LAND COMMISSION BILL

HL Deb 07 December 1966 vol 278 cc1157-222

3.0 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Kennet.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 61 [Exemption for single family dwelling-house built on land acquired before 23rd September 1965]:

LORD WADE

moved, in subsection (1)(a), after "dwelling house" to insert: or not more than two dwelling-houses which, or (as the case may be) each of which, is".

The noble Lord said: We are now dealing with the subject of exemption from levy for a single family dwelling-house built on land acquired before September 23, 1965. May I repeat that I am in favour of collecting for the community value created by the community. The only question is how best to do it. I do not think this Bill sets about the task in the right way. I believe that the levy procedure will be extremely complicated. I think it therefore reasonable to reduce the number of cases where liability may arise, especially where the amount involved is comparatively small. Furthermore, I think we should endeavour to reduce the number of anomalies. Of course, one must draw the line somewhere, and the question is simply where the line should be drawn.

Under Clause 61 a person who owns a plot of land may build a house for the only or the main residence of himself or his son or daughter or father or mother or parents in law. That, I think, is a fair summary of subsection (5).Under subsection (6) the expression "dwelling-house" includes garage, outhouse or other appurtenances. But if on this one plot of land which the owner possesses two small houses are built instead of one, then, if I understand this clause correctly, the exemption does not apply to the second house. For example, the would-be owner-occupier may think it desirable to build one house for himself and his wife and another separate one on the same plot of land for his in-laws. In that case the exemption will not apply to the second house for the in-laws. There is much to be said in some circumstances for a separate house for the mother-in-law or mother and father in law to live.

The more one examines this problem the more one sees the kind of anomalies likely to arise under this Bill. The exemption applies to a single dwelling-house, but, if I understand the clause correctly, it does not apply to a pair of semi-detached houses. If the owner, perfectly properly, decides that he would like to build a pair of semi-detached houses and that he and his family should live in one and the mother-in-law in the other there would be a liability to the levy so far as one half of the pair of "semis" is concerned. My Amendment is simply designed to permit two units of occupation, two houses, on this plot of land instead of one.

I am assuming that my interpretation of a single dwelling-house is correct. I have studied the Bill, but I have not been able to find in the interpretation clauses anything that throws any light on this point. I have, however, gone to the trouble of looking up Stroud's Judicial Dictionary, and on page 903 I find this: Dwelling house: A dwelling house is obviously a house, with the super added requirement that it is dwelt in. That seems to me to be incontrovertible, but it does not help me very much. As I say, one must draw the line somewhere, but it seems strange that one should draw the line through the middle of a semidetached dwelling-house. Of course, if one put one's in-laws into the outhouse, that would be all right: it would be a different matter.

It is not for me to suggest ways around this Bill. Once it becomes law my view is that the law must be observed. But I think it is proper to point out potential anomalies. For example, if the in-laws live in the other half of the semi-detached dwelling-house and there is a connecting door or passage, I imagine that liability would not arise. If that is so, it seems to me this will bring legislation of this sort into disrepute. I am not suggesting that there should be exemption for an unlimited number of houses on the plot of land which we are now discussing. This was considered in another place in Committee and a wider Amendment than mine was debated, and Mr. Skeffington said: We have the suggestion, which is in Amendment 202, which would mean that a landowner with a large family could, in addition to building a house for his wife or his daughter and her husband, go on giving plots of land for as many dependants as they have—children, grandchildren, illegitimate children, and step-children. Really there would be no end until one ran out of land or children or dependants. I am not suggesting there would be anything of that sort. My Amendment would simply extend the exemption to two dwelling-houses and no more than that. It would cover the case of the two separate houses, it would cover the case of the pair of "semis", and I think it would cover the case of a house divided into two separate units. There is no ideal solution, but I think the proposal I am putting forward would be a fairer one than that in this clause, and I think it would tend to lessen the anomalies. I beg to move.

Amendment moved— Page 62, line 35, after ("dwelling house") insert ("or not more than two dwelling-houses which, or (as the case may be) each of which, is").—(Lord Wade.)

THE LORD CHANCELLOR (LORD GARDINER)

As the noble Lord, Lord Wade, who so persuasively moved this Amendment, knows, levy is payable on the happening of a chargeable act or event, and speaking generally quite irrespective of the financial means of the company or person concerned. Apart from Clause 61, there are only two exemptions from levy; one is cases in which, as with certain types of charitable land, it has been thought impracticable to ascertain the value; the second is those cases in which in effect the Exchequer would be paying itself. Clause 61 is therefore a complete exception to anything else in the Bill and is an exception to meet a case of hardship. It is simply to meet the case where, before the White Paper had been published, a man had bought a plot of land intending to build a bungalow on it to retire to, or for his wife, or something of that sort, and then because he has to pay the levy the whole plan is frustrated and he cannot afford to build the bungalow.

Of course, I can appreciate the argument which has been advanced, that a couple are going to retire and need two houses to accommodate the mother-in-law. I think the noble Lord has forgotten that couples have two mothers-in-law, so if we are going to make it two houses we ought to make it three. As the noble Lord said, one has to draw the line somewhere. This is really a very special case for the reasons I have given and the Government do not propose to extend it. It is not, I think, accurate to say that they are drawing the line through the middle of a semi-detached house, because I am hopeful the noble Lord will agree that one cannot have a semi-detached house standing by itself. There must be a second semi-detached house.

LORD WADE

I am sorry if I did not state the position quite accurately. I intended to say through the middle of a pair of semi-detached houses.

THE LORD CHANCELLOR

I should respectfully accept that. But in the Government's view it would be wrong to extend what is intended as an act of generosity to help people of small means, in a way outside these narrow limits in circumstances in which it would be difficult to police it or to administer it, and which could result in a substantial profit being made. This is quite different from trying to avoid the frustration of the purpose for which a particular plot had been purchased.

LORD WADE

I thank the noble and learned Lord for his reply. I must say that I am not entirely satisfied, though I do not feel that this is an issue which should be presed to a Division. Therefore, while reserving my position for a later stage of the Bill, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD BROOKE OF CUMNOR

moved, in subsection (1), to leave out paragraph (b). The noble Lord said: I beg to move Amendment No. 38. As the noble and learned Lord has just said, Clause 61 springs from paragraph 31 of the White Paper, and it may simplify my exposition of the Amendment if I read to your Lordships that short paragraph. It says: A person owning land at the date of the publication of this Paper who satisfies the Commission that he is building a single house on the land for occupation by his family will he able to do so without having to pay levy. This exemption will relate to only one dwelling-house however much land the person may own. I entirely accept that the exemption should apply to only one dwelling I do not agree with the noble Lord, Lord Wade, who moved the last Amendment. But what I am questioning is why this concession should be made only to a person owning land at the date of the publication of the White Paper. It seems to me reasonable to consider whether it would not be equally fair to extend it to purchases made after September 23, 1965.

One must appreciate that as time goes on children grow up, and the owner of some land may wish to have his son and daughter-in-law, on their marriage, living near him on land that he owns. Whether it is a good thing for children to live near their parents or parents-in-law is an interesting moral and social question, but I do not think it should influence our consideration of these Amendments.

In my view, it will be regarded as extremely hard if, when something perfectly normal of that character arises at some date in the future, the owner of the land finds that, in order to help his son by erecting an extra house for him on the land that he has owned, though he did not own it in 1965, he will be charged betterment levy. I cannot follow the argument that he would be making a profit out of this land, because all this is within the family; and if one member of the family is making a profit, the other member of the family must be suffering thereby by having to pay more. I am not suggesting for one moment that this concession should go outside the area of the family. I believe, privately, that the solution in years to come will be a simple one. I do not think that the Land Commission will last, any more than the development charge lasted; and I think that in years to come, when this man's children have grown up, there will not be a Land Commission. But we have to legislate here on the basis that a Land Commission are coming into existence, and I want to ask the Government most seriously why paragraph (b) is needed.

This Amendment was discussed in another place along with a number of other Amendments and it is therefore not entirely clear what the reply of the Government was to this specific Amendment. Part of the reply was that the Amendment could not be accepted because it is not in the White Paper. I submit that we cannot legislate by White Paper. When Parliament considers the White Paper it considers the principles of that White Paper; it considers the White Paper in general. But it cannot be out of order in either House of Parliament to suggest afterwards that, in the detailed implementation of the policy, improvements could be made in regard to what was said in the White Paper, so I think that that argument falls to the ground. The other argument which was used was that the Amendment could give rise to evasion. If that argument was intended to apply to this particular Amendment, when it was discussed in Committee in another place, all I would say is that I do not think that it is applicable. But it may be that the Parliamentary Secretary, when he was referring to evasion, had in mind one of the several other Amendments that were discussed at the same time.

That would leave as the only argument against this Amendment that it would somewhat widen the special concession that is being made. When one considers whether or not it is right to widen a concession, one must apply common sense. One cannot reel off the answer on any a priori principles, and I submit to your Lordships that it would be regarded as common sense that if, at some future date, when a man's children have grown up and he wishes to build a house on his land for one of them on getting married, he should not have to pay a betterment levy. I think it would be regarded as contrary to common sense if he were required to pay betterment levy under Case C. It is for these reasons that I commend this Amendment to the House.

Amendment moved— Page 62, line 39, leave out paragraph (b).—(Lord Brooke of Cumnor.)

3.17 p.m.

THE LORD CHANCELLOR

As I have explained, the sole object of the Government in Clause 61 is to provide for a particular case where somebody would otherwise suffer hardship because the whole object for which he had bought a plot of land before the date of the White Paper, and therefore, before he knew what was happening, was to build a house for himself or his near family. If we were to extend the exemption beyond that—for instance, to the second house mentioned by the noble Lord, Lord Wade—it must be remembered that after six months of occupation there would be nothing to stop him from selling it, and thereby making a substantial profit.

I entirely agree that the fact that it is not in the White Paper is not a good reason for opposing the Amendment; but if the clause applied to land bought at any time it would become virtually impossible to collect levy on the development of houses, because developers would make sure that, before they started developing, the land was, at any rate nominally, in the hands of the person who would buy the house when it was completed. What is more, the developer would make sure that when he sold the land to the householder the consideration was taken outside the conveyance, as, for example, by the simple expedient of ensuring a large profit on the construction of the house so that no levy would be taken on the conveyance.

The degree of evasion to which this Amendment would give rise would mean, in the Government's view, driving a coach-and-four through the Bill. I am quite sure that that is not the object with which the Amendment is put forward—I am not suggesting that it is intended to be a wrecking Amendment. But for the reasons I have given it would, in the Government's view, amount in practice to a wrecking Amendment because of the extreme facility of evasion to which it would give rise. The reason for limiting the sole concession made by this clause to somebody who bought a plot of land at the date of the White Paper is that anybody buying a plot of land after the date of the White Paper would know about the levy and ought accordingly to have provided for it, whereas the man who bought his plot before the White Paper would not. On those grounds, I am afraid that I am unable to accept the Amendment.

LORD AIREDALE

The noble and learned Lord the Lord Chancellor, having for the moment, at any rate, held at bay my noble friend Lord Wade on the last Amendment, was not content with that, and in his answer to this Amendment launched another attack on my noble friend by pointing out, quite correctly of course, that in the case of the second house it might be sold after six months and a considerable profit made. But is it not fair comment that the man who had bought the land before September 23, 1965, could also after six months sell the land at a considerable profit? But that consideration did not prevent Her Majesty's Government from introducing paragraph (b) and allowing the gentleman who bought the land before September 23, 1965, from having this concession. So, with great respect, was it not rather unfair to launch a second attack on my noble friend Lord Wade?

THE LORD CHANCELLOR

I certainly did not mean to launch a second attack, or indeed any attack, on the noble Lord, Lord Wade, who, as I said, put his case with his usual persuasion. Of course, a line has to be drawn somewhere, but the point is that after a White Paper has been issued people know where they are about the levy. That is why there is this special arrangement in relation to the man who bought his plot before the date of the White Paper and who is then frustrated in the whole object of his buying the plot as a place to which to retire. It was a special case to meet that situation.

LORD BROOKE OF CUMNOR

I listened with great care to the noble and learned Lord, and I am in entire agreement with him about the necessity of preventing evasion of this or any other clause. From what I know about the economics of building development, it seems to me that it would be extremely difficult for any ordinary builder engaged on a big development not to do anything at all about proceeding with the building until he had already managed to sell each plot of land to a purchaser. I very much doubt whether this evading expedient, which the noble and learned Lord described, would be practicable for the developer. However, I accept that we must not leave loopholes for evasion.

But the noble and learned Lord, in his argument, did not seem to me to meet the main point which I was making. Suppose that somebody to-day were to buy a house with a piece of garden or meadow attached. In years to come, when one of his children had grown up, he might, quite sensibly, wish to build a small house on part of the garden or meadow for one of his children. It would seem to be against common sense if that person at that stage had to pay levy on the building of a house for a member of his family; nor, so far as I can judge, could there be any possibility of evasion in that case.

I should be grateful if the noble and learned Lord could consider this matter further with the Minister, because this is in no sense intended as a wrecking Amendment, as I think the noble and learned Lord accepts. It would have been possible for the Opposition to try to make the task of the Land Commission as difficult as possible and to try to amend the Bill in ways that would harm the Land Commission's reputation. This Amendment is rather designed to save the Land Commission from a certain degree of unpopularity which may in certain future cases attach to them, and it is in that spirit that I should be grateful if it could be considered further. I will not press the Amendment now. I feel sure that the Minister will bear in mind what I have said. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.26 p.m.

VISCOUNT COLVILLE OF CULROSS

moved, in subsection (3)(a), after "not" to insert: and that other project of material development has begun to be carried out,".

The noble Viscount said: This Amendment is not one in whose drafting I take any tremendous pleasure; and indeed I think that I might have done it rather better. Nevertheless, it is intended to raise a point which does not bring to the fore either the coach-and-pair which the noble and learned Lord Chancellor had so much fear of yesterday, or indeed the coach-and-four which is to-day's conveyance. It is a simple point. As I understand it, entirely within the concept of the White Paper in regard to the single dwelling-house one may change one's mind as to the occupant, but may not change one's mind as to the siting of it within the plot. I may be wrong about this, but the reasoning is as follows.

In subsection (2) of Clause 2 it is quite clear that you can serve an amended notice changing the would-be occupation of the dwelling-house from yourself to your son or daughter, but it is quite clear that under this subsection you may not change where you put the house upon the site. I believe that you would be bound by the original notice of the project as to where you put your house on the site, because if your Lordships look at Clause 38, subsection (5), it will be seen in the notice of the project to which you attach the claim for exemption under Clause 61 you have to give details of the planning permission under which you propose to build. The planning permission in the case of a single house would almost invariably have been a detailed planning permission for a house in a certain site.

I cannot believe that it would in any infringe the principle of this exemption from levy if, before the work on the house was begun—and this is absolutely essential—the person who wished to build it were to change his mind for some quite innocent and good reason and decide that he wished to put the house in a slightly different position on the site for which he also had planning permission. Unless I am wrong, this cannot be done. I should be grateful if the Government would say why, if one can change the occupant before work on the house starts, one cannot change the site or the part of the site on which it is built. It seems to me to be a restriction which I cannot understand. I do not believe anybody else can understand it, and if it can be explained whether in the first place it is the case, and secondly, if it is the case, why, I believe that the country will be most grateful. I beg to move.

Amendment moved— Page 63, line 14, after ("not") insert the said words.—(Viscount Colville of Culross.)

THE LORD CHANCELLOR

This is intended, as I have said, to apply in very limited circumstances. When a man buys a plot, he presumably knows where he intends to put a bungalow. Furthermore, so far as individuals are concerned there may be deaths, and one must allow for changes in that respect. The effect of the Amendment is to allow the owner of land to serve more than one notice claiming exemption under Clause 61, if the development in respect of which the earlier notice or notices would be served had not yet been started at the time when the latter or last notice was served. The exemption in Clause 61 was intended to deal with these very limited circumstances of the man of small means who buys a plot of land on which to put a house for himself or his family. The Amendment presupposes that two or more different projects of development might take place—for that is what it would amount to; the exemption really is not apt.

The noble Viscount might not have appreciated this, but there is no provision for withdrawing the first notice that had been served, and it would appear that if the owner served one notice but did not start work in pursuance of it until after he had served the second, he would still be exempt in respect of the house to which the first notice related and could then build as well the second house without liability to levy. That I think would be the effect of the Amendment as drafted.

VISCOUNT COLVILLE OF CULROSS

I was fully aware of this difficulty. I should have said that I was speaking to my second Amendment on this clause as well, which was, of course, expressly designed to enable the Land Commission to avoid that happening. The way I, at any rate, intended it was that if the second notice was served, they would under the powers that they have under subsection (4) be able to cancel the first one. It may be that I did not get it right, but I specifically tried to provide against that.

THE LORD CHANCELLOR

I think the noble Viscount would agree that this is all highly technical. I do not know from my own knowledge whether my right honourable friend the Minister reads Hansard, but I should suspect that might well be so. I can only leave it there.

VISCOUNT COLVILLE OF CULROSS

I am very grateful to the noble and learned Lord. It may be, again, that this is a matter which can be dealt with by way of administration. But may I just draw his attention to this? Under subsection (4) you are at liberty to serve two or more notices claiming exemption at the same time. It may be that what you would wish to do is to serve two notices in respect of the same house but with alternative occupants. I cannot think why, but you might want to. What, you could do is to serve two notices at the same time in respect of two slightly differently sited houses on the same plot. If you did that, then the Land Commission could choose which one they gave exemption on. It is a truly extraordinary thing but, as I understand it, if you have planning permission for both they can say, "Yes, you can build that one with exemption. But, no, you cannot build that one, and if you do you will pay the levy. "It seems to me that there is a very odd discretion here, unless I have not understood the subsection.

But if there was the case which I had envisaged, that the notice had been put in some time before the project was going to be begun—and indeed that can be done up to twelve months before—and a road proposal came along which would, in fact, chop off the front part of the site so you wished to site your house a little further back, then, as I understand the Bill as at present drafted, you would pay the levy if you did so. Only if you built the house in the original place, which might be straight on the back of the footpath, can you be exempt. I believe that this is a little inflexible.

The suggestion which I am making is entirely within the terms of the White Paper, as I think the noble and learned Lord accepted, and it may be that there is some administrative answer. But I believe this should not be so inflexible that this sort of minor change is prohibited. I should be grateful, therefore, to study this further, and perhaps I may take this up if necessary at a later stage if I can improve the matter. Therefore, I beg leave at the moment to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.33 p.m.

LORD WADE

moved, in subsection (3)(b), after "project" to insert: and stated in the notice to be intended as his residence (or that of the person for which he is so substituted)

The noble Lord said: If it is the intention of the noble and learned Lord the Lord Chancellor not to accept any further Amendments, there may not be very much point in moving an Amendment of this nature. But it has been suggested to me that this very complicated paragraph (b) would be a little clearer if, after the word "project" in line 19, there were added: and stated in the notice to be intended as his residence (or that of the person for which he is so substituted)". I am therefore moving this Amendment in order that the noble and learned Lord may have an opportunity of stating whether he considers these words would, in fact, improve this paragraph. I beg to move.

Amendment moved— Page 63, line 19, after "project" insert the said words.—(Lord Wade.)

THE LORD CHANCELLOR

With great respect, we do not see that this Amendment would really have any effect. This is always subject to argument, which does not do any harm, but it does not appear to us to achieve any actual object. Therefore, in any case, we would be reluctant to accept it on that ground, apart from the fact that we are dealing with Part III.

LORD WADE

I do not propose to press this. I beg leave to withdraw my Amendment.

Amendment, by leave withdrawn.

Clause 61 agreed to.

Clause 62:

Limited exemption for builders and developers of residential property

(5) Regulations made for the purposes of this section may provide that subsection (1) of this section shall not have effect unless, before the end of such period (not being less than six months) from the first appointed day as may be prescribed, the builder or developer serves on the Commission a notice containing such particulars as may he prescribed for the purpose of indicating to the Commission that a question of exemption under this section is likely to arise.

3.35 p.m.

THE EARL OF KINNOULL

moved to add to subsection (5): Provided always that where the Commission is satisfied that the failure to serve such notice within the prescribed period is due to inadvertence or is otherwise accidental subsection (1) of this section may if the Commission thinks fit have effect notwithstanding that such notice is not served within the prescribed period.

The noble Earl said: Clause 62 concerns the special provisions for limited exemption for builders and developers of residential property. In order that they may benefit from this exemption, they must within six months from the first appointed day serve notice on the Commission that they wish to claim relief under this clause. The Amendment which I am now moving seeks to prevent hardship arising, where a builder or developer for some perfectly genuine reason—such as, for instance, mislaying a letter—serves notice of claim on the Commission after the six months period.

As I understand the clause as it stands, the Commission would not have any power of discretion to allow the claim, even if they agreed with the cause of the late application. It may be argued that this discretion will be included in one of the many regulations to be made by the Minister, and that the Amendment is therefore unnecessary. If that is the case, I would earnestly suggest that it would be far safer to give the Commission this discretionary power now, in this Bill, than risk its becoming lost in the regulations still to be made, for after all it may take some time for the Minister to make all the regulations. I very much hope that the Government will see fit to accept this Amendment, which does nothing to alter the effect of the clause but simply allows the Commission a little more human understanding when dealing with a late application of claim. I beg to move.

Amendment moved— Page 65, line 19, at end insert the said proviso.—(The Earl of Kinnoull.)

THE LORD CHANCELLOR

In the Government's view this Amendment is redundant. It is, in fact, intended that the regulations which will be made under Clause 62(5) will provide that notice must be served on the Commission in respect of the land which may become liable to this exemption within six months or such longer period as the Commission may allow. The Commission will act reasonably, and obviously if there are good and genuine reasons for the failure to notify they will extend the time. Publicity will be directed to all builders about this clause, so there will not be any good reason or excuse for a builder not to know about the conditions contained in it. But I agree with the noble Earl that there are always exceptional cases which ought to be provided for, and I will undertake that when the regulations are made that discretion will remain. I hope, in view of that undertaking, that the noble Earl will withdraw the Amendment.

THE EARL OF KINNOULL

I am much obliged to the noble and learned Lord, and I willingly withdraw the Amendment on that understanding. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

On Question, Whether Clause 62 shall stand part of the Bill?

LORD BROOKE OF CUMNOR

I do not wish at this stage to take exception to anything that is in the clause, certainly not at this stage of the Bill, but I want to ask the Government whether they would be good enough, on the Question, That the clause stand part of the Bill, to give your Lordships a brief explanation of the meaning of the clause as it stands. I have some reason for asking that. I have no wish to waste your Lordships' time, but this is a clause which is going to be of considerable importance to house-builders, and we all have a common interest in ensuring that house-building goes on steadily. Thanks to the fact that the clause was amended in several places at a late stage in another place at the end of October, I think I am right in saying that there is no convenient summary on record anywhere of the meaning and implications of the clause as it now stands. I should be grateful, therefore, if the noble Lord, Lord Kennet, would give this Committee a brief summary of the clause. Then we could all consider it in Hansard and see whether we understood and agreed with it.

LORD KENNET

I should be most happy to do so. Speaking for myself, I find it a great relief that we are not at this moment debating an Amendment to a Part of the Bill which would have been a Ways and Means Bill if it had been separate, but are discussing the meaning of provisions which have come to us from the House of Commons—and in this I think this House is more properly and more happily employed than it has been employed in the last day-and-a-half.

At the date of the White Paper builders were known to hold stocks of land ripe for development by housing which in many cases represented several years' output. If they all rushed to start development on this land before the appointed day, instead of completing houses already started, the orderly progress of the housing programme would be disrupted. The purpose of this clause is therefore to enable such land to be developed at the time when it would have been developed had there been no Bill. The clause therefore exempts the development of such land by the builder, no matter when it is developed.

The exemption is granted to firms which were in business as builders or developers before September 23, 1965, and whose business included the building of houses, flats or other dwellings. It includes both those who build the houses and those who, employing another firm to do the actual building, assemble the land and dispose of the houses. A builder or developer must have held, on September 23, 1965, either the freehold or a lease of the land, or have been under a binding contract to take such an interest—not a building agreement. These are the qualifications of the developing owner as defined in Clause 32. For a project to be exempt, the principal purpose of it must be housing, but it does not need to be exclusively housing; it can include other forms of development, such as the small group of shops which might well form part of a typical housing estate. The Commission must be satisfied that the other development is subsidiary.

The exemption is limited to land which had a planning permission on September 23, 1965, or for which planning permission was granted later on an appeal from a decision of the local planning authority before that date. The planning permission can be one granted on an outline application even though, by September 23, 1965, no detailed approvals had been obtained. In practice, it is not uncommon for a project to be varied, and there is therefore no obligation on the builder to follow slavishly the terms of the original permission. Indeed, provided the ultimate project consists of houses, an exemption will be available even if the planning permission was not for houses. There is one final condition. Within a time prescribed by regulations (expected to be six months) or such extended period as the Commission exceptionally allow, the builder or developer must register with the Commission his claim to have been in business at the appropriate date and the land for which they expect to claim exemption.

THE EARL OF KINNOULL

Can the noble Lord answer one point arising out of this matter? Where land had been zoned for residential development before the White Paper was published, would that be classed as "with planning consent"? Because this has been an issue among local authorities.

LORD KENNET

We are here going into the tricky business of putting a gloss on legislation before it is even through. I must be very cautious what I say, but the condition here is the existence of a planning consent.

LORD BROOKE OF CUMNOR

I am much obliged, and I am sure all your Lordships are, to the noble Lord, Lord Kennet, for giving us that summary of the clause and for putting it on the record. I cannot for one moment accept that your Lordships' House should be confined to considering Bills in the manner suggested when they concern finance; but it is of great value, as opportunity occurs, to obtain on the record a summary of a complex clause, especially when a great many people outside Parliament will wish to know precisely what it means.

I should just like to ask the noble Lord why it is necessary to include paragraph (a) of subsection (3) of this clause; that is to say, that planning permission"— at least, outline planning permission— for the carrying out of material development was in fore immediately before 23rd September, 1965"— the date of the White Paper. The land referred to in this clause must be owned by a builder or developer; otherwise, it would not qualify for the exemption. It does not seem to me that it is very material 'whether or not outline planning permission had been given by that date. We seem to be getting into a mixture of dates (and this will come up again on Schedule 5)—September 23, 1965, August 1, 1966, and the first appointed day, whenever that may be. I do not for one moment wish to derogate from the importance and value of this clause, which I think is a very sensible one; but why would the clause not equally well serve its purpose if that particular paragraph were left out? Because once the land has been acquired by the builder or developer it must be rather a matter of chance whether outline planning permission had or had not been given on that particular date.

VISCOUNT COLVILLE OF CULROSS

Before the noble Lord, Lord Kennet, answers that question, may I say that I think my noble friend Lord Brooke of Cumnor has put his finger upon a technical matter of some importance. Of course, what is intended to be exempted under this clause is a project of material development which, as described in subsection (2), deals with housing. The planning permission which, as it were, triggers off the whole of the clause and which must have been in existence before the day the White Paper was published, need not be a permission which allows housing. It can be a planning permission for anything. Therefore, if you were a builder who owned land for a builders' yard, with planning permission, you would be exempted under this clause.

If that is the effect of the wording of the clause, as I believe it to be, it seems a very strange way to legislate. I do not know whether this is intentional—perhaps it is—but it seems to me that the logical way to do it in this clause would be to require the planning permission to be planning permission for housing development, and not for something else. But this does not appear to be the way in which the clause is drafted. Perhaps the noble Lord, Lord Kennet, can clear up this point.

VISCOUNT GAGE

I wonder whether the noble Lord would also clear up one other point. If builders' land is going to be exempted from levy under this Part of the Bill, will it also be exempted from the possibility of compulsory purchase by the Land Commission under Part II of the Bill?

LORD KENNET

The whole purpose of this clause is, as it were, to dovetail the Land Commission into the operation and to prevent the approach of the Bill which is at present before the Committee disrupting building and development progress before it came into effect. To achieve this was no easy task and a good deal of thought was given to how it should be done. If this clause had not been there we feared, as I have explained, that there would have been a rush in the direction of new development and elsewhere houses would have remained half-built; while, if one had drafted the clause differently, one might have produced a reverse effect. The Government were rather treading a tightrope in making the provision in this clause.

In answer to the question of the noble Lord, Lord Brooke of Cumnor, the date was put there because in the pursuit of a non-disruption policy in this drafting the Government decided that the provision should be limited to land which was ripe for development, and an acceptable way of judging the rightness seemed to be the existence of planning permission. If planning permission was not in force on that date then we held this to be an acceptable indication of unripe ness for the practical purposes of this Bill. In regard to the point raised by the noble Viscount, Lord Colville of Culross, I am not sure that I entirely grasped it and I should be grateful if he will allow me to read his remarks to-morrow and to communicate with him privately or to bring the matter up on Report.

The questions came in such quick succession that I regret I have entirely forgotten the point raised by the noble Viscount, Lord Gage. I wonder if he would be good enough to repeat it.

VISCOUNT GAGE

There have been many suggestions that land has been withheld from development. In my experience, the land that enjoys planning consent and which has not yet been developed is, to a large extent, owned by builders. I wonder whether builders who have exemption under this Part of the Bill because it is not desired to stop house development will also be free from the threat of any of their land being required by the Land Commission under Part II.

LORD KENNET

No, not under this clause. Of course, it is in no way the purpose of the Land Commission Bill to enable the Land Commission compulsorily to purchase land which has been developed It is intended to permit the compulsory purchase of land not developed in order that it should be developed.

Clause 62 agreed to.

Clause 63 agreed to.

Clause 64 [Meaning of "project of material development" and provisions relating thereto]:

THE EARL OF KINNOULL

I beg leave to move this Amendment in the name of my noble friend Lord Jessel. This clause deals with the factors that will constitute the start of a project. Subsection (3) of this clause lists five specified operations which, started before the first appointed day, will not attract levy for material development under Case E. This Amendment seeks to add to that list of specified operations the operation of land reclamation. I am sure the Committee will appreciate that it is an operation fundamental in making the best use of our limited natural resources. The sort of cases I have in mind are those such as land reclamation from either the sea or marsh or waste land. I would commend this Amendment to the Committee. It gives little away in lost levy; but it could help in the short period left to encourage the urgent need for land reclamation. We are losing over 50,000 acres of good agricultural land a year to building; and there is a great deal of waste land still in need of reclaiming.

Amendment moved— Page 66, line 37, at end insert ("or reclaiming land").—(The Earl of Kinnoull.)

THE LORD CHANCELLOR

I venture to think there are a great many difficulties about this Amendment. Its object is to make reclaiming land one of the specified operations provided for in Clause 64(3). It is very easy to talk about reclaiming land, but the noble Earl has not suggested any sort of definition. Presumably it would cover things like reclaiming marshes, scrub or woodland for agriculture, and reclaiming land from the sea-bed or a river bed. But under the regulations which are to be made under Clause 99(2)(c) none of these things would, in themselves, be material development. Moreover, the essential character of the specified operations, as noble Lords can see by looking at Clause 64(3), is that they are precise operations clearly forming part of a project of material development. At the time they are carried out the project must be known and one can see from the nature of them that, in the ordinary course of events, there would generally have been a notification to the local authority building inspector before the project began.

It is very necessary that the specified operation should be precise because, under Clause 80, it is a criminal offence to fail to notify the Commission before the start of a project. It must, therefore, be quite clear what the starting date is because, as I think the noble Viscount, most Members of the Committee and certainly all lawyers would agree, if we are going to make something a criminal offence there must be a reasonable degree of precision about it. How is anybody to know whether, if some scrub or a few trees were removed from land, this is going to amount to reclaiming it or not? Reclaiming land would not normally form part of a project of material development. Once land has been reclaimed it may be developer or it may not be. But in the ordinary way a good many years would pass because, while reclaimed land can be used fairly soon for agriculture, if it is required to support building ordinarily, but not always, it has to be allowed a considerable number of years to consolidate.

At the time that reclamation starts it would, I should think, be unusual for anyone to be able to be sure and precise about the development which might eventually take place on the land. So this is clearly an inappropriate time at which to assess a liability for levy in respect of the development. Apart from that, the addition of these words would, I think, make the provision of Clause 64 so vague as to be unworkable and might expose the citizen to the danger of unwittingly committing an offence. The absence of the words from this clause do no harm. If an owner of land has incurred expenditure in reclaiming land, and this has increased the value of the land, he can then claim an allowance for the expenditure under Schedule 4, Part V, if and when he may become liable for levy on a chargeable act or event. It is for those reasons that the Government feel that they cannot accept this Amendment, and I hope that with that explanation the noble Earl will be prepared to withdraw it.

THE EARL OF KINNOULL

I am obliged to the noble and learned Lord for his reply. I wonder if he would be prepared to consider this Amendment again if we can produce a precise definition of what "reclamation of land" really involves under this Bill.

THE LORD CHANCELLOR

It is always open to the noble Earl or the noble Lord, Lord Jessel, to put down an Amendment at some further stage or to write to the Minister. I have no doubt that if anybody writes to the Minister he will receive a courteous reply.

THE EARL OF KINNOULL

On that understanding, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 64 agreed to.

Clause 65 [What is comprised in a project of material development]:

4.1 p.m.

On Question, Whether the clause shall stand part of the Bill?

LORD BROOKE OF CUMNOR

There is nothing in this clause to which I wish to take exception and, greatly presuming, I believe I can understand it, but I am not absolutely certain. This, as the noble Lord, Lord Kennet, will appreciate, is another clause which will be of importance to a great many people outside Parliament. Again, as we are getting on at a fair speed this afternoon, it would be of value were the noble Lord willing to give a few minutes to putting before the Committee a summary of the clause.

LORD KENNET

When a project of development is notified there must be some precision about the boundaries of the land which form part of that project. Once the start of a project has been notified the whole of it can be completed without any further liability for levy. But base value, when levy is assessed, is 11/10ths of the current use value of the land comprised in the project. This means that no levy is charged on development value equal to 10 per cent. of the current use value. For example, consider a project of development involving the erection of ten houses on one acre of a 100-acre farm which has a current use value of £300 an acre. If the land comprised in the project is the one acre on which the houses are built £30 of development value will not be charged. But if the whole farm were taken as the unit,£3,000 of development value would be excluded from levy. The purpose of Clause 65 is therefore to ensure that the land comprised in the project is realistically defined.

The relevant land for a project includes all the land on which any actual development—works or buildings or clearing—which forms part of the project which has been notified, takes place. However, unless the land defined in the notice of the project does not include the proper curtilage of any building, the relevant land cannot include any land not included in the notice. Thus, if a project when notified includes land which is not to be directly involved in the development, the extra land would be excluded. But if the notice did not include all the curtilage, the relevant land would be extended to include it. Sometimes the project of development may be a change of use, for example, of a single room of a house. If the relevant land in such a case were limited to the single room the valuations could be odd. In these circumstances, therefore, the unit is taken as the whole house. It is the hereditament which appears as a single entry on the rating list. These are complicated provisions, and I am afraid that any attempt at a further explanation of them could not fail also to be complicated, but I hope that what I have said may stand the Committee and those interested in these matters in good stead.

VISCOUNT COLVILLE OF CULROSS

I should like to ask the noble Lord, Lord Kennet, to look at a point about which I am afraid I have not given him notice and therefore I can expect no answer this afternoon. It refers to a point which the noble Lord mentioned arising under subsection (4). The noble Lord will see that where there is a material development which does not include anything but a change of use—in other words, there is no project of building anything— the hereditament is the area of land comprised in that material development. This is simply splendid, provided you have a definable hereditament; but there are areas of waste land and areas of farming land which do not appear in the valuation list at all. Alternatively, there may be a house or a shop, or something else, with a large area of land behind it which has not been previously used and which may, or may not, form part of the hereditament in the valuation list. Until that moment no one has cared, because there has been no value to put in the valuation list in respect of that waste land.

I have met this problem under Part VIII of the Town and Country Planning Act, 1962, dealing with planning blight, where again the matter is tied to the hereditament which appears in the valuation list. Under that particular section, or collection of sections, it is extremely difficult sometimes to interpret what is, or is not, the area concerned. In this case I think it will be even more difficult. Suppose you have a house with an area of waste land behind it, and the area of waste land is turned into the same example which I used before, a builder's yard, it may well be that you will have to deal with the whole thing, with complicated valuations and everything else, on the basis of the house also being used as a builder's yard. There will be no hereditament which you can use. The waste land will not appear in the valuation list as a separate hereditament and the only thing that will appear is the house itself. This, I believe, will result in some ridiculous situations, and I should be grateful if the noble Lord would look at it again. I am not trying to be unhelpful in any way. I believe that this is a technical matter which, while the measure is still a Bill, might usefully be cleared up.

LORD KENNET

I am conscious of the indeterminate status of exemplifications or explanations by members of the Government of Bills which are before Parliament. Ideally, one would like to see a Bill perfectly framed to take account of everything and then leave it to the courts to get on with. This Bill is already long enough, so I am anxious not to go into too much detail about what effect this or that provision may have, because of the indeterminate status, which I mentioned, of what I am saying at the moment. But it seemed to me, listening to the noble Viscount, that he has raised an interesting point and one on which it might be expedient to have some expression of opinion or guidance from the Government at this stage. I will look into it and if possible I will write to the noble Viscount or make a further statement at a later stage.

LORD BROOKE OF CUMNOR

I hope the noble Lord, Lord Kennet, will not take it as any reflection on the clarity of his reading if I say that I should like the opportunity to read over in Hansard the summary that he gave us just now. As he said, we are getting into complex matters here, and though I thought I understood the clause as printed in the Bill, having listened to the explanation of the noble Lord I am not quite so certain now. But I repeat that undoubtedly it will be of value to have that collective summary of it on the record, and I am pleased to know that he has no objection to my asking him to give these summaries. I seriously believe that it will be of great value to have them on the record in Hansard for this Part of the Bill.

Clause 65 agreed to.

Clause 66 [Variation of project]:

On Question, Whether Clause 66 shall stand part of the Bill?

LORD BROOKE OF CUMNOR

I wonder whether I may be forgiven if I repeat the same technique and ask the noble Lord, Lord Kennet, to give a short summary of this decidedly complex clause.

LORD KENNET

When levy is assessed at the start of a project of development it will be assessed on the precise project notified, and that project can then be completed without any further liability for levy. It may happen, however, that before it is finished the project may be changed. There can be many reasons for this. Unforeseen difficulties may dictate a different pattern of development, or there may be changes in demand for the particular type of development, or a differing planning permission may be obtained. This clause is concerned with such variations. If the variation involves additional land it must be notified as a new project. The new project includes so much of the land of the original project as is involved in the variation. For example, if a twenty-acre estate is being developed with houses at ten to an acre, and after the first twelve acres are developed planning permission is obtained for development of the remaining eight acres, together with a further two acres, with flats, the new project would be the erection of flats on the ten acres. But the current use value of the eight acres of the original project would include the value of the right to develop at ten houses to the acre.

There may be a variation not involving additional land. In that case there is a new project if either the developer notifies the change or the Commission serve a notice that the variation seems to them substantial enough to constitute a new project.

What "substantial" means is a matter for the Commission, but clearly they are interested only in variations which realise more development value, and it would need to be a significant amount to justify the Commission in taking any action. If a developer is in doubt he can serve a notice on the Commission without prejudice to his right, if the Commission then serve a notice of assessment for additional levy, to argue, before the Lands Tribunal if necessary, that the variation is not substantial.

LORD BROOKE OF CUMNOR

I am much obliged to the noble Lord once again. On this occasion I hope that I have followed his summary with as much understanding as I was able to achieve when reading the Bill beforehand. Again I have no criticism to offer of the clause. I think it is of value that we should have this summary on the record.

Clause 66 agreed to.

Clause 67:

Project of material development begun but not completed before first appointed day

67.—(1) The provisions of this section shall have effect in relation to any project of material development (in this section referred to as "the larger project") where—

(b) one or more specified operations comprised in the project (in this section referred to as "the existing operations") began before the first appointed day to be carried out on part of the land comprised in the project, but no specified operation has before that day begun to be carried out on the remainder of that land; and

(2) If the existing operations, or some of those operations, are authorised by one or more planning permissions in force on the first appointed day, then for the purposes of this Part of this Act—

(a) so much of the larger project as relates to land comprised in that planning permission or those planning permissions, together with so much (if any) of that project as relates to any other land on which any of the existing operations began to be carried out before that day, shall be taken to constitute a separate project of material development which began to be carried out before that day, and

4.14 p.m.

VISCOUNT COLVILLE OF CULROSS

moved, in subsection (2)(a), to leave out "relates" and insert "is confined". The noble Viscount said: These two apparently innocuous Amendments are concerned with a provision which, to me at any rate, is one of unparalleled complexity. It is also one which I believe is liable to be subject to a great deal of litigation unless it is absolutely certain that the provisions of this Bill are right.

Levy under case C is chargeable when a project of material development is begun on or after the first appointed day, and the beginning of that project is signified by the carrying out of one or other of the specified operations set out in Clause 64. It immediately occurs to one that some projects of material development will have been begun before the first appointed day but will not have been completed by that day. Then one has to decide what part, if any, of that project is to bear the levy. Builders and other people concerned with a project which in this way straddles the first appointed day are concerned to know how much of the project is going to be subject to levy and how much is not. Understandably, they will wish to know beforehand what they can do to avoid the levy legitimately and what they cannot do.

I understand that the principle of this matter is set out in two short paragraphs. The first is one which was given by the Parliamentary Secretary in another place, where he said this: Clause 67 deals with projects of material development begun but not completed before the first apointed day. That is where some part of the project has not been started. In that case it has always been accepted in the principle of the Bill that there is no reason why that type of development should not bear levy. It was absolutely right that definite development where approved or started before the first appointed day should be exempt. In that statement I believe that he is not accurate, because that is not what the clause says. The other paragraph was a Written Answer by the noble Lord, Lord Kennet, to my noble friend Lord Kinnoull on June 29 last. I will not read it all out, but he said this: Thus if outline permission was given for a housing estate but that permission included a detailed permission for the road lay-out (but not the houses)— Let me interpolate here that I think that if there were outline permission which did not give any detailed approval for the road and not the houses, the position would be the same— then if a start on the roadworks had been made before the appointed day the whole project would be taken to have started before the appointed day because the houses were to be built on land comprised within the planning permission which authorised the road works"—[OFFICIAL REPORT, Vol. 275 (No. 28) Col. 772: 29/6/66.] That is a very significant statement, to which a great deal of attention should be paid. I think the intention is fairly clear. I am concerned to see whether Clause 67 implements it.

The other difficulty is this. The clause must now be read with Clause 99(3), which was put in on Report stage in another place. Again I am raising a point which I do not think has ever been explained comprehensively in terms of Clause 67 as we now have it plus Clause 99(3). Clause 99(3) makes it clear that where permission is granted on an outline application (I believe that is an unfortunate way of expressing it, because although there is a precedent in the Control of Offices and Industrial Development Act and The Land Commission Act, here it is not the application but the consent with which we are dealing), then only that development which was authorised by the outline permission, either without any need for further consent or where further consent was needed, where it had received that consent, is—in the term of art used in Clause 67—authorised by the planning permission.

I should like to take an example which is very much the same as that used by the Parliamentary Secretary in another place, but I am afraid that the way he did it is not altogether apt for explaining the problem I am trying to set out. Take a piece of land which is going to be developed in four phases—A. B, C and D. On A, there is outline consent for the houses, also a detailed consent for the road and for the houses. On B, the same applies: there is both outline and detailed consent for the road and for the houses. On C, there is outline consent for the houses and for the road, but there is detailed consent for the road only; and on D there is no consent at all.

On the first appointed day all the roads have been put in, including the roads on D, even although there was no consent, and then the houses were started on A. I understand that the intention is that on A the whole project should be considered to have been started before the first appointed day, because both the road and the houses had been begun before that day and there is detailed permission for them. On B, where the road has been begun with detailed permission and there is also detailed permission for the houses, though they have not been begun, similarly that whole part of the project is to be taken to have been begun before the first appointed day, because it is part of the larger project which relates to the land comprised in the planning permission (in the words of Clause 67(2)(a))—that is to say, detailed permission for the road. I believe that the intention, according to what the noble Lord, Lord Kennet, said in his Written Answer, is that on C also, where there is a detailed permission for the road, but not for the houses, all of the project, including both road and houses, is intended to be comprised within the project started before the first appointed day, because again the houses would be built on land comprised within the planning permission which authorised the road works, to quote the noble Lord, Lord Kennet.

What of D? It is, I think, perfectly clear that the intention is that only that amount of the project on D which actually consists of the land on which the road is to be built is, despite the lack of definition, to be comprised in the project which is deemed to have been started. But no houses on D for which there is no consent of any sort are considered to be within that project started before the first appointed day. They are to form part of a separate project subject to levy later.

On area C, about which I was talking, I can bring in the houses for which there was detailed consent but only outline consent, only because, being without detailed permission themselves, they still constitute part of the project which—and this is the crucial word—relates to land comprised in the planning permission. I believe that the word "relates" is the crucial one in that context, if that is the intention of the Bill. Therefore, the word "relates", as it were, expands the scope of the detailed consent which was granted for the levy; so that it also comprises the houses which would in due course come on to that road and would be served by it. But then, if that is what "relates" means the first time it appears in Clause 67(2)(a), why does it not mean the same thing the second time it appears? If the analogy I have given is correct, where Clause 67(2)(a) says, together with so much (if any) of that project as relates to any other land on which of the existing operations began to be carried out"— and those are the road on D without planning permission—I should have thought that "relates" ought to have the same meaning as it had earlier in the paragraph, and again be expansive, so that it also includes the house which will front on to that road.

The same thing applies where the word "relates" is used in subsection (3)(a). I believe that in the second two cases where the word "relates" is used it is intended not to be expansive, but restrictive. I believe it is the intention that it is only the actual land on which the specified project is taken to be carried out, and not land related to it, which is intended to be considered as taken before the appointed day.

I am particularly anxious that this clause should be as clear and understandable as possible. I have therefore put down two Amendments, which I hope, by differentiating between the meaning of "relates" where it first occurs and the two second occasions where it is used, will, as it were, point the distinction that is intended. I have therefore put in what I hope is an acceptable phraseology—"is confined". I appreciate that this is extremely difficult. I hope that I have explained my point with some degree of clarity, but if I have failed to do so I shall not be in the least surprised. However, I should be grateful for any help that can be given. I beg to move.

Amedment moved— Page 70, line 6, leave out (relates) and insert (is confined).—(Viscount Colville of Culross.)

LORD BROOKE OF CUMNOR

The compelling speech of my noble friend Lord Colville of Culross will have convinced your Lordships, if that was necessary, that this is a difficult clause. I had been intending to ask the Government if they would, as in the case of these few previous clauses, at some stage give the Committee the benefit of a summary of the clause. Let me hasten to add that I have no intention of repeating that request in respect of the remaining 35 clauses of the Bill, whether I understand them or not. But I think these fall into a group, and it is particularly important that people outside should appreciate what is involved in them. I hope that in the discussion on this Amendment, or on the Question that the clause stand part, the Government will, in particular, address themselves to one of the questions which my noble friend raised, and that is the dove-tailing (if I may "lift" that word which has just been used) of the answer of the noble Lord, Lord Kennet, to my noble friend Lord Kinnoull on June 29 with the wording of this clause, because views have been expressed by people more professionally qualified than I am that this clause, in conjunction with Clause 65, does not seem to bear out everything that the noble Lord said on June 29.

I am quite sure that on June 29 the noble Lord did not think to mislead the House in any way: there must be a fault on our side or on the side of the professional students of this clause. If there had been any change in Government intention since June 29, I am sure it would have been made known to your Lordships' House. But this is one of the particular difficulties that was raised in my noble friend's speech just now, and I hope that before we leave this Amendment and this clause entirely we shall be enabled to have a consecutive explanation of the clause, in addition to a reply to my noble friend's Amendment.

LORD KENNET

When the noble Viscount, Lord Colville of Culross, is moving his Amendments and making his points, I often have the impression that he is pretending to be counsel called upon for an opinion in view of future litigation under this Bill, and that he is sometimes inviting the Government to pretend to be a judge presiding over the litigation in question. It is, of course, much easier for the noble Viscount than it is for me, because he is a barrister and I am not a judge. It is difficult for Ministers, even for the Lord Chancellor, to pretend in this House to be a judge in the hypothetical cases which the noble Viscount raises.

VISCOUNT COLVILLE OF CULROSS

May I just say this? I am not doing anything of the kind. I am moving a specific Amendment which I consider and hope is an improvement to the wording of the Bill. It is certainly not intended to be a muddling Amendment or anything of the kind. I hope I have given sufficient notice for its merits or demerits to have become clear to those advising the noble Lord. I hope the noble Lord will not consider that I have been wasting the time of the Committee by giving an example. If one were to try and make a speech on this subject in pure abstract, without giving an example, I believe that it would be totally incomprehensible, and I have given the example in order to try to make the subject clearer.

LORD KENNET

I meant no offence; I meant a harmless witticism at nobody's expense. The effect of the noble Viscount's Amendment would be to give a very narrow meaning to the part of a larger project which is exempt. I believe that the Bill as drafted leaves some flexibility for a generous interpretation by the Commission, and that this flexibility might be removed by the passing of the noble Viscount's Amendment. I shall not ask the noble Viscount to accept that as it stands, but what I will do, as I have been doing in former cases, is to seek to give a fuller explanation of what the Government think the clause will do, and in view of that he can judge whether or not to go forward with his Amendment.

Just on the point of the possible conflict of what was said by the Parliamentary Secretary in the House of Commons and what I said myself in a Written Answer to the noble Earl, Lord Kinnoull, earlier, and what I am about to say now, I have looked at this carefully, and I cannot myself see any conflict. But in all cases it is better to look to the future than to the past, and I shall try to get this situation as clear as I can immediately.

Under Clause 27 levy is chargeable on a project of material development started after the first appointed day. Therefore no levy is chargeable on the completion of a project started before the first appointed day. After the appointed day there is a notice of a project and the extent of the project is defined by the notice. But there is no notice of a project started before the appointed day, and it is therefore necessary to define its limits otherwise. This is the purpose of Clause 67, and it sets out to define the project, so far as possible, as it might have been expected to be if it was one started after the appointed day, and to recognise as started, projects which would have started in the normal course of events before the first appointed day.

The normal project is one for which there is a detailed planning permission in existence before it is started. Such a project causes no difficulty and there is therefore no need for special provisions. It does not fall with Clause 67. It can be left to the general provisions of Clause 22. Clause 67 is concerned with cases where there is not detailed approval for the whole of a project at the time that it is started.

VISCOUNT COLVILLE OF CULROSS

With great respect, it cannot be Clause 22. It is Clause 27.

LORD KENNET

As the noble Viscount will be aware, I am reading from a prepared statement. It may be that there is a misprint.

VISCOUNT COLVILLE OF CULROSS

Clause 22 is Owner's right to require Commission to elect, which I do not think is the right clause.

LORD KENNET

I accept the noble Lord's correction, subject to further correction, and I am sure he will be content if it comes out right in Hansard in the morning.

Clause 67 is concerned with cases where there is not detailed approval for the whole of a project at the time that it is started. The clause provides, as might be expected, that the limits of the project are set by the limits of the planning permission—development of the whole of the land comprised in a planning permission forms part of the project which is started. However, a project following an outline planning permission would not normally be started in contravention of conditions to which the permission is subject. Generally an outline permission contains conditions that development will not be started until detailed approval is obtained. A project is started when any of the "specified operations" of Clause 64 are begun.

Clause 67 provides, therefore, that a project under a planning permission can be taken to be started only where the specified operations which constitute the start are "authorised" by the permission. Clause 99(3) has put beyond any doubt what "authorised" means, although in the Government's view there should not have been any real doubt even before that subsection was inserted on Report in the House of Commons. "Authorised" means that any detailed approvals necessary under the permission before the specified operations can be carried out have been obtained. The possibility of variation in a project is allowed for. The rules of Clause 67 are based on reality. They will have to be interpreted in the light of an actual project of development in progress after the appointed day when it may be necessary to determine whether or not it was started before. The specified operations which were carried out before the appointed day must form part of the project and they must have been authorised by a planning permission, but the project does not otherwise have to pursue the details of the permission—it must, however, be contained within the land comprised in the permission.

Clause 67 recognises one other possibility. A developer may start work without a planning permission. This is not to be encouraged, but it does happen. If works are done without permission before the appointed day they can constitute the start of a project, but this is limited narrowly to the land on which the works are done. An illustration may help to illuminate this clause. I apologise to the noble Viscount that it does not follow exactly his plots "A", "B", "C" and "D", but I think it will cover the same ground. Imagine a builder with 55 acres of land. He has an outline permission for 30 acres and detailed approvals for 10 of them. If he starts work by laying out roads or digging foundations on the 10 acres in accordance with the detailed approval, the project started will be the development of the 30 acres. The development of the remaining 25 acres will be a separate project started after the appointed day.

VISCOUNT COLVILLE OF CULROSS

That has been a most helpful answer, for which I thank the noble Lord greatly. It is now quite clear that the intention of the Government in this clause is precisely to the contrary of that which my Amendment was seeking to achieve. I put the Amendment down because I believed it to be the intention of the Government which they were not achieving. But since they wished there to be a liberal interpretation of the more complicated details of outline and detailed planning permissions, I think a great deal of relief will result from what the noble Lord has said. I quarrel with the noble Lord in only one respect. I do not believe that Clause 99(3) has put anything beyond doubt. In my view it has added at least five further difficult points of complication to this matter; but perhaps we may deal with them later on. I thank the noble Lord very much for what he has said, and I have no hesitation in asking leave to withdraw my Amendment.

LORD KENNET

I am grateful to the noble Viscount for admitting that what is concealed by complication is sometimes liberality.

THE EARL OF KINNOULL

I wonder whether I could ask one question arising out of the noble Lord's answer? Suppose a developer owns, say, 2,000 acres of land for which he has outline planning consent. What did the noble Lord mean when he said that if the development is started without detailed planning consent on these 2,000 acres before the first appointed day he will escape the levy? Is that what he means?

LORD KENNET

The field is so full of pitfalls that I would ask the noble Lord to look at my more detailed explanation tomorrow morning, to see whether he can deduce from it an answer to his question.

LORD BROOKE OF CUMNOR

To save raising any point on the subsequent Motion that the clause stand part, may I join in thanking the noble Lord, Lord Kennet, for his comprehensive reply and ask him whether he would do one further kindness? So many people have inquired of me how the purport of the second paragraph of his Written Answer on June 29 (which was quoted by my noble friend Lord Colville of Culross) is implemented in Clause 67 of the Bill or elsewhere, that I should be most grateful if he could find time within the next few days to write me a short note on that. That will enable me to clear away doubts that exist in other people's minds, and I am quite sure that I should do it more successfully if I could copy to those people an authoritative statement by the noble Lord than if I attempted a new paraphrase or explanation of my own.

LORD KENNET

I will gladly do so, but the noble Lord must he careful of deterring the Government from making successive explanatory statements on the same clause. I emphasis that what I have just said is now the authorised version.

VISCOUNT COLVILLE OF CULROSS

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 67 agreed to.

Clauses 68 to 73 agreed to.

Clause 74 [Application of Part III to minerals]:

4.40 p.m.

LORD NUGENT or GUILDFORD

moved, after subsection (1), to insert: ( ) For the purposes of the provisions of this Part of this Act and for the avoidance of doubt Case A and Case B disposals of major minerals only shall not be regarded as chargeable acts or events.

The noble Lord said: This Amendment has the purpose of exempting from levy Case A and Case B dispositions of all the major minerals. Let me say immediately—I hope to the relief of noble Lords opposite—that this will not strain their intellect, if strain their intellect the last Amendments, moved by my noble friend with such dialectical brilliance, did. They can relax their intellect now, and I hope alert their sympathy for what I believe is a good point. This Amendment should be read in conjunction with No. 43, standing in the name of my noble friend the Duke of Buccleuch and Queensberry, which is an Amendment to the definition clause, Clause 99. The two are obviously related. In the light of our earlier debates on Clause 7, it may be too widely drawn, and if necessary I shall redraft both these Amendments and move them again at Report stage.

When moving the Amendments to Clause 7 I said that the Country Landowners' Association were particularly concerned about the whole class of minerals and the effect of this Bill on them, and what I am doing now concerns only a part of the subject in which the Country Landowners' Association is interested. They still hope to see the effect of the Bill removed from all minerals, but I expect the noble Lords opposite will have noticed that the noble Lord, Lord Henley, and my noble friends and I have removed from the Order Paper our next Amendment, which was to omit Clause 74. The reason is that I now wish to direct this Amendment to class 1 minerals only, because I believe that a case has been made out that they are in a somewhat different category from minerals as a whole. Therefore I am directing this Amendment to that class, and, in particular, I am concerned with ironstone workings.

I recollect that the noble Lord, Lord Champion, informed the Committee during the discussion on the Amendments to Clause 7 that it is unlikely that the Land Commission would buy land for the working of minerals in this preferred class, and I apprehended that he saw some distinction between this class of minerals and minerals generally. It seems to me that class 1 minerals are, in fact, in a different class, in terms both of the philosophy of the Bill and of the practice of the Bill. The philosophy of the Bill is that where there is development that has value as a consequence of the action of the community as a whole, there should be a levy for the benefit of public funds. But that does not seem to apply to class 1 minerals. It obviously makes no difference whether there is housing or industrial development near mineral ironstone workings, because they do not change in value, and therefore I should have thought they were outside the general philosophy of the Bill.

Speaking again of ironstone workings, in practice the royalty received by the owner of ironstone-bearing land is al- ready subject to the mineral rights duty for the restoration fund, which may be 50 per cent., or sometimes even more, of the total royalty. I noticed that my honourable friend Mr. Farr, in another place. referred to the case of the Northampton-shire mineral owner who is receiving a royalty of 2½d. per ton and is paying a duty of 1½d a ton, which goes straight into the restoration fund. The balance of the royalty receivable by the owner of the land is then, of course, subject to income tax and surtax.

Finally, the period of extraction is short: the ironstone is extracted, and then the land is refilled and restored, and that is the end of it. I think I have made the point that this mineral development is already making a substantial contribution to public funds—and, I suggest, in the best possible way, because it is ensuring that the land is fully and properly restored. In those circumstances I submit to the Committee that there is a sound case for exempting this class of mineral working from the levy in Cases A and B. It may be that Ministers intend to make such limited exemptions in the regulations, which Clause 74 will enable them to do, but in any event I should prefer to see them in the Bill. I beg to move.

Amendment moved— Page 76, line 22, at end insert the said subsection.—(Lord Nugent of Guildford.)

4.46 p.m.

THE LORD CHANCELLOR

As the noble Lord has said, the effect of the Amendments would mean that no levy would be collected in Cases A and B on the disposal of any minerals, except sand and gravel. As the noble Lord knows, this is exactly the same as Amendment No. 107 in the other place: 'Major minerals' means all minerals other than sand, gravel and clay", and also Amendment 96: except that Case A and Case B disposals of major mineral only shall not be regarded as chargeable acts or events". So that we are only going over familiar ground which the House that deals with Supply has already covered.

The Amendments are unacceptable in principle and, I submit, would be anomalous and unjust in practice. While there is a case for exempting mineral operators from levy in Case C, because of the wasting nature of mineral development (and the regulations will provide for such an exemption), there is none, I suggest, for exempting landowners, when they dispose of land for mineral development. Any value they realise in such a transaction is development value, as in any other case, and should be subject to levy. Nor is there any reason for demarcation between major minerals and sand and gravel. It was partly on the last ground that my right honourable friend, in dealing with the Amendment below, said that the demarcation was impossible; and the point was not further pressed. The Government's view is that the Bill is right in leaving minerals to be dealt with by regulations.

Special provisions should be made about minerals because of the special nature of mineral development—for instance, the fact that it is wasting development, and the special arrangements under which the mineral operators work the minerals; that is to say, the mineral licence, under which no interest in the land passes to the operator. Because of the special nature of the mineral development there should be, and the Minister has announced that there will be, special exemption from levy for mineral operators when they start developing. Because of the mineral licence system there should be special provisions to ensure that a licence is treated as a lease; hence the operator will be treated at the start of the development as holding an interest in the land, with the landowner holding the reversion. As the landowner will have paid levy on granting the licence, any other treatment would be unfair to him.

I have referred to the statement made by the Minister—I am sorry; it was the Parliamentary Secretary. It was at the Committee stage, at column 739, and it was in reply to a question. I will read it slowly because I know some of these things are rather complicated. I was comforted by the remark of the noble Lord, Lord Brooke of Cumnor, that he had read a clause and thought he had understood it, but later came to the conclusion that he did not, because I have been in exactly the same position. Indeed, yesterday, I see, in a moment of mental aberration, I started talking about an arterial road—why, I cannot think. The question was: Is it suggested that the very removing of the minerals lying under one's land forms betterment? Could the Parliamentary Secretary help me?' The Parliamentary Secretary replied— Yes. Minerals do constitute a particular case and a particular difficulty. They were dealt with separately in the earlier legislation. I expect that the hon. Gentleman probably knows that discussions will be taking place with the industry. There are likely to be widespread exemptions in Case C because the philosophy is different. Provided that one can make certain that one can stop evasions, there will be very considerable exemptions from levy in Case C. It is being discussed with the industry now and, of course, it will be incorporated in such regulations as are made. To that extent it is true that the Bill will be modified, and I think rightly modified, in respect of minerals. Then, in column 741, he was asked: Is it the case that any fresh discovery and fresh start on any development of this kind would clearly he leviable beyond dispute? Is that the position? He answered: No, I do not think that it would. I think that this depends upon the general project, the nature of the operations and so on, and what the developing owner could have done before the appointed day. This is, of course, an entirely different kind of transaction from that dealing with betterment levy, and the regulations will make the exemptions as wide as is practical and fair in the light of the general principle that I have enunciated. I do not think that to-day I can carry it any further. In general, my right honourable friend has preferred to put a great many matters of detail into the Schedules to the Bill in order to reduce the number of regulations. But in this particular case, where discussions are still going on with the industry, the regulations have not been made, and further than I have already stated I cannot take it because, as they say in the profession, "It will be all right on the night".

When the regulations are made we shall see, but of course under subsection (2) the regulations have no effect until approval. What I have been waiting to see is whether any noble Lord would move an Amendment, either here or under Clause 98(2)(a), to provide that the regulations must be approved by your Lordships' House as well as, as in all cases under this Part of the Bill, the Commons House of Parliament. Of course, that has not happened. But your Lordships will have the satisfaction of knowing that the House which historically has the responsibility for Supply matters will be able to pass judgment on the regulations themselves before they have any effect.

This is probably the last Amendment to which I shall be replying, so perhaps I might just add this. In a sense, of course, that brings us back where we started. Again, if I may make it quite plain, I am not challenging the technique of the hole in the Bill provision, which is well established. The point is that, as your Lordships know, in the last 99 years it has been used only twice in a Supply matter, in 1930 and 1931, because of course there was a Labour Government, and this, I am afraid, is the point on which I started. It is a device not being used in very modern times, only twice in 99 years, both times employing the built-in Conservative majority here because there happened to be a Labour Government in office and it was desired to embarrass them on a question of Supply, which historically for hundreds of years has been the sole prerogative of the other place.

LORD MITCHISON

I have been sitting here not lifting my eyebrows because I promised the noble Lord, Lord Brooke of Cumnor, I would try not to lift them again. I intervene, not to say anything on the last question that my noble friend was discussing, but only to say a word or two about ironstone mining in the hope that I may reassure the Opposition Front Bench about this. I have had some experience of various kinds of mining. I sat for a constituency which I should think contained more ironstone mining than any other place in England, and the noble Lord, Lord Silkin, will probably remember I did my best to get him to pass what proved finally to be the levy on ironstone, and it was passed.

All I want to say about it is this. Naturally, one would like to see these things in a Bill, but this is quite unsuitable for putting into a Bill because of the immense variety of circumstances. It is a question of what the land is to start with, it is a question of what you do then, and it is a question of what is left at the end, and these are all really rather difficult matters, because the processes of ironstone mining themselves vary considerably with the nature of the soil, and also because the operators themselves have had to learn a good deal as they went along. I have stood on a hill not very far from Corby and heard Messrs. Stewarts & Lloyds explain to the Minister of the day that they could not possibly do what they finally did, and what was being done at the moment in another part of England. I am sure the statement was made in all good faith, but there has been a good deal of probing and experiment in this very difficult business, a business which is a matter of experience and a business which operates in circumstances so constantly different in different cases that you really must be guided, I should have thought, by the more flexible method of regulations. Not raising my eyebrows, I sit down again.

LORD NUGENT OF GUILDFORD

May I thank the noble and learned Lord the Lord Chancellor for the reply that he has given to the Committee on the point I raised, and may I say that, while of course we welcome his reassurance, which I had already gathered from reading proceedings in another place, that operators would be in many cases exempt on Case C, I must say I am disappointed that he still feels that he cannot in any way meet the point I have made for Cases A and B exemption for landowners. I feel that the case I made out is a good one on its merits and therefore it was worth putting to the Committee again, and I think it is none the weaker for the fact that it has been put before. It is a good case and I think it is quite widely recognised outside as being one worthy of attention.

Of course, I recognise the point made by the noble and learned Lord the Lord Chancellor with regard to subsection (2) of this clause, that the regulation power is reserved to the Commons only, and in no circumstances would I consider suggesting it should be amended. We have indeed, I think, already explained why we think it is worth while raising these points here on Amendment and debating them, and, if the points seem to be of sufficient importance, dividing on them. Considering the intrinsic merits of the points we have raised, and indeed, I should have thought, the restrained way in which we have raised them on Part III—after all, Part III is the "guts" of the Bill and if we did not discuss that it would be hardly worth discussing the Bill at all; it is of great public interest—I thought it was a little unfair of the noble and learned Lord to suggest that we were solely moved by a desire to embarrass a Labour Government. I am quite sure if noble Lords opposite were sitting on this side in Opposition and they had a similar Bill before the House, they would feel it was their duty in those circumstances to put down Amendments and debate them. It may be that because of the composition of this House they could not successfully win Divisions, but I do not doubt they would divide on any point they thought of sufficient importance; and whether or no the matter is finally recorded in Hansard as an Amendment secured, it still has the benefit that a matter of considerable public importance has been debated in public and the spoken word has been heard to the benefit of the whole community. With the procedure that the noble and learned Lord has most graciously advised the Committee we can properly follow, of moving the whole of Part III out of the Bill before we send it back to the Commons, we then entirely preserve the position of privilege in the other place; and if the other place does not wish to look at the two or three Amendments that may remain in the Bill by the time we have finished with Part III then of course it will not do so; it will look at it entirely unamended and no harm is done to anyone.

But, returning to the merits of this Amendment, I do feel that it is a good point. I realise that it is not perhaps in its most felicitous form, but I should like to consider putting it down again with other Amendments that I am preparing to put down on Clause 7, which also affect mineral workings for Class 1 minerals. Therefore, in those terms, I would ask the leave of the Committee to withdraw the Amendment, with the probable intention of putting down something similar on Report.

Amendment, by leave, withdrawn.

Clause 74 agreed to.

Clauses 75 to 98 agreed to.

Clause 99:

Interpretation

"disposition" includes the grant of a tenancy, the renewal, extension or other variation of a tenancy, and any other conveyance, assignment, transfer or grant of an interest in or right over land, whether made by an instrument or otherwise;

5.2 p.m.

VISCOUNT COLVILLE OF CULROSS

moved, in subsection (1), to add to the interpretation of "disposition": but does not include any mortgage effected by a demise or subdemise for a term of years absolute;".

The noble Viscount said: I have no doubt that there is no intention whatever that under Case B, Part III of the Bill, mortgages should be notifiable or subject to levy. This is indeed so if one carefully construes the Bill. But it is a most careful construction indeed that is required before one discovers this to be so. I believe the technical answer is that if you look at Clause 99(8) you find that definitions in the interpretation section of the Town and Country Planning Act, 1962, apply for the purposes of this Bill as they apply for the purposes of that Act. And if you look at Section 221 of the Town and Country Planning Act you see that "tenancy" is there described by reference to the Landlord and Tenant Act, 1954, in Section 69(1) of which you find a definition which excludes mortgages.

This may be thoroughly satisfactory as a piece of immense ingenuity on the part of the draftsman, but for those who wish to find out what is the law it is perhaps not the easiest way of expressing it. I therefore thought that there would be some merit, at any rate, in putting it in clear terms in the Bill. I think in the interpretation clause "disposition" does not include a mortgage. I do not believe that it matters that "disposition" is used equally in Part II of the Bill, because if my interpretation is right it does not include a mortgage there either, and is not intended to. So whether the wording which I have taken from Sections 85 and 86 of the Law of Property Act, 1925, is the right wording or not, or whether we ought to go back and express again the much more complicated language of Section 69 of the Landlord and Tenant Act, 1954, I do not much mind. But I should have thought that the Government might have considered, even at this stage of the Bill, telling everybody that mortgages are not intended to be dealt with. I beg to move.

Amendment moved— Page 91, line 5, at end insert the said words.—(Viscount Colville of Culross.)

LORD KENNET

The noble Viscount is perfectly right in his assessment of the Government's intention in this matter. It is not the idea that a mortgage should attract levy. A mortgage would attract levy only if it could be a disposition granting a tenancy under Clause 30. But a mortgage is excluded from the definition of "tenancy" contained in Section 221 of the Town and Country Planning Act, 1962 which is applied by Clause 99(8) of this Bill. As the noble Viscount pointed out, the 1962 Act imports the definition of tenancy from the Landlord and Tenant Act, 1954, which specifically excludes a mortgage.

The noble Viscount said that this was an ingenious way of defining the matter. I agree with him; it is. I do not think I should be telling tales out of school if I revealed to the Committee that this part of the clause was put in on the initiative of Parliamentary draftsmen who feared that as it stood before it was not sufficiently clear, and their hope was that this would clear it up. Then the noble Viscount protests at their ingenuity. Draftsmen will be draftsmen! The noble Viscount said that he did not much mind whether this was changed or not, and I should like to assure him that the Government also do not much mind whether it is changed or not. I will look at it again and consider how much rope should be given to the ingenuity of draftsmen, and if the noble Viscount would agree to withdraw this Amendment perhaps we could have another word about it on Report.

LORD MITCHISON

I am sorry again to interrupt, but before that is done there are two matters I should like to mention to my noble friend who is going to reply in a moment. The first one is that it perfectly true that you can go through these hoops and get the definition that way. There is another and even simpler way of doing it, and that is to look and see on what transactions the levy is chargeable. Nowhere will you find any- thing in the Bill—and I have been through it for the purpose—where you can reasonably say that it is intended to include a mortgage. In my submission there is no ambiguity about it. I see the noble Viscount looking at some point where he thinks there is an ambiguity. Perhaps he will tell us what it is.

VISCOUNT COLVILLE OF CULROSS

It is, of course, the same point that was mentioned by the noble Lord, Lord Kennet. It is levy under Case B, under Clause 30(1). It may be that the noble Lord has not refreshed his memory about the contents of Sections 85 and 86 of the Law of Property Act 1925. What it says is that you may create a mortgage by either a demise or, in the case of Section 86, a sub-demise for a term of years absolute, or alternatively you may do it by way of legal charge. I should have thought that it was quite clear that unless you put in some exclusion of mortgages, that would be covered by a disposition granting a tenancy for a term of years certain, and no less than seven years.

LORD MITCHISON

I will look at it if the noble Viscount wishes me to. But I have looked at this clause and I looked at it again while he was speaking. I cannot find in it anything that an ordinary, reasonable man would consider to include a mortgage or anything like it. That is my first point. The second one is that I hope that we shall remember the Scots. They have entirely different methods. I do not think they have anything that is called a mortgage. They have some things that are rather like it, and it might be advisable to see that any Amendment made here was in line with the views of the Scottish Office on the matter.

VISCOUNT COLVILLE OF CULROSS

I am very grateful to the noble Lord, Lord Mitchison, for his remarks on the Scottish point, and I am sure that if I may have a word with the noble Lord, Lord Kennet, before the Report stage the matter can be covered. But I suggest to the noble Lord, Lord Mitchison, that he must be wrong in this matter, because if there were no ambiguity about it I cannot see why the definition in the Landlord and Tenant Act has to be imported. I imagine that it was imported to avoid any difficulty, supposing that a mortgage was brought in. It is clear that there is no intention to bring in a mortgage, and I think I can agree with the Government that we can improve this Bill in this respect.

LORD MITCHISON

May I say to the noble Viscount that I have not his youthful confidence. I am not so sure that I am right, but I do not think there is anything in this Bill which would lead an ordinary, sensible man, reading it through, to suppose that a mortgage or anything of the sort was intended to be covered.

LORD NEWTON

Before my noble friend seeks to withdraw his Amendment, if that is his intention, may I say that we on this side are delighted that the noble Lord, Lord Mitchison, once again feels able to raise his eyelids.

LORD MITCHISON

I thank the noble Lord.

VISCOUNT COLVILLE OF CULROSS

I think on the last occasion the noble Lord was raising his eyelids before he started and his eyebrows at the end. I am much obliged to the noble Lord, Lord Kennet. I shall be glad to converse with him about this matter, and, if necessary, we can return to it on Report stage. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD KENNET

moved in the proviso to subsection (3) after the first "of" to insert "section 6 or". The noble Lord said: At the Report stage in the House of Commons the present Clause 99(3) was inserted because it was evident at that time from comment in the legal Press and elsewhere that there was confusion in the minds of the public about the meaning of the words "authorised by planning permission" which were used in Part III of the Bill. Clause 99(3) made it clear that these words meant that any detailed planning consents necessary under an outline planning permission must have been obtained before any work done was authorised by that planning permission. Clause 99(3) was drafted to apply to the whole of the Bill because otherwise there would be room for confusion.

We have now realised, however, that this Amendment has had more severe repercussions on Clause 6(3)(a) than expected and has made it clear that the Commission would not even be able to buy land where the planning permission was in outline and the necessary detailed planning consents had not yet been obtained. The Amendments put this right by ensuring that, in this paragraph, a planning permission without such detailed consents having been obtained is sufficient.

Amendment moved— Page 92, line 20, after first ("of") insert ("section 6 or").—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 99, as amended, agreed to.

Clauses 100 to 102 agreed to.

Schedule 1 agreed to.

Schedule 2 [Special Procedure for Compulsory Purchase Orders]:

5.16 p.m.

LORD KENNET

This Amendment is one which I undertook to introduce during our discussion earlier on, on Clause 8. We had a very full discussion on that clause, and there is nothing more to say about it. However, there is one preliminary matter. The next Amendment on the Order Paper seeks to leave out the whole of Schedule 2, and before I introduce this Amendment I wonder whether the noble Lord, Lord Brooke of Cumnor, could give us some indication whether he intends to move the subsequent one.

LORD BROOKE OF CUMNOR

With respect, I do not think that that is the next Amendment, because it is not numbered; but I think I can help the noble Lord by saying that I am not proposing to press that Schedule 2 should be omitted from the Bill.

LORD NEWTON

May I say that I was relieved that the noble Lord, Lord Kennet, made precisely the same mistake I made when attempting to leave out Clause 8? I was advised that I could not do it.

LORD KENNET

Great minds make the same mistakes. I beg to move.

Amendment moved— Page 98, line 19, at beginning insert ("Except in so far as sub-paragraphs (3) to (5) of this paragraph otherwise provide").—(Lord Kennet.)

LORD BROOKE OF CUMNOR

My noble friends and I are very much obliged to the Government for what they have done in this respect. They have gone along way, though not the whole way, to meet criticisms which we expressed when discussing Clause 8 of the Bill, a clause which is closely linked with Schedule 2. It is now clear that, if your Lordships accept this Amendment, no occupier can suddenly find himself or herself deprived of his or her home through the special quick-acting procedure of compulsory purchase. If I understand the Amendment aright, it means that if an occupier raises an objection to a compulsory purchase order where it is proposed that this special procedure shall apply, then the Minister must grant a public inquiry or, if the objector prefers, a private hearing, or, alternatively, exclude the house in question from the compulsory purchase order. That seems to be satisfactory. As I have indicated, we are not, in the circumstances, proposing to move that Schedule 2 should be omitted from the Bill. Indeed, it would not make sense to do that, so long as Clause 8 remained in the Bill, As I gave notice when discussing Clause 8, we may have to return to that at a later stage.

Speaking for myself, my view is that there might conceivably be certain narrow cases where a special procedure of this character was justified, but there could be no justification for applying the special procedure to acquisitions generally throughout the country. Clause 8 in its present form would permit that. If I may help the noble Lord by giving him advance notice of what may occur on the Report stage, I think that he may find that Amendments on the Order Paper will be designed, not to destroy the specially rapid procedure, but to limit its application to those narrow categories of case where there is a special justification for it. Having said that, I have no desire to detain your Lordships any longer on this matter. I welcome the Amendment so far as it goes, and I, for my part, do not wish to discuss Schedule 2 further in advance of the discussion we may be able to have on Clause 8 at a later stage.

LORD KENNET

I am grateful to the noble Lord for advance warning of his intentions. Our future debates will be the better for it.

On Question, Amendment agreed to.

LORD KENNET

This Amendment is part of the same situation I have outlined. I beg to move.

Amendment moved—

Page 98, line 25, at end insert— ("( ) Where the land comprised in such a compulsory purchase order as prepared in draft by the Commission consists of a dwelling-house, and the occupier of the dwelling-house duly objects to the order and that objection is not withdrawn, the last preceding sub-paragraph shall not have effect in relation to that objection. ( ) Where the land comprised in such a compulsory purchase order as so prepared includes a dwelling-house together with other land, and the occupier of the dwelling-house duly objects to the order and that objection is not withdrawn, then if the Minister referred to in sub-paragraph (2) of this paragraph—

1. (a) does not either cause a public local inquiry to be held or afford to the occupier of the dwelling-house an opportunity of appearing before and being heard by a person appointed by that Minister for the purpose, and
2. (b) authorises the Commission to make the order, that Minister shall require the Commission to make the order with a modification so as to exclude the dwelling-house from the order.

( ) In this paragraph 'dwelling-house' means any building or part of a building in which a person is residing, and includes any other building or part of a building in which a person normally resides but from which he is temporarily absent.").—(Lord Kennet.)

On Question, Amendment agreed to.

Schedule 2, as amended, agreed to.

Schedule 3 [Supplementary provisions as to general vesting declarations]:

5.20 p.m.

LORD KENNET

The provisions in this Amendment were rather fully discussed on Clause 10. I hope the Committee will agree with me that there is no need to open the matter further. I beg to move.

Amendment moved—

Page 100, line 48, at end insert— ("11A. As respects Scotland, where by virtue of paragraph 9 or 11 of this Schedule a general vesting declaration is to have effect in relation to a larger area of land than that originally comprised in the declaration, the Commission shall alter accordingly the description of the land affected by the description."—(Lord Kennet.)

On Question, Amendment agreed to.

Schedule 3, as amended, agreed to.

Schedule 4 [General provisions for ascertaining factors relevant to assessment of levy]:

5.21 p.m.

THE EARL OF KINNOULL

I hope that this Amendment will not reopen the constitutional issue. But I believe there is a misprint in the Bill, as page 113, line 34, does not tie up with page 115, line 1, which reads "after 29th December 1965". Also it does not tie up with Clause 83. I am advised—

LORD KENNET

Did I hear the noble Earl aright? Page 115, line 1, does read "29th December 1965."

THE EARL OF KINNOULL

The noble Lord is absolutely right. What I am trying to amend is page 113, line 34, so that it will tie up with page 115. I beg to move.

Amendment moved— Page 113, line 34, leave out ("before 21st December 1965") and insert ("after 29th December 1965").—(The Earl of Kinnoull.)

LORD KENNET

I must confess that, when I saw this Amendment, I was not clear that the noble Earl was going to move it simply on the ground of a misprint. Now that he has made that clear, may I ask him whether he will withdraw it and I will examine whether there has been a misprint? Of course, if there has been a misprint it will be put right. But if there has not been a misprint, I should point out that we are back in the Schedules which depend on Part III of the Bill, and all that my noble and learned friend the Lord Chancellor has said applies here.

VISCOUNT COLVILLE OF CULROSS

I understand that what happened was this. On December 21, 1965, the Bill was published or printed, and it was just before Christmas. I believe it was at a weekend, or very close to it. What then happened was that the Bill was not available to members of the public until some time after the Christmas holiday, and the first occasion upon which an ordinary member of the public could get hold of it was on December 29. Therefore, I believe it was generally considered right that the time for which the public ought to have known what was in the Bill, and dealt with matters accordingly, should not be the date when the Bill was technically first published, but the date when it was, in fact, available to them. I do not believe that there can be anything but a misprint here, because, as I understand it, where we are dealing with December, 1965, anywhere else in the Bill, the date has universally been put as the 29th though for some reason it has been printed here as the 21st. I believe there is nothing more than a misprint here—I hope that is the case—and I am sure that if the noble Lord looks at it that will be a very satisfactory solution.

THE EARL OF KINNOULL

I am quite prepared to withdraw the Amendment on that understanding. All I would say is that I have heard of cases where contracts would be affected by this (as I call it) misprint. So if the noble Lord cannot accept the Amendment, perhaps I could raise it on another occasion. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

Schedule 5 [Base value derived from previous transaction.]:

VISCOUNT COLVILLE OF CULROSS

moved, in paragraph 2(2)(a), to leave out "within the period beginning on 1st July, 1948, and ending with" and to substitute "before". The noble Viscount said: This is in the nature of a probing Amendment, and I hope that this matter has not been raised by anybody anywhere else before. Certainly, I have not become aware of the answer. There are various examples in this Bill, and I thought I had chosen the first of them, but, in fact, there is another one in Part V of Schedule 4, where the beginning of the period during which one may take account of, for instance, expenditure or other such matters has been set as July 1, 1948. As it happened, that was the appointed day for the coming into operation of the Town and Country Planning Act 1947.

It is perfectly true that under that Act there were certain financial provisions, which affected development value and claims on the £300 million fund set up in order to deal with that and other very difficult matters, some of which in a very vestigial way are still going on. Nevertheless, I believe that, so far as the context of this Bill is concerned, the appointed day for the 1947 Act now has very little relevance, and it seems a curious thing that this has been chosen as an arbitrary beginning for the period when these different matters in the Schedules are to start.

I think it would be useful if the noble Lord, Lord Kennet, could explain the philosophy which governs this, because if there is none I believe that we should take out this arbitrary starting date, and allow any transactions which occurred before September 22 (which of course has great relevance for the purposes of this Bill) to be taken into account. So if the noble Lord would be kind enough to explain why we have to use this date as the beginning for all these matters, I should be very grateful; and so, I think, would other people. I beg to move.

Amendment moved— Page 117, line 10, leave out from ("made") to ("22nd") in line 11 and insert ("before").—(Viscount Colville of Culross.)

LORD KENNET

We are still within the shadow of Part III, and so I welcome the noble Viscount's assurance that this is a probing Amendment. There is a philosophy behind this. The effect of the noble Viscount's Amendment, as he said, would be that the person liable to levy would be able to claim as his base value the price at which property was bought at any time before September 22, 1965, and not merely between July 1, 1948, and September 22, 1965. July 1, 1948, is the date, as the noble Viscount said, when the Town and Country Planning Act 1947, came into force and development values existing on that date were vested in the State. In recompense, claims could be made against the £300 million fund. Valid claims are now transmuted into a right to obtain a payment for unexpended development value and, as such, are included within current use value. Development value existing on July 1, 1948, is therefore fully recognised and allowed for in the levy scheme in the way I have explained. I hope that this is a sufficient statement of the underlying philosophy.

VISCOUNT COLVILLE OF CULROSS

I suppose that it conceivably is the philosophy in Schedule 5, but this is not the only place where that date occurs. Is the noble Lord saying that this is the philosophy all through? The Rules of Order in this House might just allow me to refer back to Schedule 4, where, of course, the subject is expenditure on property. And that, I should have thought, has nothing whatever to do with even the unexpended balance of development value which may still be hanging around in a few cases as a result of Part VI of the 1947 Act.

The noble Lord does not seem to have dealt with the general point wherever this occurs. He has, it is true, given me a reason here. Nevertheless, I believe there is some cause to look at this point again. As the noble Lord knows, constitutional point or not, there may be an opportunity for another place to reconsider it if, after all, there turns out to be a mistake. Can the noble Lord confirm whether this is a general philosophy which underlies all the references to July 1? If so I shall state them again, and see whether we agree.

LORD KENNET

No. I hoped that the noble Viscount was probing only Schedule 5. I should not be too happy at the moment to say that, on every occasion this date appears in the Bill, this is the underlying philosophy. It seems to me that there has already been a body of complaint about there being too many dates in the Bill, and there is a great deal to be said for limiting the number.

VISCOUNT COLVILLE OF CULROSS

That is exactly why I wish to take it out. I shall study what the noble Lord has said, and perhaps he will look at the other places in the Bill where that date occurs; for instance, in paragraph 10 of Schedule 5, in paragraph 42 of Schedule 4, and, for all I know, in a great number of other places. Meanwhile, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

LORD NUGENT OF GUILDFORD

moved, in paragraph 11(2)(a), to leave out "1st August 1966" and insert "23rd September 1965". The noble Lord said: This is, of course, as the noble Lord, Lord Kennet, will recognise, entirely in the spirit of his last remark about removing one superfluous date, as I regard it, from the Bill and to that extent improving it. The effect of it, of course, would be to extend the exemption from levy provided by Clause 62 to purchases of land made between the publication of the White Paper on September 23, 1965, and August, 1966.

I have, of course, studied the proceedings in another place, and from that I have learnt that on August 1, 1966, in the Committee stage in another place, the Minister announced his intention to allow such exemption from levy in respect of purchases of land for building after August 1 provided development had started within six months of the first appointed day; and he moved Amendments accordingly. I understand that the Minister's purpose was to ensure that the flow of land for development for house-building was not interfered with or handicapped during the interim period, and that, as such, it was a gesture of some value to the building industry. Nevertheless, the building industry have made very strong representations to us that it does not go far enough; and, if I may go a little wide, they contend, in particular, that the Minister's Amendment to Clause 99, which defines that detailed planning consent as well as outline planning consent is required for the purpose of Clause 62 exemption, is too restrictive.

The Master Builders' Federation would like to see a substantial widening of the Minister's concession, and they strongly contend that the flow of house-building will be handicapped if it is not granted. I should state immediately that my Amendment is drawn a good deal more narrowly than they would have liked to see it, but I think it would go some way towards meeting the practical problem which I understand the Minister intended to meet by the concession he made in Committee. It is in that sense that I beg to move the Amendment.

Amendment moved— Page 120, line 6, leave out ("1st August 1966") and insert ("23rd September 1965").—(Lord Nugent of Guildford.)

LORD KENNET

If for a moment I may go back over the history of this, the Bill in its original form provided that the price paid for land between Septem- ber 23, 1965, the date of publication of the White Paper, and the appointed day should not be taken into account for levy because it was feared that otherwise fictitious transactions would be entered into for the sole purpose of producing high base values. The White Paper explained that this would be the position. There was, therefore, no excuse for anybody to buy land for development after September 23, 1965, on which they did not think they could start development before the appointed day. All the same, it became clear during the summer that smaller builders were not buying land because they feared they would not be able to start work before the appointed day.

In order to ensure that the housing programme should not suffer in the slightest from any provision in the Bill, the Government inserted what is now paragraph 11 in the Schedule into the Bill as an Amendment. The Amendment would, they felt, encourage small builders to buy and to continue to build to the best of their resources; but, naturally, the concession related only to the period starting from the date on which it was introduced. I must say it would seem wrong to the Government to extend this period backwards to the date of the White Paper, because this would ignore the whole genesis and history of the concession. It was intended then, and is still intended now, that those who buy land should get on and develop it. If they bought land before August 1 in the expectation of developing it quickly, they will have had at least seven months' time in which to start, and generally much more.

I do not know whether there is in the noble Lord's mind any thought that these provisos may give rise to a rush of applications for detailed planning permission immediately before the first appointed day. If there is, I would say that this is a danger which we feel we must run. We shall just have to "lump it"; it does not seem to be a sufficient danger to warrant changing the provisions of this Schedule—which, I would remind the Committee, are in any case still dependent on Part III.

THE EARL OF KINNOULL

If a developer can prove that he made a perfectly genuine purchase of development land, in say, June, 1965, and that his friend, another developer, made a perfectly genuine purchase on August 2, 1965, why, in fact, in equity, should they be treated differently?

LORD KENNET

The noble Earl is intending to give both dates in 1966?

THE EARL OF KINNOULL

Yes; I am sorry.

LORD KENNET

This is going deep into the background of the matter. I do not know whether the noble Earl would consider that the inequity in this paragraph which he appears to find is a reason for supporting this Amendment.

THE EARL OF KINNOULL

I certainly support the Amendment on the grounds that the White Paper set out the reasons why it wished to defeat what it called "inflated prices". What I am suggesting is that, with this knowledge of the White Paper, a developer could perfectly well have purchased land in June, 1966, and his friend on August 2, 1966, and yet they are to be treated differently. That is my point.

LORD KENNET

Whenever you put a date into any sort of financial provision you risk giving rise to small marginal inequities. We are back at the dove-tailing problem, which we discussed before.

THE EARL OF KINNOULL

But what would it in fact cost the Government to go back?

LORD KENNET

I am sorry; I have no figures available.

LORD BROOKE OF CUMNOR

I hope the Government will consider this again. I am not saying that my noble friend's Amendment is necessarily the ideal way of simplifying the position, though it seems to me an excellent way; but otherwise the Bill is going to produce a pretty complicated plan over a short period of years. If a house-builder owned the land and had outline planning permission by the date of the publication of the White Paper in September, 1965, he is likely to be exempt from levy under Clause 62. If a developer purchased the land after August 1, 1966, and starts development within six months after the first appointed day, he is likely to be, in effect, exempt from levy, because it is unlikely that the development value of the land will have been increased substantially over that short period.

But if he happens to have bought land some time between September, 1965, and the end of July, 1966, he gets advantage of neither of these concessions. The reason for that, as the noble Lord has explained, is that it was thought that if, from the beginning, concessions were offered for purchases after September, 1965, there might be purchases at artificially inflated values in order to avoid levy. But, as things were, nobody had any incentive to purchase at an artificially inflated value, because he would have read the White Paper, and there could not now be risk of evasion, because this period is past. It is all over and done with. I should have thought, quite seriously, that there would be an improvement in the Bill if the period between the White Paper and August 1, 1966, could now be brought into one or other of these categories—the earlier category, pre-White Paper, or the later category, post-August 1, 1966.

It seems to me that we are now left, in fact, with an unnecessary complication in the Bill, and a complication that is going to have some evil effects. The noble Lord, Lord Kennet, himself mentioned a possibility; that is to say, that there is bound to be a great rush among the people who purchased land between September, 1965, and the end of July, 1966, to obtain sufficient planning permission before the appointed day to enable them to make a start on the project. That will not be very good for building, and it will certainly throw an extra burden on the planning authorities Indeed, it may mean that there is a substantial difference in the financial position due entirely to whether the grant of planning permission takes two months, three months, four months or five months in any particular case.

I would ask the Government to examine this afresh to see whether it would be possible, without any loss to the principles of the Bill, to seek to have only two separate periods in the operation of the Bill, and not three separate periods. As it stands, there is a period before September 23, 1965, where one thing happens; a period from September 23, 1965, to July 31, 1966, when another thing happens; and a period August 1, 1966, to the appointed day, when a third thing happens. In the first period people can obtain some concession from the Bill; in the third period people can obtain some concession from the Bill; but in the second period they can obtain none. I submit that not only will there be a complication but there will be intense pressure on the planning authorities from the effort to secure sufficient planning permission before the appointed day to enable some development to start.

LORD NUGENT OF GUILDFORD

I think that enough has been said from this side of the Committee to make it clear that there is a problem here. It is not a vast one; it is a transitional and limited one; but I think it should be enough to persuade Ministers opposite that there is some worth in looking at it. Perhaps the noble Lord will consider it again on Report stage. In the light of that, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 5 agreed to.

Schedule 6 [Supplementary provisions gelatin, to Schedules 4 and 5]:

5.43 p.m.

VISCOUNT COLVILLE OF CULROSS

moved to add to paragraph (4)(1): Provided that, where for the purposes of paragraph 4, paragraph 14 or paragraph 32 of the 4th Schedule to this Act, any depreciation in the value of an interest in any other land held with the relevant land, or as the case may be, part thereof in the circumstances set out in those paragraphs respectively, falls to be calculated, there shall be ascertained in accordance with the foregoing provisions of this sub-paragraph—

1. (a) the value of the interest in both the relevant land and the other land, together, and
2. (b) the value of the interest in the other land,

and the amount of the depreciation in the value of the interest in the other land shall be the amount (if any) by which the value of the interest mentioned in head (a) of this sub-paragraph exceeds the aggregate of the value mentioned in head (b) of this sub-paragraph and the current use value of the relevant interest referred to respectively in paragraph 3, paragraph 11 or paragraph 31 of that Schedule.

The noble Viscount said: I am afraid this Amendment looks a little alarming; but, within the limits of my power to draft anything, I have tried to set out what I hope is the point I was seeking to make. The question that I am concerned with arises under paragraph 4 of Schedule 6, which gives a general direction on how one is to calculate depreciation of the value of an interest. One does this by reference to the price, or…depreciation of the price which that interest might reasonably be or have been expected to fetch on a sale in the open market"— and I stress this— at the time by reference to which the value or depreciation falls to be calculated".

There are two sets of circumstances under this Bill, so far as I can see, where one is going to be dealing with depreciation. First, it occurs under Case D, and there it seems to me that paragraph 4 of Schedule 6 is entirely satisfactory and there can be no difficulty about it. But it also occurs under Cases A, D and E, if I am right—though it matters not—where, for instance, in paragraph 4 of Schedule 4 it is necessary to ascertain "whether the value of an interest in any other land" held with the land that is being sold at the same time is depreciated by the same.

It is in this respect that I should like no more than an assurance from the Government on how the valuers acting on behalf of the Land Commission are going to deal with the matter. It is almost an absurd point; but there is in my view the possibility of too strict an interpretation of the words of paragraph 4. The simple situation that would arise would be where someone has a house and a large garden. He wishes to sell the garden for development but to keep the house. It is perfectly possible, in fact, likely, that by selling the garden the value of the house itself will thereby be slightly decreased. It is that depreciation of the value of the house which he retains, which is dealt with in the paragraphs of Schedule 4, which I have set out, and which he is allowed to take into account to reduce the amount of the levy.

The problem arises whether it is possible to value the house in the way that is intended at the "time by reference to which the depreciation falls to be calculated". That time is, of course, the time when he sells the garden. It could be argued, on a strict interpretation of those words, that if you have to value it at the very time when the garden is being sold then there is no possibility of putting on the market at that time the house and the garden together so that you could see what the higher value would be. The only thing you could do would be to put on the market the house and the garden separately, because that is the transaction which is going on at that time.

If that were to happen, it would be impossible to get the larger value for the two together. In that event the provisions which allow the depreciation of the house to be taken into account will become migratory. I am certain that this is not intended to happen. I am sure that the valuers would not take this point which is open to them on a strict interpretation of the wording of paragraph 4 of Schedule 6. I have put down an Amendment which I hope would have the effect of doing what I believe would be the intention of the Government. I should not insist on this if I could have an assurance that what I have attempted to describe as being the generous interpretation of these words would always be applied by the valuers in any case concerned. I beg to move.

Amendment moved— Page 127, line 4, at end insert the said proviso.—(Viscount Colville of Culross.)

LORD KENNET

The same point was the subject of a different and less elaborate approach in an Amendment put down by the Opposition in the House of Commons Standing Committee "E". The Amendment was put down by Mr. Allason, who advanced the very same arguments about houses and gardens as the noble Viscount advanced. It was withdrawn on the strength of an assurance by my right honourable friend the Minister of Land and Natural Resources that it was unnecessary. There was a subsequent exchange of letters before Report stage between Mr. Allason and the Minister and the matter was not pursued. It is apparent that the House of Commons were contented about these worries.

These provisions were inserted in the Bill on the advice of the Valuation Office of the Inland Revenue whose valuers will be concerned in valuations for the purposes of assessment of levy in order to ensure that the amount which the noble Viscount's Amendment purports to add to base value would be added to base value. I hope, in view of the fact that we are still depending from Part III and the case that has been argued in the Standing Committee of the House of Commons, and of the assurance I have just given, that the noble Viscount will be willing to withdraw his Amendment.

VISCOUNT COLVILLE OF CULROSS

I appreciate that this has been argued before; but, as the noble Lord said, there was a subsequent exchange of letters and the matter was not returned to. For that reason I thought it might be possible that the noble Lord would like to say something on this to-day. So long as he has now made it clear that what the Valuation Office are proposing to do is what, at any rate, I hope I have set out in my Amendment, there can be no further trouble about it. As understand it, that is what the noble Lord is saying. Is the noble Lord, Lord Kennet, saying that the broad interpretation will always be used?

LORD KENNET

I am saying only that the House of Commons has been over this matter and is content. The wording was put in on the advice of the Valuation Office to achieve a certain effect, which I have just told the noble Viscount. I can repeat it if he wishes.

VISCOUNT COLVILLE OF CULROSS

Would the noble Lord repeat it?

LORD KENNET

The wording as it stands was put in in order to ensure that the amount that the noble Viscount's Amendment seeks to add to the base value would, in fact, be added to the base value. In other words it is looked after.

VISCOUNT COLVILLE OF CULROSS

I am much obliged to the noble Lord. I should like to say, with the greatest respect to him, that the mere fact that it has been dealt with in another place does not necessarily mean that your Lordships are not entitled to another explanation. I am nevertheless grateful to the noble Lord for his reading that again. It is a little complicated and I was anxious to ensure that I had heard him correctly the first time. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Schedules 6 to 11 agreed to.

Schedule 12:

Death, Bankruptcy, Winding up and Floating Charges

(2) The preceding sub-paragraph shall have effect subject to subsections (3) and (4) of section 44 of this Act; and, without prejudice to those subsections, a notice of assessment of levy served by virtue of this paragraph shall not have effect if it is served more than three years after the death of the deceased.

LORD WADE

moved, in paragraph 5(2), to leave out "three" and insert "two" [years]. The noble Lord said: We are now dealing with Schedule 12, Part II, concerned with "Death on or after relevant date". I referred briefly to this subject when I was advocating a clearance letter procedure on an earlier Amendment. The object of my Amendment is to insert "two years" instead of "three years". The noble and learned Lord, the Lord Chancellor, courteously told me that it was intended that the Land Commission should follow somewhat similar procedure to the Inland Revenue where persons potentially liable were concerned about their liability and wished to have it determined. I am obliged to the noble and learned Lord, the Lord Chancellor, for what he said in that earlier debate.

Personal representatives may, nevertheless, be faced with a serious problem, since they may have to wait three years. May I just summarise the first three subsections of paragraph 5? Under the first sub-paragraph, where a charge or act or event occurs and the person prospectively liable for levy dies on or after the relevant date but before the notice of assessment of levy has been served on him, the notice of assessment of levy may be served on his personal representatives. I am not reading in full; I am giving what I hope is a fair summary. In sub-paragraph (2) a notice of assessment of levy shall not have effect if it is served more than three years after the date of the death of the deceased. To put it another way round, the personal representative may have to wait three years. Under the third sub-paragraph even though an estate has been wound up and everything done except for this possible liability for levy, even though the estate has been wound up and the personal representative has, to all intents and purposes, ceased to be a personal representative, he will neverthelss be liable for this levy up to a period of three years.

I should have thought two years was adequate. I do not know why the period of three years was chosen. Some would say that two years is too long, but there are grounds for suggesting two years. The present provision may well create some hardship for beneficiaries, and certainly embarrassment to personal representatives, and I hope that some way may be found for shortening this period at any rate to two years. With that in mind I beg to move the Amendment.

Amendment moved— Page 174, line 15, leave out "three" and insert "two"—(Lord Wade.)

5.55 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION)

Having sat throughout all this Bill, having been given some 38 clauses with Schedules to look after for the purpose of answering questions on the Motion that the clause stand part, and having found teat on only one of them was a question raised, I am almost happy at this late stage to hear my own voice, especially as I spent three week-ends, plus many late hours, studying this Bill. I think I can satisfy the noble Lord, Lord Wade, to some extent, without accepting the Amendment. In the first place, I must point out that the three-year period is taken from the income tax precedent which requires a tax assessment to be served within three years of death. There seems to us to be no reason for substituting a lesser period.

It is, I think, the next point which will to a large extent satisfy the noble Lord, Lord Wade. The Commission will normally serve a notice of assessment within a few months of the chargeable act or event, and hence the event of death, assuming it to occur immediately after the chargeable Act, but there will be cases when a good deal of negotiation and discussion will need to go on between the parties before the assessment is served. It would not be for the interest or the advantage of either party to require the Commission to serve a notice before such discussion was completed, and a period of two years, I am told, might not be sufficient in complex cases. We think the three-year period is, and may be, an advantage to the Commission on the one side, and (this is extremely important in connection with the Amendment) an advantage to those handling the affairs of the deceased. I hope that the noble Lord, Lord Wade, will regard this as a reasonable answer to the point which he raised.

LORD WADE

The noble Lord, Lord Champion, is always reasonable in the way he presents his case. I am not entirely satisfied, but we keep hearing this reference to the shadow of Part III—

LORD CHAMPION

I never referred to that.

LORD WADE

No, it was the noble Lord, Lord Kennet, who referred to the shadow of Part III. I hope that the time will come when the shadow will be lifted, but in the meantime I will consider it further, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 12 agreed to.

Schedule 13 [Special provisions as to levy in certain cases]:

5.57 p.m.

THE EARL OF KINNOULL

I beg to move this Amendment, which stands in the name of my noble friend Lord Jessel. Part I of Schedule 13 appears to give certain exemptions of levy to companies limited by shares or by guarantees but does not include any company constituted under Royal Charter. If this is the correct interpretation, it would appear grossly unfair, and the purpose of this Amendment and the one which follows is to correct the situation. Companies constituted under Royal Charter would then be placed on the same footing as companies within the meaning of the definition of the Companies Act 1948, so that where there are transactions between members of a group no levy will be payable. I beg to move.

Amendment moved— Page 180, line 17, leave out ("either").—(The Earl of Kinnoull.)

LORD MITCHISON

I rise because I hope to go away quite soon, and this time I am lifting my eyebrows. I do not think that this Amendment is necessary. The word "company" has the same meaning as in the Companies Act 1948, and in that Act the word includes "existing companies", and "existing companies" comprise among many other kinds, charter companies.

LORD KENNET

I do not think this Amendment is necessary, but perhaps I must just tell the noble Earl how the situation which he seeks to amend arose. The provisions as they stand are largely taken from Schedule 13 to the Finance Act 1965 which was amended by paragraph 15 of Schedule 5 to the Finance Act 1966, which included companies under Royal Charter. When this happened we considered whether or not to amend this Bill so as to bring it into line with the 1966 Finance Act, but since we thought it most unlikely that the companies in question would be involved in landholding transactions between members of a group, we decided that it simply was not worth the trouble. But I have no objection at all to the noble Earl's Amendment; and were there evidence of cases of companies having this status who would be involved in this sort of transaction, I would willingly accept it, except for the fact that we are dealing with a Schedule depending on Part III. However much I may regret it, I advise the Committee not to accept this Amendment.

LORD MITCHISON

With great respect, the Amendment is still unnecessary, for the reason I gave.

LORD KENNET

I agree with my noble friend.

THE EARL OF KINNOULL

I am grateful to the noble Lord, Lord Kennet, as I am always grateful, for his observations. I am not certain that we are right in accepting everything that has been said, but I am grateful to the noble Lord for his assurance, and with that I beg leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

Schedule 13 agreed to.

Remaining Schedules agreed to.

House resumed: Bill reported with Amendments.