragraph 10 of the Second Schedule, I ought to look at the compensation. He knows that I am always prepared to do that, and obviously he will not expect me to go further than that on Second Reading. But I should say how grateful I am to him for telling me about these points at Second Reading, because it adds to the time available to me to discuss and examine them. I am sorry that we have lost a week, but as the noble Lord will appreciate, there were reasons against having this Second Reading on the first day we met. I do not want to discuss those points any further.
With regard to the Clause 34 point, I opened by saying that we were considering that. That point was raised by almost every speaker. My noble friend Lord Gage and my noble friend Lord Hylton mentioned it. We are looking into that, and I will bring to the attention of my right honourable friend the Minister of Housing and Local Government what has been said to-day, and we shall, as I said, return to the point.
The noble Lord, Lord Silkin, mentioned the number of Planning Bills that have been before the House. As he may remember, I go back to the 1944 Act. That was when I came on to the scene. If your Lordships remember, I was specially charged with public utilities, so I dealt with that and a number of other points in the Bill. The noble Lord and I discussed at that time the planning of public utilities. We have now had the 1947, the 1954 and the 1956 Acts, and we shall have other Bills, because this is a subject of great interest. I do not know that this is the most suitable terrain for the fixing of our wager, but I should like to tell the noble Lord that, having taken two wickets with two balls on Saturday, we as a Party are in a strong position to get the hat trick, and I accept with pleasure the suggestion he made to me which we can fix up on another occasion.
632 I am grateful to my noble friends Lord Gage and Lord Hylton for their support. My noble friend Lord Gage mentioned two omissions, the enforcement procedure and caravans. I should like to tell him that my right honourable friend has been considering these points for some time, and although this Bill contains a number of matters to bring the Franks provisions up to date, we did not think that the variety could be made any greater by dealing with further points. But I will again specifically remind Mr. Brooke of what my noble friend has said, and I hope that he will take it from me that these are points which, because of the difficulties being met in these fields, we consider urgent.
I am grateful also for what the noble Lord, Lord Meston, said. With regard to the point of retrospection, which has been debated in another place, my noble friend Lord Gage also gave notice that he had it in mind and would like to discuss it on the Committee stage. I hope that it may be convenient to your Lordships if I say one word about it now, as it may be helpful before we come to the Committee stage. Noble Lords may remember that my right honourable friend said in another place:The Government are perfectly prepared to examine the matter and see whether there is a fairer and more rational line than the one contained in the Bill. In saying that, however, I am not giving a promise in advance that the outcome of the examination will necessarily be that we shall find a better line than the line in the Bill.I think I ought to say that a thorough examination has now been made of the effect of applying Clause 1 to outstanding cases, as the noble Lord, Lord Meston, suggested, where notice to treat was served before October 30, 1958. Reports have been obtained from 120 district offices of the Valuation Office all over the country giving particulars of all compulsory purchase negotiations that they had in hand on October 29 and in which notice to treat had been served after August 7, 1947, and also of all cases falling within the same compulsory purchase orders where negotiations had at that date been completed. It did not cover all those, because there are nationalised industries outside it; but it covered a very large proportion of such transactions. The results of those investigations, briefly, are as follows: in some 1,500 compulsory purchase orders 22,000 633 cases have been settled; 9,000 cases are still unsettled, and in some 6,500 of the unsettled cases the new basis would make very little difference to the compensation; in over 2,000 cases it would mean an increase, and in between 300 and 400 cases it would mean a decrease. Those are the points I should like my noble friends to consider before they return to the attack.
It has always been the rule that compensation is determined by the circumstances as they exist at the date of the notice to treat. That is not fortuitous, as the date has come to be regarded as the appropriate date for compensation purposes. Notice to treat is the first step after the authorisation, and if compensation were to be assessed by reference to some date after the service of notice to treat, negotiations would become impossible until that date had been passed; and as my noble friend Lord Meston knows, the answer to the notice to treat is the notice of claim.
What I wanted noble Lords to have in mind was that since the Bill was introduced many people have ageed to a settlement of compensation. Such settlements are going on all the time. Many more cases have been settled since the date of Captain Corfield's Bill which has been referred to, more than a year ago. All those people have assumed that the Government would adhere to the normal rule which is embodied in Clause 1, and there will be a great sense of injustice amongst those people who have settled if they find, if I may put it colloquially, that the "awkward customer" has gained. although dispossessed by the same compulsory purchase order. It would make further settlements difficult; it would mean reopening settled matters. It would be difficult for the professional valuers and solicitors who have advised. In some hundreds of cases, as I indicated, the new basis would mean less compensation than the old; and whatever dividing line is taken, there are bound to be some people who believe they have suffered from the proposals. Here I put in outline the difficulties we have met, and of course I am quite prepared to come back and discuss the matter more fully. I think that those are the main points that my noble friend Lord Gage and the noble Lord, Lord Meston, raised.
My noble friend Lord Hylton raised the question of the difficulty experienced 634 by the planning committee of the borough council in dealing with the duties laid upon them by the earlier clauses when the council are the acquiring authority. There are really two answers to that point. The first is that one hopes that those on the planning committees do keep a high standard in dealing with their quasi-judicial work. But there is the other answer, that of course there is an appeal to the Minister on that point. The other matter about which I think the noble Lord, Lord Hylton, was also worried was the position where the county council delegated planning functions to a district council. They do not delegate the functions under the Bill. The Bill does not provide for the delegation of the duty of issuing certificates. I think that point is met. Otherwise I am most grateful for what the noble Lord, Lord Hylton, said.
I was very interested in the speech of the noble Lord, Lord Saltoun, and I should like specially to study two points. One was his general criticism of the Uthwatt Report, which particularly interested me, and the other was the very practical and human problem which he raised: the question of and the cost of roads and the resultant effect on open spaces, which may have houses backing on to them—the difficulty of access, and so on. I will certainly convey that point not only to my right honourable friend the Minister but also to my right honourable friend the Secretary of State for Scotland, and I am grateful to the noble Lord for taking up the point.
§ THE LORD CHANCELLOR
I have already dealt, I think, with the main arguments of the noble Lord, Lord Chorley. As he was perfectly entitled to do, he expressed, in unhesitating terms, his dislike of the Bill. I have detained your Lordships far too long, so perhaps the noble Lord, Lord Chorley, will allow me to make this part of my speech by reference. I did, in introducing the Bill, deal with two points which I think are material as my answer to his thesis about the bad effect of the Bill on planning. The first was where I dealt with the argument that had been suggested, that this would re-create the danger from floating value. The other is one which I have already repeated in my closing 635 speech; that the planning has not lost any of its effect, and we do not believe that it will lose any effect as a result of what is done in this Bill. I am very grateful to the noble Lord, Lord Chorley, if I may be purely Party political for a moment, for nailing the colours of the Labour Party to land nationalisation. That is just one of the issues on which we on our side of the House shall be very glad to fight the next Election; and anyone who makes quite clear that that is the Labour Party policy is doing us a service which we do not undervalue.
As I said, the noble Lord, Lord Douglas of Barloch, raised a very interesting aspect of the compensation and betterment problem. I have tried to give my general views on that matter and I hope he will not take it amiss if I thank him rather than discuss in more detail what he has said. Otherwise I hope I have dealt with the points raised in a series of interesting speeches, and I would ask your Lordships to give the Bill a Second Reading.
Before the noble and learned Viscount concludes, I wonder, as time is short, if he would say whether it is the Government's intention to table any Amendments, particularly to Clause 34. Of course I am not referring to drafting Amendments.
§ THE LORD CHANCELLOR
If I may answer "off the cuff", without consulting anyone, what I should myself like is to see what noble Lords have in mind upon that point on the Committee stage, 636 thus giving us a chance to examine it before Report. If my right honourable friend the Minister differs from that view I will write to noble Lords who have expressed an interest in Clause 34 and tell them how we are going to do it. I found it a most entrancing problem. The noble Lord, Lord Silkin, said that I rather gave it away by saying that we thought we had dealt with 90 to 95 per cent. of the hard cases. But I did not say that we had dealt with 90 to 95 per cent. of all cases; those were the hard cases. Naturally, I have been examining this matter since long before last October. I found it a difficult problem and, speaking for myself, I should be most interested to see the sort of views which noble Lords have. As I say, if I am wrong and if my right honourable friend would prefer to deal with it in another way, I will write to everyone who has mentioned it.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.