NEW TOWNS BILL (Hansard, 13 December 1966)

§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)
My Lords, I beg to move that this Bill be now read a third time.

§ LORD HASTINGS
I want to say only a very brief word. Of course, we are glad to give this Bill a Third Reading. We had a good debate on the Second Reading, but there is one point which the noble Lord, Lord Kennet, kindly said he would clarify, and I think it would be useful to have the information so that everybody in your Lordships' House should know it.
It concerns Clause 2, where it is laid down that any development value arising from the designation of an extension of a New Town should be ignored. I wish to ask the noble Lord how this clause will operate. One assumes that the value of agricultural land outside a New Town—I am talking more about the North, which I know—would be about £200 per acre. One assumes, also, that as a result of the proximity of the New Town, if the land were sold for building the owner might normally expect to receive about £1,200 an acre. As a result of the extension of designation of a New Town, would the value then be expected to be more? Obviously, if it were, that extra value would be ignored and no development charge would be payable upon it. But will the value be the agricultural value of £200, in which case there will be no development charge, or will the market value be considered to be the value with building permission, irrespective of the designation of an extended New Town, and will development charge therefore be payable on that part of it? I should be glad if the noble Lord could give us an illustration of how the clause will operate?

§ LORD KENNET
My Lords, in brief what this clause does is to make the basis of compensation for land acquisition the same in extensions to New Towns as it 1556 has been for some time in New Towns themselves. May I go into a little more detail? In general, a public authority acquires land on the basis of "market value"; that is, the amount which the land might be expected to realise if sold in the open market by a willing seller. The market value takes into account existing use, existing or hoped-for planning permission, use shown on a development plan or proposed by the acquiring authority, and alternative use certified by the planning authority. If the land is included in an area designated as a New Town there could enter into the value an increase (or possibly a diminution) on account of the development or prospect of development of other land in the area in the course of the area's development as a New Town. It is this, and only this, increase or diminution which is excluded by Section 6 and Schedule 1 of the Land Compensation Act 1961 from assessment of compensation payable. All the other elements I have enumerated are taken fully into account.
That is the situation as it has been since 1959 in relation to initially designated areas of New Towns and those extended areas of New Towns as they were at October 29, 1958, when the 1959 Act was introduced. Similar provisions apply, incidentally, to an area of a single compulsory purchase order, an area of comprehensive development as defined in a development plan, or an area of town development under the Town Development Act 1952. So that is well established. But the provision excluding the increase or diminution which I have been talking about does not apply, and has never applied, to an extension of a New Town area since October, 1958. Whilst such extensions were small, this did not matter a great deal, but we have had in the last five years three extensions of over 1,400 acres, and more large extensions of about that size may well be made in the future.
So Clause 2 of this Bill seeks to apply to any future extension of a New Town the same provision in relation to that extension as the existing provision in relation to initially designated areas of New Towns. The existing provision and the proposed new provision under the Bill will be, so to speak, mutually exclusive; that is to say, first, in relation to land in the original area, 1557 only an increase or diminution due to development or prospect of development of other land in the original area will be excluded; an increase or diminution due to development or prospect of development of land in the extension area will not be excluded. Secondly, in relation to land in the extension area, only an increase or diminution due to development or prospect of development of other land in the extension area will be excluded, while an increase or diminution due to development or prospect of development of land in the original area will not be excluded. Moreover, Clause 2 will not have retrospective effect on New Town areas already extended.
I hope this makes the situation quite clear. It is a little prolix, but it is impossible to put it clearly in any shorter way. What we are proposing is simply to treat future extensions of New Towns for compensation purposes as if they were original New Towns: after all, they are communities comparable in size.