§ 2.59 p.m.
§ Order of the Day for the House to be again in Committee read.
§ Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL OF LISTOWEL in the Chair.]
§ Clause 9:
§ General vesting declarations
§ 9.—(1) Where a compulsory purchase order authorising the Commission to acquire any land has come into operation, the Commission may execute in respect of any of the land which they are authorised to acquire by the compulsory purchase order a declaration in the prescribed form vesting the land in themselves as from the end of such period as may be specified in the declaration (not being less than twenty-eight days) from the date on which the service of notices required by subsection (3) of this section is completed.
THE EARL OF KINNOULL moved, in subsection (1), after "Commission may" to insert:
, if the appropriate Minister or Ministers certify in writing that it is urgently necessary in the public interest that the Commission
should have power to acquire such land in accordance with the procedure laid down by the following provisions of this section,".
§ The noble Earl said: The Committee will be aware that this clause, along with Clause 10 and Schedule 3, deals with the Commission's powers of a speedy conveyancing procedure of property or what is termed in the Bill a "general vesting declaration" following on a compulsory purchase order. The effect of this will be that not only will the Commission be able to take possession of a property 28 days after serving a compulsory purchase order under Clause 8, but under this procedure in Clause 9 the legal title of that property may, at the discretion of the Commission, be vested in or passed to the Commission within some two months of a compulsory purchase order. This will allow the Commission to resell the property before any compensation has been paid, or even agreed with the poor unfortunate owner of that property.
§ On Second Reading of the Bill, the noble and learned Lord the Lord Chancellor, in a powerful speech, suggested that this clause had been the subject of most thorough misrepresentation, and that this vesting procedure should not be viewed with such alarm, for the local authorities had been granted similar powers by Parliament some 22 years ago, in 1944; and, furthermore, the Government had had no evidence of hardship having arisen under this power. While perhaps at the time of the Second Reading one was impressed with this argument, I would suggest to the Committee now that there are three good reasons why the precedent of either the 1944 Act or the 1962 Act cannot be relied on to justify the power under Clause 9.
§ First, Parliament gave such powers to local authorities in 1944 under conditions of a national emergency, and no such conditions exist to-day. Secondly, since 1944, and particularly since 1962, this procedure has been used only in a very limited number of cases; and perhaps when the noble Lord comes to reply he will advise the Committee how often, to his knowledge, these cases have occurred, or how many there have been. But under this Bill, as the Explanatory Memorandum obligingly informs us, the Commission will use this power on most occasions when they acquire property 902 by compulsory purchase order. Thirdly, and perhaps most important of all, the procedure under the 1944 and 1962 Acts and the procedure under this Bill differ in a number of fundamental ways. One is that the Commission will now be allowed to re-sell the property before any good root of title has been established by them, and before, of course, any compensation has been paid, or even agreed with the previous owner.
The noble and learned Lord the Lord Chancellor went on to advise us that in practice the Commission will put the onus on the vendor to submit both a claim for compensation and proof of his interest in the title. On the strength of this proof of title from the vendor, the Commission will pay out compensation, but will have the reserve power to recover part or the whole of that compensation if in the future another worthy claimant turns up. The noble and learned Lord went on to say:
"it" being the clause—
also removes the need for the Commission to employ lawyers to investigate the title of the vendor in order to ensure that the Commission have acquired a good title."—[OFFICIAL REPORT, Vol. 277 (No. 67), col. 1082; 14/11/66]
He used the expression "unchallengable title". From this it becomes apparent that the Commission will in practice check a title only when some other claimant comes along and seeks compensation for his interest in the property. I suggest to the Committee that this sets a dangerous precedent, and one for which I believe not even this Government could produce a predecessor, unless they referred back to the days of Cromwell.
§ The noble and learned Lord's argument in favour of this clause at the time of the Second Reading appeared to give the impression that either the legal profession over the years have deliberately advised a long and expensive procedure of conveyancing at the expense of the public, which this clause will quite safely short-circuit, or that, due to the serious shortage of qualified lawyers employed by the Commission, this clause was giving to the Commission power of a skeleton system of conveyancing which was more of an emergency measure of conveyancing than anything else. I would suggest to your Lordships that neither of these I conclusions appears very satisfactory, and 903 that to most people the care with which normal conveyancing is carried out by lawyers to-day, albeit sometimes slowly, is always a comfort that their interests are being properly safeguarded.
§ To return again to the noble and learned Lord's case on Second Reading, he suggested to us that this procedure does not in anyway deprive the owner of his rights, for by this clause an owner cannot be dispossessed of his property any more quickly. Nor, the noble and learned Lord advised us, does it affect his right of objection to compulsory purchase, for Clause 9 is concerned only after such a compulsory purchase order has been made. Furthermore, he went on to say that the procedure has the advantage that in most cases the vendor will receive from the Commission compensation far more quickly than it is normally paid or settled.
§ Such, then, was the noble and learned Lord's case for recommending this clause to your Lordships. I would humbly suggest to the noble and learned Lord, and to the Committee, that this procedure, as it at present stands in the Bill, will clearly deprive certain persons of their interest in the property, and I give your Lordships these three examples. First, there is the case of the tenant of the property. As I understand it, as soon as the property becomes vested in the Commission, the Crown body, the tenant will immediately lose the security of tenure granted to him under the Rent Act 1965, and the Landlord and Tenant Act 1954. Or take the case of some poor old lady who has an interest in a property and who, due to the Commission's lack of qualified staff, and the fact that her own lawyer has not been informed, never stakes her claim for compensation, simply because she has never been informed that the property has been taken over by the Land Commission. How long does she have for appeal; or, for that matter, how long does she have for putting in her claim? Perhaps again the noble Lord can answer that when he comes to reply.
§ Thirdly—and perhaps the most serious of all—there is the case of an owner who has his property compulsorily acquired by the Commission, and who finds himself having to purchase immediately alternative accommodation. Being a lesser mortal than the Commission, he will 904 have to produce the full capital payment before he can take possession of his new property. But due to the lack of qualified staff on the Commission, and because there is no time limit set in this Bill saying when the compensation shall be paid, this may take many months to go through; and during all this time the owner will have to pay heavy bank charges for the capital he has not yet received. Here again it appears that there is no redress at all, and that the owner cannot quicken the process of settlement for compensation.
§ Turning to my Amendment, it seeks to persuade the Government to recognise that, while this special procedure may well be an advantage to the Commission, in limited cases the normal conveyancing procedure should remain, for it has been built up over many centuries and is not only respected by those in this country but envied, I would suggest, by many outside this country. If the Government were to take steps to enforce that all properties throughout the country should be registered when sold, this would surely overcome the difficulty of the delay in conveyancing and would answer the basis of their argument about the need for this clause.
§ The Amendment, if accepted, would have the effect of requiring the Commission to make out a case to the appropriate Minister, and to state why it wished to use this procedure. In each case it would have to be established that speedy conveyancing was urgently required in the public interest. But perhaps the most important point of all about this Amendment is that it sets out the principle that, should this procedure lead to, say, a public outcry because of hardship to a vendor (and it does not need much imagination to envisage this), the Minister of the Crown, and not merely the Commission, must be directly answerable for such an event. I am sure we all know that the Railways Board has come under constant criticism for this very reason: that it is not directly answerable in Parliament. If the Bill is not amended the Commission, I suggest, will be ten times worse; and if it starts using these dictatorial powers as widely as the Bill suggests then I believe that every citizen in this country will live to regret the day the Commission was born. I beg to move.905
Page 9, line 15, after ("may") insert the said words.—(The Earl of Kinnoull.)
§ LORD MITCHISON
If I may say so, I think this Amendment is unnecessary and rather dangerous. This is a clause which deals simply with the question of what happens about title after a compulsory purchase order has been made. It is a purely procedural clause and reasons have been given (and I should have thought no one could really deny them) why it was more convenient to have this form of vesting order in place of the numerous and detailed inquiries necessitated, not by the dark machinations of lawyers but by the complications of our own land laws. One has to remember the position. The position is that the Minister has already had to be satisfied that it is necessary in the public interest to enable the Commission to obtain authority; that is as far as the special procedure cases are concerned.
With regard to the normal procedure case, the Commission have had to make up their mind about it; they have had to entertain any objections which have been made, and the Minister's authority is required. In those circumstances I should have thought it was unnecessary, besides the compulsory purchase order, with all its safeguards, to have yet another appeal to the Minister. In the case of the special procedure this is particularly dangerous because in effect it would give a Minister power to override an Order which had passed through both Houses of Parliament and had obtained Affirmative Resolutions there, and in consequence the position would in effect he that the Government of the day, the Executive, would have power to over-rule a Parliamentary decision made under Clause 9. I think that applies only to the special procedure case.
I think one also has to remember that it is necessary in all these cases that the Minister should be satisfied that the acquisition was urgently necessary in the public interest. I think that applies equally well to every act of a Minister and the Commission. "Urgency" is, of course, a rather vague term. If it means very much, then I should dispute the need for an urgent call for this form of procedure. If it has no meaning one wonders what it is adding to the pro- 906 cedure in the two previous clauses, bearing in mind that this clause is only substituting a general vesting order for the more detailed procedure which would take a great deal of time. As for depriving the owner or occupant of any rights, if that is the position one would expect to find Amendments to restore those rights in some form or another, but I cannot see what the general vesting declaration does to the prejudice of owners or occupiers. On the contrary, I should have thought it would accelerate the proceedings and enable them to get the same amount of compensation more rapidly. Therefore, with great respect to the noble Earl, I regard this as an Amendment which arises from a misunderstanding of the fundamental nature of the clause we are considering, and one which would hold up proceedings, confer no advantage on the owner or occupier, but, on the contrary, deprive him of the early fruits of compensation which he may otherwise expect.
I am all for providing a reasonable amount of work for the Bar, but one must not overdo it, and I think that if these land operations are to have the sort of significance which is indicated in the White Paper then one must have a procedure of this kind to simplify, so far as possible, what would otherwise be a matter of inquiries, conveyances and all the rest of it. I do not think the owner or occupier is a penny the worse off. I listened carefully and I could not see why the substitution of a vesting procedure for other methods disadvantaged them in any way whatever. I hope the Government will be firm on the matter and will not accept this Amendment, which I think is rather misconceived.
§ 3.17 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION)
The noble Earl moved his Amendment cogently and, of course, with sympathy for the owner. He stated a point of view about the necessity for safeguarding the rights of owners, to which we all have to pay a great deal of attention in the matters we are dealing with in this Bill, but like my noble friend, Lord Mitchison, I am bound to say that I believe the Amendment is misconceived. As the noble Earl said in support of his Amendment, the effect of it would be to restrict the use of the vesting declaration 907 procedure to individual cases where the Minister had certified that it was urgently necessary that it should be used.
Clause 9 enables the Commission, once a compulsory purchase order has become effective in relation to any land, to obtain a good title to the land simply by executing a declaration that the land is vested in them, instead of by the usual method of taking a conveyance from the owner on payment of compensation, which payment can safely be made only after an investigation of title. This declaration is defined in the clause, as my noble friend has pointed out, as a "general vesting declaration".
The normal compulsory purchase procedure requires, first, notices to treat; secondly, settlement of compensation, and, thirdly, conveyances before the purchasing authority had good title. The vesting declaration method gives the authority a good and immediate title converting the rights of owners into rights to receive compensation, and I think this last sentence is really the gist of the matter. The position of a good and immediate title by the Land Commission will mean that once it has acquired land by the compulsory purchase method and has executed the vesting declaration it will be able, without further unnecessary delay, to put the land into the hands of the developer, and this, as I said on a previous Amendment, is what the Commission will be expected to do.
As we visualise it, the Commission will always be buying land in order to dispose of it, and will need a good title before it can do so. Under the normal compulsory purchase completion procedure, although the Commission would be able to enter into possession fourteen days after the notice to treat, it could not get a good title until compensation was finally settled, and if, for example, because of a reference to the Lands Tribunal or to the courts on a question of compensation the settlement was delayed, the land could be left in their hands.
Perhaps I ought to add that normal completion procedure, which requires investigation of title, and so on, is not only more expensive than the general vesting procedure but also makes heavy demands on scarce manpower. The de- 908 cision to adopt a general vesting procedure is to some extent the result of applying organisation and method techniques to the problem of acquiring land. The Commission's procedures will be based on the belief that land-owners as a whole can be trusted not to claim compensation for interests they do not hold, and the Commission will therefore do little or no investigation of title before paying compensation. I must here add a precautionary note, that the Commission will retain power to deal with the possibility of abuse in the isolated case. These powers are contained in Clauses 24 and 93.
The noble Earl mentioned the vesting procedure under the 1944 Act. That was not introduced to deal with war-time emergency or the post-war difficulties that might be faced, but was a measure introduced following the Uthwatt Report as part of the reconstruction of the planning procedures necessary for the post-war conditions.
With regard to the second point about which the noble Earl asked me a question, there are no figures immediately available of the number of occasions on which the procedure has been used, but certainly it has been used. The third point to which I must make reference is that there was no obligation to use the procedure to investigate title. This was done only to ensure that too much compensation was not paid. The last point I would make in reply to the noble Earl is that the period within which a claim for compensation can be made is six years from the date when the person first knew or could reasonably be expected to know of the vesting.
Perhaps I ought to stress the fact that the vesting declaration procedure cannot disadvantage owners or occupiers of land whether they be vendors to or purchasers from the Commission. As my noble friend said, payment of compensation might well be quicker than under the normal compulsory purchase procedure because of the saving of time from not having to investigate title. It will not be possible to dispossess occupiers earlier than under the normal procedure; this does not enter into this at all. For all these reasons we believe that the Amendment proposed is misconceived and would advantage no one. In the 909 circumstances I hope the noble Earl will be prepared to withdraw his Amendment.
I have listened to what the noble Lord, Lord Champion, has said with great attention, and I am bound to say I still have one or two questions which perhaps he can resolve. I am thinking of land which is in the possession of trustees, the beneficiaries being householders of a community, which has very often been threatened with compulsory purchase because it happens to have considerable value for use for other purposes than those for which the trustees are bound to use it. In the case of compulsory purchase by a local authority, the land is bought by the local authority for a certain purpose and the local authority is there. In the case of land purchased by the Land Commission under compulsory purchase, I rather gather from what the noble Lord, Lord Champion, said that the Land Commission would be acting as intermediary and they may transfer the land to somebody else, perhaps some developer. In that case the title will be taken from the owners, the trustees, and given to the developer. Supposing the developer proves to be a man of straw. Are the Land Commission liable for the compensation or would the trustees have to look to the man of straw? That is, I think, a very important point.
There is another point, which I do not suppose comes up here, but which might give rise to some question. Are the actual beneficiaries entitled to compensation or are the trustees? Those are questions I should very much like to be cleared up.
As I understand it, the noble Lord has cited the case of trustees and beneficiaries and has talked about their being subjected to compulsory purchase. We are not in this clause dealing with compulsory purchase, but rather with the way in which we shall bring about the payments to those from from the land has been obtained as a result of the compulsory purchase. What would happen in the event of the Commission purchasing land through the use of the compulsory purchase order is that the decision would be taken and all the necessary steps would have to be gone through, rights of appeal and so on, 910 by the trustees on behalf of the beneficiaries. What we are here considering in this Amendment is, once that compulsory purchase order has been made, how do we set about the job of paying the original owner of the land.
§ LORD CHAMPION
In the case of the developer being a man of straw, the Commission would buy the land and would pay for it. If the Commission got into trouble with the man of straw, as the noble Lord put it, this would not affect the original person who sold the land in the first place to the Commission. I should have thought this would be the Commission's problem, not the problem of the man from whom the Commission had obtained the land. I hope that answers the noble Lord's point.
§ THE EARL OF KINNOULL
The noble Lord, Lord Mitchison, described this clause as purely a procedural issue. I think possibly it would be fair to point out to him that his noble and learned friend the Lord Chancellor did not seem to take this view, as he took some pains to stress there had been precedents for taking these emergency powers.
I am quite prepared to withdraw this Amendment, but before doing so I should like to ask the noble Lord, Lord Champion, about the effect on tenants of properties. He mentioned that the rights of occupiers of properties will in no way be affected. As I understand it, the Commission will be a Crown body, and a Crown body is not affected by the Rent Act 1965 or the Landlord and Tenant Act 1954. Under both those Acts tenants have security of tenure. Before I withdraw this Amendment, I should like an assurance that in fact this position will continue; otherwise, perhaps we could put down an Amendment to that effect.
§ LORD CHAMPION
I think that if the noble Earl will look at later clauses in this Bill he will find that tenants have certain rights, and the Commission's task will be to take them into consideration. But this point does not arise on this clause, and we might have an opportunity of discussing it later. Perhaps if the noble Earl would care to see me afterwards—I do not mean out of school or anything of that sort, not in my study 911 but in my room—I should be happy to point out the parts of the Bill which in fact will provide certain safeguards for the tenants.
§ Amendment, by leave, withdrawn.
§ 3.30 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES) moved, in subsection (5), to leave out all words after "affected" and to insert:
or a description by reference of those lands in the manner provided by section 61 of the Conveyancing (Scotland) Act 1874".
The noble Lord said: This Amendment improves the drafting of an Opposition Amendment which was accepted at Report stage in another place. If the Amendment is made, subsection (5) will read as follows:
In the application of this section to Scotland a general vesting declaration shall contain a particular description of the lands affected, or a description by reference of those lands in the manner provided by section 61 of the Conveyancing (Scotland) Act 1874.
The effect of this Amendment, in both its forms, is as follows: Where the Land Commission acquires land compulsorily it may do so by executing a general vesting declaration. This procedure cuts out a good deal of the conveyancing which would otherwise be necessary. In the application of the Bill to Scotland, however, provision is made for recording the declaration in the General Register of Sasines, to which there is no counterpart in England, in order to preserve the completeness of the Scottish Land Register.
§ It was always the intention that, for the purpose of recording, the prescribed form of a vesting declaration provided for in Clause 9(1), should include a requirement for a legal description of the land concerned. The Opposition in another place however, desired to amend the Bill so as to provide in the Bill itself for a description of the land. There was no objection in principle to this Amendment, but the form of the Amendment as put in by the Opposition is open to misconstruction. It seems to suggest that the normal practice will be to have a particular description of the lands affected, whereas in Scotland a description by 912 reference is much more common. The Government Amendment which it is now desired to substitute corrects this false emphasis, and at the same time gives greater precision to the reference to the Conveyancing (Scotland) Act 1874, by specifying the relevant section. I beg to move.
§ Amendment moved—
§ Page 10, line 7, leave out from ("affected") to end of line 8, and insert the said new words.—(Lord Hughes.)
THE EARL OF SELKIRK
I take it that this registration of title through compulsory purchase would not affect any bonds on the General Register of Sasines? They would, I presume, continue to be valid, although the title to the land itself would be changed.
§ LORD HUGHES
I think that is the position. As I think the noble Earl is aware, we in Scotland have always prided ourselves that the General Register of Sasines provides a complete record of everything affecting title to land. The purpose of this Amendment is to keep the situation in this respect in line with the position as it has always existed.
May I understand that? Does that mean that the Land Commission will take over the responsibility for the bonds on the land?
§ LORD HUGHES
I am not quite clear about the point. Presumably, if the Land Commission is compensating the owner of the land for its full value, the responsibility will rest on that owner to give a clear title, one free of the encumbrances of a bond. Alternatively, presumably it is possible that if the Land Commission is accepting responsibility for the extinguishment of a bond, the price which it will pay will be correspondingly reduced. What is quite certain is that the Commission will not compensate someone for land on the assumption that it is free of bond, and then extinguish the bond also.
No. But the noble Lord must consider this point: that land which last year was worth a considerable amount, and which was used as security for a bond for a considerable amount, may, under this Bill, be purchased by the Land Commission for a price that is less than the bond. In that case, who takes over the responsibility for the bond?
§ LORD HUGHES
It seems to me that the noble Lord is raising a circumstance which is unlikely in these days to arise; that is, a situation where land which had considerable value last year has a lower value this year. If, in fact, that situation had been fairly common, I greatly doubt whether the Land Commission would have had the power that it has. In the meantime, I have had a note from the Box which confirms that both ways are possible, that the Commission can take over the land and the responsibility for payment of the bonds; but I want to emphasise that that does not mean that the Commission is going to become Santa Claus, in that the present owner of the bond is to have the benefit of the land without some account being taken of the bond liability.
I can give the noble Lord a practical instance of some land which I know quite well, which was valued before the General Election before last by a competent firm of valuers for a considerable sum. I do not think that the land is worth as much to-day as the value they put upon it. If that land had been the security for a bond, it might well happen that the sort of case I put before the noble Lord would arise.
§ LORD HUGHES
It is difficult to argue this on the basis of a single case. What would seem to be indicated by the noble Lord is either a piece of bad valuation or a piece of kind valuation.
Surely the noble Lord is not right in thinking that we are legislating only for this year and next year. We are legislating for many years ahead. There have been booms and there have been slumps. If one looks as the price of land in the United States in 1930, it must have been a mere fraction of what it was in 1928, and the bond holders then lost all their money.
§ LORD HUGHES
With respect, I do not think that anything which is being done here—which, after all, is a registration of title—in any way affects the position of the bond holders. If land changes in value along the lines which are suggested, and which some of us would consider an improvement, instead of always rising in value, at least the bond holder will be in no worse position in such a situation than hitherto.
§ On Question, Amendment agreed to.914
§ Clause 9, as amended, agreed to.
§ Clause 10 [Effect of general vesting declaration]:
§ LORD CHAMPION
This is a drafting Amendment. As subsection (2) stands at the moment, it is not clear what the words "on that date" refer to. The Amendment makes it clear that they refer to the end of the period specified in the general vesting declaration, and the words refer back to the commencing words in subsections (1) and (2) of the clause. I beg to move.
§ Amendment moved—
§ Page 10, line 35, leave out ("on that date") and insert ("at the end of that period").—(Lord Champion.)
§ On Question, Amendment agreed to.
LORD HUGHES moved, in subsection (4), to leave out all words after paragraph (c) and to insert:
( ) In relation to land in Scotland, at the end of the period specified in a general vesting declaration, or if a notice of objection to severance is served under Schedule 3 to this Act, when that notice has been disposed of in accordance with the provisions of that Schedule, that declaration, if still being proceeded with or, as the case may be, that declaration as altered under paragraph 11A of that Schedule, shall be recorded in the General Register of Sasines, and on being so recorded shall have the same effect as a conveyance registered in accordance with section 80 of the Scottish Act of 1845.
§ The noble Lord said: With permission, I should like to link with this Amendment Amendment No. 45, to Schedule 3. These linked Amendments carry out an undertaking given at the Report stage in an-another place on October 26. Schedule 3, "Supplementary provisions as to general vesting declarations", provides, among other things, that if a declaration comprises part only of the building or area of land then the owner of the building or land can serve a "Notice of objection to severence" of his property, whereupon the Land Commission must withdraw the vesting declaration or agree to take the larger unit, or refer the matter to the Lands Tribunal—in Scotland, to an official arbiter. The defect in the Bill as it stands, as was pointed out by the Opposition in another place at Report stage, is that there is no provision for amending the description of the land which is contained in the declaration if as a result of the notice of objection to 915 severance a greater area of land is taken, or of stopping the declaration going on the record if the objection results in no land being taken. The Amendments put down by the Opposition at Report stage in another place exposed this difficulty but did not completely rectify it. They were withdrawn on the understanding that Government Amendments would be put forward at a later stage. The Amendments which I now put forward carry out this undertaking. I beg to move.
§ Amendment moved—
§ Page 11, leave out lines 28 to 32 and insert the said new subsection.—(Lord Hughes.)
§ On Question, Amendment agreed to.
§ Clause 10, as amended, agreed to.
§ Clause 11 agreed to.
§ Clause 12 [General powers of management]:
§ On Question, Whether Clause 12 shall stand part of the Bill?
I want to raise on the Motion that the clause shall stand part of the Bill the question of the management of agricultural land which is required by the Commission. We have not been told a great deal about the likely policy of the Commission in the investment of their funds, but we know that they have been charged with the purchase of land in advance of requirements so as to obtain for the community any profit which arises as a result of planning consent for development being given in respect of that land. I presume that this means the purchase of land which is known in town planning circles as "white" land; that is to say, land whose primary purpose is agricultural but where other uses can be sanctioned as a necessity arises. It is those areas which have had the biggest rise in value. The owner may overnight, by the issue of planning consent, find the value of his property increased from £200 or £300 an acre to ten times that value, and even more. I am sure this is going to exercise an almost irresistible appeal to the Commission.
I imagine—and I hope that I do not exaggerate—that quite large areas of land will be acquired by the Commission in this way, possibly as much as 50,000 or 100,000 acres, land which at present pro- 916 duces a good deal of food. Some of this land no doubt will be disposed of in a few months' time; some may be retained for a year, two years, three years, five years or even longer. I am wondering what will be the status of the present occupiers of that land during those periods. They will be of two classes, tenant farmers and owner-occupiers. I assume that if the Land Commission do not want to dispose of land at once for development, they will be disposed to let it back to the existing occupiers. In the case of tenant farmers, who usually enter into written agreements with their landowners, this will simply mean a change of landowner. But in the case of owner-occupiers, it would mean that by a stroke of the pen they would be converted from owners into tenants. I imagine that they would form the majority of those affected, having regard to the fact that some 60 per cent. of all farmland is owned by owner-occupiers. I suppose that in the case of the tenant farmer, and of the owner-occupier who is converted into a tenant, they would have to negotiate fresh leases or fresh terms with the Commission.
Your Lordships are no doubt well aware that, since the war, there has evolved a code with statutory force governing relations between landlord and tenant and covering such matters as notices to quit, arbitration in regard to rent, improvements, maintenance, and so forth. Most of this appears in the Agriculture Acts, but there are other Acts which come into consideration here; for example, the Protection from Eviction Act, which recently went through your Lordships' House, containing special provisions in regard to agricultural tied cottages. What I, and I am sure other people, would like to know is whether the Commission, as owner of that agricultural land, will in all these respects be under the same statutory obligations as any other owner of agricultural land and, if not, in what respects those obligations are going to be modified. I ask this question because it seems to me that in some ways the Commission will be in a different position from any other Government Department or statutory body or Commission.
Agricultural land is, of course, frequently bought by Government Departments and other persons with compulsory powers, but I think that hitherto it has always been for some immediate purpose, 917 such as planting of trees, or military training, or, in the case of local authorities, for the protection of amenities or water supplies. This is the first occasion of which I am aware where a body of people, armed with compulsory powers, will be able to acquire tracts of agricultural land as a sort of holding operation for purposes which may not mature for several years. This appears to raise new problems as it may well affect food production, which is a matter of great moment to us all. Therefore, this is a matter of general importance.
§ LORD KENNET
I am grateful to the noble Viscount for having brought up this point. It is a point of general interest, and the Committee need have no fear that anything is going to change from the familiar situation. First of all, the Land Commission will be in business for development. It will not be any purpose of the Land Commission to acquire agricultural land as agricultural land. I think that the noble Viscount recognised this in his speech. It will from time to time be assembling parcels of land, and until it has got the last parcel it wants for a particular development it will be quite wrong and uneconomical of it to take any step to cause the agricultural occupiers of the first parcels of land to move.
By what will the Commission be governed when during this interim period it is an agricultural land owner? The noble Lord was quite right to distinguish between tenants who are there already and who would undergo a change of landlord, and, on the other hand, owner-occupiers who will have to become tenants of the Land Commission for the remaining months that they are on the land before development begins.
The agricultural land owned by the Land Commission will be managed in the same way as other agricultural land owned by Government Departments. The Land Commission is a Crown body as is any other Government Department, and the Agricultural Holdings Act 1948, which is the main law regulating the relationship of agricultural landlord and tenant, applies to the Crown, and hence will apply to the Land Commission as well as to any other Government Department. That being so, I hope that the noble Viscount, and indeed the Committee, will agree with me that although we are adding the Land Commission to the 918 list of Government Departments which may hold agricultural land, we are not making any change in the provisions under which such Departments may hold such land.
§ THE EARL OF KINNOULL
I believe that I inadvertently missed my Amendment No. 17, but I wonder whether I may just raise a point now, because it was a probing Amendment. The purpose of the Amendment was to establish beyond reasonable doubt that in regard to the powers under this clause which allow the Commission toexecute any building, engineering or other works in, on, over or under any landthey must apply for planning consent before carrying out the work. I appreciate that this is confirmed in Clause 13, but it has occurred to many people that the wording of Clause 12 is such that it could be interpreted as meaning that the works may be executed without planning consent. A further query arises because normally Crown land does not require planning consent. Perhaps the noble Lord could confirm again that, although the land involved here will be Crown land, it will on this occasion require planning consent. It is obviously important that the intention of Parliament should always coincide with the interpretation of a Bill, and this may not happen under Clause 12.
§ LORD MITCHISON
May I intervene for a minute? This subject was dealt with very clearly, rather shortly and quite correctly—as I hope your Lordships will agree when you look at it—in another place. One must remember that this clause gives no compulsory powers whatever to the Land Commission. It gives them the function of acting as landowners and holding land, but it gives them no powers which would not be available to the ordinary landowner. In substance, what was said below was that it is intended to deal with the sort of objection which says, "You are doing something which is beyond your proper functions as a landlord. It is not within your powers", as the phrase goes. Therefore, though the clause adds no compulsory powers, it makes it clear that the Land Commission can function as ordinary landowners over agricultural land or anything else, to the extent that they have to hold it.
919 The position is made clear by what my right honourable friend the Minister below described as "that horrible subsection (5)". I entirely agree that subsection (5) is horrible, but what it comes to is this: "You cannot do anything which you would not have power to do under your general powers, and if you do any more you will not get any protection from this clause, except that you cannot be charged with doing something which you are allowed in general terms to do under this clause; that is to say, to manage and dispose of land. You cannot be charged with that being an excess of power, as it is the kind of thing that you are allowed to do."
Therefore, when one looks at the provisions of the first subsection and reads it in that light—in spite of what one might think if it stood by itself, or if it stood in some other context—all it means is that the Land Commission have a general power to hold land and execute certain works and so on, and shall not be charged with doing something which is not their duty or their function because they are doing what they are allowed to do under subsection (1).
May I quote a very short sentence from column 396 of the Report of the Committee proceedings below?As I think the honourable Gentleman, said the effect of this subsection….—that is, subsection (5)—…is to make clear that the powers under subsection (1) shall be within the vires of the Commission, but this applies without any compulsory powers for the purpose of doing them."—[OFFICIAL REPORT, Commons, Standing Committee E, col. 396; 12/7/66.]
§ LORD KENNET
To deal briefly with the point belatedly raised by the noble Earl, Lord Kinnoull, I would confirm once again that the Land Commission in their own operations are subject to planning law, irrespective of the fact that they are a Crown body. This is set out very clearly in the clause after the one which we are now considering—Clause 13.
So far as I am concerned, being a very simple person, I am easily confused by legal language. But if the noble Lord has assured me, as I think he has, that atenant under the Commission will be in exactly the same position as he would be in under any 920 other landlord, then I cannot ask for further assurances.
§ LORD KENNET
Provided that his landlord was a Government Department. The tenant would be in exactly the same position as if his landlord were any other Government Department.
I shall have to look further into that, because, to my knowledge, no Government Department has ever held land for long periods in anticipation of something else happening.
§ Clause 12 agreed to.
§ Clauses 13 to 15 agreed to.
§ Clause 16 [General power of disposal]:
§ 3.57 p.m.
LORD BROOKE OF CUMNOR moved to leave out subsection (5) and insert:
(5) If at any time it appears to the Commission or to the Minister that land acquired by the Commission compulsorily for a specified purpose it not needed for that purpose, such land shall be offered for sale or disposal first to the owners or successors in title from whom the land was acquired compulsorily, and in the event of their not acquiring it in accordance with the provisions of subsection (2) of this section, it shall then be offered for sale or disposal on the open market.
§ The noble Lord said: I hope that the Government may be able to say something helpful in reply to this Amendment, because as subsection (5) of this clause is drafted it might be taken as a clause to give statutory sanction to Crichel Down procedure by the Land Commission. Most names have transient notoriety, but that of Crichel Down seems to have passed into the language. Twelve years ago such a scandal arose that the Conservative Government gave an undertaking that if any agricultural land was acquired by a Government Department or agency and afterwards was found to be surplus to requirements, and if it had not been so developed that its whole character had been altered, then, in the first instance, it should be offered back, at the current market value, to the original owner from whom it had been compulsorily acquired. That has been the accepted practice ever since. I hope I shall hear that that is the continuing practice of the present Government.
§ The Land Commission, however, is a new body, and one of the purposes of this Amendment is to seek an assurance from the Government that, either by 921 amendment of the Bill or by a ministerial direction or otherwise, the Land Commission will respect the principles laid down in that statement which was made to Parliament in July, 1954, and which has given over these twelve years considerable assurance to the public that a scandal of that kind would not arise again. My Amendment deals somewhat narrowly with the point that if either the Minister or the Commission finds that land which has been compulsorily acquired by the Commission for a specified purpose is not needed for that purpose, then it shall first be offered for sale or disposal to the previous owners. I appreciate that if my object is to be achieved by amendment of the Bill it will probably need a somewhat more complex Amendment, or shall I say more developed Amendment, to attain the purpose entirely.
§ The existing subsection (5), I would submit to the Committee, is drafted too widely. As I read it, the Land Commission might seek to acquire compulsorily a piece of land, and though the compulsory purchase order might be objected to by the owner, the Land Commission might get its way, maintaining at the public inquiry (if there was a public inquiry, as I trust there would be) that it was needed for some entirely social and desirable housing development. As I read the present subsection (5), the Land Commission could then say, having got the land, that it would be rather better to transfer the land to a local authority for use as a sewage works, even though that point had not arisen at all during the public inquiry or during any of the period of time available to the previous owner or owners for making objections and representations.
§ I take it that the Government have in mind some kind of safeguard. I want to feel I am right in assuming that the Land Commission is going to behave in an honourable way, and that it is not going to be the sort of body that would, almost in bad faith, mention an acceptable purpose for land that it desired to acquire and then immediately, or very soon afterwards, switch the use of that land to some purpose which might give much greater cause of offence to the previous owner or to the neighbouring owners. Part of my reason in moving to omit subsection (5) and to substitute 922 my new subsection was to see whether I could extract from the Government a satisfactory assurance that the Land Commission would not behave in that way.
§ But I come back to the Crichel Down point. I appreciate that it is not intended that the Land Commission should become a permanent or long-term owner of undeveloped land. Indeed, the noble Lord, Lord Champion, said only this afternoon that when the Commission acquired land it would normally be with the object of disposing of it again reasonably quickly. But I think the Committee must recognise that there are likely to betimes when the Commission acquires land in good faith and then discovers, again in good faith, that it is surplus to requirements. It may have been purchasing parcels of land in connection with some of the stated purposes under subsection (4) of Clause 6—let us say (4)(a) or (4)(b)—and then discovers that it has drawn the perimeter rather too widely, and has got possession of more land than it needs. What will the Commission do then? My Amendment is designed to ensure that in such circumstances there can be no question of the Commission proceeding to sell that surplus land to any Tom, Dick or Harry, perhaps without even informing the previous owner, from whom it was taken compulsorily, of the fact that it is being sold elsewhere.
§ This is more than a probing Amendment, but it is certainly not a wrecking Amendment. I trust that we shall hear that the Government are as anxious as my noble friends and I are to ensure that there are no Crichel Down scandals in connection with the work of the Land Commission. I beg to move.
Page 17, line 37, leave out subsection (5) and insert the said new subsection.—(Lord Brooke of Cumnor.)
§ LORD SILKIN
I have very great sympathy with the speech which the noble Lord has just made, but his speech is at complete variance with the Amendment that he has put down. His speech dealt with the case where land was acquired and was subsequently found not to be wanted. I would certainly agree that in such a case the land should, in the first instance, be offered back to the original owner. But the Amendment provides 923 one purpose and it then turns out that it is not needed for that purpose but is needed for some other purpose—and that circumstance, I think, is not the circumstance of the Crichel Down case. It may be that in such a case, if the land is not needed for the purpose for which it was originally acquired, one should get the authority of a Minister to use it for some other purpose, but I do not think that in such a case one should go back to the original owner and offer it to him. I do not know how far the noble Lord meant to go, but his Amendment certainly goes much further than he did in his speech.
§ LORD BROOKE OF CUMNOR
Perhaps I may try to satisfy the noble Lord, Lord Silkin, who I see is seeking to be helpful to me. I mentioned the type of case where the land might have been compulsorily acquired under a statement by the Land Commission that it was needed for some thoroughly acceptable purpose, a purpose which few adjacent owners would find unacceptable, and I pointed out that, under the Bill as it stands, it would appear that the Land Commission could then proceed to sell that land to a local authority for, let us say, a sewage works, that purpose never having been mentioned at any earlier stage. I agree with the noble Lord, Lord Silkin, that my Amendment goes further than the Crichel Down type of case. My objection to the subsection in the Bill which I am seeking to leave out is that it seemed to me to be an invitation to the Land Commission to repeat another Crichel Down. But the words which I propose to substitute for that subsection are designed not only as a security against another Crichel Down scandal but also as a guarantee against the type of transaction which I exemplified by the case of the sewage works.
§ LORD PARGITER
Surely the Crichel Down case was not entirely in line with what the noble Lord has just said. The Crichel Down case was a case where land was acquired, where there was no change in the user of the land at all and where it was not offered back to the original owner, who was very anxious to re-acquire it, but was sold to someone else entirely different. It was not a question of price, or anything else: it was purely a question of the land being sold 924 to someone else when, logically, it ought to have been offered hack to the original owner. That is rather different from the case where land acquired for a particular purpose is possibly used for another purpose. The cases are not on all fours.
The case here, as I see it, cannot be argued in the way which has been put forward—at least, not if it is to be as it is in this Amendment, as my noble friend Lord Silkin has indicated. This Amendment is very wide. It deals with cases where the Land Commission acquire land for a particular purpose. It may well be that the land will not be required for the particular purpose for which it was acquired, but may be required for some other and equally good purpose. Under this Amendment, the land could not be used for that purpose: it would have to be offered back to the original owner at market value. Then, presumably, if it was again required for some public purpose, there would have to be another compulsory purchase order to acquire it again. In the meantime, the land would probably have increased its value two or three times—at least, that is what would be likely to happen. I do not think anybody could argue that this is a reasonable thing to do.
The Land Commission acquire land in good faith. It is the planning authority that alters the user of the land, for better planning purposes. What are the Land Commission to do in those circumstances? Are they to agree to the altered planning proposal and dispose of it for this purpose; or must they offer it back to the landlord? According to this Amendment they must take the latter course. At what price is it offered back to the landlord? The new planning consent may have altered the value of the land. It may be different from what it was in the original proposal. It it is sold back at market value, what becomes the market value? Does the new value become market value?
It seems to me that the Amendment could not stand up as it is at present. It would, in effect, from the point of view of acquisition of land under this particular clause, wreck the intentions of the Commission, the good intentions of the Commission, who acquire land quite properly for a particular purpose. They argue their case and get authority to 925 carry that purpose out, and then find, perhaps through no fault of their own, through circumstances outside their control, that the user of the land is altered. On this Amendment they could not offer it for sale to the local authority, or to a private developer, or to anybody else, for that particular purpose. I think the instance of a local authority acquiring it for sewage disposal purposes is stretching the argument too far. In any case, there would be stringent regulations regarding planning consent for that purpose. It seems to me that this is going to the extreme limit. It is hardly the type of argument which supports the Amendment which has been put down. I hope the Amendment will be resisted because it would make the position of the Land Commission in some circumstances untenable.
§ 4.13 p.m.
§ LORD LEATHERLAND
Like my noble friend Lord Pargiter, I have for many years been a member of a county council and, for similar reasons to those that he explained, I should like to oppose this Amendment. I can see some virtue behind the ideas of this Amendment; but I feel that it goes too far. I do not want to follow the noble Lord, Lord Brooke of Cumnor, in the matter of what he called the Crichel Down scandal. That was a scandal which occurred under a Tory Government; I hope that a Labour Government would not be guilty of any such action as that. But when we, as a county council, purchase land, as we frequently do, perhaps for a school in a community which we know is developing rapidly, we are sometimes approached a little later in the scheme by the urban district council or the borough council who suggest that the two councils should revise the layout for this new community. They say: "Let us take the land you had designated for school purposes as, possibly, land for a housing scheme. We, in turn, will give you part of the housing land for the purposes of your school. "That is quite an easy arrangement to come to between the two authorities; but in the light of the Amendment moved, if the original authority who acquired the land for the school discovered they did not require it for that purpose, then the next step would be to offer the land back to the original owner or else put it on the open 926 market. I think that would be to the detriment of good local government administration.
It is the fact that in my county the county council and the urban district council, who are undertaking some overspill development from Greater London, are entering into combination for the purchase of areas of land. It may be that the areas designated at this moment on the plan for the school and those designated at this moment for housing will be interchanged at some later stage in the development and negotiations. With that knowledge, I feel it would be much to the detriment of the two local authorities if they were hamstrung in this way, and if at the moment when the original purchasing authority say: "We do not require it now for the purpose for which it was originally required", we had to put it on the open market and offer it to the highest bidder. I can see what the noble Lord, Lord Brooke of Cumnor, is getting at. We do not want anything in the nature of a Crichel Down scandal.
But if this Amendment is passed in its present form it would wreak incalculable harm on the local authorities at two strata who are trying to operate together in the public interest.
§ LORD CHAMPION
My reply has been well argued, first, by the noble Lord, Lord Silkin, whose knowledge in this field is so much greater than mine, and then by my two noble friends who have tremendous local government experience and who therefore will know something about the problem of switching land from one purpose to another. I hope I can give the noble Lord, Lord Brooke of Cumnor, the assurance he wants, without necessarily accepting the Amendment, As has been said, the Amendment goes very far and would extend the Crichel Down policy on the disposal of surplus land far beyond the original limits of the Crichel Down procedure that has been followed ever since the days of the difficulties that arose as a result of Crichel Down. This policy has been maintained by all Governments, including the present one, since the time of Crichel Down without any significant alteration. The policy is, broadly, that agricultural land which is still recognisable as agricultural land—and this is an important point—should be offered back to the person from 927 whom it was bought (if it was bought under the threat of compulsion) when it became surplus to Government requirements.
This policy does not apply—and never has applied, so far as I know—to any land other than agricultural land. If the Commission buy agricultural land under threat of compulsion and re-sell it as agricultural land, then, no doubt, they too would follow the Crichel Down policy and offer it back to the original owner. But it would not be wise to extend this principle to land other than agricultural land, because the special considerations that make it fair that agricultural land should be offered back to the original owner do not apply. These special considerations are that in many cases the land was torn away from a viable agricultural unit and it ought to go back into that unit if it is at all possible. The Amendment certainly embodies a vast extension of the Crichel Down policy.
But I must mention the fact that it is Government policy, which is not based on statutory requirements, that land is offered back to the owner in these cases. This can be enforced in the case of the Commission by ministerial direction; and subsection (1) makes this quite clear. It would be absurd to have a statutory requirement which dealt with only one compulsory purchasing body. If we put this direction into this Statute it would be the sole piece of legislation which contained it. We think it would be wrong to put it in here. In any case, we are sure that this policy will be followed, and we can give the assurance to the noble Lord that we will, by ministerial direction, enforce it if the necessity should arise.
There is another factor in the Amendment that I must mention. It has been mentioned by my noble friends Lord Pargiter and Lord Leather land. If the Commission did not want to use the land for the specified purpose for which they bought it but wanted it for some other purpose for which they had compulsory purchasing powers, the Amendment would cause them to have to go through the useless manœuvre of selling the land back to the owner and then putting a compulsory purchase order on it. I am sure the noble Lord, Lord Brooke of Cumnor, would not want that to happen, 928 and, in the circumstances, I cannot imagine that he would wish to press his Amendment. The question of buying land for one purpose and switching it later for another goes further than the Crichel Down principle. The noble Lord, Lord Brooke of Cumnor, has said—and I think he is quite right—that we must assume that the Commission will behave reasonably; we have to start from that point. If they do not behave reasonably, we have the safeguard of the fact that they are answerable to the Minister and, of course, to the Parliamentary Commissioner, should any objection be taken to anything they do.
There is just one further fact I must mention. It is the fact that the Land Commission need planning permission and this is also a protection in this connection. I would add (and I hope I have given to the noble Lord, Lord Brooke of Cumnor, the assurance he requires) that we do not propose to permit—and this is really what it amounts to—the Land Commission to depart from what has been the Crichel Down policy in respect of agricultural land being sold which could suitably go back to the original owner.
§ 4.21 p.m.
§ LORD BROOKE OF CUMNOR
I am very much obliged to the noble Lord, Lord Champion, for having given to the Committee and to me the assurance which it was the principal object of putting down this Amendment to elicit from the Government. It seems to me most important that it should be known to be the fact that the Government will insist, if necessary by Ministerial direction under Clause I, that the Land Commission complies with the principles laid down in what I might call the Crichel Down statement of July, 1954. I would not ask the noble Lord to give me an assurance that those principles should be extended in this case, because I appreciate that there is a difference between agricultural land and other land, but before I ask leave to withdraw the Amendment I wonder whether the noble Lord could go somewhat further and explain to the Committee just how free the Land Commission will be to change its mind and to go on changing its mind?
Broadly, when a local authority obtains confirmation of a compulsory purchase order, having said that it wants land for a particular purpose, and then changes its 929 mind and wants to switch to another purpose, it has to get Ministerial approval for the change. As I see it, the Land Commission is not subject to Ministerial approval al all where it wishes to switch land from the original stated purpose to another. While accepting that the Commission will act in good faith, as I trust that it will, and as I am sure that under its present chairman-designate it will, nevertheless what is the safeguard to the public were the Land Commission to be found, for one reason or another, frequently to be, as it were, belying the statement it had made originally when it first sought to acquire land compulsorily?
It would be very bad for the reputation of the Land Commission if it became commonly said that not much faith could be placed in the statement made by the Land Commission at a public inquiry to the effect that it desired land for a specific purpose. Suppose the number of times mounted up in which it was found that afterwards the Land Commission disposed of land for quite a different purpose. It would begin to be felt that Parliament had not been sufficiently insistent in protecting the interests of the public against this. I am not imputing any bad faith to the Land Commission, because I entirely appreciate that on occasion it may find that land acquired for one purpose may be better disposed of for another purpose; but equally it is most important, particularly important to all those concerned professionally in the transactions that will take place, that it can be in general accepted that when the Land Commission says it requires to obtain land compulsorily for a particular purpose it really means it, and that there is no great likelihood of the land being used for a different purpose.
Would it not be wise to insert in the Bill a provision that the Land Commission must obtain the authority of the Minister when it wishes to change its mind? That would simply be an extension of the latter part of the existing subsection (5) in Clause 16, which requires the Commission to obtain Ministerial consent when there is to be a switch in the use of land acquired under Clause 6(4)(c). Would it not be a valuable reassurance to the public if the Commission had to obtain the consent of the 930 Minister in all cases of switching? The public would then have the normal democratic protection through Parliament of being able to question a Minister as to why he had given his consent. Here, it seems to me, one has a body which is protected from immediate Parliamentary questioning and criticism, yet is given a very wide discretion.
I do not know whether the Government will say that the Council on Tribunals could challenge the action of the Land Commission if it repeated its change of mind so frequently that people began to lose faith in its assurances, but I hope that the Government will agree that here is a genuine problem, and that I am not in any way intending to be obstructive or obstinate. I am simply anxious to see how we can best secure that the public will believe that there is always genuine substance in a statement by the Land Commmission that it desires to obtain land compulsorily for the purpose that it mentions. If that were to go, a great deal of harm would be done to the Land Commission, and I think I am entitled to ask the Government how they will protect the good name of the Commission and maintain the faith of the public in this important matter.
§ LORD MITCHISON
Metaphorically the loudspeakers are positively dripping honey and obviously I must be careful not to disturb this harmonious atmosphere. I do not want to do so. I entirely agree with the noble Lord, Lord Brooke of Cumnor. It is very important to keep the good name of the Land Commission, and it is important in the public interest that it should start well and continue well. But I think that it is not quite fair on the Land Commission to take the analogy of a local authority all the time. There is another possible analogy. Suppose land is sold to a developer who, having bought it for one purpose, uses it for another. The effective check on him in a case of that kind is the planning permission he may require for the new purpose, and it seems to me that this is really the effective check in this kind of case, too. If one takes for instance the case of an offensive trade, or something of that kind, being carried on, it does not seem to me that the right person to decide whether you should or should not have an offensive 931 trade carried on in the neighbourhood is the former owner, as seemed to be implied at one time. It must, I should have thought, be the planning authority, and if one is going to look at this matter at all one has to be clear on what is meant by "purpose".
The instance given by the noble Lord, Lord Brooke of Cumnor, is a long way away from the type stated in general terms, and solely with the object of limiting powers during the first transitional period under Clause 4 of the Bill. The noble Lord took another of these premises just now as an instance of the kind of thing he had in mind, but that is entirely different from the change of purpose when land, bought for development, say, as a housing estate, is, as regards part of it, changed from a house to a shop or from a shop to a garage or something of that sort. It may be these comparatively minor changes which the noble Lord has in mind when he spoke about protecting the public.
If this Amendment were to be taken any further, it would be necessary to be very clear, especially with regard to Clause 4, about what was intended by "change of purpose". I trust that no assurance will be given by the Government which will limit the Land Commission, subject as they are to planning permission all the time, to changes which would not meet with a similar limitation if they were carried out by a developer. A developer with general planning permission may or may not get planning permission for a change he has in mind. That is what planning permission is intended for.
When a similar point was raised below, there was some suggestion that the previous owner was entitled to buy back on special terms. I think that that is precluded by the wording of the Amendment. Therefore it is simply a question of whether or not to offer the land back on a change of purpose, and not of the amount of compensation. That being so, I suggest that the planning machinery is the right safeguard. When we compare the Land Commission with the local authority, we forget that a local authority buy land for the purpose of their function, for use as a school or playground or whatever it is. The change is carried out incidentally in their accounts and is not a change of purpose, because a 932 change does not really exist in the case of a developer who changes within the limit of his development or, as in the case of the Land Commission, when it is essentially a body for promoting development. I trust that the Government will not get so intoxicated with the verbal honey which has been descending on us that they will in any way tie the hands of the Land Commission in doing what they are really required to do—namely, to get the land of this country put to the best use in the public interest.
§ LORD CHAMPION
I am not sure whether my noble friend was complaining about the honey dripping about us. Some little time ago one of my noble friends on this side of the House came to me and said, "There is too much ' flannel' about this place." I took him severely to task. I said to him, "In this august assembly we do not use 'flannel'; we use plush." I hope we shall continue to use the courtesies of exchange during the further stages of this Bill.
I hope and expect that the Land Commission would never buy land with the underlying idea of just switching. We expect that those whom we should appoint for this task would be persons of integrity and good judgment. If the Commission met the circumstances suggested by my noble friend Lord Mitchison, I think they should be able to switch, always provided that the switch was in the national interest. I agree with the noble Lord, Lord Brooke of Cumnor, in hoping that they will not find it necessary to do this too often, but if they do have to do it they should have a clear purpose and be able to justify it, if necessary, to the public as a whole. The Land Commission in this matter are half-way between the Minister and the local authorities. We think it would be too restrictive to require the Commission to get Ministerial consent in every case where a change appears to them to be necessary in the national interest. The Commission might not even require to have the Minister's consent to buy, if there was no objection to the original intention of the Commission to buy. As I said previously, there is always the power of the Minister to supervise the administration. I hope that the noble Lord, Lord Brooke of Cumnor, will accept this as 933 the further assurance for which he was asking.
§ LORD ST. HELENS
Before my noble friend replies, may I ask the Minister this question? He said that he hoped that the Land Commission would always be able to justify their actions as being in the national interest. What I should like to know is: how can any member of the public call upon the Land Commission to justify any action? How can a grievance be ventilated by a member of the public?
§ LORD CHAMPION
My noble and learned friend the Lord Chancellor said on Second Reading that the Commission would be subject to the Ombudsman, the Parliamentary Commissioner. If any member of the public felt that something was happening which dealt harshly with him, he could lay a complaint before the Parliamentary Commissioner, who will be appointed under the Bill which is now going through Parliament. This is clearly the intention. But if there was found to be a mass of disquiet about the way the Commission were going about their work, there is always Parliament, and I am fairly sure that Parliament would be informed.
§ LORD CHAMPION
If we were discussing the Parliamentary Commissioner Bill I might be able to answer the noble Earl, but not on this simple Amendment.
§ LORD BROOKE OF CUMNOR
I am entirely satisfied by the assurance given by the Government on the Crichel Down aspect of this matter. As to the other aspect, I should like to have an opportunity of reading carefully what the noble Lord said in both his replies, and I must reserve the right to put down a further Amendment on Report if I feel that the case justifies it. I am grateful for his obvious recognition that there is a problem here and that there must be some safeguard for the public, either by the Parliamentary Commissioner or by the Council on Tribunals, or by some other means. But it might simplify the work of the Parliamentary Commissioner if we could insert safeguards in the Bill. However, I should like to thank the noble Lord, Lord Champion, for what he has 934 said, so far as he has gone, and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 4.40 p.m.
§ On Question, Whether Clause 16 shall stand part of the Bill?
§ LORD NEWTON
I should like to raise a point which I believe to be of considerable importance, not only to this Committee but also to the public at large and I mean public at large—and not just those who own land and property. I gave the noble Lord, Lord Kennet, notice last week that I was going to raise it. Clause 16, which we are now debating, gives the Land Commission a general power of disposal of property in its possession.
Subsection (2) of Clause 16 reads as follows:Except where so required or authorised by any such directions"—that is to say, directions of the Minister under Clause 1—or by section 18 of this Act"—which deals with concessionary crown-hold dispositions—the Commission shall not sell, lease or otherwise dispose of any land, or any interest in or right over land, except for the best consideration in money or money's worth which car. reasonably be obtained.That seems to be to be quite an unexceptionable principle. But it immediately compels me to ask this question. With subsection (2) of Clause 16 in the Bill, how will the Land Commission carry out one of the objectives stated for them in the White Paper—namely, to secure that the burden of the cost of land for essential purposes is reduced.
I think it will be most helpful to a great many people if the Parliamentary Secretary can take this opportunity of explaining precisely how, in the view of the Government, this Bill, when it reaches the Statute Book, will secure that the burden of the cost of land for essential purposes is reduced. We know all about concessionary crownhold. But unless the concession is going to be considerable, it will not follow from the fact that concessionary crownhold dispositions can be made that housing will be any cheaper then than it is today. The only thing one can be certain about is that when land is disposed of by means of concesssionary crownhold the house built upon it will 935 probably be cheaper than a similar house that is not disposed of in that manner. But that is quite a different story.
I think it is important that the Government should tell us how this Bill will achieve its stated objective—because this objective has been made much of in speeches up and down the country, during the time of the last General Election and before; and I would go so far as to say that it was because people were led to believe that one of the consequences of having a Land Commission would be that, somehow, houses would be cheaper they thought it a good idea and gave the Government the mandate to bring in this Bill. The Minister, Mr. Willey, when he makes speeches in the country about the Land Commission, nearly always refers to the objective of securing that the burden of the cost of land for essential purposes is reduced. But I am not aware that he or any other Minister has explained how, and I should be grateful if the noble Lord, Lord Kennet, could tell us.
§ 4.44 p.m.
§ LORD KENNET
The noble Lord's intervention goes to the root of this matter and of several others. I am grateful to him for having given me notice of his intention to raise it, and for the opportunity to try to wrap up this whole matter in one. The White Paper on the Land Commission set out the intention that the Land Commission shouldsecure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.There are two parts to this: first, taking a share in development value to the community; and secondly, because this is done, ensuring that the burden of cost to the community is reduced. The question, therefore, is how the Government will secure the second of these objectives.
Many of the essential purposes for which land is required are functions of local authorities, and the White Paper explained broadly the way in which it was intended to help local authorities. Paragraph 35 said that it was intended that the proposals for the levy on development value would be complemented by arrangements under which local authorities would benefit financially from the operations of the Commis- 936 sion It went on to explain, however—and I think it is probably here that doubts and confusions have arisen—that, for a variety of reasons, it was the intention that the gain to the Exchequer from the operations of the Land Commission would in one way or another be reflected in the new arrangements under which local authorities will receive financial assistance from the Government. Most of these arrangements are already known to your Lordships, because they are contained in the Local Government Bill which we have just been considering. This was, indeed, mentioned by my noble friend Lord Champion at an earlier stage in Committee in the debate on Clause 4.
The Local Government Bill (I think I should perhaps recapitulate) provides for increased Exchequer assistance to local authorities amounting to £30 million in the first year, increasing to £60 million and to £90 million yearly, and in deciding that these amounts were appropriate the Government had regard to the cost benefit to the Exchequer from the activities of the Land Commission. The Government were also particularly concerned about the cost of land in two specific sets of circumstances and have, in the Local Government Bill, provided for specific grants towards the costs of redevelopment and towards the cost of acquisition of land for public open space. Through the grant system substantial Exchequer assistance is thus being given to virtually all land acquisitions by local authorities in one way or another, and the burden of the cost of land is thus reduced. The Government are also introducing a new Housing Bill which will revise housing subsidies. Through this channel of direct Exchequer grants the burden of the cost of land for local authority housing will be reduced. In these ways the Government have given effect to the promises made in paragraph 35 of the White Paper.
So far as private development is concerned, so long as an open market in land continues—and the Land Commission Bill leaves the market in land to continue—land cannot be made available at a price below the market value without some system of control to ensure that the concession in the price of land is not immediately turned into a cash profit by the wrong person. Thus, if land was made available cheaply to a builder, this 937 would not necessarily reduce the price of the house that he sold; it would go to swell the builder's profits.
It is for this reason that the Government have chosen to help private enterprise housing in other ways. There are two main methods of assistance. First, the Land Commission Bill provides for disposal of land for housing on concessionary crownhold terms. Here the burden of the cost of land is directly reduced by actions of the Land Commission, but it is necessary to associate this with rights of pre-emption in order to ensure that the concession is enjoyed by the person for whom it is intended. Although the possibilities of extending the scope of concessionary crownhold will be explored thoroughly by the Land Commission, the Government have indicated that they expect that at first this will primarily be a means of assisting housing associations and societies which provide an existing machinery for policing disposals. The Land Commission are, however, given power to make concessionary disposals on crownhold terms in any way that, in practice, proves to be effective. The Government are also introducing a measure to assist house purchase—the mortgage option scheme—and this also will reduce the burden of cost, including the cost of buying land.
The Land Commission must not, therefore, be looked at in isolation. It is part of a co-ordinated and coherent programme of legislation which the Government are introducing, and the Land Commission must be looked at in this context. To sum up, I think I can understand the perplexity about how the Land Commission is supposed to reduce the price of land to the public by itself if it is looked at alone. If it is looked at in conjunction with other legislation which has gone through your Lordships' House, or is shortly to come to us, and if one bears in mind that Exchequer funds themselves are to be swollen by the proceeds of the land levy, then I think it is clear that the claim in the White Paper, that the true burden of the cost of land to the community is reduced by the present Bill, is met.
§ LORD MITCHISON
May I be allowed to supplement what my noble friend has said, because I have had a long interest in this Bill, and like other Members I have spoken about it in the 938 course of Election campaigns. I accept the proposition that in the Bill there is no direct attack on land prices, in the sense that there is no attempt to control them, to put a fixed figure on them, or anything of that sort. I do not think that has ever been suggested. But I suggest to the noble Lord who asked the question that he must have regard to both Parts of the Bill, and to the effect of both Parts on land prices. I do not think I can do better than to quote these words:We need an agency which will acquire the land, make the plan, provide the services and then dispose of the land according to the plan either by selling or letting it to private or public enterprise.The quotation continues:It is a by-product of this necessity that produces betterment; that is, the increase in the value of the land as it is brought into development will be either a total or partial compensation to the public.That is what Sir Keith Joseph said about the subject matter of the Bill—it was not, of course, then in existence—on May 4, 1964.
I find nothing to quarrel with in those words. If it is a by-product of this necessity that produces betterment, that is really a way of saying that it is because of that necessity that the local authorities and other public bodies have had to pay constantly increasing prices and rapidly increasing prices for the land they needed in order to perform their public functions. If we can set up a body which, in one way or another, with adequate powers of compulsory purchase, can cope with that outstanding public difficulty, then indeed we shall have taken a step to lower the price of land. For if it is to be lowered to local authorities, then the general effect on the market is bound to he a lowering one.
I speak from my own experience and my own eyesight—I am subject to correction about this—but as I go about a good deal, as I am sure your Lordships do, I have the impression that more property is coming on to the market and that prices on the whole have ceased (I do not say they are falling much) the wild rise which took place some year or so ago. If we have done no more than that, that is a great deal. We shall be told that this is a dangerous and terrible Bill. The more noble Lords opposite go on saying that, perhaps the more frightened the people with land will be, and 939 land prices may be lowered in that way. I do not mind any help from wherever it comes, whatever the motives are, if we can cope with the land problem in this country.
The need to provide land for public purposes and the need to control this business of outrageous development values rising sharply and suddenly is, I am quite certain, a task which the last Governments, the Conservative Governments, ought to have undertaken, which they recognise they ought to have undertaken and which Sir Keith Joseph had in mind when he said the words I have just read out, but about which they did nothing. I think that is the real effect of this Bill. It is not an attempt to say, "You shall do this and that about the price of land". It is an attempt to remedy what I take leave to call "outrageous development value", to keep down the rise in the price of land and, we hope, to lower it quite definitely.
We have not reached the levy yet, and I think I should be out of order in referring to it at any great length. But the point about the levy seems to me to be this. If it were left to the capital gains tax to deal with this kind of matter we should be proceeding on a different principle. The levy is an attempt to take a substantial part and, we hope, a growing part, of the unearned increment on land for the public benefit—immediately, if you like, for the Exchequer—and ultimately, as my noble friend made clear, for the benefit of local authorities, too. That seems to me to be quite clearly a means of dealing with the rising price of land in this country, with the refusal of land for public purposes, and with those who took land for houses and, instead of using it for the purposes for which it could best be used, held on to it simply with the object of selling in time, perhaps in a short time, at a profit. It is for that reason that I regard this Bill as carrying out, quite effectively and quite properly, so far as I can see, the intention which was put before the country more than once, and which was stated in the words I have just quoted from Sir Keith Joseph.
I wonder whether at some time somebody from that side will explain how—it may be the inten- 940 tion—the spiral of high prices will not continue just as much as ever, but under new management, as it were. I realise that there are some good boys who will get rewards out of this, but it seems to me that the remainder (which, I suppose, goes for practically all industry and private houses) will have to pay as they did before. There is a certain dichotomy in this Bill, in that I do not see how you can make money out of it, as the Land Commission are supposed to do, and at the same time make land cheaper. I hope that some day somebody will explain that.
§ LORD MITCHISON
If I may reply to that question, as we are in Committee, I would say one thing to the noble Viscount. It seems to me absolutely essential for this purpose that there should be powers of compulsory purchase, as there are in this Bill, and that there should be a betterment levy, as there is in this Bill. Those were the things the comparative lack of which (because the local authorities had limited powers) frustrated the intention of those who, like the noble Lord and myself, would like to see the price of land moderate and fall for local authorities and the job they have to do.
§ 4.58 p.m.
§ LORD NEWTON
I think this has been a useful little debate. At one moment it appeared to me that the noble Lord, Lord Mitchison, held the view that, because the first appointed day is coming nearer, land prices are beginning to fall. I should have thought that the reason was more elementary than the one he gave. It is because of the Government's freeze and squeeze that people have not the money to buy land.
I am grateful, as I am sure all your Lordships are, to the Parliamentary Secretary for taking great care to try to explain the inexplicable. Each of your Lordships will have to decide how satisfactory that answer was. I shall read it very carefully to-morrow. My first conclusion is that it is now quite clear that the Land Commission will do nothing whatever to reduce the price of land or the price of houses. The noble Lord, Lord Kennet, was at pains to point out that paragraph 35 of the White Paper states:The Government intends that its proposals for a levy on development value described in 941 this Paper will be complemented by arrangements under which local authorities will benefit financially from the operations of the Commission.As I understood the explanation, they may in the future benefit financially from the collection of the levy, but simply because the Government are imposing a new tax, and they will then have new money which they will be able to spend in whatever way they like, and apparently by giving higher grants to local authorities. They could have got that money by increasing an existing tax or inventing a new one—nothing whatever to do with the Land Commission, as I see it.
The noble Lord, Lord Kennet, said the Land Commission should not be looked at in isolation. He said that it should be seen as part of the Government's land and housing policy and that there would be before very long a Housing Bill to provide for higher subsidies for local authority housing. That seems to be another way of saying that the Land Commission in itself will not do anything to secure that the burden of the cost of land is reduced, and the Government have to look to other measures. I think most of us, and certainly the general public, look at the Land Commission in the way that the Government, when talking about it, both before and since the publication of this Bill, have led us to look at it. I think most people look upon the Land Commission as something which will mean that in the future land will be cheaper than it is now. That is why I said during the Second Reading debate that it seemed to me the general public had been "sold a pup". I still feel that after listening to Lord Kennet's explanation.
§ LORD KENNET
I cannot accept for a moment the implication that the public have been misled. The White Paper used the wordsthat the burden of the cost of land for essential purposes is reduced".The noble Lord has addressed himself to other questions. I gave as comprehensive an account as I could of the way in which the burden of the cost of land is being reduced.
§ Clause 16 agreed to.942
§ Clause 17:
§ General provisions as to crownhold
§ 17.—(1) With a view to making land available for development and use for any particular purpose, while retaining for the benefit of the Crown any element of value which may be or become attributable to the prospect of any development of that land (whether by way of redevelopment or otherwise) for any other purpose, the Commission may dispose of the land by way of a disposition to which this section applies.
§ 5.3 p.m.
THE EARL OF KINNOULL moved, in subsection (1), to leave out "particular purpose" and insert
purpose prescribed by the regulation made by the appropriate Minister or Ministers under this Act.
§ The noble Earl said: If the importance of each of the 102 clauses in this Bill were to be judged by the volume of criticism, I think it would be fair to say that Clause 17 would hold a very safe seat in the top ten. The Committee will be aware that this clause creates for the Commission a new type of tenure known as a "crownhold", which will be used by the Commission when disposing of land, whether it be freehold or leasehold. By this new tenure the Commission will, by a restrictive covenant which will limit the future use of the property, control all property they dispose of, and so, should the owner of such property wish to change its use at a later date, he will first have to negotiate with the Commission a waiver of this restrictive covenant. It is then that the Commission can recoup the future development value that may arise.
§ The main criticism of this new tenure would appear to be that when the Government create a new land tenure the country is surely entitled to know for what good reason, what benefit and what purpose it has been created. The Government's reply so far in another place has been, in my submission, both inconsistent and somewhat garbled. The Minister has said that the crownhold tenure is in line with their policy of returning to the community a substantial part of the development value which the community itself has largely created. But no one can believe, surely, that this important new tenure has been specifically set up to duplicate the Commission's main instrument of recovering development value namely, the levy.943
It is interesting to note that the Government Chief Whip in another place recently wrote to the Daily Telegraph in defence of the crownhold tenure, following a letter from Dr. Denman of Cambridge University. In this letter the Government Chief Whip said:
The Bill makes it plain that the purpose of a crownhold is to enable the Commission, when disposing of land for a particular purpose"—
and he put into brackets the following words
(the erection of a church or a women's institute or for market gardening use) to return to the community the benefit of any additional value which may in future arise.
I think I should repeat "a particular purpose", because these are important words in this clause, but we find no mention in the Bill of churches or of women's institutes as mentioned by the Government Chief Whip. Therefore the examples he gave can be only an interpretation of what he thinks will happen.
If we study what the Minister has said in another place, particularly on the Committee stage of the Bill, we find that when winding up on this clause on July 14 he said, in column 440,
…as land is being made available through the Commission for development, an increasing use might well be made of the crownhold provision.
So we see that the Government's real intention is not that the crownhold should be used for just "a particular purpose" but in fact for any purpose.
§ The effect of crownhold tenure if used widely by the Commission would, I suggest, be enormous. The first and most obvious problem that will arise is what is the value of crownhold as against freehold or leasehold? It is quite possible that some innocent person may purchase a crownhold property in the future and then find that the Commission wish to acquire it for redevelopment. So far as I can see, there is no reason under this clause why the Commission should acquire it at a figure less than the person paid for it, and I should like to ask whether the Government intend to issue a formula to act as guidance to people acquiring crownhold properties, or perhaps the Commission themselves would advise on a value.
§ The second effect of a crownhold is that it would appear to become a wasting 944 asset. For instance, if one takes the case of a factory, when it is first built its value could be, say, £100,000, but in thirty years' time the factory will have outgrown its use and will require redevelopment. Then I suggest its value will be site value only—it may possibly be only £10,000—but if the company comes to redevelop it will naturally require under this clause to apply to the Commission for permission. It will then find that not only will it be faced with the cost of the redevelopment but also with the cost of gaining a waiver of the restrictive covenant. I suggest that the crownhold tenure could well have a paralysing effect on modernising Britain—the very opposite, if I may say so, of one of the main objectives of the Commission.
§ A third and major effect the crown-hold tenure will have on property is that the Commission will control, by their use of restrictive covenant, the planning use of any particular property they acquire and resell. What one can see happening is that the crownholder could well approach the Commission and ask for a waiver on his restrictive covenant. The Commission, of course, could look into this, and, in my opinion, could, quite within their rights, say, "No we do not agree", or they could suggest such an abortive figure for waiving the covenant that it would completely preclude any economic development by the crown-holder. You could have here the Commission coming into direct conflict with the local planning authorities on what future use the property should have.
§ The professional bodies in a brief prepared for the Members of the House of Commons came out strongly against the widespread use of this crownhold tenure, and suggested it would be perfectly possible to implement the objectives by means of a positive covenant. They went on to ask why none of the recommendations of the Wilberforce Committee had been taken up. I hope that the noble Lord when he comes to reply will take the opportunity to answer this point.
The Amendment seeks to find out what are the particular purposes of the Minister in using this crownhold tenure, and what objections he has to being made responsible to specify those purposes by regulation. Is the purpose of this clause as narrow as the Chief Whip, Mr. Silkin,
suggested in his letter to the Daily Telegraph, or is it as wide as the Minister suggested in the Committee? If it is as wide as the Minister suggested, it would perhaps be easier if the wording of this clause was changed from "particular purpose", as I said, to "any purpose". One of the beauties, if it can be described as such, of the concessionary crownhold is that its purpose is crystal clear, for it will perform one of the two main functions of the. Commission—namely, provide residential building land at a concessionary price below market value. But the purpose of the crownhold tenure as worded under Clause 17 is both vague and, I suggest, sinister. One is left with the feeling that the Government could change the second main objective of the Commission,
to return a substantial part of the development to the community
to return the entire part of the development value to the community by means of a 100 per cent. levy granted by the crownhold tenure".
If this is the case, I suggest that it is time the Government had the courage to declare it. I beg to move.
§ Amendment moved—
§ Page 18, line 9, leave out ("particular purpose") and insert ("purpose prescribed by the regulations made by the appropriate Minister or Ministers under this Act.").—(The Earl of Kinnoull.)
§ 5.14 p.m.
§ LORD MITCHISON
If we could look at the Amendment for a moment before we come to the very general issues which the noble Earl raised, the Amendment is, so far as I can see, not in any sense to change the general provisions as to crown-hold but simply to provide that they shall only be used with a view to making land available for development and used for anypurpose prescribed by regulations made by the appropriate Minister or Ministers under this Act".They remain with all the noble Earl's general objections to them, but their use is to be confined to cases prescribed by regulations. I find no provision for these regulations in the Bill, and I imagine what the noble Earl intends is that the Minister should make the appropriate regulations. I wonder if that is right.
946 The Land Commission have certain functions and duties, and if one looks at the clause in question one finds, I think, that it is the Land Commission which have a discretion here to dispose of land by way of a crownhold disposition. I should have thought that this constant attempt by noble Lords opposite to bring in a Minister was really rather illogical. As a rule they object to too much Ministerial interference. I should have thought it was reasonable in a matter of this sort to leave with the Commission the discretion which the Bill provides for and which the noble Earl, except in this one rather minor respect, does not really want to interfere with.
He does not say what the regulations are to be; there is no sort of limitation on them, and the effect of his clause would really be very little different, so far as I can see, from that of the language in the Bill. The Minister could make any regulations he chose and that is that. He mentioned the Chief Whip. In their absence, I might venture to doubt whether even Chief Whips are always the best expounders of a Bill, though in this particular case I thought Mr. Silkin was quite right. He gave a few instances, out of which the noble Earl sought to find a category or a principle or something of that sort. They were just instances, quite simple things. I do not know what it was about them that upset the noble Earl.
§ THE EARL OF KINNOULL
What in fact upset me was that the Chief Whip of the noble Lord's Party gave the impression that this clause would only be used for these types of rather specific cases. But what I am suggesting is that in this Bill this is not the case.
§ LORD MITCHISON
The noble Earl has one advantage, or disadvantage, over me, that he reads the Daily Telegraph and I do not. I do not know what the Chief Whip said in any more detail than the noble Earl told us, but from what he told us they seemed to me to be instances and nothing more. I hope I may succeed in that respect in allaying the noble Earl's fears.
What was more important was that the noble Earl took this occasion to make an attack on the whole principle of crown-hold, which hardly arises on this Amendment, but we do not have any rules of order and there it was. I do not know 947 whether I ought to answer it. To answer it is not very difficult. One has to see what the purpose of crownhold is; to retain for the benefit of the Crown any element which may be or become attributable to the prospect of any development; that is to say, development value. The whole object of this clause is to allow the Land Commission to dispose of property while retaining the development value. That is what the covenants are for. I should very much like to know whether the noble Earl and other noble Lords opposite really object to that. I thought we had their support on this; that it was quite reasonable, in a number of cases at any rate, to retain the element of development value for the Crown in this case, and ultimately for local authorities; it is the same thing.
It did not appeal to the noble Earl. He preferred that it should stay where it is, that they should never be able to retain it, because he does not object to the machinery except in the one minor respect that appears in this Amendment. He therefore prefers that development value should stay where it is. The whole object of this Bill is to see that an element, quite a large element, of development value passes to the Crown, to use the language of this particular clause, and these crownhold dispositions are for that purpose. I am not quite sure whether we might or might not have been able to do the same thing by trying to twist the leasehold system in this country. In some ways, it is rather like a lease but there is some uncertainty about the position over covenants. I think that is probably the fairest way of putting it, and it seemed better to have a particular form of disposition, crownhold. I do not quite know what is wrong with it. I agree that it is not so good as freehold, but it is better than most leaseholds. What is it going to be worth? It is impossible to say. It will depend on what is the element of development value in any particular case.
It might have been possible to do the same thing by using the Scottish feu—indeed, in some ways this is rather like a Scottish feu. It is applied to feus. It is an elastic instrument. I do not think we have anything like so elastic in England as Scotland has for that particular purpose, and it is therefore a new thing. But the object is perfectly clear. 948 The means that are taken to do it seem to me to be perfectly reasonable. A man may be glad to have his own house without at the same time wishing to speculate about it. He usually wants to live in it. For a person who is going to live in a house, crownhold does not have that sort of damaging, disparaging effect that the noble Earl seems to wish to attribute to it. It is rather a recognition of some of the facts of life, one of which is that most people who own houses live in them. That is the purpose for which they buy them and use them. So far as I can see, there is nothing here that prevents that. Nor is that the idea. The idea is that the development value shall be retained by the disposing authority, that is to say, the Land Commission.
We can hardly go into the matter in detail on this Amendment. Perhaps I have gone too far as it is. The noble Earl raised the point, and I have been puzzled as to why people were frightened of this proposal. I think we ought to be more like the Athenians and welcome something new. Anyway, we live in a changing world. It is likely that our institutions, and particularly things like our forms of land tenure, could be changed from time to time. Here is the creation of a new form of tenure, if you like—one that is not radically different from other forms, but a new one, and it is for a particular object: the object I have set out.
As to the Amendment, it is, I suggest, a sensible thing here, having set up a Land Commission (incidentally, I, too, would congratulate the public on getting such a good chairman), to let them get on with the job. It seems to me quite clearly a question for them whether or not they ought to dispose in this particular form or in some other way.
§ LORD NEWTON
Earlier in his speech the noble Lord, Lord Mitchison, expressed surpise that we on this side of the Committee were continually trying to bring the Minister into the Bill. I can tell him quite shortly why that is. It is because the Minister is responsible to Parliament, and the Land Commission are not.
§ LORD MITCHISON
If I might answer that at once, there is no difficulty at all in questioning about it, because 949 the Minister can give directions; and direction-giving power is quite wide enough (this was clearly stated below) to oblige the Minister to answer questions on almost everything in the Bill, including this.
§ LORD NEWTON
Yes, but that is asking questions. If he is required to make regulations, then Parliament can have a debate on the regulations.
§ LORD MITCHISON
If he is required to make regulations. We have not been told what the regulations are going to be, or anything about them.
§ LORD KENNET
My noble friend Lord Mitchison has, I think, answered the general attack upon the principle of crownhold with such spirit and such a wealth of knowledge that there remains little, if anything, for me to say. But I would take up just two points which the noble Earl, Lord Kinnoull, mentioned. The first concerns his point about an industrial company and its factory, if it has crownholds or is under crownhold disposal. Of course, a crownhold covenant would not necessarily—or even probably: indeed I think it most unlikely—be so framed that it would cover the renewal of obsolete plant. It is no purpose of the Land Commission—how far a field do we have to go, for goodness' sake!—to thwart industrial modernisation. Even beyond that, it is no purpose of the Land Commission and the land levy as a whole to take money in respect of any consideration except development value. So that if a factory wants to renew itself, that is within its existing use. If, on the other hand, the company concerned wants to pull down an old factory and turn that land to a completely new sort of use which is going to be more profitable, then one might imagine that the effects of the crownholds would come into play.
Secondly, the noble Earl expressed the fear that under these crownhold provisions the Land Commission might be assuming the functions of the planning authority—that they would be an equivalent to the planning authority. Of course, a planning authority says, "Thou shalt", or "Thou shalt not". This is the way it is framed, and if the effects of the crown-hold covenants are such as to limit the future use of that land to something which the planning authority would be 950 willing to go beyond, then one can imagine discussions between the planning authority and the Land Commission; and one can, indeed, imagine the crown-hold land being put to the new purpose on the payment which is envisaged in the original covenant.
The noble Earl is always asking this question: Are the Land Commission going to take over the planning functions in this country? Let me take one more opportunity of saying, No, they are not.
To turn to the Amendment itself, the effect of the Amendment (we have almost lost sight of it) would be to limit crownhold dispositions to disposals for housing purposes or purposes prescribed by the appropriate Minister or Ministers in regulations. As the clause stands, un-amended, crownhold dispositions can be made in respect of land being disposed of for any purpose. In view of everything that has been said, and the general discussion of crownhold, I do not think it is necessary for me to go any further into the grounds for which the Government think it will be better to leave this clause unamended; and I hope that in view of that the noble Earl will withdraw his Amendment.
§ THE EARL OF KINNOULL
One is always most obliged to the noble Lord, Lord Mitchison, who takes an interest in one's Amendments. But, as he himself admitted, I think last week, he is of course an unrepentant Socialist; and an unrepentant Socialist is, I suggest, blinded by doctrine and, sadly, can never be persuaded by reasoned argument. As regards the noble Lord, Lord Kennet, I believe that one of the real problems of crownhold would be the problem of the valuer, because if a site is purchased to-day and developed in ten years' time, how will the valuer decide what is normal inflation and what is development value? As I see it, this would be the real problem. However, I do not feel that I can press this Amendment, and therefore I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Clause 17 agreed to.
§ Clause 18:
§ Concessionary crownhold dispositions
- (a) by the purchaser, feuar or tenant, or
- (b) by persons for whom such accommodation is to be provided by the purchaser, feuar or tenant in accordance with arrangements approved by the Commission,
§ 5.29 p.m.
VISCOUNT GAGE moved, in subsection (1), to leave out the words after "crown-hold disposition" down to and including "tenant" in paragraph (b) and to insert:
to a housing association or housing society or co-ownership group".
§ The noble Viscount said: I move this Amendment, confined to concessionary crownholds, to housing associations, housing societies and co-operative groups, in the first place, because the noble and learned Lord the Lord Chancellor and the Minister have told us that this is going to be the normal way to make dispositions of concessionary crownholds. I am glad to know that that is so, because, having been president of a federation of housing associations for some years past, I have seen the excellent work that these bodies have done. I am grateful to the Government for giving them an extra boost. All Ministers express sympathy with this movement, but some give more practical expression to that sympathy than others.
§ Having said that, I am a little disappointed to see that these crownholds are not going to be available to housing associations which have subsidy. I think that is unfortunate, because one of the most satisfactory forms of housing association we have seen is that in which one has blocks of unsubsidised dwellings, where people who are in full employment can well afford to pay economic rents, associated with a smaller group of subsidy-earning dwellings where people can go to retire and can be looked after by their relatives. It is a great pity that this very desirable form of housing society development should be interfered with for an administrative reason.
§ I am sure that the argument will be advanced that nobody should be in the position of receiving a double subsidy. But, in view of the discussion we have just had, I wonder whether that argument 952 can be sustained. We have had an animated discussion on the question of how local authorities are going to have land made cheaper to them. The explanation has been that they are going to get financial grants. Coming from a county which is always at the end of the queue for the general grant, I shall believe that when I see it. But it does not affect the argument that local authorities will get a double subsidy. They will get financial help and will get the normal housing subsidy in respect of their houses. Therefore it is a little mean and misguided that housing associations which have enjoyed charitable status and which provide for elderly people should be cut out of the concessionary crownhold land. I hope that this point will be examined again.
§ The other reason why I am suggesting this limitation is that I find it extremely difficult to see how otherwise the requisite continuing control will be maintained. I know that I am impinging a little on the next Amendment, but it would appear to be logical that a housing authority which looks after subsidised housing could also logically look after subsidised sites, which is what these are; but I feel that there would be a good deal of administrative complication about their doing so. It would be passing the buck, as it were, to the local authorities in the difficult task of this continuing control and it would result in considerable difficulty if they had to account to the Land Commission, but I suppose it would be possible. The other alternative would be to have two authorities in the same area, one dealing with subsidised housing and the other with subsidised sites, and that would seem to be even more confusing. However, I do not wish to impinge on the subject matter of the next Amendment. I beg to move.
Page 18, line 42, leave out from ("disposition") to ("in") in page 19, line 2, and insert ("to a housing association or housing society or co-ownership group").—(Viscount Gage.)
§ LORD KENNET
The effect of this Amendment, as the noble Viscount outlined it, would be to limit concessionary crownhold disposals to housing associations, societies and co-ownership groups. Co-ownership groups are, of course, 953 usually housing societies, so it is these two categories with which we are here concerned. The noble Viscount based his objection to the wider power in the Bill to grant concessionary crownhold on the fact that it would allow local authority housing to receive concessionary crownhold facilities but would not allow housing associations, which already received a subsidy, to do so; and he complained that since local authority housing already receives a subsidy, it ought to be excluded. I hope I have the noble Lord's argument correctly.
The trouble with his Amendment is that if one were to limit crownhold disposals as he proposes, and cut out local authority housing, one would also, as the Bill is at present drafted, cut out the Land Commission too, in the sense that one would deprive the Commission of the possibility of building their own houses and then disposing of them direct to individuals with the benefit of concessionary crownhold. In other words, one would deprive the Land Commission of the possibility of saying, "We think that these individuals, Tom, Dick and Harry, are the kind of people who could benefit from this, and we will give them concessionary crownhold with such a covenant to ensure that they do not abuse it", and would limit the Commission's operations to those carried out only through housing societies which already exist or would be created for the purpose. I should be very reluctant to see the Land Commission circumscribed in that way, and I hope that in view of that consideration, the noble Viscount will agree to withdraw the Amendment.
§ LORD BROOKE OF CUMNOR
What the noble Lord, Lord Kennet, has said is very important. When the Committee agreed to subsection (1) of Clause 12, which empowers the Land Commission to:execute any building, engineering or other works…where they are of the opinion that it is expedient to do so with a view to the subsequent disposal of that land or any other land.I doubt whether noble Lords appreciated that apparently the Land Commission themselves are to go in for building houses on a large scale. This may be known in certain circles, but I do not 954 think it has been known or appreciated up until now by your Lordships' House. I must say that I feel somewhat apprehensive about this. The Land Commission have a great deal to do, and I understood that the principal purpose of the Land Commission was to acquire land which might not otherwise have come forward for development and then dispose of it as rapidly as possible so that development could take place.
It now appears, from what Lord Kennet has said, that the Land Commission will be able to divert a great deal of their energies from their primary purpose in order to set up in business as a builder. I cannot see any purpose whatever in the Land Commission occupying themselves in this way. They are going to have a very heavy task and I believe that it would be no bad thing if an Amendment to the Bill were to debar the Land Commission from indulging in building operations of this character. I had supposed when my noble friend moved this Amendment that he was primarily seeking to emphasise the great importance which this clause relating to concessionary crownhold might have for housing societies and housing associations, and indeed they had been specifically mentioned by the Government on the Second Reading of the Bill as the first type of recipient for the concession. That seemed to me reasonable. I think we are all in some difficulty, because this Amendment happens to come before the next Amendment standing in my name, which would perhaps render possible a wider discussion of the use of the Land Commission's powers here.
While I have no desire to stop the Land Commission from doing reasonable things under this clause, I certainly think that we require to have an authoritative statement from the Government as to whether the Land Commission are envisaged as a large-scale builder building houses for sale. I cannot remember anything of that kind being forecast in the White Paper—perhaps I did not read it carefully enough—and I certainly cannot remember anything of that kind being said on the Second Reading of this Bill. To my mind, it gives quite anew conception of the way the Land Commission will spend their energies, if it is believed by the Government that this is going to be one of their major activities.
955 As I say, it may be that this Amendment is too restrictive. It may be that we should amend the clause in some other way. We know from the Government that housing associations and housing societies occupy an important position in this whole conception of concessionary crownhold. But will the Government help us further by indicating how far they contemplate that the Land Commission are going to set up as a builder themselves and whether there are any other directions in which this Amendment will be too restrictive.
My noble friend Lord Brooke of Cumnor appears to think that my Amendment would be too restrictive. I know that he is a great supporter of housing associations, and therefore his advice weighs heavily with me. I agree with him that the reasons advanced in support of the suggestion that I should withdraw it are somewhat difficult to understand, since Clause 12(2) states specifically:Notwithstanding anything in the preceding subsection, the Commission shall not, except with the consent of the appropriate Minister or Ministers, execute on land to he disposed of by them for housing purposes any works for the provision of housing accommodation or for purposes connected therewith.I agree that the subsection says,…with the consent of the…Minister".but, even so, I too am surprised to hear that it is the intention that the Commission shall engage in house building. But in view of my noble friend's advice, and in view of the fact that wider considerations may emerge from this, I beg leave to withdraw the Amendment.
§ LORD KENNET
Before the withdrawal of the Amendment is accepted by the Committee, may I just say that I am not quite sure what all the fuss is about here? It is stated in the White Paper that the Land Commission can build houses, and it is in the Bill itself, by implication, in the provision which the noble Viscount, Lord Gage, has just read out: that the Land Commission may not build houses without the consent of the Minister. If a Bill provides that the Minister must permit something it is clearly envisaged that that something may be done by the body to whom his permission is necessary before it is done.
The noble Lord, Lord Brooke of Cumnor, made great play with building 956 houses on a large scale, and thought that the Land Commission might divert a great deal of their energies to becoming a large-scale builder. He asked for an authoritative statement from the Government that that was not envisaged among the purposes of the Commission. I most willingly give him a statement to the effect that it is not envisaged that the Land Commission shall immediately become a large-scale builder and go into great operations all over the country, in competition with the existing provisions for building houses. That is far from the purpose.
May I revert for a moment, just as further clarification, to the Amendment which the noble Viscount has already withdrawn; that is, the question of local authorities benefiting twice over, once from concessionary crownhold and once from the direct housing subsidies? It is not the intention that they should benefit twice over. We want to leave the Land Commission free to make concessionary crownhold disposals in favour of local authorities, when the local authorities themselves are acting as housing associations on a cost-rent or owner-occupation basis, but it is not the idea that they should get concessionary crownholds on houses which would enjoy normal housing subsidy in any case. I thought I should explain that at this moment.
§ Amendment, by leave, withdrawn.
§ 5.45 p.m.
LORD NUGENT OF GUILDFORD moved, after subsection (1), to insert:
( ) The appropriate Minister or Ministers shall prescribe by regulations—
§ The noble Lord said: The effect of this Amendment would be to require the Minister to make regulations to guide the Land Commission as to the disposition of concessionary crownholds, and this will take us into a field that certainly my noble friends on this side are very interested to hear more about. The Bill as it is now drafted leaves the Land Commission completely free as to how 957 they will dispose of property which they have acquired at market price less the levy, and they will therefore be disposing of it at a significantly lower figure than market price. Ministers have stated before, and stated again to-day, that the Commission will normally dispose of crownhold land to local authorities, housing associations, co-operative housing groups and also to private builders, and possibly, as the noble Lord, Lord Kennet, has just told us, may develop land themselves. This raises important questions of public policy which were asked in another place and, to my mind, were not answered.
§ Public money is involved and it should be properly accountable. Crownhold, in fact, carries a subsidy from public funds in two ways. First of all, there is a sum of £45 million provided by the Exchequer to start up the Land Commission. Secondly, as all the levies collected by the Commission will be paid into the Exchequer whenever a crownhold disposition is made, the amount of the levy concerned is in effect deducted from the total payments made to the Exchequer, and to that extent, again, the public purse is reduced. I have spelled this point out in some detail, because Ministers in another place threw some doubt on whether this really was a subsidy from public funds. I contend most strongly that this is a subsidy from public funds, and therefore the method of disposition must be clear and above board.
§ The background to the disposition of houses is well known to all of us here. Every housing authority—certainly,,in the southern part of England and, probably, in the Midlands—has a long waiting list exerting strong and continuous pressures by numerous families for a house—thousands, tens of thousands, hundreds of thousands of families. This gives rise to many complaints and to many very hard cases. Over the years I have myself dealt with hundreds or thousands of them, and I know how very easy it is for suspicion to arise if there is any sense of favouritism over any case at all. It has been my privilege to take up many cases, and invariably I have been satisfied by the very high class of administration which the local authorities with which I was concerned invariably conducted. But I make the point advisedly, because this is the general situa- 958 tion that again and again I have heard complaints where some disappointed applicant for a house has seen somebody else get the house and feels that his application was stronger, that his circumstances were even more worthy of attention, and that there has been some favouritism.
§ With local authority housing, I am glad to say that throughout the country the general position is good. Local authorities take immense pains. They have elaborate systems of points, and so on, and they are therefore usually able to satisfy the applicants. This is the background to the questions I am going to ask, because I feel that unless Ministers can satisfy public opinion that these dispositions will be made fairly in every way, they are going to cause complaints rather than give satisfaction.
§ The first questions I should like to ask the noble Lord, Lord Kennet (if he is going to reply), concern dispositions to a local authority. The first point I wish to ask the noble Lord (although I think he has partially answered it) is this. When a crownhold disposition is made to a local authority for the development of a housing estate, will the subsidy be regarded simply as a windfall for that local authority, or will it be set off in some way against some other Government grant? If the disposition is of land for housing to be provided by the local authority, will the local authority have an obligation to let or sell those houses at a figure below the market rate, or will the local authority simply take the benefit into its housing account and let or sell the houses according to its normal policy? And, if the local authority lets or sells at a special, reduced figure, will the local authority select tenants or purchasers from some special class or category?
§ The second category of dispositions about which I should like to ask the noble Lord is dispositions to a housing association or similar body. And may I say here that I very much support my noble friend Lord Gage in his praise of housing associations and the excellent work they do? Nevertheless, where a crownhold disposition is made to a housing association, the housing association gets the piece of land at a figure considerably below market price, and therefore has a very substantial advantage. I should be glad if the noble Lord would tell us how a housing association will be chosen for 959 this subsidy. In what circumstances will a housing association get this benefit? And will there then be any obligations on the housing association with regard to its own membership?
§ Then, thirdly—and this, I believe, is the most difficult class of case—there is the disposition to a private building firm. When the Land Commission are disposing of a piece of crownhold land for development by a private building contractor, how will the Commission choose the builder? Will there be advertisement and competition? And what obligations will be laid on the builder as to the purchasers of the crownhold houses? These are just a few of the major points that occur to me in that field.
§ Finally, there is the field that has just been discussed—development by the Land Commission themselves. I observe, as the noble Lord has told us, that this is mentioned in paragraph 24 of the White Paper, and I think it would be helpful if the Committee could be told in what circumstances the Minister would give his consent for the Commission to carry out such a development. And what would be the basis of selection of crownholders or tenants in these circumstances? On the face of it, it would seem that in selecting tenants the Commission would be very much at a disadvantage, compared with a local authority housing committee or a housing association. Through local circumstances, these other bodies know exactly the conditions, circumstances and merits of each applicant's application, and this is most important if a fair deal is to be given, and is to be seen to be given.
§ These are a few of the major points which occur to me by way of difficulty in the disposition of a crownhold, and it is for this reason that my noble friends and I have put this Amendment on the Order Paper. The Amendment requires the Minister to make regulations on the lines indicated, which would give some guidance to the Land Commission when they were making such a disposition. As I said at the beginning, I am sure that when they are making this disposition it is fundamental that it should be done in a way that is understood, and clearly understood, by the whole community, and in a way that is seen to be fair. Other- 960 wise, far from giving satisfaction and relief, it will do exactly the reverse. I beg to move.
Page 19, line 6, at end insert the said subsection.—(Lord Nugent of Guildford.)
§ LORD KENNET
This Amendment would require (I draw attention to the word "require"; it is not just "permit") the appropriate Minister or Ministers to make regulations about the advertising of the Commission's intention to make concessionary crownhold dispositions, about how the price of disposal was to be determined and about the principles on which the person to whom the disposal was to be made was selected.
It is obvious that the Land Commission will be doing all these things, carrying out all these functions which the noble Lord has just listed, according to certain criteria. I think this Amendment puts before us very squarely the question: Are these criteria to be developed and formulated by the Land Commission, within their own organisation and as a result of their experience, directly, or are we to force the relevant Ministers to determine these criteria for the Land Commission now and to impose them upon the Land Commission from outside—and, if so, when? We want to think about that, because I think it would be most unfortunate if we were to pass a Bill which bound Ministers to make regulations about these matters before the Land Commission had any experience whatever of how they could best operate.
I think we should also be very cautious before we envisage tying the Land Commission in a way in which local authorities are nottied. At the moment, Ministers do not regulate all these activities when they are carried out by local authorities, and I think there would be a great and justified protest, both from local authorities and from Parliament, if they attempted to do so. Again, I should remind the Committee that, although I am resisting the idea of binding the Minister to make regulations about this, the power of direction—that is, the Minister's power to direct the Land Commission to do this or that, or to adopt certain criteria—is there and can be exercised at any time; and Parliament can debate the kind of directions the Minister is making, or failing to make.
961 Let me try to answer, very briefly, some of the specific questions asked by the noble Lord, Lord Nugent of Guildford. I may say, before I start on this task, that his questions really amounted to: What sort of an animal is the Land Commission going to be? What is it going to do—and where, when and why? His questions ranged very wide indeed; and I hope that the whole discussion on this Bill, both on Second Reading and in Committee, will, as we go along, answer many of these questions.
I would also ask the Committee to realise that one can go into these matters only to a certain depth. I understand the reasons behind the wish of noble Lords opposite to know in every detail how many buttons there will be on the boots of the chairman of the Land Commission, such is the distrust they feel of the Commission; but I hope they will feel that they need not go too far into detail. We are setting up a new creature; we want it to operate within certain rather widely defined limits. There is already a body of complaint that the Bill is too complicated. If we were to go much further into dependent regulations I think we should deprive the creature of any chance of living a normal, healthy life, and of finding its feet. Having said that, let me try to answer as many as I can of the questions the noble Lord has asked me.
He asked what would be the duties of the local authority about the value, as it were, of the concessionary crownhold. Would they have to pass it on, or could they swallow it for their own purposes? The answer is that they will be obliged to pass it on to the inhabitants of the houses in question and to police it subsequently to see that the inhabitants, whatever their form of tenure is, do not cash it by selling to later inhabitants. The local authority, in these circumstances, will choose who gets the houses as they do at present with their own houses. I think it would be no more appropriate for the Minister to regulate their choice in this case than it would be in existing cases. A housing association which gets the benefit of concessionary crownhold will do so only if it can show that its rules are good enough to ensure that it can do what I have just described in the case of the local authority. It is envisaged that the Land Commission will consult with the housing association concerned and see 962 that it is a capable enough organisation to prevent the concession from being improperly disposed of or passed on.
The noble Lord asked about disposition to private builders on concessionary terms. This is not envisaged at all; because private builders are not equipped to operate as housing associations or to ensure that the cash value of the concession remains in the right hands. Lastly, once again on the Commission's own right to build and to dispose under concessionary crownhold of the houses, I should add to our former discussion that the intention is that this right has been put into the Bill with a view only to circumstances where building cannot get done by any other method. Noble Lords know as well as I that these circumstances will be rare. Indeed, it is there as a sort of emergency provision, a long-stop. In the event that it does have to be used, or when it is used, then the idea at present is that the Land Commission should he as free in the choice of people to put in those houses as a housing association would be, or as a local authority would be, when acting as a housing association, for the purpose of getting the benefit of concessionary crownholds.
§ 6.5 p.m.
§ LORD MOLSON
Two passages in the speech of the noble Lord, Lord Kennet, aroused in me the gravest doubt about how this provision is expected to work. He referred to the Amendment as "requiring" the Minister to lay down certain conditions under which the houses built by the Land Commission were to be let. He said there was no reason why the land Commission should be tied down in advance to any greater extent than the local authorities. But, of course, there is absolutely no analogy between the two. There are local authorities covering the whole of this country who are responsible for houses. It is their duty to familiarise themselves with what is required. They normally have lists of applicants for houses; they have a long experience of choosing tenants for these houses. In the case of the Land Commission, which, as the noble Lord, Lord Kennet, emphasised, is something entirely new, they have no experience of this kind; they have no machinery for choosing tenants; they have no knowledge as to what kind of rent should be asked.
963 The noble Lord said that there was no reason why the Land Commission should be subjected to particular restriction under this Bill. But there is, of course, an extremely good reason. It is that the Commission are the creation of Parliament, while the local authorities are the elected representatives of the ratepayers of the district. Therefore, when we are setting up a body of this kind, and empowering it to deal with these matters, it is essential that the principles on which it is to work should be known.
Further, I do not understand why the noble Lord thinks that this body is going to be kept, in some way, in reserve. I can understand the wish of the Government to have a Commission for obtaining the land that is needed for house-building. I can understand, therefore, the compulsory powers which it is proposed to give to the Commission and the possibility of their then selling to the local authorities. Why it should be proposed that the Land Commission, apparently, should be entitled to by-pass the housing authorities by building houses themselves and letting them, and to do so on principles which are not laid down in this Bill, I do not follow at all. It seems to me that there is the very greatest danger that the Land Commission, in exercising these emergency powers, are going to cut right across the existing established and experienced administration of the local housing authorities.
§ LORD MITCHISON
Local authorities, lest they get unduly above themselves, are just as much creatures of Parliament as are the Land Commission. Had they not been constituted by Parliament, and had they not been given certain powers and duties, they would not be in their present form. As I understand this clause, the main object of it is to pass over land on concessionary terms to local authorities, housing associations and voluntary bodies of various kinds but of that general description. I do not know what is upsetting noble Lords opposite so much about this.
I cannot see in the Bill any suggestion whatever that when land is passed over in that way on concessionary terms to local authorities or housing associations the Land Commission should then step in and tell the local authorities how to select 964 their tenants. A great many things have been said in the course of the long discussions in another place about what the Land Commission would or would not do; but this I think is the first time it has ever been suggested that the effect of this clause is to enable, encourage or inspire the Land Commission to the unhappy task of having to select council tenants. It really is rather nonsense.
After all, the Land Commission are to be a large body; they are necessarily going to work in rather large units; they will have local offices—that is part of the intention; but it is a long step from that to deciding upon the selection of council tenants in the—I forget how many—hundreds of urban district councils in and about Lancashire. I have never seen this suggested anywhere. When one looks at the Amendment one sees it says that the Minister is to prescribe:…the manner of advertising the Commission's intention to make the disposition".A Minister has to do a great many things. I should have thought that that was a comparatively small task and that it might have been left to the Land Commission which, I would remind the Committee, is not necessarily the Devil. Then the Minister is to prescribethe method of determining the consideration.Why should this be settled by regulations by the Minister? This is going to put a lot on to the Minister. Is he to set up a new tribunal? How is he going to determine the considerations? Is he going to say what is the consideration? Is he going to say the method by which you arrive at it? If the latter, he seems to be founding a new court of his own; if the former, interfering with the tolerably clear principles in the Bill.
Then there are the housing lists. The Amendment goes on to say that the Minister shall prescribe:…the principles for the selection of the purchaser, the feuar, tenant or persons referred to…".Why do you want this put into the Bill? Is it going to be the same way in which local authorities select their tenants at present? I should have thought it was, and the right people to do it were the local authorities, and that they would do it. Then when you come to a housing association what is to be done under this arrangement? I should have thought the 965 housing association was competent to select the persons who were to occupy the houses, but its warmest supporters now wish the Minister to tell the housing association how to run its own affairs. It is, saving your Lordships' presence, rather far-fetched is not it?
This was the Amendment which, as the noble Lord who moved it here indicated, was moved in the Standing Committee in another place. My noble friend the Minister said he wondered whether the noble Lords who moved and supported it realised the harm they had done themselves by moving it. And the harm that they did themselves was more or less on the lines of what some of your Lordships have been urging to-day. The Minister pointed out that this was tying red tape round the operations of the Land Commission, to a degree which, I should have thought, the warmest advocate of bureaucratic interference opposite would hardly wish to propose or to enforce. It is really rather a fantastic suggestion, is not it? There may be cases where you could make some sense out of it, but to make a general or universal application is neglecting the functions, duties and general performance both of local authorities and of housing associations and other bodies, and telling the Minister to stand over them and tell them what to do and all kinds of things which might be quite different in different cases.
I should have thought the substance of what we have here was partly the business of the Land Commission—such as methods of advertising and so on; advertising is clearly a matter for the responsible body doing it—and partly a question of the local authority and the housing association carrying on their usual practices. It is carrying the thing a stage further for no purpose that I can see. I find this Amendment so hard to follow. I hope I have been courteous to your Lordships as I should dislike to be anything else, because everybody is always very polite and kind to me, but I really do not see what the object of all this is and what is the intention.
Then it is said that there is a subsidy which we ought to have to account for. I cannot find a subsidy—does the noble Viscount, Lord Gage, wish to interrupt me?
§ LORD MITCHISON
I beg the noble Viscount's pardon.
It is said that there is a subsidy. The subsidy lies in the Land Commission getting land free of the levy. We have not yet come to the levy, but that is where the point is. As regards the concessionary crownhold, there is in a sense a subsidy in that they dispose on particularly favourable terms to housing authorities, housing associations and the like. But that is not a case of accounting for public money, at least, not so far as I can see.
I am sorry to say this, but I really do not understand what is the purpose behind this Amendment and I think that it had rather a short shrift in another place for much the same reason. I do not think that my right honourable friend the Minister quite understood it. Perhaps it is a deficiency of Socialists in understanding to which the noble Earl, Lord Kinnoull, so eloquently alluded a few minutes ago. Perhaps we simply cannot understand these things, but I do assure your Lordships that we have tried.
I think that we would all wish to congratulate the noble Lord, Lord Mitchison, on the continuing and energetic support which he has given to his own Front Bench. Perhaps it brings into relief the comparative absence of support that they have had from any other of their Back Benchers. I should be rather interested to know whether the noble Lord, Lord Leather land, and the noble Lord, Lord Pargiter, both of whom are very experienced in local government, would have felt quite so happy about the vague relationships which are going to develop between the Commission and local authorities. I quite agree with the noble Lord, Lord Kennet, that one cannot expect to tie up the Commission absolutely in great detail, but when they are compared with local authorities, whose powers are defined in the greatest possible detail in Acts of Parliament, there is extraordinary vagueness in the Commission's responsibilities. I do not think it a very good analogy, and I hope we may have a little more information about the Commission and local authorities and other people before this debate is over, but I sometimes despair that we shall.
§ 6.15 p.m.
§ LORD CLITHEROE
I wonder whether the noble Lord, Lord Kennet, could relieve my anxiety about this question of building houses? I am bound to say that it came as a great surprise to me to hear that the Commission were going to build houses. There is nothing in the Title of the Bill to make one suspect that, nor so far as I recollect was there in the Second Reading speeches; but I have read Clause 12and I understand the fact that it is possible, as the clause is drafted, for houses to be built by the Land Commission. But can the noble Lord, Lord Kennet, tell me whether these houses are to be built for sale, or to let, or whether it is intended that they should be built on some rare occasion, for example, to house a member of the staff or for something of that sort? I cannot believe that the Government have the intention of making this Bill to authorise the Land Commission to build houses to let and to sell. There has been no previous discussion about this or suggestion that this was the intention of the Bill. Can the noble Lord reassure us and tell us that it is not the intention to build or to let houses except in such exceptional cases as I have suggested?
§ LORD KENNET
The noble Lord, Lord Molson, made the point that we should be prepared to bind the Land Commission with regulations in circumstances in which we should not be prepared to bind local authorities with regulations because the latter had a fund of local knowledge. It seems to me that if the Land Commission have insufficient local knowledge to be trusted to look after themselves, my right honourable friend the Minister has even less, and this is not the right grounds for insisting that he regulates the activities of the Land Commission in every smallest detail. As has already been pointed out, the Land Commission will have local offices, and in everything they do they will be co-operating most closely on a daily basis with local authorities in whichever area they operate. They must do so. It cannot be otherwise. The Commission must have planning permission. They will not know what are the needs, very largely, unless the local authority tell them, and in all these 968 respects they will build up a fund of local knowledge very quickly indeed.
The noble Lord, Lord Clitheroe, insisted once again on the fact that the Commission were going to build houses, and he asked me why they were going to build houses, and whether they would be for rent or for sale. I think the Committee should beware of allowing itself to build up a picture of the Land Commission as a house-building organisation. They are not that. We have been discussing for many days what they are, and as I have already said, they have the right to build houses, but the idea is that this right should be used only if all else fails, and only by specific permission of the Minister. Noble Lords may ask what is meant by "if all else fails". I will answer, frankly, that I have not the least idea. I do not think that anybody has the least idea of what a situation in which all else had failed would look like. I simply cannot imagine. But one's inability to imagine the situation does not lay a duty upon one of legislating to prevent a body from taking a step to provide for an unimaginable situation if it does arise, and this is precisely what is being done.
The Land Commission will not be specifically precluded from building houses where it is envisaged that all else will fail to get them built; and in order that they should not misuse this ability it has been subjected to specific Ministerial consent in each case. Should the noble Lord ask me to describe a situation where it could arise, I would say, "No, let us do that as and when the Minister gives a specific consent in a specific case. Then we shall know what we are talking about". At the moment we do not.
§ 6.21 p.m.
§ LORD NUGENT OF GUILDFORD
May I thank the noble Lord, Lord Kennet, for answering at any rate some of the points that I put to him, and in particular for giving us a piece of information which he must know is entirely new—that the Land Commission do not intend to dispose of crownhold land to private builders. As he will know, his right honourable friend in another place (in column 459of the OFFICIAL REPORT of the Committee Stage) indicated that it was still the intention of the Minister, and he obviously had the matter under further consideration. He said that it was 969 very difficult but he was still thinking over it. Also referred to in that context was the statement by Mr. Richard Crossman which indicated that certainly at that time Her Majesty's Government were intending just this.
§ LORD KENNET
May I clarify this point? We will look at Hansard in the morning, but I do not think that I could have said that the Land Commission did not intend to do so. Their intentions cannot be slated because the Commission do not yet exist. What I said was that it is not expected that they should do so.
§ LORD NUGENT OF GUILDFORD
I put it down immediately it was said, and what I put down was "no intention of disposing to private builders." I think that noble Lords have the impression that the noble Lord did tell this Committee that that was what the Land Commission were not going to do. However, we can look at Hansard in the morning. If the noble Lord now wishes to give us a different impression, this is something we must take note of. It rather justifiies what I originally thought, because the disposition to private builders is quite one of the most difficult aspects to safeguard. In a way I felt some relief when the noble Lord said that it was not the intention of the Government that the Commission should have these powers, but if he wishes to change that view now, no doubt he will let us know and we can think further about it.
The other point on which the noble Lord, Lord Kennet, gave the Committee some help was in describing to us how a local authority, and also a housing association, would proceed where it had a crownhold disposition made to it. I find these answers clear and helpful. But the real point here about which noble Lords on this side are concerned is the difference between a local authority and the Land Commission. Certainly I do not share the view of the noble Lord, Lord Mitchison, however charmingly and however courteously he puts it, that they are constituted exactly the same—Parliament sets them both up and there is no difference between them. It astonished me to hear that.
§ LORD NUGENT OF GUILDFORD
What the noble Lord said was that local authorities were just as much the creatures of Parliament as the Commission are.
§ LORD MITCHISON
With great respect, that is not to say that they must have the same functions and duties. Indeed, I said the opposite. We have just heard from the noble Lord, Lord Molson, that the Land Commission is a creature of Statute. So are the local authorities. It is a small point.
§ LORD NUGENT OF GUILDFORD
The noble Lord may be able to comfort himself by believing that he did not give that impression; but he did. He said that local authorities are just as much the creatures of Parliament as the Commission are. In my judgment, although certainly they are constituted by Parliament, and Parliament could abolish them all, once Parliament has instituted them, they are obliged to be elected, and that, to me, makes a very big difference. It alarms me that the noble Lord should feel that it makes no difference at all. The noble Lord will have plenty of opportunities to speak again—he has spoken before—so perhaps he will allow me to finish my remarks.
I am astonished that the noble Lord, Lord Kennet, did not disown this view, because it is an extraordinary reflection on an elected body. The election of these bodies is surely a difference of enormous substance in their constitution and in their character. If the noble Lord, Lord Mitchison, will contain himself for a moment, he will get his opportunity, after I have made my point. I see a complete difference between a body which is elected by the ratepayers and which can be thrown out if they are dissatisfied with it, and a body selected by the Minister.
§ LORD MITCHISON
I need hardly say that I did not say anything else. Not only are the local authorities creatures of Statute, but their duties and finances, and many other things about them, are from time to time regulated by Parliament. In effect, they represent a partnership between Parliament, on the one hand, and the local electors, on the other. There is clearly no dispute about this, and no difference between us. Neither the noble Lord nor I is quite half-witted.
§ LORD NUGENT OF GUILDFORD
It is not for me to comment on who is 971 half-witted in this matter. I am glad to have given the noble Lord an opportunity of further comment.
§ LORD KENNET
If I may back-track for one moment, I feel that we may have produced a misunderstanding about crownhold and private developers. Might there not be confusion in the minds of noble Lords opposite between crownhold in general and concessionary crownhold in particular? If I may outline it again, it is certainly expected that the Land Commission will dispose of land to private developers on crownhold terms. It is not expected that the Land Commission will dispose of land on concessionary crown-hold terms—that is being reserved for housing associations and other bodies.
§ LORD NUGENT OF GUILDFORD
I should like to study the noble Lord's point in more detail before making a comment on it, but certainly he has given an impression to the Committee different from that given by his right honourable friend in another place. However, we can let this pass and give it some further thought.
I feel that the point I was making is germane to this. I am bound to say that I still feel the same anxiety about developments by the Commission themselves where the Commission decide, in special circumstances, to dispose of property, either by crownhold to private persons or to them as tenants by concessionary crownhold. I feel that the Commission will be in great difficulty in making their choice in a way that is fair and can be seen by the whole community to be fair. I feel strongly that these matters fall on a ground full of the strongest possible feelings. Where a man has waited for years for a house and sees somebody else getting a house from a public authority, he feels angry and suspicious, and nothing will satisfy him except the full publication of just how it was done.
I believe that the noble Lord is giving the Commission a job to do which will be most invidious for them. I do not feel satisfied by what he has told us to-day that enough thought has been given as to how this body will function and deal with this matter. It is a very difficult field. Do not let us imagine that the whole country will be smothered in concessionary crownholds. There will 972 be only a few here and there, and if those few are not allocated in a satisfactory manner, then there really will be trouble: there will be trouble for the Minister, for the Land Commission and for everybody. It is for this reason that I feel that further thought should be given to this matter—and thought which will eventually find its way on to the Statute Book in the form of a regulation.
I should wish to give some flexibility to the Minister. The Amendment, as drafted, "shall prescribe by regulation", is perhaps a little tight. For this reason, I am prepared, if the Committee are willing, to ask leave to withdraw the Amendment now, but with the firm intention of putting it down again on Report stage, with "may" instead of "shall", because I feel most strongly that, although the Minister has given us some answers and some satisfaction to-day, he has not met the substance of the case, and grave doubts remain. Nevertheless, on those terms, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Whether Clause 18 shall stand part of the Bill?
§ 6.43 p.m.
§ LORD ABERDARE
I do not want to keep the Committee for more than a minute or two, but there is one point which I think can legitimately be put under this clause upon which I should be grateful if the noble Lord, Lord Kennet, could give some clarification. In my view, when planning and encouraging the provision of housing it is equally important to plan and encourage the provision of open spaces for sport and recreation. I think this is a self-evident proposition, and it is one that has been put forward many times in debates in your Lordships' House on such subjects as sport and recreation, the countryside and increased leisure.
One thing that has recently inhibited this kind of development has been the enormous price of land. I was hoping, therefore, that possibly under this clause something in the way of concessionary crownhold could be considered for these sports bodies, most of them amateur bodies and without much in the way of financial resources, for the provision of these very needful recreational facilities. To give them their due, the Government 973 have shown an encouraging interest in this kind of development. They have established the Sports Council, and the Sports Council, in turn, have established regional sports councils, and they are at the moment surveying the entire provision of sport and recreation throughout the country. But it will be extremely difficult if high prices have to be paid for the land. I should be grateful if the noble Lord, Lord Kennet, could throw some light on the question of whether the Land Commission can make land available for recreational purposes, either through the concessionary crownhold method or in some other form.
§ LORD KENNET
Concessionary crownhold can be used only for land which is to be used for housing. So, unfortunately, one cannot look at it as a means for helping those who are providing playing fields and open spaces. At first blush, one might think that this matter should be left to the operation of the normal subsidies system. But I have looked further into it to see whether the Land Commission Bill can be used in any way for the advantage of those who are interested in this subject.
It would be possible for the Commission to dispose of land on a normal crownhold basis under Clause 17, and to restrict by means of crownhold covenants the use of the land to playing fields. If this happened, the market value of the land would be very substantially reduced. But it must be recognised that such a disposal would, in effect, be a subsidy to such clubs, because the Land Commission would be forgoing the opportunity of betterment at a later date. The Commission, when it comes into existence, may well feel that a subsidy should come direct to the clubs through the Department of Education and Science, who may make available a 50 per cent. grant on the acquisitions of land for these purposes, and that it would be wrong to provide an additional subsidy, in effect, from public funds by means of the Land Commission Act. However, it is clear that if clubs find that they could be helped, and it would be convenient that they should be helped, in this manner, the Bill before the Committee provides a means whereby it can be done. I cannot, of course, commit the Commission to pursuing any such 974 course of action until they have investigated the matter for themselves.
§ Clause 18 agreed to.
§ Clause 19 [Enforcement of crownhold covenants]:
LORD HUGHES moved, in subsection (4), to leave out words from the beginning down to and including "Sasines, the" and to insert "As respects land in Scotland each". The noble Lord said: This Amendment will make subsection (4) read as follows:
As respects land in Scotland each crown-hold covenant shall be binding upon every successor of the covenant or",
and so on to the end of subsection. The effect of the Amendment is to make all Scottish crownhold covenants binding on successors, and that such covenants must be repeated or validly referred to in any disposition conveying an interest to a successor. The Bill as it stands at present secures this result only in those cases where the disposition has been recorded in the Register of Sasines: and I should say that it is normal practice for such a disposition to be registered it is the safeguard of the purchaser to his title. But it is not right that the Land Commission's security should depend on the recording of a disposition, and it is desirable, therefore, to make it clear in the Bill that the covenant binds successors and must be repeated or validly referred to in all cases. I beg to move.
Page 21, line 9, leave out from beginning to ("crownhold") in line 11 and insert ("As respects land in Scotland each").—(Lord Hughes.)
§ On Question, Amendment agreed to.
§ Clause 19, as amended, agreed to.
§ Clause 20 [Notice of breach of crown-hold covenant]:
§ 6.39 p.m.
LORD ILFORD moved to add to subsection (4):
Provided that a local authority as defined in subsection (6) of section 11 of this Act serving such counter-notice shall, subject to payment to the Commission of compensation equal to the increase in the value of the
interest the subject of the said counter-notice which is attributable to the extinguishment of crown-hold covenants to which that interest is subject, be relieved".
§ The noble Lord said: This Amendment is concerned with the new form of crownhold tenure which is introduced by the Bill and about which a good deal has been said this afternoon. It is only concerned with that subject in the relatively restricted field of its application to land acquired by local authorities. Much has been said about local authorities, and I will endeavour not to say any of it again. Your Lordships will recollect that the crownhold tenure is subject to certain covenants which the Bill calls "crownhold covenants", and which are intended to enable the Land Commission to ensure that land is used, generally speaking, for the purpose which was agreed when the crownhold was granted.
§ The Bill provides that if there should occur a breach of one of these covenants the Commission can repossess the land and remove the crownholder by a relatively simple procedure, which consists of the service of notices, counter notices and ultimately the decision of the county court judge. No doubt the crownhold procedure will enable the Land Commission to ensure that lands granted by the Commission are in fact used for the purpose for which the grant was intended. It provides a very simple and expeditious procedure to ensure that that is so. That may be necessary, and I dare say it is, where the Land Commission are dealing with private individuals. But where you are dealing with a public authority who acquire land for some public purpose, then the position seems to me to be altogether different. The local authority are, after all, a public authority, and they acquire the land for the purpose of carrying out their public duties and responsibilities. I am sure that the Land Commission will not wish to interfere with the discharge of the functions of the local authority and, indeed, so far as the discharge of functions is concerned there are other means of ensuring that they are properly and adequately discharged.
§ The application of the crownhold covenant to land of that sort seems to me to be entirely out of place. One 976 takes an example. Supposing the local authority acquires land from the Commission for the purpose of constructing a swimming bath. Later, for reasons which are good reasons to the local authority, they decide that a public library would be more useful and acceptable on that particular site. That, I am sure, is the sort of question with which the Land Commission will not desire to interfere. They will not wish to prevent the local authority from making a change of that sort by use of these restrictive covenants.
§ Accordingly I hope that my Amendment puts the situation of the Land Commission in the right place. In the case of lands acquired from the Commission by a local authority, it provides that these crownhold covenants should not apply. There is really no need for them, as I have pointed out. I hope your Lordships will feel that a restriction of this nature on the exercise of public functions of a public authority is not a desirable thing, and that you will agree that, in the case of crownhold land which may be acquired by a local authority, these crownhold covenants should have no application. Of course, there will be a considerable difference in the value of land when it is subject to the crownhold covenants and the value when the crown-hold covenants have been released. We recognise that, and the Amendment provides for that. It provides that the local authority, in claiming to be free of the obligation under the covenant, must pay compensation amounting to the difference between the value of the land with the crownhold covenant and the value of the land without it. I think that puts the matter fairly and in the interests of both these public bodies, and I hope your Lordships will see your way to agreeing to this Amendment. I beg to move.
Page 23, line 36, at end insert the said proviso.—(Lord Ilford.)
§ 6.45 p.m.
§ LORD MITCHISON
I feel some difficulty about this Amendment. It does not merely exempt local authorities from penalties for breach of the crownhold covenant. That is what it amounts to where there has been a breach. But if I understood him aright, the noble Lord 977 was claiming that they should never be bound by these covenants. What he wants to do is to give them the choice: they either get the better terms that are conditional on the covenant and keep the covenant or, if they choose, later on they exercise their right and give up the difference between the special terms and ordinary terms and may then break the covenant.
I cannot believe that that is quite the right way of doing it. It gives them a sort of free option but, be that as it may, I wonder whether it is really sound to do this? This benefit is to operate mainly for the benefit of local authorities, for housing associations and for other bodies. For this purpose the housing associations and other bodies are performing a similar function to local authorities, though in a different way and, of course, with differences of structure and the rest of it. But I find it a little rough to allow it in one case and not in the other; and I should have thought that those two cases together comprised the vast majority of cases with which one would have to deal under this Bill.
I have another objection. We are all subject to the law, even local authorities, and it seems to me to be quite reasonable to provide that the question of what should be done on a breach of covenant should be determined by a court. It always has been, so far as I know, and courts do not find it very strange. County courts may find it stranger than the High Court, but I should have thought that it was essentially a judicial function. That is what the Bill provides. What it comes to is this. A local authority can break its covenants with impunity, and no county court can touch it. A housing association, if it breaks its covenants, has to be brought before the county court for adjudication. That does not seem quite right somehow.
§ LORD ILFORD
I wonder whether I may interrupt the noble Lord for a moment in order to try to help him. Of course, a housing authority has only a single function, and the land would be required only for that function.
§ LORD MITCHISON
I am not so sure about that. There is possibly a 978 difference between the use of land. We were told about swimming baths and libraries, or something of that sort. You may say that that is the same function as building houses, but I am not sure that it is. Be that as it may, I leave it like that. The essential point is that what is sought to be done here is to let the local authorities decide whether or not they will have the benefit of the better terms, with the obligation that that benefit involves, or whether, having taken the benefit, they will pay back the difference and then discharge themselves from the obligations. I cannot think that you should give an option like that. I cannot think it is right in one case to leave a matter of this sort to the courts, and in another case to the local authority itself.
I would say that while of course one realises that local authorities are elected bodies—I think we all realise that; we have all had practical experience of it—housing associations have a certain personal character, too, and one must treat them fairly in a case of this kind. Quite frankly, I prefer the terms of the Bill which leave the whole question to the county court judges and the Ministers who were dealing with this matter in another place, who were able to assure the Committee or the House, as the case may be, that it can be managed from the county court point of view. And why not? We do not want local authorities to be above the law on this point. If I may say so, I think they are a little unwise to suggest it.
§ LORD KENNET
I am not sure that we have been discussing this Amendment as if it had the effect which it does. The effect of it is that where a local authority had broken a crownhold covenant and the Commission had served on it a notice of breach of covenant, and only then, the Amendment would relieve the local authority of its duties under the crown-hold covenant on payment of compensation.
This seems to me to be a long way round to reach a position which I think was the position the noble Lord intended to aim at, and it was certainly the position discussed at some length in Committee in the House of Commons. The Amendment, which was to Clause 19, would have reached the position there that local authorities would have been 979 entitled to relief from crownhold covenants as of right before they had decided to break them. This Amendment was withdrawn after the Minister had resisted it on the grounds that it was unnecessary. He maintained that it was unnecessary because the Land Commission would always behave responsibly and reasonably where a local authority wanted relief from a covenant in order to carry out development in the public interest.
Moreover, the Commons' Amendment would have involved an elaborate code to settle the compensation payable in this event, possibly with reference to the Lands Tribunal, and so on. So the Opposition Amendment was withdrawn when the Minister promised to consult the local authority associations. This he has done. The only association which showed any interest in reaching this state of affairs was the County Councils Association who, although on balance they would just have preferred something like the Commons' Amendment, nevertheless were content to rest on the assurance given by the Minister in the House of Commons. That is where we stood until the noble Lord put down his Amendment, which has the much more complicated effect of postponing this until the local authority has actually broken the crownhold covenant. In view of that, I do not know whether the noble Lord would feel it appropriate to withdraw the Amendment and possibly look at it again with a view to a simpler one, if he so desires.
I think the noble Lord was speaking of the Association of Municipal Corporations and he mentioned that the County Councils Association is still not entirely happy. I have not put down an Amendment on their behalf, but I will consider the matter again, as he suggested.
§ LORD ILFORD
I am obliged to the noble Lord for having met me thus far, although perhaps it is not very far. However, I have no desire to press this Amendment on the noble Lord or on the Committee, and therefore I ask leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Clause 20 agreed to.
§ Clause 21 agreed to.980
§ Clause 22 [Owner's right to require Commission to elect]:
THE EARL OF KINNOULL moved, after subsection (3), to insert:
( ) Where a counter-notice under this section states that the Commission propose to acquire the specified land any person entitled to an interest in that land or in part of that land, whether that interest is a material interest or not, may within three months after the date of service of such counter-notice serve on the Commission a notice in the prescribed form requiring the Commission to acquire his interest and unless before the end of the period of twelve months from the date of service of the counter-notice the Commission have entered into a binding contract to purchase such interest the Commission shall before the end of that period prepare in draft a compulsory purchase order for the acquisition of the specified land under this Part of this Act.
§ The noble Earl said: The Committee will be aware that Clause 22 deals with the right of the owner of property who applies for, and obtains, planning consent for the development of his land to serve on the Commission a notice requiring them to decide whether or not they wish to acquire the land. The owner is given three months from the date of the planning consent in which to serve notice, and in turn the Commission are given three months to reply. If the Commission decide not to acquire the land at once, they are unable to change their minds for the next five years, as I understand the clause. If, on the other hand, they elect to purchase, they must do so either by compulsory purchase order or by entering into a binding contract.
§ The purpose of this clause is to safeguard the rights of those with a lesser interest in a property than what is defined under this clause as a "material interest". If the Commission enter into a binding contract there appears to be no obligation on them under this Bill to acquire the interest of those with what is known as a lesser interest—say a leaseholder with nineteen years to run. My Amendment would allow all such persons with these interests to require the Commission to acquire their interest at the same time as the major interest. As I understand the Bill, if the Commission use their compulsory purchase powers to acquire the property, these lesser interests are, in fact, safeguarded. It is where they enter into a binding contract on the property that this anomaly occurs. I beg to move.981
After subsection (3), insert the said subsection.—(The Earl of Kinnoull.)
§ LORD KENNET
The Amendment proposed for the protection of the holders of minor interests in property purchased by the Commission seems to me to be unnecessary, in that their interests do not need protecting. The clause as it stands is inserted in the Bill in order to enable the owner of land who wishes to develop it, and, of course, has obtained planning permission, to find out what the Commission intend to do before he incurs expenditure on drawing up detailed plans. Only the owner of a material interest can serve the notice because only he can sell the land to the Commission and only he is likely to want to develop it. If the Commission decide to buy by agreement, there is no reason why the owner of any minor interest should have his interest purchased. If the Commission wish to develop the land they will have to buy him out anyway, while if they do not he may remain undisturbed in his enjoyment of his tenancy, or wait for his reversion to fall in, until such time as the Commission do wish to develop. Moreover, if a tenant has an interest greater than twenty years he can serve the notice himself.
§ THE EARL OF KINNOULL
I thank the noble Lord for his reply. It is perhaps the first time this afternoon that I completely disagree with his argument. However, I will look at his reply and, if need be, put down a further Amendment at the next stage. I beg to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 22 agreed to.
§ Clauses 23 to 26 agreed to.
§ Clause 27:
§ General provisions as to betterment levy
§ 27.—(1) A levy, to be called "betterment levy" (in this Act referred to as "levy"), shall, subject to and in accordance with the following provisions of this Part of this Act, be charged where the development value, or part of the development value, of land is realised on or after the first appointed day.
§ (2) For the purposes of this Part of this Act the development value of any land, or part of that value, shall be taken to be so realised in the cases distinguished as Cases A to F respectively in the following table, and 982 so referred to in the following provisions of this Part of this Act.
|Case||Description of Case|
|A.||Where the land is disposed of by way of any such disposition as is mentioned in section 29(1) of this Act which is made on or after the first appointed day.|
|B.||Where the land is disposed of by way of any such disposition as is mentioned in section 30(1) of this Act which is made on or after the first appointed day.|
|C.||Where the carrying out of a project of material development of the land is begun on or after the first appointed day.|
|D.||Where such a right to compensation as is mentioned in section 33(1) of this Act accrues in respect of the land on or after the first appointed day.|
|E.||Where the land is the subject of any such disposition as is mentioned in section 34(1) of this Act which is made on or after the first appointed day.|
|F.||On the occurrence on or after the first appointed day of such other acts or events relating to the land as are designated for the purposes of this Case by or under section 35 of this Act.|
§ 6.58 p.m.
LORD NEWTON moved to add to the clause:
( ) No levy shall be chargeable where—
§ The noble Lord said: This is an Amendment to which my noble friends and I attach considerable importance. Nevertheless, I do not think I need take very long in moving it, because the purpose of the Amendment is a simple one. It is to exempt small transactions from the levy. It is to be presumed—or at any rate I presume—that those who take part in small transactions are likely to be mostly small people. I think for that reason alone it is desirable to exempt these small transactions, and also I think, perhaps wrongly, that that would not be offensive even to so unrepentent a 983 Socialist as the noble Lord, Lord Mitchison. But perhaps he will tell us in due course.
§ We are not wedded to the figure of £4,000. The reason we have chosen it is that it seems to be a reasonable level, but more particularly it is the level below which estates are, at present at any rate, exempt from estate duty. An Amendment with a similar objective was debated in another place, and the Minister, it seems to me having read his words, was not unsympathetic to the principle, but he made the criticism that that particular Amendment as drafted could lead to abuse by the fragmentation of fairly large properties; in other words, it would be possible for an owner, corporate or otherwise, to sell off plots of land so that in each case the consideration for the individual transaction was under the figure, which was then in that Amendment £5,000. In drafting this Amendment we have attempted to avoid that criticism. It may not be absolutely watertight, but it seems to me that if Her Majesty's Government were to accept the principle of this Amendment it would certainly not be beyond the wit of learned draftsmen to tighten the thing up so that there would not be any risk at all of abuse, or at any rate only a very small one.
§ Another advantage, to our way of thinking, of having a principle such as this incorporated in the Bill is that presumably small transactions would not bring in a very great deal of levy. On the other hand, they would very likely involve the Land Commission and their staff in a very considerable amount of work which they would not have to face if this Amendment were accepted. I am sure whatever view any of us takes of the merits of the Land Commission we do not want them to be overburdened with work so that they will have difficulty in doing their job properly. So I hope very much that Her Majesty's Government in this Committee will be as sympathetic to the principle of the Amendment as I believe the Minister was in another place. I beg to move.
Page 32, line 25, at end insert the said subsection.—(Lord Newton.)
§ LORD MITCHISON
I should like to assist the noble Lord, Lord Newton, as 984 far as I possibly can. I am glad to hear the noble Lord is not wedded to £4,000, because all his friends were wedded to £5,000 in another place, and I am all against political bigamy. Otherwise the language is different, but it was the same Amendment in substance, and the major point put by the Minister was that it left the door wide open to what he called fragmentation; that is to say, splitting up a transaction into a series of transactions each of which would be under £4,000. We can all express our views about how far it is feasible or likely to happen, but I suggest that in a matter of this sort the opinion of the Minister, a responsible Minister who has to operate the Act, is really rather weighty. I should have expected the noble Lord to tell us how fragmentation was going to be avoided, and why this clause was not wide open to fragmentation, but this valuable piece of information he did not vouchsafe to us, and I just wonder what has been happening.
It is politically rather attractive; it looks all right at first sight. You say, "This is in defence of the small man". Sure enough, the noble Lord said it. But there are some naughty men about in land, and it attracts a great many wheezes and devices. While I certainly would not say that all owners of plots of land under a value of £4,000 were rogues, it is possible to have land worth £40,000 and to split it up into ten parts and have the benefit of this clause. Those who, having heard this criticism from the responsible Minister in another place but wish to put this proposal forward as an acceptable proposition here, might at least tell us—and perhaps the noble Lord will—whether they think the Minister was wrong in saying that this leaves the door wide open to evasion or fragmentation, as the case may be, or whether they have any device for preventing it. There is nothing in the language of the Amendment that would save this particular Amendment from the criticism that was made in the other place.
I mention only one other thing. I think one has to be a little chary about fixing on a given point. One is constantly getting it, as the noble Lord, Lord Brooke of Cumnor, is well aware, in financial legislation. If you draw the line at £4,000 you may be very hard on the man who has got a property worth £4,100. That is 985 inevitable. If you are going to do anything about it you usually want some kind of escalation. The noble Lord is fully entitled to say that that is not his business; that ought to be done by the Government draftsman; and I would not differ from him on that matter. I just indicate the point. The major issue is, as the Minister said, that the Amendment opens the door wide to evasion. Noble Lords opposite are dead against evasion—and I mean that; they really are; we are public spirited people trying to do our best for the country. We do not want to encourage that kind of thing. Where a responsible Minister says it opens the door to evasion he must be answered or we cannot accept the Amendment.
§ THE DUKE OF BUCCLEUCH AND QUEENSBERRY
In spite of what the noble Lord has said, I feel there is more that should be said about this Amendment, and I submit strongly that it provides an opportunity to the Government to improve the Bill. At Second Reading the emphasis was on urban and semi-urban transactions of substantial sums and the prevention of vast profits on sales for development. If there is an insistence upon the levy for small transactions it gives the impression that the intention is different and is much wider. This Amendment will help in several different ways and on both sides. The Land Commission will be saved much costly work and correspondence and investigation in small cases, and it will help those who would otherwise be affected.
Even if the Commission collected the levy on small transactions which are below £4,000, maybe much below it, the expenses on their side may remove any profit or even show a loss. Apart from that, there is the work involved and the cost upon the owners, who may be farmers or occupying owners, or small landowners or bigger landowners; all of those will have extra work of an unproductive nature which will be taking up their time and will take them away from attention to work of a more beneficial nature. The smaller the landowner the less help he will have to deal with this correspondence with the Land Commission, but the bigger the landowner the more forms he already will have to deal with. I think the views of the professional bodies and their criticisms about the extent to which the levy is taken 986 have been made clear. The time of professional managers of land and active landowners and farmers is already fully employed, and better employed, upon all the work which bears continuously upon such people—their own work and, quite likely, local, national and public work; and they already have to give a great deal of time to other forms to do with their business and with employment. I feel that some acknowledgement of this side of the question is due from the Government.
It is difficult to anticipate the operations and the effects of the Bill, but this levy on smaller transactions will, so far as I can see and as my noble friend has just said, fall mainly or largely upon people in the countryside. The application of the levy to small transactions seems to indicate too little effort to understand or to consider the countryside and its economy. There are many aspects of land use and development which are raised by this and other legislation, and the tendency is so much now, both in new legislation and in taxation, to remove the financial resources from the land where this is most needed, with perhaps a deliberate policy of weakening and preventing the countrymen from carrying out their job.
It is said that advisers at high level, with more knowledge of how owners have treated the land and the people on it in central Europe, have a big say in these matters, but are less aware of the care for the land in this country. It should be well known that all the proceeds from sales of farm and forestry land are most urgently needed to be put back into the land, for productivity, equipment, buildings, housing and forestry; and that a common difficulty now is for enough ever to be raised for the necessary expenditure. Sales of farmland will have to pay a levy because of the higher value of the farms, whether the increased value is due to the public or to the proprietor; but no attention is paid to the increased costs on the land in farm buildings, equipment and other things, which are equivalent to the increase in the value of the land.
I should like to remind your Lordships that the best planners and developers in a purely landward area are often the men living on the spot, and I urge that they be encouraged to carry out their local responsibilities as owners of the land and 987 not impeded from doing so. I think that some acknowledgment of these problems is due and I submit that it would be found on both sides that it is desirable to omit small transactions up to whatever sum is chosen, thus simplifying the Bill and avoiding the imposition upon people in the country of much additional paperwork for no evident result.
§ 7.13 p.m.
VISCOUNT COLVILLE OF CULROSS
The noble Lord, Lord Mitchison, puzzled me a little in respect of this Amendment when he said that he did not think my noble friend Lord Newton had dealt with the fragmentation argument. The noble Lord has been most assiduous in reading the Reports of the Committee and subsequent stages in another place, and I am sure that he has been equally assiduous in reading the Amendment that we are in fact debating. I should be grateful, if he saw fit to speak again, if he would give his views upon paragraphs (b) and (c) of this Amendment which seem to me to be designed to meet precisely that point.
As I understood the argument about fragmentation, one form, for instance, which it could take would be that the developer would split up the large project and sell it through individual companies, each of which would own one plot and would thereby, if only paragraph (a) was in the Amendment, escape the levy. But that could not be done, because in paragraph (b) the exemption does not apply where there is a body corporate selling the land or is otherwise involved. Then again, paragraph (c) makes it quite clear that, so far as the transaction is concerned, it must relate to the person concerned and it must be his only piece of land, or his principal piece of land—I suppose that if he had an allotment or something it would not matter.
I am quite sure that these matters were designed in order to avoid fragmentation. But the noble Lord ignored them and did not comment on them at all. In this respect this Amendment is quite different from that moved in another place, for the good reason that, as the noble Lord pointed out, the difficulty was explained about this, and my noble friends have, I think, sought to meet it. Perhaps either the noble Lord, or the noble and learned 988 Lord the Lord Chancellor, who I think is perhaps to reply to this Amendment, would give their views on this.
But then I am also worried about what my noble friend the Duke of Buccleuch and Queensberry has said, if it is indeed the case that farm buildings and suchlike are not going to be reflected in the matters which may be taken into account in assessing the base value in Cases A and others like it, because I should have thought that under Part V of Schedule 4, paragraph 42(a), it was precisely matters of this kind which would have been taken into account as improvements and ancillary rights and would therefore have been reflected and added to the base value before the difference between that and the market value was assessed. So again, I think that the Committee might like some clarification of this matter—a very important one indeed.
Perhaps I could just ask, arising out of that—if there is any possibility of getting an answer to-day—why it is, if I am right that improvements on farms and buildings and fixed equipment may be taken into account in assessing what is the base value of the land, that only those which were carried out before the first appointed day are allowed to be brought into account in this respect? It may be that this is dealt with in some other provision of the Bill, but I should have thought that this ought to be a continuing process and one which should rightly be taken into account in the whole process of assessing the levy. I would therefore hope that some further comment upon this, other than a mere reliance on what the noble Lord, Lord Mitchison, has said, would be given to the Committee before we go any further in this matter.
§ LORD MITCHISON
I will not take long. What I was talking about was, and is, what the noble Lord, Lord Newton, said when he introduced the Amendment. I do not remember his saying that the two paragraphs, which I have read again, at the end of the Amendment, really made matters much better, and there I agree with him. It just depends on how ingenious you are.
I am perfectly certain that the noble Viscount, Lord Colville of Culross, if he were morally a much worse person than he actually is and were asked to avoid the levy by the use of this Amendment, 989 would find no difficulty whatever in the process of fragmentation, in spite of the language of the Amendment: a few nominees, trustees and the rest of it, and the thing would be far simpler than many of the really dirty deals that go on in land in London and elsewhere.
May I take the opportunity of saying to the noble Duke that I earnestly hope that this Bill will not only have effect in the countryside but also have effect in the areas around the towns where the sharp rise in land prices has been at its worst and most rapid during recent years. Perhaps he would allow me to say that he has been such a good landlord in relation to the borough that I once represented—he is a neighbour of it—that I would be sorry indeed if he got hit too hard by this. I do not think he will.
§ 7.20 p.m.
§ THE LORD CHANCELLOR (LORD GARDINER)
We now have a change of bowling, or perhaps it is batting—I am not sure. This being the first Amendment to Part III of the Bill, perhaps I ought to remind your Lordships that if this Part containing these Schedules had been a separate Bill, the procedure of another place would have required that it should be introduced on a Ways and Means Resolution, so that it would have been a Supply Bill; and if your Lordships were to amend this Part of the Bill and send it to another place, that course would appear to be an infringement of the privileges of the Commons. The only thing I want to add on that point is to stress that this has nothing to do with Party politics, nothing to do with there being a Labour Government. What I have said relates to the relations between the two Houses in circumstances in which one of them has or asserts a privilege. I thought that that consideration ought to be in your Lordships' minds when considering an Amendment to this Part of the Bill.
The Government have considerable sympathy with the views which have been expressed on this Amendment. Nobody really wants the Land Commission to mess about dealing with a large number of very small matters, taking up a lot of administrative work and time and not producing, perhaps, anything which, in the end, is really worthwhile. Of course, 990 there are already to some extent de minimis provisions in the Bill itself. In the first place there is the 10 per cent., which in itself could have a substantial effect; levy is taken only when the amount of development value is more than a tenth of the current use value. This in itself should rule out many very small cases. Then, secondly, so far as the definition of "material development" is concerned, this is, as your Lordships know, wider than that in the 1947 Act and should exempt a wide range of minor development and ensure that levy will be taken only where a substantial amount of development value is realised.
The difficulties about the Amendment are those which have been already mentioned by my noble friend Lord Mitchison. It will, I am afraid, enable fragmentation. One must realise that those who are concerned in property (shall I say?) investment, or speculation as one may regard it, are men of intelligence who are not going to pay a levy if they can help it; and if we provide by a clause like this a simple state of affairs when all a man has to do is to sell to his son, or to some man of straw, for an amount which will ensure that he falls within this exception—an amount less than its value—and then he simply resells to another nominee, each of them in turn making sure that they come within the exception, nobody will have to pay the levy at all. We have not at the moment been able to see any way of getting round this. If noble Lords opposite could suggest a clause which was watertight I have no doubt that we should be happy to consider it. But in our view this Amendment, as drafted, would open the door wide to fragmentation and would enable people to limit the consideration and sell for less than a thing is worth to a nominee, then to another nominee—not necessarily a limited company but to an individual—and in this way the thing would be left wide open.
In answer to the question in regard to improvements to farms, such improvements are included in current use value and therefore do not have to be allowed for otherwise. That, I am afraid, is the answer to that. I hope that the noble Lord, Lord Newton, will not press this Amendment, because, for the reasons I have ventured to give, it is not one that I can advise my noble friends to accept.
§ LORD BROOKE OF CUMNOR
We are all obliged to the noble and learned Lord the Lord Chancellor for intervening to give us the benefit of his wisdom on this Amendment. I think all noble Lords appreciate that this Bill has not been certified as a Money Bill; in fact we have already amended it in certain respects. The fact that this Part, Part III, of the Bill is concerned with a levy which Ministers of another place took great care to assert was not a tax, does not prevent us from examining it and, if we think fit, amending it. It will then go back to another place, and there it is for them to consider what view they take.
§ LORD MITCHISON
If the noble Lord will allow me, does he agree that if this Part of the Bill stood by itself it would need a Ways and Means Resolution?
§ LORD BROOKE OF CUMNOR
The Lord Chancellor has just said that. I did not think it was necessary for me to repeat it; I thought the noble Lord, Lord Mitchison, would have been listening. We are now dealing with an Amendment of an interesting character, because Government spokesmen, both here and in another place, have said that they have much sympathy with the purpose of the Amendment. The purpose, of course, is twofold and I hope the sympathy is extended in both directions.
First, I hope for sympathy with the Land Commission, who could be relieved of a good deal of what I might call unprofitable work, if small transactions could be successfully excluded without fear of evasion. When I say "unprofitable", I do not mean to say that it would not be useful work, but that the net revenue from the levy might well be outweighed by the cost of administration. I presume that that is the reason why, in the case of death duties, whereas when I was first elected to Parliament one paid death duties on any estate over £300, that limit has now been raised to £4,000 or £5,000.I do not suppose that that is due to Treasury generosity. I presume that it was found to be not worth while collecting duty on the small estates, bearing in mind the substantial administrative costs. So far as I am aware, the Government have no particular desire to impose on the Land Commission a great deal of petty work where the product of 992 the levy would, in fact, be completely offset by the administrative task. So up to that point we are at one. I hope that the Government also have sympathy with the genuine small owner. I am not talking about the fragmented owner; I do not think we have any sympathy with him. But in general it is the practice of Parliament to see whether one can temper the cold wind of taxation to people who have no great means and who are not engaged in any very substantial activities.
The task, therefore, is to try to find a plan which would work. I have read the proceedings in Committee in another place, and the principal objection raised by the Minister there, Mr. Willey, was that the Amendment which the Committee in another place were considering was wide open to fragmentation. I rather agree. I have no reproach for Mr. Willey in having taken that point. But the Amendment which my noble friend Lord Newton has moved is not open to the charge of a risk of fragmentation in the same manner; that is to say, the would-be avoider of levy would have to be a great deal more skilful to avoid the provisions of this Amendment than he would have been had another place accepted the Amendment which was there put forward.
I hope that my noble friends will back the idea behind this Amendment, even if it may need in due course certain improvements. There is no sanctity about the figure of £4,000; I should be perfectly prepared to see a lower figure than that written into the Bill. But there must come at some level a point where not only would it not be worth while to try to collect the levy, but it would not even he worth while to try to do the astute fragmentation; the administrative cost which the fragmenter would get into, and the trouble it would involve, would outweigh any advantage from avoiding the levy. I appreciate also that there would need to be some escalator arrangements to shade off the full liability to levy which would arise above £x, while if you were just under £x you would pay no levy. I think the noble and learned Lord will appreciate that this is not something which an Opposition can plan and put into draftsmen's language. That is why the point is not covered here. But we were well aware that something of that kind would be required.
993 I make a strong appeal to the noble and learned Lord and to the Government. We are not just engaged in some kind of obstructive clash. As I say, the spokesmen for the Government in both Houses have now said that they have a good deal of sympathy with what the Opposition are trying to do here. Now can we not make a further effort? Can we not work out a plan? If the noble and learned Lord would say that he accepted in principle, on behalf of the Government, that there should be an exemption for the really small transactions, and that he would be prepared to work out with his right honourable friends, and consulting us if he thought fit, between now and Report stage, something which could be done I should willingly advise my noble friend to withdraw this Amendment. But if we can get no favourable reaction at all, if we simply get a statement that this proposal would leave the Bill too wide open to the abuse of fragmentation, even though the Government have a great deal of sympathy with the purpose which we are trying to achieve, then I think we must, as it were, "cash in" on that sympathy. We must press what we are seeking to do and ask that it is more seriously considered.
But I very much hope that the noble and learned Lord will be prepared to reply that this is so important a matter, and so inherently non-controversial a matter so far as the main purpose of the Bill is concerned, that it would be worth while to make a further effort to see whether the idea behind the Amendment could be so shaped and moulded as to cut out the liability to levy falling on the genuinely small man. That would also relieve the Land Commission of a tremendous amount of work, which I am quite sure the Commission itself, when it is set up, will have no desire to have to perform.
§ THE LORD CHANCELLOR
I think the Government have said throughout that they have sympathy with this. Noble Lords opposite are much cleverer than we are. In another place the Opposition produced an Amendment which they themselves now concede would have left the procedure wide open to abuse. They have now produced one which, while open to abuse, is not so widely open to abuse as the one they produced before. I would 994 encourage them very much to improve on this Amendment, and we can all see whether or not it is possible to find a method which is really practicable, bearing in mind that we have to realise that people do not like paying levies, that they have all got good lawyers, and that if a transaction can be done in such a way, or by such a series of transactions, as will, in fact, relieve of levy somebody who otherwise would have to pay a large amount, they will do it. But I am in no way averse to our all putting our heads together and seeing whether or not a viable way can be found.
§ LORD NEWTON
Like my noble friend Lord Brooke of Cumnor, I also should like to thank the noble and learned Lord for giving us the benefit of his wisdom. He said that it represented a change of batting. He has been defending his wicket with just as much determination as his noble friends have heretofore. I do not think there is much point in anyone on this side of the Committee trying to argue any longer the merits of the principle which is enshrined in this Amendment. It is perfectly obvious to me, as I imagine it is to all of your Lordships, that there is considerable sympathy with the principle in the minds of the Government. But they say that, even though my Amendment is not so open to abuse as was the one moved by my honourable friends in another place, it still is open to abuse.
My noble friends and I have no wish at all to make it possible for there to be abuse by fragmentation, and certainly it is no object of this Amendment to help the potential fragmenter. The noble and learned Lord was good enough to encourage us to keep on trying to find a watertight Amendment. I suppose we should be grateful for that compliment. But I take the view that it is really a duty of the Government, with all their resources behind them, to do this. Unless they are prepared to say, as a matter of principle, that they do not think that small transactions should be exempted, then it is up to them to find a way.
§ LORD NEWTON
That is sometimes said by Ministers or by Governments, when they are not really convinced that 995 they want to go to the trouble to do something. I am sure it would be possible to find a method of achieving this object, or something like it, without there being any risk of abuse. It seems to me that the best way of encouraging the Government to keep on trying about this is not to withdraw the Amendment.
§ LORD OGMORE
I have listened with considerable interest to this very interesting discussion, and perhaps I may be allowed to say a few words from what might be called a neutral corner. It seems to me that the Opposition have the better end of the battle. I think we all agree that these small transactions should be excluded; first of all, as the noble Lord, Lord Brooke of Cumnor, has said, because otherwise there may be hardship to a large number of small people, and, secondly, because of the administrative burden which will fall upon the Government and those administering the levy. I think that what really broke down in the 1909 Act—the original Land Values Act—was when every property, whatever it might be, had to have a land certificate. Possibly the same argument applied to the Act of the noble Lord, Lord Silkin, in 1947. If every property, or a large number of properties, will be affected, then the whole system may break down.
I do not believe that the noble Lord, Lord Mitchison, is right when he talks about fragmentation. If a man had to have a whole series of assignments or conveyances to large numbers of brothers and uncles and so on, the complexities of the scheme would be so great that it would become quite nonsensical. The danger of fragmentation is covered, I think, by the restriction on limited companies in this proposed subsection. That is quite sufficient. Anyway, what is the purpose of legislation? Surely the purpose of legislation is to cover the maximum number of cases; to cover the honest people. If you were never able to put forward any contention, however worthy, because some people, some crooks—not crooks, but smart practitioners—may avoid it, then it seems to me that a large amount of our legislation would never get through at all.
I would remind the Committee that in the case of all transactions affecting the 996 transfer of property, whether freehold or leasehold, there is a Finance Act provision under which a person has to provide a certificate, or give a covenant, saying that it does not form part of a larger transaction or a series of transactions for an amount other than that stated for Stamp Duty. If that has been evolved for Stamp Duty, I do not see why the same sort of clause should not be introduced where the Land Commission provisions obtain. I would suggest that those who are dealing with this matter might look at the provisions concerning the normal conveyance of land, when they will see the clause about the Finance Act certificate.
There is just one other point that I should like to make. Although I am entirely in sympathy with the official Opposition in this—I think they have made an extremely good case, a very sound case—I am rather worried by the point made by the noble and learned Lord the Lord Chancellor when he said that there might be a constitutional issue here. Normally, I do not worry very much about issues with the Commons. I never worry about differing from the House of Commons; and we Liberals have on several occasions recently, as your Lordships know, challenged the House of Commons when the official Opposition have refused to do so. But here is a question about which the House of Commons are particularly sensitive—that is, the question of financial control—and the noble and learned Lord the Lord Chancellor has advised the Committee that this might raise a constitutional issue. He has said that a very difficult circumstance may arise, and that the House of Commons might be right in raising it. On the other occasions to which I have referred, when we forced a vote, I do not think they would have been right in raising a constitutional question; but in this case, the noble and learned Lord the Lord Chancellor being of the opinion and advising the Committee that this might raise an important constitutional issue, I think the Committee ought to take that into account very seriously.
§ LORD CHAMPION
I wonder whether this might be a convenient moment for the Committee to adjourn until ten minutes past eight. I am sorry to be squeezing things so much, but we rather hope that when we come back we shall 997 perhaps be able to resume the House for purposes of which the noble Lord will be aware. If we are not able to resume the House, we can take any further speeches on this particular Amendment and, if necessary, a Division. I beg to move that the Committee do now adjourn.
§ Moved, That the Committee do now adjourn until ten minutes past eight.—(Lord Champion.)
§ LORD BROOKE OF CUMNOR
If I am permitted to speak, may I ask the noble Lord, Lord Champion, to reconsider his Motion? I would judge that in one way or another our discussions on this Amendment would be completed within five or six minutes. That being so, it seems a pity not to dispose of it. I think it will be rather awkward to come back, after a break, for the Statement and then to return to this Amendment. Ought we not to complete our consideration of it now?
§ LORD SHEPHERD
We would concede the point that the noble Lord has made on condition that the Committee raises no objection to reassembling at ten minutes past eight.
VISCOUNT COLVILLE OF CULROSS
Why is the Committee going to reassemble at ten minutes past eight, if I may ask the noble Lord? Is it proposed to go on with this Bill then?
§ LORD SHEPHERD
The noble Viscount may be aware that noble Lords on all sides of the House are interested in, are concerned with and are awaiting, a Statement.
§ LORD SHEPHERD
We are now in Committee, are we not? I can therefore address your Lordships only as the Committee. The House itself, of course, is interested, but we are now in Committee. I did not intend to suggest to my noble friend Lord Champion that we should resume the House at this stage, because I did not know whether we should be in a position to make the Statement close to eight o'clock. Therefore, what I suggested to my noble friend was that we should adjourn this Committee stage until about ten minutes past eight so that we could continue Business, if necessary, until such time as we could resume the House 998 to hear the Statement. But if the noble Lord would like this particular point to be dealt with and finished, then, on condition that the Committee reconvenes at ten minutes past eight, I would certainly raise no objection.
§ LORD CONESFORD
I wonder if I may put one point to the noble and learned Lord the Lord Chancellor arising directly out of the point that was put by the noble Lord, Lord Ogmore. I appreciate, I think, that, quite apart from whether or not a Bill is a Money Bill, a particular Amendment may he ignored or resisted by the Commons on the grounds that it affects their privilege. That is quite independent of whether it is a Money Bill. I think I am right in saying that. But does that affect in any way the propriety, if this House so wishes, of our expressing our view on any part of a measure without prejudice at all to what the Commons may think fit to do, in the light of their privileges? I do not know if the noble and learned Lord follows the question I am putting to him, but it is what I should like him to bear in mind in answering the point of the noble Lord, Lord Ogmore.
The other point on this Amendment that I should like to put to the noble and learned Lord is this. He said in his last speech dealing with this Amendment that, having regard to the sympathy expressed on both sides for the object of this Amendment, he was all in favour of both sides getting together. I think that was something like his own words. What I should like to know is whether that could be understood as meaning that this side of the Committee would have the advantage, perhaps, of the assistance of Parliamentary draftsmen; because, if it did mean that, it might make quite a big difference.
§ THE LORD CHANCELLOR
I am quite willing, of course, to take any course the Committee likes. It looks as though, if anybody wants any dinner at all, we should adjourn—we shall even now have only about twenty minutes—but if the Committee prefers to continue in spite of that fact (and, apart from anything else, there is a constitutional question of some importance here) I am, of course, entirely at the disposal of the Committee. The House, as the Committee knows, may have to resume, as I understand it, at any time after eight.
§ LORD BROOKE OF CUMNOR
I am reluctant to interrupt the noble and learned Lord, but I should like to know whether we are to continue to address our remarks to the Motion to adjourn or to the Amendment.
§ LORD CHAMPION
There is a little difficulty about this. Had I known that we were going on to discuss my Motion to this extent, I would long since have withdrawn it, but one does not care to interrupt too much. However, I think that perhaps I ought at this stage to withdraw it in order to get back to the Amendment, so that we might take our Division, and so that we might get some dinner. I beg to withdraw my Motion.
§ Motion, by leave, withdrawn.
§ THE LORD CHANCELLOR
I do not know that I can add very much. I have already said, let us all consider this together. I do not know whether I can offer the assistance of Parliamentary draftsmen on the constitutional point, which is, of course, of importance. I must make it clear that so far as I am concerned, I am not going to be a party to any amendment of Part III of the Bill because, for the reasons I have explained, if it were sent down to another place it would be an infringement of the privileges of the Commons; and I am not taking part in that. Noble Lords opposite will, of course, do whatever they think fit. There is nothing to prevent this House from not passing a Supply Bill or from taking out part of a Supply Bill. That, as I understand it, would be no infringement of the privileges of the Commons; but amending it would be. That is the position as I see it. It is for that reason that I cannot properly advise the Committee to amend any part of Part III.
VISCOUNT COLVILLE OF CULROSS
The noble and learned Lord has made a very profound statement, because it appears to me from what he said that even if we have the smallest technical amendment in the wording of this Bill, whether it is considered highly desirable by the Government or not, it is quite impossible to do anything about it if it is in Part III. I do not believe that to be the case. I have looked at the precedent of Lord Silkin's Town and Country Planning Bill of 1947. I find in Part VI, which was the equivalent part 1000 in that Bill of Part III in this one, that this House made no fewer than ten Amendments to the text of the Bill. By what means it was done I do not know. There may be some peculiarly cunning method by which the matter can be amended or by which Amendments can be said to be acceptable by the Government and they are subsequently incorporated in the Bill as returned to another place in some form different from the way in which we normally do it. But I believe it is possible. If it was done in the case of the 1947 Bill, I do not see why it should not be done in the case of this Bill. Moreover, if it cannot be done, it seems that the Government would be at a grave disadvantage if they find some technical amendments that they would like to make. I hope that this constitutional issue is not going to be considered to be overriding in respect of the whole of Part III of the Bill and the relevant Schedules.
§ THE LORD CHANCELLOR
This is precisely why it did not seem to me a very good point to decide under extreme pressure of time. If the Committee want to decide it under extreme pressure of time we will do that. I should be less than honest if I did not make it quite plain that there are on the Marshalled List Amendments to Part III which I should say, but for this point, I should be prepared to accept. They are mostly Amendments which I do not think anybody can say will make much difference one way or another and about which, in the ordinary way, I should say, "It does not seem to me that this makes much odds and I am prepared to accept them". But I am not prepared to be a party to that which, in my view, would constitute an infringement of the privileges of the Commons if it were sent down to them.
There is some precedent in this matter in that some 35years ago there was a somewhat similar Bill and the House took this course after Amendments. They then at Report stage removed the whole of the Supply part and sent it down to the Commons without that part. That is not an infringement of the privileges of the Commons, as I understand it. But if that course is taken, I do not think there is any reason to suppose that the Commons are likely to 1001 pay any attention to something which officially they cannot see. I really think that this is an issue which all sides of the Committee ought to consider seriously. But if noble Lords opposite would like an immediate Division on it without further discussion, I am prepared to agree to that.
§ LORD OGMORE
I hope that the noble Lords on the Opposition Benches will not have an immediate Division; because if, after consideration, it were found that the noble and learned Lord, the Lord Chancellor, was wrong—although I think he is right—the Amendment could be put down at a later stage. I think that what the noble and learned Lord has said corresponds with all that I have heard on this practice. I have always understood that you could entirely reject a Bill regarded as a Money Bill but you could not amend it; or, if you did, nothing happened. That is how I have understood the situation. I am grateful to the noble and learned Lord for giving us the benefit of his opinion. I think that in this House we should give the Lord Chancellor's opinion on a matter of law such as this the greatest weight; because he is the chief lawyer not only of this House but of the Kingdom.
At the risk of Members getting indigestion, I should like to say that I think it would he ill-advised of us as a Committee to go against the opinion of the Lord Chancellor in a matter of this kind and thus run the risk of very serious conflict with another place who, at the moment, are not too keen on us, anyway. I feel we should not go out of our way as it were, to risk a conflict with them. I beg the Opposition, therefore, not to press this to a Division. I think they have certainly got the best of the argument and I have said so. To do so will put us, who believe in what they said in the merits of the case, in an awkward position. What are we to do on these Benches? I think they are right; but I also think the noble and learned Lord, the Lord Chancellor, is right in the serious warning he has given the Committee. What are we to do? He said he would not vote. Does that mean that the Lord Chancellor would not vote at all? Does he advise the rest of us not to vote so that there will be a 50–0 vote for the Amendment?
§ LORD OGMORE
There might be a Division. Probably the noble and learned Lord, the Lord Chancellor, would not agree to its being carried without a Division. If a Division is called for—and that is what we are discussing—does the Lord Chancellor advise those of us who feel as he does on the constitutional issue not to go into the Lobby? Or should we go into the Lobby against the Amendment although we agree with its merits?
§ LORD BROOKE OF CUMNOR
I do not think I can presume to advise the noble Lord, Lord Ogmore, how his conscience should lead him in the Division Lobbies this time. I am conscious of being one of the most junior Members of this House, so I feel it presumptuous of myself that I am called to speak on this occasion. But, as it appears to me, the offer that the noble and learned Lord, the Lord Chancellor, made to the Committee some minutes ago, to enter into discussion about this matter, was really stillborn; because if it is inconceivable that this House should amend the Bill, there is really very little purpose in having any discussion about how it should be amended. Indeed, I was very seriously concerned when the noble and learned Lord said that there were some Amendments on the Marshalled List which he would have liked to advise the Committee to accept—presumably because he thinks they will improve the Bill. Yet he felt debarred from so advising the Committee lest that should be an infringement of the privileges of the Commons.
The only way in which I can see that we can now make progress is to bear in mind that this is not the last stage of the Bill in this House. Whatever we do in Committee we are not sending the Bill straight away to another place without considering it on Report and without considering it on Third Reading; and there is opportunity, in the practice of your Lordships' House, to move Amendments even after the Third Reading of the Bill. As an independent judge the noble Lord, Lord Ogmore, said that the weight of the 1003 argument is on the side of the Opposition, and it seems to me that the right thing is for my noble friend, Lord Newton, not to withdraw his Amendment, but for the Committee to come to a decision on the matter and then, at a later stage of the Bill, to try to thresh out these important constitutional questions.
But let us at this stage, at any rate, do the sensible thing to improve the Bill as we see it. I hope that the noble and learned Lord the Lord Chancellor will be willing, when the Committee comes to the other Amendments which he thinks will improve the Bill, to allow this Committee to incorporate them in the Bill. It seems to me that this is a practical and common-sense way of proceeding. I said in an earlier stage that I did not think that the Amendment itself contained the seeds of great controversy. I thought the Amendment was to seek to achieve a purpose about which almost everybody was agreed. What we disagreed about was that some noble Lords felt a wholly satisfactory way of achieving this purpose had not yet been discovered. This does not seem to be the normal approach to a major clash between the two Houses of Parliament. That is why I should like modestly to suggest to the Committee that we should, according to our own consciences, record our views on this Amendment, bearing in mind that there are further stages of the Bill before anything has to be reported to another place.
§ THE LORD CHANCELLOR
Perhaps I may add this further comment. The position seems to me to be this: either this House sends down Part III of this Bill with Amendments or it does not. If it is going to send it down with Amendments, then—and this view has not, I think, been seriously challenged—this would be an infringement of the privileges of the Commons. If, on the other hand, it is not going to send the Bill down with Amendments, what is the use of taking days in Committee on Amendments which are not going to be sent to the Commons?
I feel, as Lord Chancellor, not exactly, perhaps, as distinct from the Government, but as Speaker of this House, that it is not advantageous to Parliament in any way if there are unnecessary frictions 1004 between the two Houses. We are, after all, a Parliament in which there are two Chambers, and the system will work best if we keep to a minimum the causes of friction between the two Houses. While noble Lords opposite will, of course, at each stage of the Bill take exactly what course they think right, the difficulty I feel is that if we are going to spend days on Amendments which the Commons are not going to see, that seems rather a profitless exercise. On the other hand, if as I understand it, noble Lords opposite do agree that an Amendment to Part III of the Bill sent down to the Commons would constitute an infringement of the privileges of the Commons, is not this a decision of considerable importance?
§ 8.3 p.m.
§ LORD CONESFORD
May I put one point to the Lord Chancellor? I must say that I was under the impression—but I may be quite wrong about the precedents—that quite apart from whether a Bill is or is not a Money Bill, the House of Commons might take a view of one of our Amendments that it was an Amendment which they would ignore because they would regard it as a breach of their privilege. But suppose they liked the Amendment. In that case they would not be bound to take that view, would they?
The point I should like to put to the noble and learned Lord, the Lord Chancellor (I may be absolutely wrong about this) is that I thought there were cases where, though the matter was one where the Commons might say that any insistence on the Amendment would be an infringement of their privilege, they would yet say that they would consider it on the merits. They might even like an Amendment we made. I thought there were precedents where, Amendments having gone to the Commons, no objection was taken to them, even though they were Amendments to which the Commons might have taken objection on the ground of privilege. If the noble and learned Lord the Lord Chancellor cannot answer that question straight away, I would ask whether he would look into such precedents, because it seems a matter of some importance.
§ LORD PARGITER
Before the noble and learned Lord the Lord Chancellor replies, may I put a further point to him? 1005 If an Amendment concerns a matter that is especially within their province, will they consider such an Amendment—never mind the merits of the case—if it comes to them from here? The problems of another place, except on certain matters, are specifically reserved to them, and I should think they would not want to open the door in any way, notwithstanding the merits of what might be put to them. With due respect to the Committee, I do not think it can be done in this way.
§ THE MARQUESS OF SALISBURY
I intervene, with great diffidence, only to say this. In point of fact it is for the Commons to decide whether a matter is privileged, not for us. We can send back anything we like. They decide, under the Rulings which are given, and we, of course, have to accept their decision. But I do not think there is anything to prevent us from sending back an Amendment, even if it is going to be ruled as a question of privilege when it gets back to the Commons. There may be advantages in it, because there may be some point which your Lordships' House might think it very important to be made. Even if they know that it is a privilege Amendment, they may want to register a protest or make some point which they regard as vitally important. I myself should have been very reluctant to accept the view of the noble and learned Lord the Lord Chancellor that we rule that a subject is privileged to the Commons. It is for them to do that, I think, and not us.
§ THE LORD CHANCELLOR
May I start with Erskine May, at page 841? It says:The right of the Lords to reject a Bill for granting aid and supplies to the Crown has been held to include a right to omit provisions creating charges upon the people when such provisions form a separate subject in a Bill which the Lords are otherwise entitled to amend. The claim of privilege cannot therefore be raised by the Commons regarding amendments to such Bills whereby a whole Clause, or series of Clauses, has been omitted by the Lords which, though relating to a charge and not admitting of amendment, yet concerned a subject separable from the general objects of the Bill. On 30th July 1867 it was very clearly put by Earl Grey and Viscount Ever sleigh that the right of the Lords to omit a Clause which they were unable to amend"—unable to amend, your Lordships will note—relating to a separate subject was equivalent to their right to reject a Bill which they 1006 could not amend without an infraction of the privileges of the Commons.That is what has been done in the past, and particularly, I think, in a Bill of 1931 which was the last occasion on which it was done: that, having made Amendments, the whole of the offending part of the Bill was then omitted at Report stage; and that is then not an infringement of the privileges of the Commons. The Amendments then do not, as I understand it, get to the Commons. But, of course, Members of the House of Commons can read Hansard, and if the Government like some Amendment which has been moved here there is nothing to prevent them from including it. But I am rather apprehensive that, in the existing state of relations between the two Houses, if we do that which we know constitutes an infringement of the Commons privilege it would not seem to me likely that they would take that course.
§ LORD BROOKE OF CUMNOR
I have familiarised myself with the 1931 precedent, and the relevant point arising from that precedent seems to me to be that your Lordships' House did amend the Bill. They did pass a number of Amendments to that Bill, and then at a final stage they moved out the whole of one Part of the Bill in order not to infringe Commons privilege. But the essential point is that they did agree to a number of Amendments to that Bill in Committee, or on Report, and finally they moved out the whole Part.
We are not even at the Report stage of this Bill yet; we are certainly not at the Third Reading; and the 1931 precedent shows that there are direct precedents for amending a Bill of this character, or part of a Bill of this character, on the Committee stage. I listened carefully to what the noble and learned Lord the Lord Chancellor said when he apprehended that we might be wasting our time by considering all these Amendments to Part III of the Bill, as we could not effect changes in that Part directly without infringing Commons privilege. But, while he was speaking, it crossed my mind that the Government themselves had allotted Monday, Tuesday and Thursday of this week, and possibly part of Wednesday too, to further consideration of the Land Commission Bill in Committee.
1007 It seems to me a curious action for the Government to take, when the noble and learned Lord the Lord Chancellor says that this would be a complete waste of your Lordships' time. If your Lordships will examine the remainder of the Marshalled List which we have not yet reached, your Lordships will see that practically every Amendment from now on concerns Part III of the Bill. Therefore, I cannot see that we are doing wrong or wasting time if we are occupying days which the Government themselves have allocated to further consideration of the Bill in Committee, and I hope that we
§ Resolved in the affirmative, and Amendment agreed to accordingly.
§ [The sitting was suspended at twenty-one minutes past eight and resumed at a quarter to nine.]
§ On Question, Whether Clause 27, as amended, shall be agreed to?
§ THE EARL OF KINNOULL
I should like to take this opportunity to discuss the Amendment which I did not move because it was embraced by the previous Amendment. Perhaps it would be for the benefit of the Committee if I read shortly what the Amendment was in-
§ shall be able to continue. But having said once again that this is not the final stage of the Bill, and having reminded your Lordships that certainly Bills of this character have been amended in your Lordships' House in Committee on previous occasions, I still have a good deal of sympathy with my noble friend Lord Newton in not withdrawing his Amendment.
§ 8.13 p.m.
§ On Question, Whether the said Amendment (No. 26) shall be agreed to?
§ Their Lordships divided: Contents, 50; Not-Contents, 29.1007
|Aberdare, L.||Daventry, V.||Monk Bretton, L.|
|Albemarle, E.||Dundee, E.||Mowbray & Stourton, L.|
|Alport, L.||Dundonald, E.||Newton, L.|
|Ampthill, L.||Emmet of Amberley, Bs.||Nugent of Guildford, L.|
|Auckland, L.||Falkland, V.||Oakshott, L.|
|Barnby, L.||Fortescue, E.||Redmayne, L.|
|Bessborough, E.||Gage, V.||St. Helens, L.|
|Brecon, L.||Glendevon, L.||Salisbury, M.|
|Brooke of Cumnor, L.||Goschen, V. [Teller.]||Sandford, L. [Teller.]|
|Brooke of Ystradfellte, Bs.||Grimston of Westbury, L.||Selkirk, E.|
|Buccleuch and Queensbury, D.||Harlech, L.||Strange of Knokin, Bs.|
|Carrington, L.||Hastings, L.||Swinton, E.|
|Coleraine, L.||Holford, L.||Thurlow, L.|
|Colville of Culross, V.||Inglewood, L.||Vivian, L.|
|Conesford, L.||Killearn, L.||Wedgwood, L.|
|Congleton, L.||Kinnoull, E.||Wolverton, L.|
|Cullen of Ashbourne, L.||Milverton, L.|
|Bowles, L. [Teller.]||Kennet, L.||Sorensen, L. [Teller.]|
|Burden, L.||Leatherland, L.||Stamp, L.|
|Burton of Coventry, Bs.||Lindgren, L.||Stow Hill, L.|
|Campbell of Eskan, L.||Longford, L. (L. Privy Seal.)||Strabolgi, L.|
|Champion, L.||Mitchison, L.||Strang, L.|
|Crook, L.||Ogmore, L.||Taylor of Mansfield, L.|
|Faringdon, L.||Pargiter, L.||Wade, L.|
|Gardiner, L. (L. Chancellor.)||Phillips, Bs.||Williamson, L.|
|Hilton of Upton, L.||Popplewell, L.||Winterbottom, L.|
|Hughes, L.||Shepherd, L.|
§ tended to do. It was to ensure that no levy shall be chargeable in Case E where the amount of consideration for the relevant disposition does not exceed £500. The point at issue is that, as the clause stood, farmers would have found that such dispositions as easements would have attracted the levy. I suggest to the Committee that if Part III of the Bill was returned to the Commons it would be an unworkable situation if the levy should be chargeable on all easements such as electricity pylons, water pipelines, oil pipe-lines, and Post Office telegraph poles. The reason why the levy 1009 should fall on these way leaves is that the amount of levy would not exceed 10 per cent. of the development value.
§ A further point in favour of the exemption of such small dispositions is that at the present time the statutory bodies have enough trouble with farmers to contend with when they wish to establish a pipeline over the farm, and if the farmers find that such easements, which they do not wish for anyway, are subject to a levy, I would suggest that the risk of shotguns to settle arguments will be vastly increased.
VISCOUNT COLVILLE OF CULROSS
My noble friend Lord Kinnoull has raised a very important point, and it is a great deal more complicated than might appear at first sight. My noble friend was dealing with the position under Case E in Clause 27. Then one looks at what is dealt with in Clauses 34 and 35 and in some of the Schedules which also relate to this matter.
My noble friend has dealt with the case of a pipe-line or a way leave for an electricity line, or something of that nature, being taken across the land. I expect it is the experience of the Committee that this sometimes happens. A pole for the electricity supply may be placed upon your land, and you then have a rent payable by the Electricity Board which is something in the region of less. a year. That, as I understand it, is either the granting of an easement under Clause 34, or, if it is not that, it is one of these rather nondescript dispositions which will attract levy in certain circumstances under Case F, which is Clause 35. There is a sort of "catch all" provision in Clause 35(3) which deals with precisely the sort of words my noble friend was dealing with.
First of all, I think it would be extremely interesting, although it may not strictly arise on this clause, to know what the difference will be in the type of easement about which my noble friend was talking where it occurs under Clause 34, and equally the sort which will occur under Clause 35. Clause 35 was put in as an Amendment in another place in order to replace a general provision which previously appeared in the Bill.
The matter is taken really to a degree of absurdity when we get to the effect of 1010 notification of this sort of easement, because this is really the point. I do not imagine that there is going to be a great deal of development value realised by the grant of an easement of a pole at a rent of 1s. 0d. per year. Nevertheless, the whole calculation has to be gone through, and if it should turn out that there should be a penny development value realised then this has a subsequent effect, because again it is in Part V of Schedule 4, and it will be seen there, under paragraph 42(c) that where there is a payment of any consideration for a disposition which constituted a "chargeable act or event" falling within Case E, that is going to be one of the matters to be taken into account towards the reduction of the gap between the two values upon which levy will subsequently be assessed. One shilling may be a ridiculous figure to take, but the difference that would be involved may nevertheless be there. I have no doubt that this particular part of Schedule 4, dealing with expenditure on improvements and ancillary rights, does not deal with anything that now occurs in the Case F provisions, because I expect they will be dealt with under the regulations made under the clause itself.
I have no doubt that similar set-offs will occur upon a subsequent disposition, taking account of the sort of matter with which my noble friend was dealing. This is all very complicated, and I rather think that there may, on some occasions, be still more complications. If there is some small matter of this sort it seems to me that the Government may well consider—and perhaps we will leave out the constitutional issue at this moment—whether here again under Cases E and F there ought not to be a minimum below which neither notification nor levy is dealt with at all under the Bill.
If that were the case, surely it would relieve the Land Commission of an enormous amount of administrative expense. I believe it will do no harm whatever to the grantee, who is the person, I believe, who notifies in the event of a Case E disposition taking place. I cannot believe it will seriously affect his position under the ancillary rights provisions in Schedule 4 which are brought back, of course, into the main provisions of the Bill itself. If we are able to accept this point on the main provisions which 1011 have been decided already, then here again I think my noble friend has raised a most useful point which ought to be considered as a corollary to the matter we have just been talking about. Therefore I hope the noble and learned Lord the Lord Chancellor will be equally sympathetic to this point. Of course it is not an Amendment, but I hope he will endeavour to see whether he can include this matter in his kind offer of assistance (if it be necessary) to try to draft a suitable Amendment for the next stage of the Bill.
§ THE LORD CHANCELLOR
This is in substance the subject matter of the manuscript Amendment which the noble Earl put down. The offer which I made was to consider something together with noble Lords opposite. This was rejected and the matter was put to a Division. I do not think noble Lords opposite, after I made that offer and they had rejected and spurned it and insisted on going to a Division, can expect me to take the same attitude on what is really exactly the same point. As I understand it, the object of the Amendment would be to prevent the Commission from taking levy when development value is raised by the grant or release of an easement or the release of a restrictive covenant when the consideration was less than £500. These particular transactions constitute chargeable acts or events only when they are notified by the person who pays the consideration—and he will notify only when he wants to claim the amount of the consideration he is paid on a later chargeable act or event—let us say when he is paid for development value.
There are two difficulties, I would suggest, in this context. First, if someone has realised development value there seems no reason why he should not pay the levy, particularly if it is as substantial an amount as £500; and, secondly, one is in the same difficulty on the question of avoidance, because a developer could pay £500 each for a series of easements on neighbouring property with a suitable friendly arrangement with the owner of that property so that when he came to develop he did not have to pay any levy, as the whole of the development value he would otherwise be liable to pay would have been paid away in return for the easements.
1012 So far as way leaves are concerned, they may or may not be easements; the great majority of them probably will not involve any development value and would not in fact be notified. The laying of a cable or overhead line can sterilise land for development and the payment then made can be the whole of the development value in a plot of land; and in those cases, though they may be few, there would seem to be no reason why substantial development value should escape merely because it is paid in those circumstances.
My general answer would have been the same as before if we had all agreed that we would think about this and see whether we could find a practical answer. But noble Lords opposite rejected that offer and insisted on dividing. What they do in relation to further Amendments is, of course, entirely a matter for them.
VISCOUNT COLVILLE OF CULROSS
The noble and learned Lord has been very good in explaining this particular matter, which is by no means simple. But would he not agree that, quite regardless of whatever view the House or anywhere else may take about Amendments we may make, if, as he said, it is up to the person, I think the grantee, to decide whether or not he wishes to notify in all the cases which fall under E—and I suspect, when it comes to the point, under F as well, because they are very similar in son-le respects—there can be very little harm done if on the occasions when the consideration is very small there is neither notification nor any substantial set-off thereafter in the subsequent disposition; otherwise the matter would he taken into consideration for his benefit. He has to choose; either he notifies and then takes the result of the notification for his own benefit, or he does not. Where the matter is a very small sum indeed, it is perfectly true he can notify. It may turn out to be £25, and later on he can take the benefit of the £25 if he subsequently sells the land or disposes of the easement. But why burden the Land Commission with dealing with these interminable affairs for £25? Surely the time and the work of the civil servants is going to be a great deal better used if they are dealing with substantial matters rather than these very small matters.
1013 Will the noble and learned Lord not agree that if it is, in fact, a matter of choice whether or not you notify, then presumably everybody, to be safe, will notify, and the whole rigmarole will have to be gone through? The Land Commission will have to deal with it upon the full basis of valuation as set out in the clause and the Schedule, and also keep a record of that against the day when the matter comes up again and has to be resurrected and dealt with all over again. I would suggest this matter ought to be considered again.
§ THE LORD CHANCELLOR
There are two observations I would make about that. The first is that noble Lords opposite, who conduct themselves properly, probably do not realise how many people there are who, without being criminals, will use every device they can to avoid paying tax if they can evade it. They do not break the law. It may be said that therefore they cannot be criticised. A section of the Bar consists of tax counsel who do nothing but tax matters, and who, most of the time, are devising some means by which somebody may quite lawfully and properly so arrange things that he does not have to pay some tax which otherwise he would have to pay.
VISCOUNT COLVILLE OF CULROSS
I think this is a matter of some importance. That would be avoidance, not evasion, would it not?
§ THE LORD CHANCELLOR
That would be avoidance, and of course perfectly lawful, if you can find a way round. Such citizens cannot be criticised, although whatever Government is in power has to raise a certain amount of revenue; and if "A" avoids paying what, in common with other citizens, he was intended to pay, then it means that the other citizens have to pay more. Some people regard that as not being highly moral, knowing that the other citizens will have to pay more. On the other hand, some say, and are entitled to say, "If I pay a lawyer a lot of money which other citizens do not take the trouble to do, and as a result my lawyer has found a way of getting round the obvious intention of the Act which imposes this tax, I am quite entitled to do so".
But noble Lords opposite are, if I may say so, so highly principled that 1014 perhaps they do not always realise that, in imposing a levy of this kind, one has to see that there are not a lot of loopholes which gentlemen of the kind to whom I have referred can find a way through. Our difficulty about this proposed Amendment, as it was about the last one, is that it is, in our view, open to considerable abuse.
§ Clause 27, as amended, agreed to.
§ Moved accordingly, and, on Question, agreed to.
§ House resumed.