HL Deb 02 May 1963 vol 249 cc404-16

7.53 p.m.

Order of the Day for the Second Reading read.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS)

My Lords, I beg to move that this Bill be now read a second time. The Bill is part of the Government's policy for tackling the problems arising from the growth of employment in Central London. This is a subject which has been discussed several times in your Lordships' House; only last November, my noble friend Lord Molson pressed the Government to take the action which they are now taking.

The extent of the problem arising in London, and the Government's proposed policy for tackling it were outlined in the recent White Paper London—Employment: Housing: Land, published on February 25. The root of the problem is the growth of employment; and the type of employment that is most important is office employment which accounts for more than half the total jobs in the central area. Office employment has been steadily rising ever since the war; over 150,000 new jobs have been created in Central London in the last ten years. This trend can be expected to continue for some years at least. In mid-1962, 18 million square feet of office space was either under construction or had received planning permission, and in addition to this new applications are being made all the time.

Much of this office growth—in commerce, insurance and banking, for instance—is, of course, essential both to the life of London and for national prosperity. It is not therefore the Government's policy to stop all further growth in office employment in Central London. But it is clear that not all the growth that has taken place needs to be in central London; and there is a strong case for moderating the rate of new office building at the centre, in view of the problems in the field of housing, planning and transport to which the continued growth gives rise.

This is the background to the Bill. I should now like to outline its main provisions as briefly as possible, concentrating on their relevance to the London employment problem. Planning permission is needed for redevelopment of or for additions to office buildings. It is open to the planning authority to refuse permission; but, if they do, they face in some cases the risk and, in others, the certainty of paying compensation. And office values are such that any amounts involved can be very large indeed.

The cause of the trouble is to be found in the Third Schedule to the Town and Country Planning Act, 1947, which is now consolidated in the Town and Country Planning Act, 1962. The Third Schedule is a basic element in the structure of the planning machine. When the new planning system was set up, the Schedule settled what should be regarded, for purposes of compensation and valuation, as being included within the "existing use rights" of owners of land. In the context of the financial structure of the 1947 Act, this meant, among other things, that development included in the Third Schedule could be carried out without paying development charge; and that the possibility of such development was ignored in the assessment of claims against the £300 million fund.

The "existing use rights" defined in the Third Schedule include not only rights to rebuild or alter existing buildings, but also rights to increase the size of them in the course of these operations. The intention of these "tolerances", as they are called, was to give owners of property a little elbow room and to exempt trivial operations from both development charge and the right to claims on the £300 million fund. The tolerances which have caused trouble, and which it is the main object of the Bill to modify, are the notional right to add 10 per cent. to the cubic capacity of a building where a site is redeveloped; and the notional right to add 10 per cent. to the cubic capacity of a standing building.

First, may I deal with rebuilding. When an office block is redeveloped, or a new building erected on a site where offices previously stood, the rebuilding may increase—that is to say, it is allowed to increase—the cubic capacity of the original building by 10 per cent. But with modern building methods, the rebuilding of an old building with high ceilings and a wasteful layout can, as a result of the 10 per cont. cubic increase, produce a 40 per cent. increase in floor space; and it is, of course, floor space that controls the density of employment.

The right to compensation, if permission for redevelopment including this 10 per cent. increase in cube is refused, is not entirely clear. There is no direct claim to compensation, but the owner may serve a purchase notice though he may have to demolish the buildings before doing this with any real chance of success. If the purchase notice is confirmed, the local authority is required to buy his land; and in this case the price will be fixed on the assumption that he would have been allowed to redevelop with a 10 per cent. increase in cube. This is a complicated matter and it is not possible to generalise. But the essential point is that the London County Council—who bear the brunt of the central London problem—have felt that they were in real danger of having to pay heavy compensation in such cases. As a result, they have felt unable to give decisions which would have prevented these large floor space increases on redevelopment and which would prevent them in the future.

The Bill deals with this situation by making it clear that the planning authority will not run the risk of having to pay compensation where, on redevelopment of a site, they restrict the increase in floor space used for a particular purpose to 10 per cent. of that used for the same purpose in the original building. This is achieved by Clause 1(1) and the Schedule to the Bill. This restriction of the floor space increase is relevant to the valuation of a building and to the assessment of compensation; it does not affect the ability of the planning authority to grant planning permission for more floor space if they so wish, any more than the original Third Schedule restricted their ability to give permission for buildings with an increase of more than 10 per cent. in the cube if they wanted to do so. It is for this reason that I have referred to the rights granted by the Third Schedule as "notional".

The Bill does not remove the notional right granted originally by the 1947 Act to a 10 per cent. increase in cubic capacity. What it does is to qualify this right by restricting the increase in terms of floor space of any particular use. Any floor space in excess of this may be put to some other use approved by the planning authority.

I turn now to the question of enlargement of existing buildings. A similar tolerance of 10 per cent. of the cube is included in the right to alter an existing building. This right, like all the rights in the Third Schedule, was originally tied to the situation existing when the new planning system came into effect on July 1, 1948; but the Town and Country Planning Act, 1954, extended the provisions of the Third Schedule to new buildings also. One result of this is that a developer who has got a planning per- mission—perhaps for a high building—from a local planning authority (or perhaps from the Minister on appeal) can, as soon as the building has been put up, claim the right to add 10 per cent. to its bulk, under the threat of a claim for compensation. There is no doubt about the right to claim compensation in this case. The right to enlarge an existing building is included in Part II of the Third Schedule, and compensation may be claimed under Section 123 of the 1962 Act.

This situation makes nonsense of planning control, especially in the case of high buildings, where the exact height may have been a matter of long and detailed consideration. For this reason, the Government consider it right, not merely to qualify the provisions of the Third Schedule, but to remove this right altogether from buildings erected after the appointed day for the 1947 Act, since their size will have been settled under the new planning code; and this is achieved by Clause 1(2) of the Bill. This change applies only to post-1948 buildings. For buildings which were in existence when the 1947 Act came into force, the notional right of enlargement granted by that Act is retained, but the right is qualified in the same way as the right to an increase in cubic capacity on rebuilding; that is to say, the increase in floor space devoted to a particular use may be restricted to 10 per cent. without risk of compensation. These are the main provisions of the Bill.

I should mention the fact that the Bill is drafted to operate from the date of introduction, which was February 25. This is necessary to forestall possible attempts to evade its effects—in particular, the removal of rights on enlargements of existing buildings—while it is going through Parliament. None of the changes in the Bill will, however, affect development for which permission has already been granted.

So much for the detail of the Bill. In conclusion, I should like to return to the wider picture with which I began, to put the Bill in its context. Taken on its own, the Bill might seem to be a purely restrictive measure. It is, of course, restrictive, in the sense that it will give planning authorities the ability to restrict office growth in some areas where it would be wrong to allow more.

But the Government's wider policy is not restrictive. To attempt to cut down office growth in Landon without providing alternative outlets could have serious consequences. We are therefore encouraging the creation and expansion of attractive office centres away from central London, both on the periphery and further afield.

The Government are at the same time taking steps to reduce the demand at the centre. They are doing this in two ways: first, by seeing whether more of its own staff can move out. A review of Government staff in London is at present being carried out and should be completed in the near future. Second, the Location of Offices Bureau has been set up to encourage private employers to move their offices out of London, and to make it easier for them to do so.

Difficult problems of housing and transport will remain in London. But, by taking these positive measures to enable office growth to continue in the right places, the Government have set the Bill in the context of a wider policy, within which it will play a useful part in helping to achieve the long-term planning objectives for London. I beg to move.

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

8.5 p.m.

LORD SILKIN

My Lords, the noble Lord has attempted to explain this Bill, but I am bound to say that I do not recognise the Bill from his explanation. He talked as if it were a Bill about London and about offices, but this Bill refers neither to London nor to offices. It is a perfectly general Bill which applies to the whole country and to all types of development. It may be that this is the purpose of the Government; that the object is to deal only with London and only with offices; but in the whole of the Bill there is not a word about either London or offices. We must, therefore, take it, as the Bill stands, that it will be of general application throughout the country and deal with all types of property.

Even accepting that the Bill is much wider than the noble Lord has explained to us, it is nevertheless, a very small Bill and one that will have a very modest effect. And I cannot see that it will have the kind of effect the noble Lord has in mind, of removing difficulties about density and about getting the right kind of development in the right place. It must have a very small effect, although I do not deny that it will have some effect. But it is certainly not an adequate solution of the difficulties and problems which have moved the Government to introduce this Bill, arising from the concentration of development and offices in and around the immediate neighbourhood of London.

As I say, London is not mentioned, and it is quite a different Bill from what has been explained. I would agree with the noble Lord that the Third Schedule to the Act of 1947, which has now been consolidated into the Act of 1962, has been extended in a way which was never intended by the original promoters of the 1947 Act. There it was intended rather to give elbow-room to those who were proposing to develop property which had been destroyed. It was very much in the context of war damage that these particular provisions of the 1947 Act were passed. Some of the property which was destroyed was much too small, and one wanted to give opportunities, in rebuilding this property, to provide new buildings which were worthwhile, and it was thought that by increasing the cubic content to the extent laid down in the Third Schedule one would achieve that purpose. But, of course, the ingenuity of developers has enabled them, in certain cases, by erecting buildings with rooms of a lower height, to get, as the noble Lord said, 40 per cent. more accommodation than was originally intended; and while one would not object to that in the case of residential accommodation the evils have arisen in the case, particularly, of office accommodation in London, of which we have too much, though the same is not necessarily true in other parts of the country. I should have preferred to see a Bill which dealt specifically with London and the congested areas, if we were going to carry out this restriction, rather than make it general, because there are many parts of the country where one would not object to the 40 per cent. increase, and certainly not in respect of housing accommodation.

There is one other point that I should like to raise at this stage. I think that we all dislike retrospective legislation. I know that in this case the legislation is retrospective to the date when the Bill was first introduced. It may be said that some people had notice of it, but a great many people bought land in good faith and paid the price for it in the knowledge that for sixteen or seventeen years the law had permitted them to rebuild with the additional percentage of cubic content. They had paid their price. They had perhaps gone to expense in producing plans, employing architects, surveyors, and possibly in even going out of town. And I think it is very rough on those people who have paid the price for the land on that assumption as well, that they should suddenly be prevented from carrying out the development they intend.

I hope it will be possible to reconsider this matter in the further stages of the Bill in such a way that where it is in the public interest that this development should be permitted it will be permitted, and that where there is a refusal on the grounds of public interest there should be some compensation paid. I am not putting forward an Amendment at this stage, but I am giving the noble Lord warning that this sweeping change in the law, which takes effect even before the Bill is passed, can result in very great hardship to certain individuals; and without at this stage laying down the basis on which this hardship should be removed I should like to give notice that I will be moving Amendments. I hope that the Government will consider the matter as well, to see whether we can be more specific and ensure that the restriction they have in mind is confined only to cases where it is really necessary and not applied generally. But, subject to that, I certainly approve the principle of the Bill and I would support the Second Reading.

8.12 p.m.

LORD CONESFORD

My Lords, I rise briefly to support this Bill, and in doing so I speak not only on my own behalf but also on behalf of my noble friend Lord Molson, who had hoped to be present but had to leave for a longstanding engagement. On the question last raised by the noble Lord, Lord Silkin, I should like to say that, as at present advised, I do not agree with him, but I think that it will be more convenient to deal with that matter when he brings forward at a later stage the Amendment to which he referred.

I wonder whether, at the outset, I might be reminiscent to this extent—because the noble Lord, Lord Silkin, quite rightly was reminiscent on the subject. Some sixteen years ago he and my noble and learned friend, the present Lord Chancellor, Lord Molson and myself were all working in the Standing Committee which considered the Town and Country Planning Bill, later the Town and Country Planning Act, 1947. It is rather interesting to recall that when that Committee came to consideration of the Schedule we are now discussing, my noble friend who is now the Lord Chancellor put forward an Amendment making "lettable floor space" the test. If I may quote just one sentence from his speech, it was as follows [OFFICIAL REPORT, Standing Committee D, 1946–47, Vol. III, col. 1093]: That, surely, would give him"— he was referring to the noble Lord, Lord Silkin— a better test, in the case, for instance, of offices, than the cubic capacity standard". I think that it is of some interest to recall that comment. But I am in agreement with the noble Lord, Lord Silkin, that there may well have been reasons operating at that time in considering the terms of the Schedule which no longer have the same force.

The Minister has made clear to-day, and my right honourable friend the Minister of Housing and Local Government made clear on the Second Reading of this Bill in another place, that the object of the Bill is to make it easier to check office-building in central London. The noble Lord, Lord Silkin, is, of course, quite right in saying that the Bill is limited neither to offices nor to London, neither of which it mentions. Nevertheless, if, as I believe, the proposals are just, I think it is right to make the provisions universal, even if the most urgent need is confined to the case of London. In London the need for this reform of the law has long been obvious. The action that Her Majesty's Government are now taking is belated, and even today, I fear, inadequate. But, as I think was said by somebody in another place, I must not look a gift mouse in the mouth. Ministers quite rightly claim that this Bill is only one of the steps that they now propose. Nevertheless, my impression of their policy as outlined in the White Paper is that even now they do not realise the magnitude of the problem in London, or its urgency.

A little less than a year ago, on May 29, 1962, we carried in this House an Amendment to the Transport Bill which I had drafted and moved. We carried it, against the advice of the Government, with the support of all Parties, by a majority of 59 to 39. The effect of the Amendment which I moved, and in which the House supported me, was to stop the British Railways Board from developing any of their land in the County of London to provide office accommodation not required for their own purposes, unless the Minister of Housing and Local Government certified that, by the time it became available for use, an equivalent amount of existing office accommodation in London would have been converted to residential use. Though in subsequent stages of the Bill I could not hold the whole of that victory, Her Majesty's Government met me, and those who had supported me in carrying that Amendment, to the extent that now appears in Section 87 of the Transport Act, 1962. Nevertheless I am convinced that the principle I then proposed was the right principle and that it should still remain the object that Her Majesty's Government should seek to achieve in Central London.

I am not going to trouble the House with any figures, because some have been given in the White Paper, others have been given by my noble friend to-day, and others by my right honourable friend the Minister in the Second Reading debate in another place. Perhaps I might, however, read out one recent statement. On November 8 last year I put the following Question to Her Majesty's Government [OFFICIAL REPORT, Vol. 244, col. 382]: To ask Her Majesty's Government whether they will give their estimate—

  1. (a) of the number of persons entering and leaving the county of London daily for the purpose of work; and
  2. (b) of the increase expected when tenants have been found for all the office buildings already erected or now in course of construction, or for the erection of which planning permission has already been given."
In his Answer my noble friend Lord Chesham gave the figure of 1,340,000 as the number of people who now travel daily to and from work in the central area of London, and he said New offices in the central area are expected to provide employment for some 80, 000 additional people, most of whom will travel into, and out of, the area daily. Since then, of course, there have been still further permissions given. Unless we stop this process, London will grind to a standstill.

I am well aware that the capital of this great country is a place where commerce and trade are important. But in the interests of commerce and trade it is important that this capital shall not lose its reputation as a civilised city. The sort of scenes we witness on the railways, morning and evening, already are injurious to the reputation of London. Nor is it in the least true that even the greatest companies need to have their head offices in this city. Two of the most successful insurance companies in the United Kingdom are the Norwich Union and the General Accident Corporation, neither of which has its head office in London.

In another place, during the discussion on this particular Bill, strong pleas to stop this process were made, both from the Government and from the Opposition Benches. It seems quite fantastic that at such a moment, if the newspapers are to be believed, the Railways Board have put forward, or intend to put forward, a claim to erect office accommodation at Euston which, if allowed, will be quite ruinous to the future of London. It is all the more fantastic when one bears in mind that British Railways have themselves declared their inability greatly to increase the provision on the railways for those who come into and leave London daily, yet they appear to be claiming the right enormously to increase the traffic with which they cannot cope. I beg Her Majesty's Government to realise in time the urgency of this problem. If Section 87 of the Transport Act is not strong enough to enable the Minister to refuse the application in toto, then let Her Majesty's Government seek further powers without delay. I agree with the noble Lord, Lord Silkin, that, although this Bill makes a contribution in London, it is not a very great contribution. That, I think, is acknowledged by the Ministers themselves in the speeches they have already made in both Houses.

May I invite my noble friend's attention, finally, to what happened in another place on Second Reading? Many of the points that I am putting forward were put forward forcefully and with eloquence by the principal speaker for the Opposition, Mr. Stewart. He was followed immediately by my right honourable friend Sir Richard Nugent, who spoke with considerable experience as the Chairman of the Standing Planning Conference for the London Region. He was, in general, supporting those parts of Mr. Stewart's speech which I am now supporting, and he spoke of the danger of killing London by congestion. If my right honourable friend the Minister acts now to save London he will not only have the support of informed Members of all Parties, he will have the gratitude, and not the curses, of posterity.

LORD HASTINGS

My Lords, I should like to thank the two noble Lords who have spoken on this Bill. I am glad that they have given it a welcome, even though rather a mild one. I should like to say to my noble friend Lord Conesford that I hardly like to detain your Lordships any longer by any lengthy comment on what he has said, but certainly his remarks are much to the point and will be carefully read and studied by my right honourable friend and his Department. The noble Lord, Lord Silkin, said at the beginning that he could not find anything about London in the Bill, and that this really was a general Bill. That is, of course, perfectly true. If I may say so with great respect, I think he has got the thing the wrong way round, because in the White Paper to which I referred there is a clear statement in connection with this office problem in Central London—namely, that the Government consider that these doubts must be removed, and they are introducing legislation for this purpose immediately". As the noble Lord will remember, attached to the White Paper is an Appendix setting out the Third Schedule, and the problems arising therefrom and what the Government intend to do about it. So it is quite clear from the beginning that the raison d'être for this Bill is the office problem in London. It is, of course, meant to apply to the country as a whole, because it really would have been impossible to make different laws for valuation or compensation in different places.

To take his second point, I said in my speech that it really is not a Bill to restrict office development or any other sort of development where it is not necessary to do so. Clearly, in the provinces—indeed, in most places, whether town or country—it will be within the discretion of the local planning authority, and normally they will not restrict development so long as it fits in with their overall plans. So, therefore, I do not think there need be any fear that, by applying the Bill generally, we shall affect in any deleterious manner desirable development anywhere in the country.

I do not think that at this stage I will say much about the criticism of the noble Lord, Lord Silkin, in respect of retrospective legislation. Obviously, of course, it depends on the circumstances—the sort of land that is bought; what was on it, if anything was on it or not, and if so when the property was built. But I am most grateful to him for giving warning that he proposes to put down an Amendment, or perhaps more than one, to deal with this point which is worrying him, and I think I will reserve my argument in detail until I see his Amendment. Again, I thank both noble Lords for taking interest in this Bill, and I would now ask that it be read a second time.

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

House adjourned at half-past eight o'clock.