Lords Sitting of 14 November 1966

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Worcester

TELEVISION DETECTOR VANS
2.35 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the present annual cost of operating detector vans to track down television licence evasion, and by how much this cost is likely to go up when the fleet of vans is increased, as recently announced by the Postmaster General.]
LORD SORENSEN: My Lords, about £75,000, which will rise to £150,000 when the fleet is doubled.
THE EARL OF KINNOULL: My Lords, I thank the noble Lord for that reply. Would he not agree that this form of collecting taxes is setting a thoroughly bad precedent?
LORD SORENSEN: My Lords, I understand that the equation of the cost of the fleet of vans to what is produced is about 27 per cent., which means therefore that there is a profit of about 73 per cent. on the investment, which I think is quite good. No doubt this is also of benefit to those who desire to pay their taxes.
LORD INGLEWOOD: My Lords, since there is said to be something like £10 millions worth of revenue not collected, can the noble Lord tell us how long he thinks it will be, bearing in mind the figure he has given us, before all the licences due will be paid?
LORD SORENSEN: My Lords, I am afraid there will always be a certain number of unfortunate citizens who do not perform their duties; but progress is being made.
LORD FRASER OF LONSDALE: My Lords, while I thoroughly support the efforts to get the money in and to thwart the tax evader, may I ask the noble Lord whether there are any technical means by which a van can tell whether or not a licence has been paid?
A NOBLE LORD: This is a technical question.
LORD SORENSEN: I am reminded by my colleague that this is a technical question. Nevertheless, I would say that there are available means by which the presence of certain sets can be detected, and then, of course, investigation can be made to see whether the owner of the set has paid the tax.
LORD WAKEFIELD OF KENDAL: My Lords, why do the Government not require dealers in broadcasting sets not to sell a set until a licence has been purchased? The noble Lord will be aware that the wired broadcasting companies have to be quite sure, before they make a connection to a customer, that the customer has a television licence. Why cannot dealers in new or secondhand sets be required to ensure that their customers have a licence? In this way, many millions of pounds which is badly needed by the B.B.C. could be collected.
LORD SORENSEN: My Lords, I thank the noble Lord for that suggestion. In fact, it has been considered and I understand that some announcement will be made about this in due course.

ACCESS TO PARLIAMENT DURING PROCESSION
LORD SHEPHERD: My Lords, with the permission of the House, I should like to make a short Statement.
The House will be aware that the President of Pakistan will be arriving in this country on Thursday, November 17, to commence a State Visit. Her Majesty will meet the President at the Tate Gallery at 2.45 p.m. and the procession will then drive along the Embankment past the Palace of Westminster and up Whitehall. The House of Lords may be sitting at the time the procession passes and I have been concerned to ensure that the right of access to the

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palace of Westminster should be enjoyed by Press and should not be interrupted.
The Commissioner of the Police of the Metropolis will do everything possible to comply with the Sessional Order of this House directing him to keep the passages through the streets leading to the House free and open during the Session of Parliament, and the road will be kept open for Peers until the last possible moment before the procession actually passes the Palace of Westminster and be reopened as soon as the procession has passed. It is also intended to keep the footpath in front of the Palace of Westminster empty, and, to assist Peers, the Commissioner of Police will make available windscreen labels with directions on the reverse on the most suitable routes to be followed to the House. Your Lordships will appreciate, however, that while the procession is actually passing the Palace of Westminster, access may be temporarily impeded, although the Underground subway will still be available. The period during which access will be limited will be very short and any inconvenience to your Lordships will be kept to the minimum.
May I also inform the House that at about 3.30 p.m. my noble friend Lord Champion will be making a Statement on the visit of Mr. Kosygin to this country.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, is it known at about what time the procession will be passing the Palace of Westminster?
LORD SHEPHERD: My Lords, as I have just said, Her Majesty will be meeting the President at the Tate Gallery at 2.45 p.m. It is not for me to state the duration of that meeting, but I would imagine that the procession would return at about 3.30 p.m.

VETERINARY SURGEONS BILL [H.L.]
Returned from the Commons on Friday last, agreed to, with Amendments the said Amendments printed, pursuant to Standing Order No. 45.

REDUNDANCY FUND CONTRIBUTIONS ORDER 1966
2.43 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, I beg to move that the Redundancy Fund Contributions Order 1966, a copy of which was laid before the House on October 25 last, be approved. The effect of the Order is to increase the the weekly Redundancy Fund contribution paid by employers from 5d. to 10d. per man, and from 2d. to 5d. per woman. In introducing the Redundancy Payments Bill in another place my right honourable friend the Minister of Labour, in referring to the cost of this scheme, said that none of the relevant factors, namely, number of redundancies, age and length of service of workers, and future changes in earnings, could be foreseen with precision and that only experience would show where any adjustments would be needed. Although two special surveys of redundancies known to employment exchanges were made at the time, firm forecasts could not be made on the basis of this information—for example, since the introduction of the scheme, it has been found that the scheme itself affects attitudes and practices in industry. With these reservations, our calculations produced a mid-point estimate of an annual payment of £19,000,000, of which £13,600,000 would be borne by the Fund. To meet this and cover contingencies, weekly contributions were fixed at 5d. for a man and 2d. for a woman, producing an estimated incomes of £18,000,000 a year.
These rates were criticised at the time as being pessimistic. The reverse has proved to be the case, and for two main reasons. First, claims on the Fund have been running at an annual rate of 125,000, compared with a mid-point estimate of 105,000. Secondly, the proportion of over-forties getting redundancy payment has been much higher than in the pre-Act surveys—more over-forties means higher total payments because of the higher scale of payments for years of service over forty-one and because on average older workers have longer service. It also increases the proportion of the total payments made by the Fund, because this increases for years of service over forty-one. As a result the average per capita payment from the Fund has been running since mid-April at £180

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compared with a figure of £130 based on the pre-Act surveys. The Fund has been running at a loss of £100,000 a week on average since mid-April. The balance, which was then £2,600,000, has been exhausted and our borrowing from the Consolidated Fund to date totals £350,000.
There is no question, therefore, that an increase in the contribution is needed promptly. It is needed for three purposes: first, to clear this deficit; secondly, to enable the Fund to build up an adequate reserve so that we do not find ourselves again in a situation like the present, and thirdly, to cover the future likely level of expenditure. In estimating this future level we must expect heavier claims on the Fund because of the recent increase in the level of unemployment. It is not possible to put a precise figure on future trends. Nor is it in any event possible to establish an exact correlation between redundancy payments and the unemployment figures. There is, therefore, inevitably, a considerable element of judgment in any attempt to forecast future expenditure from the Fund. In the short run we must obviously expect high expenditure, say £650,000 a week over the next six months, compared with £430,000 a week over the last six months. It may take another twelve months, with expenditure on an average of £600,000 a week, before we get near normal again, say, from the Spring of 1968.
On present trends the deficit might reach £4,500,000 by the beginning of February. The Minister's borrowing powers under Section 25 of the Act are limited to £8,000,000, though this can be raised to £20,000,000 subject to Treasury consent and Affirmative Resolution of Parliament. But any such delaying action would merely aggravate the problem and force us to make a larger increase in the end. In the Government's view, therefore, contributions must be increased promptly, and the earliest practical date is February 6, 1967. The Minister had originally intended to increase costs to one shilling for a man and 6d. for a woman. But after consulting the C.B.I., the T.U.C., and nationalised industries, who all felt that this was on the high side and that he was trying to do too much too quickly, he decided, after considerable
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deliberation, to fix the contribution at 10d. and 5d. This will almost certainly mean that the Fund will remain in deficit for over a year, but there should be a small credit balance by the Spring, 1968. It is of course unfortunate that we have to make this increase. But the addition to labour costs will be minimal—on average, less than one-tenth of one per cent. Finally, in commending the Order to the House may I say that the Government recognise that there is a considerable element of judgment in the provisions it is making for the future. If in the end the Fund should recover more quickly than anticipated and build up a satisfactory reserve in a comparatively short period, the Minister will, at that stage, review the contribution I am now asking the House to approve. My Lords, I beg to move.
Moved, That the Draft Redundancy Fund Contributions Order 1966, laid before the House on October 25, 1966, be approved.—(Lord Champion.)
2.48 p.m.
LORD DRUMALBYN: My Lords, I should like to thank the noble Lord, Lord Champion, for his explanation of this Order and to congratulate him on the skill with which he has wrapped up the perfectly obvious fact that the Government have guessed very wrong. My Lords they have "thought of a number" and they have now had to double it. The real truth of the matter is that what one might call the mutual insurance premiums for redundancy payments are being doubled while the benefits remain the same. We accept, of course, that it was not possible to judge with precision (that is what the noble Lord said), what the cost would turn out to be; but there is a considerable difference between judging the matter with precision and being 100 per cent. wrong.
The noble Lord says that this Fund will remain in deficit until the beginning of 1968, and by that time he hopes that it will come once again into credit and, presumably, that a reserve fund will be built up. All I have to say to him is that the Government will have to alter their policy very considerably and pursue a consistent policy instead of, as in this case, having not only had a lack of consistent policy but a lack of any policy at all. I have only to remind your Lordships that the Prime Minister said, as

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recently as last March, that he did not expect any considerable increase in unemployment.
The two main factors here are the increase in unemployment and the higher incidence of redundancies among older people than was expected. Obviously we cannot oppose this Order. The Fund must be put into balance. But I hope that the noble Lord will not say, every time increases of this kind are proposed in the burdens that have to be carried by industry, that they are only "minimal" burdens. They are increasing all the time, sometimes necessarily, as, for example, in the industrial training levies, and sometimes less necessarily, when perhaps the burden could have been more wisely spread. I do not think that the noble Lord makes his case any better by claiming that this is only a little one, because they all mount up. I cannot advise your Lordships to oppose this Order, but I deplore it.
LORD MCCORQUODALE OF NEWTON: My Lords, this seems to me to be an unfortunate case. It is difficult, over the Table, to follow exactly the figures given by the noble Lord, although I am very grateful to him for the care with which he explained the Order. It would appear that the costs are going up from 130 to 180 units, and therefore the charges must be doubled. I fail to see why the charges should be doubled, except from the Exchequer point of view. Obviously the heavy hand of the Treasury has been in this matter.
Why should it be necessary to build up a sizeable reserve? These payments could be adjusted and paid in and out as we go along. Why do the Treasury wish to build up a reserve?—because they always want to mulct every penny piece they can out of industry and everybody else. I should have thought that at this time the Government would have taken more care of industry, and would not have wished to put on to industry, both nationalised and private, more than was absolutely necessary. Even in this last hour, I would ask the Minister to make sure that directly the Fund is in balance again these charges will be reduced, and not to hand everything over to the dead hand of the Treasury.
LORD CHAMPION: My Lords, I am grateful to both noble Lords, though of course they have not received this draft
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Order with any great cheers. Both noble Lords have pointed to the fact that it is not a good argument to say that this is "only a little one". I must admit that there is a great deal in this viewpoint. When asking for something from the taxpayer, we all tend to say, "It is only £10 million or £30 million", and when we take something out of industry, to say, "It is only one-tenth of 1 per cent." But we recognise that all this has to be taken out of industry, and I agree with the noble Lords that we must be very careful about this and not overdo it, as Governments can do—perhaps I might almost say "tend to do"; but I must not say that because then I might be in trouble elsewhere.
I think we have done the right thing in this connection, despite what the noble Lord, Lord Drumalbyn, said about our failure to forecast accurately. Clearly, it would have been impossible to forecast this, because the amount of data available to us was so limited. We are instituting something new. We thought that we had arrived at the right figures in 5d. and 2d., but this has proved not to be the case. Therefore I think it is right that we should ask industry to face this additional charge in order that we may carry on this policy—and it is the right one—of securing that there is a greater degree of mobility of labour. It is part of an economic policy designed to ensure that people are being employed in those employments where they can best serve industry and the nation. Despite the criticisms, I believe that the House will pass this sensible Order.
On Question, Motion agreed to.

TEACHERS' SUPERANNUATION BILL [H.L.]
2.56 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move that this Bill be now read a second time. This is a Consolidation Bill, and therefore it will go in due course to the Joint Committee on Consolidation Bills.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

INDUSTRIAL INJURIES AND DISEASES (OLD CASES) BILL [H.L.]
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. This also is a Consolidation Bill, and accordingly the same observations apply.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

BARBADOS INDEPENDENCE BILL
House in Committee (according to Order).
House resumed: Bill reported without amendment. Report received.

LAND COMMISSION BILL
2.59 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. In case I should forget it later, may I say that later to-day I have to fulfil a public engagement, which Lord Chancellors cannot avoid, and I hope that your Lordships will excuse me if, unfortunately, I have to leave before the end of the debate.
The proposition upon which this Bill is founded is a simple one. It is that the value attached to land by the right to develop it is value which has been substantially created by the community, and the community is therefore entitled to recover some part of it. This is a proposition that has been debated many times over many years; indeed, it has been discussed over centuries and in many kinds of circumstances. Very few, I think, would now disagree with it, and therefore I will not waste time debating it. I will turn instead to the methods by which we propose to achieve that end.
There have been many attempts throughout history to recover for the community a proper share of development value. For
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a variety of reasons these have all been frustrated. But we can learn from the lessons of the past and it is therefore with confidence in its future that we commend this Bill to Parliament.
The White Paper on the Land Commission, which was published in September, 1965, set out two main objectives. The first was to secure that the right land is available at the right time for the implementation of national, regional and local plans; and the second to secure that a substantial part of the development value created by the community returns to the community, and that the burden of the cost of land for essential purposes is reduced. The Bill sets out to achieve these two main objectives by establishing a Land Commission with two main functions. The first is to acquire, manage and dispose of land; the second is to collect a levy on development value.
This brings me immediately to one of the main points on which the Bill has been attacked. It has been argued that although the objectives are beyond reproach there is no need for a Land Commission to achieve them. The first function, it is said, is unnecessary: other bodies, including national, regional or local planning authorities, already have adequate powers to ensure the availability of land. The second function, it is said, does not require a Land Commission; it can more effectively be handled by Inland Revenue: and, indeed, some would argue that the point is already covered adequately by the capital gains tax.
To take the latter point first, it is, I think, widely accepted that there is something special about development value; that it differs from other gains, and ought to be treated separately. The levy on development value is not just a tax to raise revenue. It is a means of ensuring that the community takes its proper share of the values which it has itself created by community expenditure and public decision. Given this special treatment of development value, collection of the levy will require additional staff, whether it is done by the Inland Revenue or by some other body. It is the view of the Government, however, that it is essential that the body responsible for the levy should also have effective powers of compulsory purchase, and this would not be appropriate for the Board of Inland Revenue.

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It cannot be denied that the imposition of a levy on development value may incite some landowners to withhold land which otherwise would be offered for development. There can be many reasons for their doing so. They may, for example, believe that if they hold on for a few years all this will be swept away and they will be able to realise the full amount of the development value for themselves. This is a decision that can be taken quite lightly, because land does not deteriorate. The landowner can continue to enjoy the current use of the land while the development value lies there waiting to be plucked, at whatever time may suit him best. If landowners acted in this way on a widespread scale, the immediate impact would be on the essential programme of private enterprise housing. I stress the private enterprise programme, because, of course, local authorities already have compulsory purchase powers and can, if necessary, ensure that land is available for their needs. The private builder, however, could not do so.
If this possibility is to be avoided there must be a body with effective powers of compulsory purchase ready and able to use them in order to ensure that builders can indeed get enough land to maintain their programmes; and the body must be able to use the powers quickly enough to prevent prices being forced up by a fear of scarcity. This can be assured only by the existence of a body such as the Land Commission, and since the need for such powers derives from the levy, both functions must be vested in the same body. The Land Commission will thus assess and collect betterment levy and, from information gained from these operations and in other ways, will watch the operations of the market in land and be able to use their powers of acquisition and disposal where this is necessary in order to prevent the market from being distorted by artificial scarcities. In this context the existing powers of compulsory purchase held by local authorities can be no substitute for the powers of the Land Commission.
Thus the two objectives in the White Paper are closely related, and the two functions of the Land Commission are interdependent. It is indeed the combination within a single Land Commission of the power to collect levy,
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together with wide powers to acquire land, that will make the Land Commission an effective instrument for the purpose of achieving the objectives, which are themselves beyond dispute.
However, the Commission are provided with powers of acquisition which will enable them to play a wider and more positive role than that of ensuring that the supply of land does not dry up because of the introduction of the levy. I shall be dealing with these powers in a moment. Suffice it to say now that the Commission will be able to facilitate development in both the public and the private sector by the judicious use of their powers to buy land. The Commission can, for example, play their part by assisting with the assembly of land in privately undertaken schemes of redevelopment, and also will be equipped to undertake the large-scale purchases, sometimes well in advance, that will undoubtedly be necessary if our expanding population is to be properly housed in the right places and according to modern planning ideas. Here the Commission may be operating in the public sector. But it is not the intention of the Government that the Commission should supplant the various authorities who would have powers to acquire land for development. For example, local authorities will still have their compulsory purchase powers in support of their various statutory functions.
Neither is it intended that the Commission should become a super-planning authority. There are two safeguards against this in the Bill itself. First, although the Commission may buy land compulsorily for the purposes of a public authority, they can do so only with the agreement of that authority or otherwise with the consent of a Minister. Secondly, although the Commission will be a Crown body, it has been made specifically subject to planning control and the Commission's powers of compulsory purchase will depend upon planning decisions.
Having touched on the possible scope of the Land Commission's activities, may I now turn to the Bill itself? I will not deal with it in any great detail—there will be an opportunity for this on other occasions—but will try to bring out some of the main features and to touch on some of the points of principle which

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may arise from it. It seems to me that the Bill is rather complicated. But length and complexity are inherent in any legislation affecting land. I am afraid this is the result of our somewhat tortuous land laws. They result from the need to achieve fairness to individuals and between individuals, and consistency of treatment in a wide variety of situations. Some of the situations may seldom occur, but nevertheless they need to be dealt with if there is to be certainty. As the Minister has already explained in another place, he has preferred, at the cost of some length and complexity, to spell matters out in the Bill itself in order to give certainty, rather than to leave them vague or to leave them to be dealt with by regulations. Some regulations are provided for, but even here so far as possible the scope of the regulations is narrowly prescribed.
I agree, of course, that this is a Bill of 102 clauses with 16 Schedules but, as I have said, I am afraid that this is the consequence of the state into which we have allowed our land law to get. This really goes back quite a long way, because if one goes back to the Land Clauses (Consolidation) Act 1845, one finds that that was in 152 sections with 2 Schedules, or, if one takes the latest work in this field of the previous Conservative Government, the Town and Country Planning Act 1962, this was in 226 sections with 15 Schedules.
The Bill is in four Parts. The first Part deals with the constitution of the Land Commission and the financial arrangements; the second Part with the acquisition, management and disposal of land; the third Part with the betterment levy; and the fourth Part deals with general and supplementary provisions. Part I—that is, Clause 1 and Schedule 1—deals with the constitution of the Land Commission. They are to be servants of the Crown, and the Ministers—the Ministers for the purposes of the Act are the Minister of Land and Natural Resources and the Secretary of State for Scotland—will be entitled to give them directions. Schedule 1 sets out the details of their procedure and constitution. They are to consist of not more than nine members to be appointed by the Ministers. They appoint their own staff, except that the secretary must have
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the approval of the Ministers. There are the usual provisions for their remuneration, for a quorum, and for matters of that kind.
It occurred to me at once to ask whether the Land Commission would be included in the Schedule of the Parliamentary Commissioner Bill as being a body which would be subject to the Ombudsman. I am told that that is so—they will be. The Commission's activities on the acquisition, management and disposal of land will be financed out of a fund to which advances not exceeding £45 million may be made out of the Consolidated Fund. The ceiling on the advances can, however, be increased to £75 million with the approval of the House of Commons. This£45 million is not the limit upon the amount that the Commission can spend upon acquiring land; it is the limit upon the amount of money that can be put into the Commission's acquisition and management fund from the Consolidated Fund. However, the Land Commission will buy land at market value less the amount of levy payable and will, with certain exceptions, dispose of land at market value. The amount of levy deducted from the price when land is acquired by the Commission will thus show as a profit to the fund and there may well be other profits to the fund from the trading activities of the Commission. The land acquisition and management fund will therefore grow from the trading activities of the Commission and should in time be self-supporting. The £45 million or the £75 million therefore represents the limit upon the assistance that can be given to the Commission from the Consolidated Fund to their working capital.
To the extent that the Commission sell the freehold of land shortly after they have acquired it—and where land is made available for private building it is to be expected that the Commission will normally sell the freehold—a working capital of up to £45 million, even without being supplemented by profits from the activities of the Commission, could support a substantial turnover of land. Clearly, however, substantial acquisitions of land well in advance of requirements which will tie up capital may have to wait until the Commission have built up their resources, and the need to build up resources will also limit the extent to

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which the Commission can assist in redevelopment where costs of acquisition can be high and land and property may have to be held for perhaps two or three years.
The administrative expenses of the Commission are to be met from Votes in the same way as those of any other Government Department. It is envisaged that the Commission will have a staff of about 2,000, with a small headquarters in Newcastle and the remainder of the staff spread over eleven regional offices. The total administrative expenses of the Commission are estimated to amount to about £4 million. Valuation work for the Land Commission will be undertaken by the Valuation Office of the Board of Inland Revenue and it is estimated that their costs for work on behalf of the Commission may amount to £3 million a year. All sums received by the Commission, except those obtained from disposals or the management of land in their possession and thus appropriate to the land acquisition and management fund, will be paid directly into the Exchequer. This is primarily the proceeds from the levy. It is estimated that with the rate of levy at 40 per cent. in a full year, if there were no acquisitions by the Commission, the proceeds of the levy would be of the order of £80 million. This will of course be reduced to the extent that the Commission buy land net of levy and the notional amount of levy deducted from the purchase price appears as a profit in the fund. In the early years also t will be reduced by various transitional provisions. Perhaps before leaving Part II should say that provision is made for an annual report to Parliament, and also for annual accounts which will be considered and reported upon by the Comptroller and Auditor-General in the usual way.
Part II of the Bill, together with Schedules 2 and 3, contains the Commission's powers of acquisition, management and disposal of land. The Commission will be able to buy, by agreement, any land which in their opinion is suitable for development. Their powers to buy land compulsorily are however subject to limitations. As I have already said, before a compulsory purchase order can be made there must be a planning decision indicating that development of the land is appropriate. The Bill thus ensures that
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compulsory acquisition powers can operate only within a framework of decisions by the planning authorities and that the Commission does not supersede the existing planning system.
The Bill confers on the Commission comprehensive powers of compulsory purchase which will enable them to acquire any land on which there has been a planning decision, but until a date appointed by an order approved by both Houses of Parliament the compulsory powers of the Commission will be limited to the purposes set out in subsection (4) of Clause 6. In the first stage, therefore, the Commission's powers of compulsory acquisition will be limited to four purposes—namely, the acquisition of, first, land which in the opinion of the Commission ought to be acquired by the Commission in order to secure its early development or redevelopment; secondly, land which in the opinion of the Commission ought to be acquired by the Commission, in order to secure its development or redevelopment as a whole; thirdly, land required by a public authority possessing compulsory purchase powers for the purpose of its functions; and, fourthly, land which is to be disposed of to housing associations or through local authorities or directly on concessionary terms for private housing.
These provisions, which are all in Clause 6, define the limits on the Commission's activities. The power to buy d compulsorily in order to secure its ly development is the essential support to the levy. Here the two functions of the Commission are most closely related. It is very difficult to forecast with certainty what effect the levy will have on the market in land. It is to be hoped that, at the moderate level at which the levy will start, it will be sufficiently accepted by landowners as reasonable for it to have little effect on the market. But, as I have already explained, the Commission must clearly be able to cope with any difficulties that may arise in the supply of sufficient land to maintain the essential building programme.
The other purposes for which the Commission can use compulsory purchase powers will enable them to buy land for large-scale comprehensive development, whether it is urban land requiring redevelopment or urban land required for some major development, like a new town

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or town expansion, or a substantial area of land which needs to be brought into development on the boundary of an existing town. They can also act on behalf of local authorities or perhaps groups of local authorities or other public authorities—but, as I have already said, normally only with their consent or at their invitation—or can buy in order to provide land for concessionary disposals for private housing, on which I shall have more to say later.
I should like to deal specially with certain procedural questions which have attracted some attention in another place. First, under Clause 7 the Commission will follow a procedure which is half-way between that appropriate to a Minister and that used by a local authority, but the procedure follows closely and applies the provisions of the First Schedule to the Acquisition of Land Act 1946, which governs virtually all compulsory purchase powers by other bodies. In form the Commission's compulsory purchase orders will be like those made by Ministers who have compulsory purchase powers for their own functions. The Commission will make a draft order. If there are no objections to it, the order will then be made and become operative. In this the procedure follows the adaptations in Part II of the First Schedule to the 1946 Act which applies to Ministers. If, however, there are objections, the Commission are treated in much the same way as any other subordinate body like a local authority and an order requires ministerial approval. When a local authority makes a compulsory purchase order it requires confirmation by a Minister before it becomes operative, whether or not there are objections. In the Commission's case, the reference to a Minister is necessary, as I said, only if there are objections, but in that event the Minister must give his authorisation before the Commission may make the order. The procedure under which the Minister may make an authorisation is virtually identical with the procedure under which a Minister confirms a compulsory purchase order made by a local authority. The Minister must give the objector an opportunity to be heard generally at an inquiry, and must then consider the objection and the report of the person who held the inquiry before
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deciding whether or not to give the authorisation. The rights of the individual are therefore as fully protected under this procedure for the Land Commission as they are in any other compulsory purchase.
Clause 8 and Schedule 2 provide, however, that in certain circumstances this procedure can be modified. It is intended only to enable the Commission, in exceptional circumstances, to act quickly—if, for example, the supply of land for development failed on such a scale as seriously to threaten private development. It is not envisaged that this is a procedure which would be applied to an individual case. In the circumstances in which it would be applied there would be a need for the Commission to make a number of compulsory purchase orders, and this could impose such a burden on the normal machinery for holding inquiries that the delays could be intolerable. This clause and Schedule, therefore, provide for a shortened procedure in which the requirements relating to advertisement and the services of notices are curtailed—but by no means removed—and objections can be considered without the obligation upon the Minister to grant a hearing. A similar power was provided in the Acquisition of Land (Authorisation Procedure) Act 1946, and during the five years in which that power was available it was used fairly widely without causing any significant criticism. It necessarily involves some curtailment of the landowner's opportunities to elaborate on his objection but it does not absolve the Minister in any way from the obligation to consider the objection. There has been much misrepresentation about this matter in another place, and I therefore repeat that the Minister, under this procedure, is obliged to consider the objection and there is no question of any land being taken from anyone compulsorily without his having full opportunity to object. He can state his objections at length in writing.
I repeat that this is very much a reserve power. It comes into effect only with a ministerial order which would be limited in time; it would be confined to those parts of the country where Ministers were satisfied that it was needed, and would also be confined by Ministers to the classes of compulsory purchase order for

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which it was essential. The power would not be invoked unless Ministers were satisfied that the Commission was confronted with a very serious situation. The Government hope, and indeed expect, that landowners will act reasonably and will not withhold from the market land which is clearly needed for development. But the Government would be failing in their duty if they did not take powers to ensure that in the event of an organised withholding of land the essential development of the country would be able to continue. The Government think that if this situation arose it would be likely to do so in the early years of the Commission. The powers under Clause 8 and Schedule 2 will therefore be available only within the first five years after the first appointed day, unless that period is extended by both Houses of Parliament.
I would also draw specific attention to the vesting procedure in Clauses 9 and 10 and Schedule 3. This matter also has been the subject of some misrepresentation. The procedure is based upon the expedited completion procedure which has been available for certain compulsory purchases by local authorities since 1944; that is, for 22 years. Under the normal compulsory purchase order procedure, a local authority can enter on, and take possession of, land within two or three weeks after the confirmation of a compulsory purchase order, without waiting for compensation to he settled or for title to be investigated. The local authority has de facto possession: the owner is dispossessed and the local authority can build its houses or schools and use them. However, until compensation is settled and the land is formally conveyed, the local authority does not have a good title and would not therefore be able to dispose of it to a private purchaser. The expedited completion procedure first made available in 1944 was designed to enable a local authority that was buying land for redevelopment, and therefore primarily for re-disposal, to get a good title to the land more quickly. The Commission will always be in this situation. Their function is to buy land for the purpose of re-disposing of it, and, except where they are deliberately buying land well in advance, they will want to dispose of land as soon as possible after buying it.
But there is another, more important, advantage in the vesting procedure. The vesting declaration gives the Commission
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an unchallengable title, and any subsequent purchaser from the Commission does not therefore have to investigate the Commission's title. This saves the time of scarce lawyers acting both for the purchaser and for the Commission on disposals by the Commission. It also removes the need for the Commission to employ lawyers to investigate the title of the vendor in order to ensure that the Commission have acquired a good title. The vendor's title is of significance only in determining his entitlement to compensation. Investigation of title can lead to considerable delays, not least the receipt by the vendor of his compensation. The Ministry of Transport, who have considerable experience of paying compensation before investigation of title, have found however, that, in practice, vendors of land very seldom claim title to more than they own or fail to disclose encumbrances. It is therefore proposed, in the interests of efficiency and saving of scarce staff, that the Commission shall not normally investigate title before paying compensation. The vendor will be invited to arrange for his solicitor to set out a declaration of his title—and the vendor's solicitor's fees for this will be paid by the Commission—and compensation will be paid on the strength of this. The Commission will, however, have a reserve power of recovery in the unlikely event of too much compensation being paid—because, for example, of a failure by the vendor to disclose an encumbrance or because the vendor claimed title to land which was not in fact his.
This procedure does not in any way deprive the owner of his rights. He cannot be dispossessed any more quickly than under the normal procedure whereby an acquiring authority can enter on land quickly. It does not in any way affect the right of the owner initially to object to compulsory purchase. It is concerned only with the procedure after a compulsory purchase order has been made, but it has the great advantage that, because the lengthy operation of investigation of title by the solicitor to the Commission is dispensed with, it will in most cases be possible for compensation to be paid much more quickly, and will very substantially reduce the administrative burden on the Commission and the demands which the Commission would have to make upon the scarce supply

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of solicitors. As your Lordships may know, the Law Society estimate that they are 5,000 solicitors short, which is 25 per cent., and there are 30 jobs waiting to choose from for every newly qualified solicitor.
I come now to the Commission's management and disposal functions, in Clauses 12 to 21. The Commission will have all the powers necessary to enable them to manage land efficiently while it is in their possession, including power to carry out works, such as the lay-out of estate roads or the provision of services. They will have a reserve power, but only with Ministerial consent, for the provision of houses, but I will deal with this when I come later to crown holds. Subject to this, it is not envisaged that the Commission will normally undertake substantial development. They will normally dispose of land for development by others. But, in so far as the Commission do undertake any development, although they are a Crown body, they will be subject to building by-laws or regulations and to planning control. In disposing of land the Commission have the widest discretion. They can, for instance, dispose either of leasehold or freehold interests. In disposing of land to public authorities, the Commission will normally dispose of the freehold; they will probably do so also if they are disposing of land to a builder for private enterprise housing. They will be expected, when disposing of land, to obtain the best price they can, unless they are disposing of a concessionary crownhold interest, or otherwise are authorised by a direction of the Ministers to do so.
I turn now to the provisions in Clauses 17 to 21 which deal with crownhold. A principal objective of the Government's land policy, as set out in the White Paper, is the return to the community of a substantial part of the development value which the community itself has largely created. The main instrument for this will of course be the levy. But when the Commission are disposing of land it would be inconsistent with this objective if the Commission were not able to reserve the right to any future development value which may accrue to that land. The Commission will therefore, when disposing of land, whether on a freehold or a leasehold basis, have the
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power to impose such restrictions upon the future use of the land as will enable them to retain the element of value attaching to the prospect of development other than that for which they are disposing of the land. Thus, for example, the Commission might sell freehold a plot of land for the erection of houses, but subject to a restriction against development for anything other than houses. If, at some time in the future, the question arose of the houses being demolished and replaced by shops which would be a more valuable use and would therefore release development value, the Commission, by enforcing their covenants, could ensure that the whole of the additional value atributable to the shopping use returned to the community. The special points about crownhold covenant are that they will be enforceable by the Commission even though the Commission may hold no land which can show benefit from that covenant but that, unlike covenants in a lease which are enforceable by a right of forfeiture, they ensure that whenever they are enforced the crownholder retains the full value of the land for the purpose for which he originally bought it from the Commission. In other words, a person buying a house subject to a crownhold covenant cannot be deprived of the value of that house so long as it exists.
The second purpose of crownhold is to help prospective owner-occupiers of houses. Clause 18 enables the Commission to dispose of land for housing at a concessionary price—a price below the market value. This is one of the ways in which the Government propose to help a person who wishes to provide his own house or to help agencies which set out to provide houses for owner-occupation. The difficulty about a concession of this kind is to ensure that the benefit goes to the person for whom it is intended. If land is just sold at a price below market value without control, the concession can be realised—and indeed would be realised very quickly—either by going merely to swell the builder's profit or by being taken on the first resale. Clause 18 therefore provides that when land is disposed of for housing at a concessionary price it will be done so subject to crownhold covenants which will include a right of pre-emption to the Commission, thus ensuring that the Commission can

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recover the concession, but only the concession, that they have made. The Commission will be able to dispose of land on concessionary crownhold terms direct to the person who is to occupy the house, and they can either do so by disposing of the plot or they can, with the consent of the Minister, build the house and dispose of that, or the Commission can dispose of land to a body which can undertake to police the further disposal to individual owners. In practice it is expected that the Commission will normally dispose of land on concessionary terms to housing associations or societies or co-ownership groups whose rules will ensure that the benefit of the concession in the price of land, is indeed passed on to the occupants of the houses. It is not envisaged, however, that the concession would be made to bodies who are otherwise in receipt of a subsidy.
I have dealt at some length with Parts I and II of the Bill. I do not propose to deal in any detail with Part III. The 59 clauses in Part III, together with 10 of the Bill's 17 Schedules, are concerned with the levy on development value. The clauses and the Schedules are unavoidably complex, but the basic ideas are really quite simple. There are three basic principles attaching to the levy: first, it will be charged only on development value and not on any increases in the value of the land for its current use; secondly, development value on which levy has been paid will not be chargeable again, and, thirdly, levy will be payable by the person who realises the development value. Your Lordships may remember that in the Act for which my noble friend Lord Silkin was largely responsible the development charge always fell on the person who developed the land. Development value will normally be realised by the person who sells the interest in the land, and the levy will he assessed on the actual price paid. A disposition of land by inheritance or gift will not be charged to levy; but, of course, if it were followed by the development of the land, the value then realised would be charged.
Once the levy comes into operation it is intended to provide by next year's Finance Bill that capital gains for the purposes of the long-term capital gains tax, or for the purposes of corporation tax, will be limited to gains in the current
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use value of land and will cease to bite on development value. The levy will thus become the Government's main instrument for dealing with development value, which will not be subjected to both levy and capital gains tax. There are certain transitional circumstances in which levy might apply to a value which was otherwise subject to capital gains tax, and this matter is unravelled by Schedule 8 to the Bill which provides for any capital gains tax paid in these circumstances to be deducted from the liability to levy.
The levy is a flexible instrument which can be varied according to the supply of land and the Commission's ability to ensure sufficient land for development. It has been announced in the White Paper, and the Minister has given a number of assurances, that the levy will be set initially at 40 per cent., but it will be increased progressively to 45 per cent. and then to 50 per cent. at reasonably short intervals. Such rates of levy still leave very substantial incentives for development, and considerable care has been taken in working out the provisions to minimise the possibility of unfairness on any individuals, and also to minimise the possibility of interference with the operations of the market and the progress of development. Thus, for example, levy applies after the sale of land and is taken out of the proceeds. The conveyance of land does not have to be held up until levy is assessed—indeed, levy cannot be assessed until after the conveyance has taken place.
So far as development is concerned, the only obligation before the start of development is to notify the Commission, and development can then proceed while the liability for levy, if any, is determined. As I have already said, in many cases no levy will arise at development because it will already have been taken on a previous disposition. Indeed, there is a specific provision that where land has changed hands at arm's length in the full knowledge of planning permission for the project of development that is to be carried out, if the Commission are satisfied with the terms of the disposition, there will be no need for any notification or assessment at the start of development, provided that it takes place within two years of the disposition.
I have spent some time on the principles of Part III of this Bill to which your Lordships are now being asked to

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give a Second Reading. If I have not spent more time on the details of Part III it is partly because on Second Reading the House is concerned more with principles than with matters of detail, and partly because if Part III had been, as it might have been, put into a Supply Bill, it would not be the practice of your Lordships' House to amend it.
Part IV of the Bill, as I have said, contains general and supplementary provisions. In particular, it contains in Clause 99 the definitions and interpretations. The most important of these, of course, is the definition of "material development". This is significant for two purposes; first, the powers of compulsory purchase of the Land Commission relate only to land which is suitable for material development; secondly, development value to which levy applies is the value arising from the prospect of material development, and no levy will apply to increases in current use value which is the value which land has if any planning permissions for any material development are disregarded.
"Material development" is defined negatively; in other words, it is defined by development which is not material. Very briefly, development which is not material is any development covered by Schedule 3 to the Town and Country Planning Act 1962 (subject to one minor qualification); secondly, any development which is permitted under the General Development Order, and, thirdly, any development specified in regulations made under this clause. The effect of these definitions is that it is only substantial development that is caught; in other words, the erection of new houses, shops, offices or factories or substantial changes of use: for example, from a house to an office. The owner of a house can extend it very considerably—indeed by as much as 1,000 square feet, which is roughly the equivalent of a typical council house—without this constituting material development. The definition of "material development" has deliberately been made wide in order to prevent the Commission from being cluttered up with the need to assess levy in many minor cases.
The Bill also provides that it is only when the development value realised is greater than 10 per cent. of the current
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use value that any liability for levy can arise. This is also a provision to prevent unnecessary assessments of levy and to ease the impact of levy on redevelopment. Here I quote two sentences. The first is:
"Land which is essential to the free and healthy development of towns is being kept out of the market in order to enhance its value."
Then:
"The growth of the value of urban sites is due to no expenditure of capital or thought on the part of the ground owner, but entirely owing to the energy and enterprise of the community."
That quotation is from cols. 532 and 536 of the House of Commons OFFICIAL REPORT of April 29, 1909, from Mr. Lloyd George.
As your Lordships know, my noble friend Lord Silkin's Town and Country Planning Act 1947 was dismantled by the Conservative Government in 1953. Since then building plots in London have risen in price from about £400 to £2,000. Even in the two years from 1963 to 1965 the price of building plots in the Swindon-Oxford-Newbury area has often more than doubled. In the Cambridge area since the dismantling of the 1947 Act, and particularly between 1958 and 1964, the cost of building land has risen from between £500 and £1,000 an acre to between £5,000 and £20,000 an acre. A former Conservative Member of another place has frankly recountered how he bought 173 acres for £36,000 and then sold three of those 173 acres for £18,000. As your Lordships may remember, in the Lavender Hill case land bought for £7,500 was resold two years later to the Enfield Council, who simply had to have it to house their people, for £240,000. It is now being claimed that, as the Enfield Council ultimately entered on a rather bigger scheme of development with flats, the sellers are entitled to at least another £150,000.
My Lords, for too long the property speculators have bled white those of our people who have wanted a home to live in, at a price or at a rent they could afford. I commend this Bill to the House as a means by which this racket will be ended—and about time, too! I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)

VISIT OF MR. KOSYGIN
3.50 p.m.
LORD CHAMPION: My Lords, this might be a convenient moment for me on behalf of my noble friend the Leader of the House, who unfortunately is unwell, to repeat a Statement which is being made in another place by my right honourable friend the Prime Minister. His words are:
"As the House knows from the Communiqué at the end of my visit to Moscow in February, I invited the Chairman of the Council of Ministers of the Soviet Union, Mr. A. N. Kosygin, to visit this country as the guest of Her Majesty's Government. Mr. Kosygin expressed his thanks for this invitation, which he accepted; and I am now glad to be able to inform the House that it has now been agreed that Mr. Kosygin will arrive in Britain for an official visit on the 6th of February, 1967."
My Lords, that concludes the Prime Minister's Statement.
LORD CARRINGTON: My Lords, I am sure it would be the wish of everybody in the House to send a message to the noble Earl, the Leader of the House, that we hope he is not seriously ill but will be back very shortly in his accustomed place.
SEVERAL NOBLE LORDS: Hear, hear!
LORD CARRINGTON: Equally everybody in the House will welcome the news which the noble Lord, Lord Champion, has just given to the House. These visits are always a good thing, particularly those by Communist leaders who come to London and see how we live. I am sure that all noble Lords will hope that the visit will be both fruitful and successful.
LORD OGMORE: My Lords, on behalf of my noble friends on these Benches, I should like to associate myself with the two messages which the noble Lord, Lord Carrington, has suggested should be conveyed.
LORD CHAMPION: My Lords, my task is an easy one. I will, of course, convey the messages which have been given by the two noble Lords, and I thank them both for what they have said.

LAND COMMISSION BILL
3.54 p.m.
Debate on Second Reading resumed.
LORD BROOKE OF CUMNOR: My Lords, I feel sure that all your Lordships who have been addressing your minds to the better comprehension of the Land Commission Bill over the last few days will wish to join with me in thanking the noble and learned Lord the Lord Chancellor for his lengthy and painstaking exposition of this Bill. I would differentiate only about the last few sentences of his speech, which appeared to me to import a good deal of political prejudice into what is, in any case, an extremely difficult subject, even if approached wholly impartially. I am quite sure that as we continue our discussions on this Bill we shall find it helpful to return and examine the noble and learned Lord's speech.
I hope he will not think it disrespectful of me, because I assure him it is intended as a compliment, to say that he made the best of a bad Bill. I could not help contrasting in my mind the presentation of this Bill by the Government with the protestations which were made by the Government not so many months ago about the necessity for simplifying the law of the land and the importance of setting up a Law Commission to do so. Having worked as hard as I can on this Bill, I have modestly, but regretfully, come to the conclusion that I have not yet reached the degree of intellectual acumen that is required for membership of your Lordships' House. The noble and learned Lord was good enough and wise enough to say that it seemed to him that the Bill was rather complicated. If, indeed, in the opinion of the Government this is the way to make the law intelligible to the general public, I must be grossly underrating the ability of the public to understand the legislation which this Government are bringing forward.
May I, for example, invite your Lordships' attention to one or two of the passages of this Bill? I will trouble your Lordships with only a single sentence, which I should like to read:
"If the operative provision in question is paragraph 8, then for the purpose of calculating the appropriate deduction paragraph 19 or, as the case may be, paragraph 21 of this Schedule

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shall apply as if the taxable disposal which occurred had been the first separate disposal and not the relevant taxable disposal, and accordingly as if—

(a) in paragraph 19 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which accrued on the taxable disposal in question were a reference to so much of the chargeable gain which accrued on the relevant taxable disposal as is properly attributable to the first separate disposal, and

(b) in paragraph 21 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which would have been taken to accrue on the taxable disposal in question if the assumed tax condition had been fulfilled in relation to it were a reference to so much of the chargeable gain which in those circumstances would have been taken to accrue on the relevant taxable disposal as is properly attributable to the first separate disposal."

That is sub-paragraph (2) of paragraph 23 of the eighth Schedule to the Bill. When your Lordships have taken that fence, you will find paragraph 24 of Schedule 8 an even stiffer one. Seriously, I am bound to ask the Government, what are the reasons for the extreme complexity which is the very essence of this Bill? The noble and learned Lord sought to excuse it by referring to the length of the Town and Country Planning Act 1962, which, he said, was a Conservative Act; but, unless my memory plays me false, that in fact was a Consolidation Act which caught up together the legislation of many previous Governments of different political Parties, including what remained of the 1947 Act which was piloted by the noble Lord, Lord Silkin. Therefore I think the comparison was hardly a fair one.
The White Paper states the purposes of this Bill. The Government want to do two things. First, they want to tax profits made from the increased value accruing by the grant of planning permission. The Lord Chancellor said that there was something special about development value, and that value attached to land by the right to develop it has been partially created by the community. That word "partially" covers a wide range. I grant that in certain cases it may be largely created by the community. In others, it has not been created by the community at all to any perceptible extent. It is fallacious to suggest that one equitably deals with this very difficult matter of value created by
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the community by imposing a standard charge, whether it is 40 per cent. or 45 per cent. or 50 per cent., on every case of value added by a planning permission. Personally, I think there is a lot to be said for continuing to make efforts to tax the increment of value created by a planning permission. Indeed, one might have had a workable tax or levy a good many years ago had it not been for that disastrous decision by the Labour Government of 1947 to impose development charge at 100 per cent. It was not the fact of the charge, but the fixing of the development charge at 100 per cent., which halted development just at the time when the national interest called for development to be vigorously encouraged. The result was that within six or seven years the charge had to be abolished.
LORD SILKIN: My Lords, may I ask the noble Lord one question? I am not challenging that it was a bad decision, but it was done by regulation. Why did not the noble Lord's Government make a fresh regulation reducing the 100 per cent.?
LORD BROOKE OF CUMNOR: It is difficult enough to discuss the Land Commission Bill 1966. I really think that I should not be assisting your Lordships if I were to give you my views on the Town and Country Planning Act 1953.
LORD SILKIN: I thought you were doing so.
LORD BROOKE OF CUMNOR: I shall not, at any rate, do so on this occasion. I cannot help wondering whether Part III of this present Bill will last as long as the 100 per cent. development charge in the 1947 Act. I cannot help thinking that likewise a time will come, and will come fairly soon, when it is seen to be unworkable.
Of course, in contrast with those days twenty years ago and with the days of the Uthwatt Report, we have now an overall capital gains tax, and I am bound to say I did not find the explanation of the noble and learned Lord the Lord Chancellor wholly convincing as to the reasons why the taxing purposes of this Bill could not have been sufficiently achieved by suitable application or modification of the provisions of the capital gains tax. There is no inherent virtue in devising an extra new tax. It

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does not lead people to say how clever or how just you are. Indeed, I should have thought that the present Government would have learned that by now by experience, from the public reception of some of the additional taxes which they have invented.
I hope—and I think that in expressing this hope I am speaking not just for noble Lords whose approach to this Bill may be a Party political one, but for all noble Lords and a great many interested people outside in the country—that the Government will, in the course of our proceedings, explain much more carefully why they preferred not to adapt an existing tax and why they chose so gravely to complicate the law by inventing a new tax, which at one swoop adds 134 complicated pages to the law—134 out of the 189 pages of which this nearly unintelligible Bill consists.
The noble and learned Lord the Lord Chancellor said that if Part III had been presented as a separate Bill it would have been a Supply Bill, and it is not customary for your Lordships' House to amend Supply Bills. But, of course, the fact is that it has not been presented as a separate Bill, and I am sure that the noble and learned Lord is as well aware as I am that there are precedents for your Lordships' House seeking to amend a Part of a Bill which, though concerned with finance, nevertheless has not been presented as an independent Supply Bill.
The second main purpose of this Bill is to ensure that land is available at the right time and in the right quantity, and to enable land to be bought for public purposes in advance of requirements. I think all of your Lordships would in principle endorse that object, too. As to buying in advance of requirements, not only New Towns but urban redevelopment may call for that. But when the authorities concerned already have compulsory purchase powers, it is necessary for your Lordships' House to ask why they could not be allowed to carry on and use those powers. This Bill, in fact, authorises the Land Commission to duplicate all the existing compulsory purchase powers of authorities. From time to time Parliament has reviewed those powers and in carefully defined directions has extended them, but one cannot help asking precisely what further compulsory acquisition purposes are to be pursued
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under this Bill; whether there is any real statutory limitation on them, or whether we are simply to trust that the Land Commission will use their enormous powers wisely.
Here may I extend my own good wishes, and I hope the good wishes of the whole House, to the newly appointed Chairman-designate of the Land Commission, who is to take up these massive duties if the Bill reaches the Statute Book. I am sure that the Government were wise to choose somebody who has his great experience in these difficult property fields.
I have read the Reports of the debates on this Bill in another place, as, quite clearly, the noble and learned Lord the Lord Chancellor has, and I noticed how often Ministers accused the Opposition there of being suspicious. But if adequate powers already seem to be present in the law, and a new body is appointed to exercise them, is it not natural to inquire with some care precisely what else this new body is going to do? If one's wife normally has £15 a week for housekeeping, and one week says that she must have £50, is it unusually suspicious of her husband to inquire exactly why she wants an extra £35? This is what your Lordships have to try to find out.
Are the Land Commission to be free to buy compulsorily any developable or redevelopable land they like, without stating any purpose? I think they are, and that when they have bought it, even if they have stated the purpose, they can then use that land for a completely different purpose from the one on which they based their decision compulsorily to acquire. The noble and learned Lord explained that the £45 million was merely working capital, and that in fact they would have a kind of revolving fund replenished by their trading activities and disposals of land. That leads me to wonder whether there may be any effective limit on the Commission's rapacity, if I may use that word in respect of a body on which Parliament seems to be imposing such very slight restraints.
I cannot myself see what is to prevent the Land Commission from acquiring as quickly as they possibly can all land which is capable of development, wherever it may be. When the Commission have deprived the present and legitimate

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owners of their land or their homes, without giving any reason, they can sell again at any price they like, if they sell by way of concessionary crownhold, to anybody they like, and the Commission themselves will decide independently and, so far as this Bill is concerned, entirely arbitrarily who shall receive their favours.
I noted that the noble and learned Lord explained that, at any rate in the first instance, the Land Commission would sell by way of concessionary crownhold only to housing societies and the like, but there is nothing at all in the Bill to limit their activities to that. This seems to me in rather sharp contrast with what the noble and learned Lord said as regards Part III of the Bill, when he told your Lordships that the Minister has preferred to spell matters out rather than to deal with them by regulations. With regard to concessionary crownhold, there are no regulations and no spelling out. It is left completely to the discretion of the Commission.
This also appears to be a Bill to legitimise Crichel Down action. I can remember in my political experience few events which enraged the country generally so much as the revelations on Crichel Down. After that, the Conservavtive Government laid down elaborate principles to ensure that, except in certain fairly rare types of cases, if land which had been acquired compulsorily or under threat of compulsion was no longer required for a public purpose, it should be offered back to the original owner. I can find nothing in this Bill that would so confine the Land Commission, or would require them to sell back to the original owner, from whom they had acquired land compulsorily, land which in their opinion was no longer required for the original or any other purpose. I trust that, while this Bill is going through the Committee stage, your Lordships will inquire very searchingly into that.
Broadly, it seems a pity that a Government plan to achieve certain purposes which in themselves are widely acceptable among all Parties and all sections of opinion should, in the drafting of this Bill, be extended to almost unlimited powers which, frankly, will be abhorrent to the citizen as soon as he discovers what they are. It is going to be extremely
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important to your Lordships that we should distinguish carefully between what happens after the first appointed day and what happens after the second appointed day. Most of the purposes for which the Land Commission can acquire land before the second appointed day seem quite reasonable, but the purposes open to them after the second appointed day are wholly unacceptable. After the second appointed day, anyone who tries to improve his property will lay himself open to having it taken from him. I should be grateful for the Government's comments later on that statement of mine. If it is not correct, I hope the noble Lord, Lord Kennet, will correct or limit it; but certainly, as I read the Bill, anyone who tries to improve his property after the second appointed day will lay himself open to having it taken from him.
The likely result of that, in the first instance, is a strong discouragement to develop—exactly what happened after 1948. Even the noble and learned Lord, the Lord Chancellor, went so far as to say that it was very difficult to forecast what effect the levy will have on the market in land. I wish the Government had made more effort seriously to study and forecast that before bringing in this Bill. But if the owner is discouraged from going forward with his own development plans—if, indeed, he does nothing—and the Land Commission then think that his property is capable of improvement, he may find it taken from him just the same. The theory appears to be that you discourage the existing owner from improving his property on the supposition that someone who has never owned it before will, if he can get hold of it, develop it better. This is the odd logic of Socialism, and I simply cannot understand it.
On a particular point, I wonder whether the Government would be good enough to define more closely the relationship between the Land Commission and the planning authority. I appreciate that the Land Commission themselves cannot give a planning permission; and the noble and learned Lord assured us, although it is not very easy to read this in the Bill, that the Land Commission cannot themselves develop without being covered by planning permission. If, in the Land Commission's opinion, land is suitable for material development in accordance with Clause 6 but no planning permission exists, and if there is no allocation in

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the development plan for a more fruitful use, will the Land Commission themselves apply to the planning authority for permission to develop, or will they have to hold off, or what?
I would now invite your Lordships' attention to Clause 8. It has hitherto been accepted that no one should be dispossessed of his home or his property without the right to object and to state his objections at a public inquiry or at a private hearing. That has been the case with very few exceptions throughout our history, and those exceptions have been in very special times. That has been universally accepted. Socialism now wishes to destroy this, as I thought, elementary right of the citizen. When Clause 8 is brought into play, the noble and learned Lord assured us, the owner's objections will be considered, but he will have no right to present them himself or through his counsel. He will have no right to claim a public inquiry. He will have no right to claim a private hearing, even, by someone appointed by the Minister. I cannot help wondering what would have happened if, when I was Home Secretary, I had sought to enact that, because there were serious arrears in the criminal courts and it was very important to speed up the discharge of business, accused persons should no longer be allowed to defend themselves or have themselves defended in open court. This seems to me to be what is happening here; and if one makes that comparison—and I think it is a fair comparison—one sees the enormity of this proposal.
The noble and learned Lord assured us that this power would not be used in the individual case. But it seems to me almost more breathtaking that this power might be used for a whole generality of cases, perhaps for a substantial area of the country, perhaps for the whole country, because the Land Commission were getting behind in their acquisition of land for development. It surely will be a serious charge against the efficiency of the Land Commission if their own planning and operation is so faulty that they allow a situation to arise in which such a shortage of available land develops. But if they do, clearly the fault will lie with the Land Commission themselves; and a very strong case will need to be made before
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that elementary right of the owner can be removed from him.
Under Clause 8, as I read it, the Minister may make an order that all compulsory purchase orders shall henceforth be brought within this special procedure—and I would ask your Lordships to note that that order does not even require the Affirmative procedure in Parliament. It goes through unless it is successfully challenged in either House. It was stated in another place that under Clause 8 the Land Commission could take away anybody's home within 28 days without any obligation to offer the occupant alternative accommodation. If this is in fact a misreading of the Bill, if the Government say this is impossible, may I ask them to explain in detail what there is in the Bill to make it impossible and what kind of assurances they are prepared to give that, under this Bill, the individual citizen will not be liable to be treated as disgracefully as it appears to be threatened he will be?
I come now to Clause 18, which deals with concessionary crownhold dispositions. Like the noble and learned Lord, I am not attempting to deal with every clause. I know that the proceedings on this Bill will be long, and that many noble Lords wish to speak to-day; and I expect that by the end of the debate we shall have covered most of the controversial provisions of the Bill—although, I fancy, not all of the unintelligible ones. The concept of concessionary crownhold in Clause 18 appears to be the only provision in the whole Bill which may in certain cases lower the cost of building land. In that case, it will do it by the very crude method of direct subsidy. This is not at all what the public have been led to expect. A year or two ago the Party opposite were claiming that they had a policy to reduce land prices. Indeed, it is said in the White Paper that one of the objects of this Bill is
"to secure…that the burden of the cost of land for essential purposes is reduced."
It is extremely hard to see any provision in the Bill that will secure that, except this one enactment in Clause 18 that will allow subsidy.
Frankly, I think that past talk about having a policy that will reduce land prices has proved to be nonsense. By

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taxing development, the Bill will, in general, increase prices, and the public are going to discover that; they can no longer be hoodwinked after the Bill comes into operation. As to Clause 18, I recognise that at first this power of subsidy is to be used only for building societies, co-partnership schemes and so on; but there is nothing in the Bill to limit it to them. Suppose a builder is negotiating to buy certain land for building houses. As I read Clause 18, there is nothing to stop the Land Commission from stepping in at that point, acquiring the land compulsorily and then selling it to a rival builder at a cut price. That cannot be right. I hope that the Government will not merely explain what Clause 18 is intended to do, but limit the powers, either in the Bill or by regulation, to ensure that everybody clearly understands that the Land Commission are not be allowed to act inequitably in such ways.
I should like to ask the Government a few more questions before sitting down. Why does the Bill provide that an owner may have to wait for six years before he can find out whether he has to pay a levy or how much levy he has to pay? Is it because the Government foresee the Land Commission being absolutely overwhelmed and falling into gross arrears, just struggling to be able to give decisions six years after the event in question has taken place? If we are to contemplate that kind of contingency, something is fundamentally wrong with the Land Commission as a whole and the concept behind it. Unless the Government are prepared drastically to reduce that permissible period of six years, this is the only conclusion your Lordships will be able to arrive at: that the Government are providing for the likelihood of this Land Commission falling far, far behind in their work. They are going to have an enormous amount to do. There was a clash in another place when a member of the Opposition suggested that the Land Commission would have to deal with over two million cases per annum. The Minister said in reply that that was a gross exaggeration and that in his opinion he calculated that it would not be more than one million.
If, indeed, it is going to be anything like one million, would it not be sensible
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for the Government from the outset to exempt quite small transactions from the levy? That has been accepted for years in the case of death duties. I can remember when all estates over £300 in total value were liable for duty. The Treasury have seen over the years the wisdom of modifying that and now estates up to £3,000 or £4,000 are exempt from death duty. Rather than allow the Land Commission to struggle into a position where it takes six years to say what levy is chargeable, it will be better to lighten their task from the outset by drastically relieving them from having to deal with all these small cases—cases which are never liable to give rise to public scandal. I do not really believe that the public would mind as much as apparently the Government imagine they would if, for example, an owner-occupier were allowed to sell his house without paying development levy.
Then what about those cases where development value accrues in cash to the owner only over a long period? As I read this Bill, the Land Commission can insist on payment of the levy in advance. Is the man to borrow from his bank in order to pay tax on money he has not yet received? Not a very long time ago the banks were told by the Government not to advance money to anybody for the payment of the selective employment tax. Is this a different category? In any case, it is surely inconsistent with present Government policy if people in this position are to be told specifically by the Government that they should borrow from the bank to pay the tax on money they have not yet received.
I pass to the position of charities. Hitherto, charities have been generally exempt from taxes. I think the House would be grateful if the Government would explain precisely how far Clause 57 exempts charities and how far it does not. Why should there be any limitation at all on the exemption granted to charities in this matter?
Speaking generally, it appears to me that the whole concept of this development levy is in practice going to give rise to a tremendous amount of uncertainty and that, as always, uncertainty will prove to be one of the grave disadvantages weighing against every attempt to collect any sort of betterment levy. The idea of a betterment levy is acceptable; but, to

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my mind, its practical application is so difficult and so uncertain that I doubt whether one will not create more injustice than justice by attempting to collect it. The noble and learned Lord said that there was a 25 per cent. shortage of solicitors, and we already know there is a shortage of valuers. He was good enough to explain that certain provisions in this Bill were designed to simplify the procedure in order to spare the professional people extra work. But the Bill as a whole is not going to spare them; the Bill as a whole is going to pile enormous new burdens on both solicitors and valuers. And one of the particular respects in which it will do that, quite apart from the sheer difficulty of the wording of the Bill, is the degree of untainty it is going to create.
The Land Commission will, as the noble and learned Lord admitted, require a very large staff. At this time when the Government say that we need a shakeout of men who are urgently required for productive and export industries, an extra 2,000 people—who, I should say, will need to be reasonably skilled people—will have to be put to these new tasks falling on the Land Commission, and something like £7 million a year in cost of staff and administration has to be faced. My Lords, I regard this as the worst piece of legislation to come before Parliament for fifteen years at least. Because it was produced in the last Parliament and was included in the programme on which the Party opposite won the last Election, I shall certainly not advise my noble friends to vote against it; but we will try constructively in Committee to make it a better Bill. If we cannot succeed in that, and if our Amendments are not accepted in another place, then I forecast that much of this measure, well-intended as part of it is, will suffer the same fate as the 1947 100 per cent. development charge did. It will get hated for itself, and public opinion will turn so strongly against it that hardly anyone, even in the Party opposite, will regret its demise when it is repealed by a Government with greater common sense and understanding.
4.30 p.m.
LORD WADE: My Lords, I should like to thank the noble and learned Lord who sits on the Woolsack for expounding the objects of this Bill. If anyone could
1102
persuade the House that this was a Bill worthy of support, it would be the present Lord Chancellor; but in spite of that, I am not persuaded. I will not compete with the noble Lord, Lord Brooke of Cumnor, in quoting from the Bill though I could quite well do so.
From time to time I take a Government Bill home to study over the week-end, and I took the Land Commission Bill home this week-end. I must say that it was the most difficult homework that I have had to tackle for a long time. The 189 pages, with 102 clauses and 17 Schedules, have varying degrees of complexity, but the matter does not end there. Unfortunately, one of the characteristics of modern legislation is that the longer the Bill, the more provisions there seem to be for regulations and for delegated legislation. It should be the other way round: if it is a long Bill, it should contain everything. Unfortunately, it does not work out that way, and here we have a number of provisions for regulations; and in addition, the discretionary powers to which the noble Lord, Lord Brooke of Cumnor, has already referred. The Bill has proved a headache for Members of Parliament in both Houses, but it will be even more of a headache for laymen and for professional people who will have to advise them and interpret the Bill. It may well be that professional advisers will be paid for this, but that does not alter the fact that it is unproductive work and will involve, also, a great deal of time and effort.
Furthermore, there will be the use of manpower in staffing the Commission. I do not know how many valuers will have to be employed, but at the present time there is a very serious shortage of valuers. Yet here they are being drawn away from other important work in order to take on duties for this Commission that is being set up. As we know, the rating revaluation is being postponed owing to the shortage of valuers. If, as an outcome of the Bill, there were to be a simplification of town planning procedures, and if, in fact, the right land would be made available at the right time; and if there were a recovery for the community of land values without discouraging development, it might be that the price in accepting this Bill would not be too high. But I do not see any real prospects of these objectives being achieved.

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Here, my Lords, I must introduce a personal note, because when the White Paper was first published (I think in September, 1965) I expressed the view that the Government's proposals might, by drastic amendment, be converted into something approaching a Liberal measure, and that possibly the proper course, when the Bill was brought before another place, might be to allow a Second Reading with a view to amending it. I think I am on record as having said that. But when the Bill was published I became convinced that it was quite impossible to convert it into anything like a reasonable measure which would be consistent with the policy which the Liberals have been advocating. In that sense I agree that it is unamendable.
The Liberal aim is to reform our town planning procedures, and the procedure for land acquisition; to simplify it in certain ways, and at the same time to ensure that the collection of part of the values created by the community was done in such a way that it would not deter development. I do not see how that can be achieved under this Bill. Furthermore, the Bill has a number of objectionable features as well as tending to discourage development. It was for that reason that Liberal Members of Parliament in the Commons opposed the Bill, both on Second Reading and on Third Reading; and I think that was the right course. The question arises in this House, what attitude should be taken to the Second Reading? I think that the responsible attitude would not be to vote against a Second Reading. After all the Bill has been passed by the Commons, and an important part of it has been designated as a Money Bill. Therefore I think that we must attempt in Committee to remove some of its worst anomalies.
Those remarks were by way of preface. It is reported that Mr. Gladstone, when addressing a large public meeting, and after speaking for an hour, paused for a moment and said, "Gentlemen, that was my preface". Well, my Lords, in this case one has to choose between making a detailed criticism of the Bill, which would involve a speech of Gladstonian length, or offering a few comments on the principles of the Bill and the main objections to it. I propose to follow the latter
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course. In the first place, I suggest that this levy is, in effect, a capital gains tax; and that for many firms dealing in development there will be three taxes to be considered and taken into their calculations when deciding what to do. There will be the corporation tax, the existing capital gains tax, and then there will be the levy. I suggest that this three-tier taxation is unnecessarily cumbersome. I am not arguing against the principle of collecting values created by the community, and, in particular, values which arise as a result of planning permission. I think the principle is sound; in fact, I advocated it for a long time.
In March of this year there was a very interesting conference in London, called a colloquium, organised under the auspices of the Acton Society Trust, which discussed the whole subject of land values. With the exception of myself, there was a very impressive gathering of experts. There were, of course, differing views on this subject of collecting l and values. The suggestion that there should be a Land Commission was put forward in one quarter, but I doubt very much whether, had this Bill been published at that time, a single voice would have been raised in favour of it. I came away from that conference convinced that the only way to collect land values without deterring development would be by way of a ground rent, payable annually, based on site value and rising and falling as the site value rose or fell, with the rent re-calculated, say, every five years. That would be fundamentally different from this present levy, which is, in effect, a capital gains tax imposed on certain specific events.
I cannot see any real merit in having two capital gains taxes—because that, in effect, is what will happen. I agree that it is not intended that there should be double taxation, but while much of what is in these very complicated clauses and Schedules is intended to prevent double taxation, there may nevertheless be some overlapping. Nor does it alter the fact that there will be three taxes, the corporation tax, the capital gains tax and a levy. It is an extremely complicated piece of legislation. Another objection, which has been referred to by the noble Lord, Lord Brooke of Cumnor, is that

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we shall have two entirely different bodies collecting the same kind of revenue, the Inland Revenue collecting income and other taxes and the Land Commission collecting the levy. This seems to me to be a bad precedent. I have listened to the words of the noble and learned Lord the Lord Chancellor on this point, but I still think that it is a bad precedent, and we are bound to ask why it has been introduced.
Some light was thrown on this in an article by Mr. Skeffington, Parliamentary Secretary to the Ministry of Land and Natural Resources, in the Building Societies' Gazette. In December, 1965, in an article in the Gazette, Mr. Desmond Heap, Comptroller and City Solicitor, City of London, criticised the proposals in the White Paper, among other things the suggestion that the levy should be raised and collected by the Land Commission. In reply, Mr. Skeffington said:
"One final point must be made in reply to this suggestion that development value ought to be dealt with by the Inland Revenue through the capital gains tax. I have already mentioned the risk that the levy may lead to land being withheld from the market and that, for this reason, the levy-collecting body must be equipped with compulsory purchase powers."
Earlier he had said:
"…we must also have powers to ensure that necessary development is not prevented by owners withholding their land on account of the levy."
That seems to me to give away the whole show. I am aware that the noble and learned Lord made somewhat similar observations. In effect, it means this. In this Bill, we are imposing a levy which it is thought will deter some people from developing their land or selling it for development; and, therefore, having imposed a levy which will deter development, we then set about adding additional compulsory powers to offset the effect of the levy introduced in the same Bill. On the one hand, we deter development; on the other, we introduce additional compulsory powers to offset that effect.
Again a number of anomalies may arise. These, of course, will come to light as we see how the Bill works out in practice. Take, for example, the case of a man who owns a piece of land and decides to build a house which he intends
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to use for his own occupation and to make it large enough for his wife's parents to live with him. As I understand it, in that case he may be exempt from levy. But suppose he decides that it would be better that his in-laws should live in another house and there is sufficient land available to build two houses, one for himself, his wife and family and another for his in-laws. He gets planning permission to build the second house and lets it to his wife's parents. If I interpret the Bill correctly, he will be liable to levy. But he may be so confused, and feel that it is all so unfair that there should be this levy, that he decides not to build on the land at all. In that case the Land Commission may come along and take the land away from him by compulsory purchase, because he has been deterred from developing by fear of the prospect of a levy.
Again, the levy is imposed under a number of different provisions and is somewhat of a hit-and-miss affair. It is true that there are a great many shots, in order to try to hit as many people as possible. Nevertheless, it is a somewhat hit-and-miss affair. We have Cases A to F set out in Clause 27. Case F reads as follows:
"On the occurrence on or after the first appointed day of such other acts or events relating to the land as are designated for the purposes of this Case by or under section 35 of this Act."
The clauses from Clause 28 onwards deal with each different Case—all lengthy clauses—until we come to Clause 35, which covers about one and a half pages, the effect of which is to enact that this matter will be decided by regulations. So that, in effect, Case F covers a variety of instances where the levy will be imposed as a result of regulations. We are going to have taxation by regulation. I should have thought that that was not very sound in principle.
It has been suggested in another place, but I do not think so far in this debate, that this may be a stepping stone to the nationalisation of land. That may be so. If it is, it is an extremely involved way of bringing it about. The objection to nationalisation, which has often been discussed over the last half-century, is a practical one—namely, that it would involve a large bureaucracy. It seems to me that under this Bill that we are creating a bureaucracy whether we have

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nationalisation or not. Coming back to the point which I made at the outset, I consider that we have to think of those who have to interpret and operate these proposals. It is an appalling prospect. It is legislation run riot. I do not think that the objectives to which the noble and learned Lord the Lord Chancellor has referred will be achieved, and I believe the people of this country will live to regret this Bill.
4.48 p.m.
LORD SILKIN: My Lords, I rise to speak on this subject with a nostalgic feeling. I seem to have heard all this before. I heard it twenty years ago, when the Town and Country Planning Bill was introduced in 1946. It would almost seem as if both noble Lords, Lord Brooke of Cumnor and Lord Wade, had gone back to that day, looked up Hansard and repeated the speeches that were made at that time. I well remember all the arguments that were then put forward. But the 1947 Act, as the Bill became, originated in the days of the Coalition Government, and was accepted by all Parties, particularly the principle of levying a development change.
Your Lordships may remember that that originated from the Report of the Uthwatt Committee, which was established during the war, in 1942, to examine the case for restoring to the community the whole or a portion of the values which it had itself created following the development of land and at that time there was almost unanimity on the levying of a development charge. The quarrel was as to the means, as to the method and as to the setting up of the so-called Central Land Board. We are hearing all this again to-day. I would not have referred to this to-day, but the noble Lord, Lord Brooke of Cumnor, thought it right to condemn the 1947 Act as being unworkable because of the 100 per cent. development charge, and contended, therefore, that the then Government were justified in 1953 in repealing that section of the Act. I thought it only fair to put the point to the noble Lord, that if the objection was to the 100 per cent. development charge—which is what he said: and he said that if it had been less it would have been workable—then why did not the then Government reduce the charge?
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The 100 per cent. charge was imposed not under the Act, but by way of a regulation, and I have never pretended that it was the right thing to do. When the right to develop had been acquired, it was logical to charge a corresponding amount; but it was not wise. I must take full responsibility for having imposed the 100 per cent. charge; and that I do. But when I write my memoirs, in fifty years' time, I shall explain how it came about. But I would ask this question of the noble Lord, Lord Brooke of Cumnor, and others who are going to make the same point: why did they not reduce the amount of the development charge, rather than abolish it altogether?
LORD BROOKE OF CUMNOR: My Lords, I cannot answer the noble Lord's question directly, because I was not a member of the Government in 1953. There is something in what he says. I think it is possible to make an arguable case in favour of reduction of the development charge in 1953, instead of its complete abolition. But I suspect the fact was that by that time development charge, being 100 per cent., had become so unpopular that it was felt by the then Government that no modification of the charge would achieve the result which almost everybody thought was desirable—that is, a drastic change to enable development to speed up.
LORD SILKIN: The noble Lord is conjecturing, of course, and I should not have thought that was a very good reason. The fact remains that the community had already paid for a good deal of this development value, and that was lost to the community.
But there is one other result that flowed from the abolition of the development charge at that time, and it is that since 1954 land values have enormously increased. I have made some inquiries as to the increase in land values, and I find that since 1954 they have gone up 500 per cent. In other words, all this increase in land values, which nobody can suggest has been created by the owners of land—the increases are due in large measure to the activities of the community—has gone into the pockets of the actual landowners. Had this Bill, or the 1947 Act, been in operation, the community would have been saved hundreds of millions of pounds every year, and

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land prices, cost of building and development would have been much less.
The noble Lord, Lord Brooke of Cumnor, finds it difficult to argue entirely against some kind of levy, but he thinks it would be more appropriate that it should be dealt with by means of general taxation or by means of a capital gains tax. Apart altogether from the question of administration (and I maintain that it would be much more difficult to deal with this matter through the ordinary tax machinery), I would suggest to the noble Lord that if it were dealt with through the instrumentality of the capital gains tax, an owner of land would be entitled to set off other losses which have no bearing at all on the question of land against the gains on land. It seems to me that this would be grossly unfair and quite out of accord with the general policy of this Bill.
A good deal of the criticism from the noble Lord, Lord Brooke of Cumnor, and the noble Lord, Lord Wade. consisted of detailed points about detailed items. I should be very glad indeed if those points were raised and discussed later, because there may he something in them. I think there may be something in the criticism of Clause 8 of the Bill; and there may even be something in the criticism about the difficulty of the clause which the noble Lord, Lord Brooke of Cumnor, read to the House. I would only say that a great deal depends on the way in which a clause is read. The noble Lord read it very fast, and naturally, in a Bill of this kind, which is technical in language, nobody could be expected to follow it read at that speed.
I congratulate both the noble Lord, Lord Brooke of Cumnor, and the noble Lord, Lord Wade, on doing the best they could with a bad job. But we have to accept the principle that a development levy is right. It is impossible to dispute the fact that the increase in the value of land as a result of planning permission is very largely due to the activities of the community. I see the noble Duke, the Duke of Buccleuch and Queens berry, here. He knows perfectly well that if he could get planning permission and develop 1,000 acres of his land he would make an even bigger fortune than he already possesses.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: My Lords, the noble Lord knows quite well that we develop our land intensively for agricultural and forestry production.
LORD SILKIN: I am sorry; I should not have directed my remarks to the noble Duke. But the fact remains that we all know from our own experience that agricultural land in England and Wales is worth something of the order of £200 to £300 an acre, and that if planning permission to develop can be obtained, even the least profitable kind of development is worth ten times that sum. It cannot be suggested that that increase in value, purely as the result of a grant of planning permission, justifies the owner's retaining the whole value of that increase. There may be other land adjoining which is not so treated, and the owner does not get the increase. The whole thing is a great gamble. Therefore I think we must accept to-day, as has been accepted for many years past, that it is right for the community to try to get back the increase in the value of land that is due to its own efforts. I think it is justifiable to look at this Bill to see whether it will succeed in that effort and whether the means by which it is proposed to collect the development levy are the best.
Some criticism has been offered against the setting up of a Land Commission to collect the levy. We had the same sort of criticism against the setting up of the Central Land Board in 1947. But I am sure it is right; I am sure it is not a duplication. It is essential that the body which is collecting the levy should also have the other powers of acquisition of land and so on, which are conferred upon it by this Bill. I think the noble Lord, Lord Wade, suggested that it would interfere with the powers of local authorities and others who already have powers of compulsory acquisition. But the fact is that it is not proposed that the Land Commission should carry out the powers of the local authorities. Local authorities wanting to acquire land will be able to do so without any interference from the Land Commission.
There are clearly numbers of cases where under existing legislation it would be quite impossible for a local authority to acquire land. The noble and learned Lord the Lord Chancellor has referred

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to the case of the landowner who would prefer to hold back his land and refrain from development in the hope—and the noble Lord, Lord Brooke of Cumnor, encouraged him in that hope—that there may be a future Government who would do the same as was done in 1953, the wisdom of which the noble Lord, Lord Brooke of Cumnor, now appears to doubt. But there may well be such owners of land, and it is right that the Land Commission should be in a position to acquire their land compulsorily if that land is really required in the interests of the community for development. That is something which could not be done by the local authorities under existing powers.
Moreover, the noble and learned Lord the Lord Chancellor stressed the fact that from the point of view of the economic interests of this country it was essential that we should be able to acquire land where it was needed and when it was needed. We have at the present time over a thousand local authorities, all empowered to acquire land. But their criterion is not to acquire it where it is most needed by the national interest: all they are concerned with is what is the interest of their own community. It is quite right that that should be so. But the concern of the Land Commission will be to take a much broader picture—a regional, or even a national picture—to see that development is carried out in places where development is most needed, and that there is not this competition for land between these thousand different local authorities. It is essential, if we are to carry out the general policy of redeployment of labour, that there should be mobility. As mobility of labour involves the building of large numbers of houses in places where employment is available, it is only by means of a Land Commission looking at the picture as a whole that such land can be made available for the purpose.
VISCOUNT GAGE: My Lords, I hope the noble Lord will forgive my interrupting, but he seems to be suggesting that the Land Commission will decide for themselves where the land is needed for the nation. As the Land Commission have no planning functions, could he explain how they will derive that knowledge?
LORD SILKIN: They will have to get planning permission, and I cannot conceive that any Land Commission would be allowed, quite irresponsibly, to acquire large areas of land all over the country without any kind of control by the appropriate Minister. They will have to get information as to where land is required for development, and it will be their function merely to secure that land.
Local authorities have not the power to acquire land on any substantial scale in anticipation of future requirements. I can say from my own personal experience that we have been saved hundreds of millions of pounds through New Town corporations being empowered to acquire land in anticipation. Each of the New Towns acquired some thousands of acres at a time when there was no development and no planning permission. If they had waited until the land was ripe and planning permission had been obtained, they would have had to pay much more, perhaps five or six times more, for the land than they did. When one multiplies that sort of case all over the country, one can well see what a tremendous advantage it would be for a Land Commission to be able to acquire land in anticipation. But that could not possibly be done by the local authorities. The kind of land which would be acquired would spread over many areas. It would not necessarily be confined to the area of a particular local authority, and we can be quite certain that if it were left to the local authorities it would not come about.
Nor have the local authorities the resources to enable them to acquire land in anticipation. They would have to borrow on a very large scale, and very few local authorities could afford to do that. For that reason alone it is essential to have a central body, a national body, available to acquire necessary land. Moreover, under Clause 62 of the Bill it is contemplated that assistance will be given to private builders and that there will be a limited exemption from the levy. Here again it would not be practicable to expect local authorities to do that.
I was glad that neither the noble Lord, Lord Brooke of Cumnor, nor the noble Lord, Lord Wade, referred to the argument about "creeping nationalisation." I had come prepared to deal with that argument but since they did not raise

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it, I will leave it. Perhaps one noble Lord will raise it again in some future speech. But it was made a good deal of in another place.
VISCOUNT GAGE: With reason.
LORD SILKIN: I have some excellent replies to that point, and it is a great pity it was not raised.
I will not indulge in criticism of the Bill or comment on any particular clauses of it. I am sorry that the noble Lord who is to reply is not here, but there is one matter I should have liked to mention and to have a reply to. Why are not the whole of the proceeds of the levy going to be entrusted to the Land Commission? I see that they are going to be able to deduct the levy in cases where they acquire land and in certain other cases, and they will be able to retain that money, but as regards the general levy, when development is about to take place, they are required to pay the proceeds into the funds of the Exchequer and there is no obligation on the Exchequer to treat that as being different from any other monies they acquire. Therefore these monies will be lost in the general revenue and treated, presumably, in the same way as tax derived from motor car licences, which originally was intended for road improvement. Would it not be far better if the whole of the proceeds of the levy were entrusted in to the hands of the Land Commission so as to ensure that they dealt with the whole of it in the way that was most appropriate?
I now want to say a few words about the unintelligibility of the Bill. It is stated to be vague and badly drafted, difficult, and impossible to follow, and that noble Lords have spent weeks in studying it without success. I am glad the noble Lord, Lord Brooke of Cumnor, did not say that it was wholly unintelligible, as was said in another place. Like other noble Lords, I myself have spent a certain amount of time reading this Bill. I am not going to pretend that it is not capable of improvement, but taking this Bill by and large and having regard to the complexities of our land system and to the desire to be fair and to deal with a larger variety of cases separately in the Bill, and having regard also to the fact that, as we know, in spite of the shortage of lawyers there must be law-
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yers who are busily engaged in seeing how the provisions of this Bill can be evaded, it was essential to get something that was watertight and tried to provide for every possible case.
I must confess that, while I would agree one cannot read this Bill like a novel, and certainly not at the speed that the noble Lord, Lord Brooke of Cumnor, read out one paragraph, I found it on the whole quite intelligible. There were quite a number of occasions when one had to read a clause twice, or even three times, but at the end of the day I found it quite intelligible and, if they are sincere criticisms, I fail to understand those people who say they cannot understand a word of it, as one person said in another place.
This, again, is reminiscent of my 1947 Act. I think it is even said to-day by kind people that there was only one person who could understand the Bill at the time: unkind people said that even that one person could not understand it. But it was not true, and the discussion in Committee at that time proved that it was not true because it was fully understood. I am only sorry that three noble Lords who were on the Committee of the Bill at the time—the noble Lord, Lord Cones-ford, the noble and learned Viscount, Lord Dilhorne, and the noble Lord, Lord Molson—are not here and are not taking part in the discussion; but certainly whatever may have been said on Second Reading, when it came to the Committee stage the Bill was intelligible and they proved it, and I am quite certain that will be the case with this Bill. In fact, it was in Committee for seventeen days in another place, and the time was not taken up in explaining the terms of the Bill but in dealing with genuine Amendments designed to deal with the merits of the Bill and certainly not with clarification.
In conclusion, I should like to join with the noble Lord, Lord Brooke of Cumnor, in expressing my own feeling that we are getting off to a good start in having appointed Sir Henry Wells as Chairman of the Land Commission. I know he will make an excellent Chairman. He has been interested in town planning and associated with the activities with which this Bill is concerned for at least twenty years. I have known him for over twenty years. As noble Lords will

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know, he is a member of a well-known firm of chartered surveyors and has given many years of his life to public work as a member, vice-chairman and chairman of one of the new town development corporations, and in a great many other similar capacities. I am sure that we have the right man, one who is not self-opinionated or arrogant, a man who will listen but who is quite capable of making up his mind at the end, and I know we all wish him every possible success.
I am assured now that this Bill will receive an unopposed Second Reading, but I look forward to a long and valuable Committee stage. I hope the Government will not try to curtail discussion. I am sure that we in this House will have a valuable contribution to make in improving this Bill, and if we look at it objectively, as the noble Lord, Lord Brooke of Cumnor, in an unguarded moment, said we should, and try to improve the Bill, it will emerge as a piece of machinery of which we can feel proud and will falsify all the predictions which have been made about it as to its unworkability. Having given it a Second Reading our job must be to make it workable, and I am confident that we can do so.
5.19 p.m.
VISCOUNT GAGE: My Lords, I suppose all Bills that are produced in response to popular agitation tend to develop characteristics which in human beings might be called evidence of split personality, by which I mean that the campaign that precedes the introduction of a Bill may bear little resemblance to the finished product. There was certainly an agitation, indeed a clamour, for something to be done about what was called "the scandal of high land prices", and the theory was generally held, and indeed held with the encouragement of the Government, that these prices were deliberately engineered by a group of people called speculators, with the obvious inference that if the speculators were only seen off the prices of land would come tumbling down. The Minister of Land was therefore presented as a sort of Robin Hood figure who was going to take away the ill-gotten gains of these evil rich men and distribute them to the meritorious poor, which all through
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the ages has been a very popular thing to do.
Those of us who have had something to do with these matters in the past may have been a little mystified by this campaign. I had been chairman of a county planning committee for some twenty years in an area in which there was a good deal of building, and I had never met anybody who quite fitted in with this conception of a speculator. It is true that at one time we were concerned about the amount of land that remained undeveloped although it had planning consent, but we went into this, and in nearly every case it was found that the explanation was that development companies and builders, particularly the larger builders, maintained reserves of land which they developed only in accordance with the market for the houses they built on it.
One of the arguments advanced nowadays seems to be that if you take land from big builders and give it to little builders you will reduce the cost of housing. I think that is a very debatable question. I know that there was no local feeling about these big development companies; the local feeling, such as there was, was almost entirely directed against the town planning authorities, people like myself, who were accused of artificially raising the price of land by the restrictions we were imposing. I certainly came to the conclusion—I speak with limited knowledge—that at any rate in my county the price of land had not been engineered by anybody; it was simply due to the normal process of the market, to the queue of people who were looking for a particular piece of land; and to say that the price of land would come tumbling down if the speculators were removed seemed to me to contain just about as much sense as saying that if you did away with all the jobbers on the London Stock Exchange the price of shares would come tumbling down. I may be wrong, but there has been so much emotion and so little real investigation of this matter that I may equally be right.
Anyway, I was very much interested to see how the speculators would be defined in this Bill: whether, for example, they would include such bodies as British Railways, who, we were told, last year sold 28 acres of land to the Greater

1117
London Council at a price of £125,000 an acre. But when the Bill appeared the answer to all this became clear, because we were all to be speculators—anybody who desired to sell a house or land—with a certain group of exceptions. So Robin Hood seems to have turned into something suspiciously like an employee of the Board of Inland Revenue, which is a far less glamorous position and I believe will be a far less popular one. As has been stated, the means whereby they will collect this levy is of almost incredible complexity, and I certainly should not think of vying with the Conservative members of the committee in another place who went through these complexities and had the unusual distinction of being congratulated by the Minister on how well they had done. I certainly should like to add my tribute as well.
But I am much more concerned with the positive functions of this Commission, the raison d'être of the Commission, all the things they will do which the Board of Inland Revenue could not do. It seems to me that these functions fall into three rough groups. There is the acquisition of land to be sold at market value—market value may be higher than the value at which it was bought or in certain cases it might be lower. Then there is the acquisition of land to be disposed of at special concessionary terms to certain favoured people, which I am very glad to see includes housing associations, with which movement I have been connected. Finally there is assistance to local authorities, financial and also material—and this is the point I wish to come on to—apparently on occasion taking over certain of their functions.
All these merit serious consideration, but I feel that the first thing to try to establish is what the real resources of the Commission will be. To put it in colloquial language, if we know how much money the Commission will have to play with we can form some idea of the total impact they are going to make on the life of the community. They will obviously want money to acquire land; they will want money to assist local authorities and they will want money in very large quantities to do any development or redevelopment. So far as I understand it, which is probably very
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little, they seem to derive their money from three sources. One is the £45 million, which can be raised in certain circumstances. Then I suppose we can disregard what might be called the levy collected on third party transactions, transactions in which the Commission themselves play no part— £80 million—because I believe all that goes back to the Exchequer; I think the noble Lord, Lord Silkin, confirmed that. Finally we come to what they can make on trading account. They buy the land, they can keep the levy, I understand, and if they sell at a profit they can keep that. I suggest that it is almost impossible here and now to say what that will amount to in, say, five years time. I imagine it is a matter of absolute conjecture; because although you can compel a man to sell land you cannot compel another man to buy it, and the market price of land depends on various things, such as the degree of confidence in the industry, the credit squeeze and so forth.
I confess that I should rather like to listen-in to the first meeting of the Land Commission, if it has not already taken place. I imagine the proceedings would go something like this. The chairman would start by reminding the Commission of their terms of reference and would also remind them that they had been enjoined by the Treasury on the absolute necessity of balancing their books. He would invite members to suggest ways in which this £45 million should be invested. Then I suppose somebody might say, "Perhaps the soundest way would be to put it all into agricultural land near towns. You cannot lose on that sort of transaction. If we can persuade the Minister to be fairly generous with planning consents we may in five or ten years' time make a large profit, and then we shall be able to do something". Somebody else would say, "That's all very well, but you must remember that, on the law of averages in five or ten years there will be a change of Government and we shall be abolished". They would think that over and then adjourn to a working lunch. In all seriousness, what do the Government visualise that the Commission will do within the next few years? Clearly they cannot act as a sort of universal boy scout, doing good turns all round the countryside, a little bit of crownholding here, helping a local authority there, redevelopment there,

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all on £45 million. It really would not make administrative sense.
We have been told again this afternoon that one of the arguments for having a Land Commission and equipping it with powers over private property which far exceed anything which we have ever known in peace time is that some local authorities are not pulling their weight, either through inability or through unwillingness. I believe there will be a great deal of misunderstanding as to who is to do what unless the Government make their views much clearer. In particular, I would turn to Clause 6(4)(b), which refers to schemes of comprehensive redevelopment. This is a short paragraph, but it deals on the fringe with some of the most important problems in local government now. They are urgent problems, because the city centres are now acting as extremely efficient traffic bottlenecks. However varied their schemes may be, and however speculative they may be—and they are speculative—they all have this in common: that they mean locking up a great deal of money for quite a long period.
May I give an indication? In my own county we have in contemplation sixteen schemes, of which two are fairly advanced and one is practically completed. These two schemes will lock up about £3 million. That is two out of sixteen schemes, in a part of the country which is not noticeably derelict. It is perfectly clear that if the whole of the £45 million were used for this purpose it would not go far. That is well known to the Government, because on September 30 this year they issued a circular, from which I should like to read a couple of sentences. The circular said:
"Public investment for 'planning' purposes has grown rapidly in recent years. Loan sanctions rose from nearly £24 million in 1962/63 to nearly £50 million in 1965/66 and would have risen higher but for the deferments imposed by the Government during the past year. Within these total figures acquisition of land in advance of requirements…has risen sharply from £8 million in 1962/63 to £19 million in 1965/66…There are, at present, several hundred town centre development schemes at various stages of preparation and implementation…In total the proposed provision of facilities in town centre schemes up and down the country greatly exceeds the need and possibility of execution."
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Then it goes on to foreshadow a rationing scheme, which I think is a sound thing to do.
One would have imagined that if the Land Commission were going to play any part as is foreshadowed in this Bill in the task of redeveloping these city centres, and perhaps more derelict areas, there would have been one passing reference to it in this circular, but it is not once mentioned. So we are left to reconcile, as best we can, the statements of the Minister of Land and Natural Resources that local authorities are doing too little, adducing that as a reason for introducing the Bill, and this circular, which is issued from the same Ministry. If words mean anything at all, this circular suggests that they are trying to do far too much. What does it all mean? I feel that if this paragraph is left in its present state there is a real danger that at least some local authorities reading the Bill and the circular will breathe a sigh of relief and say, "If this Commission are really to take on these difficult and expensive schemes, more power to their elbow; let them take them on!". I do not believe for a moment that they will be in a position to do so.
I have ventured before now to suggest in this House that the technical, complicated and essentially long-term schemes, which we all think, in principle, ought to be carried out, will be carried out only by some measure of inter-Party agreement. If we are to have an entirely new approach every six or seven years, which is the lifetime of the ordinary Parliamentary Government over the last 150 years, we shall get involved in a game of snakes and ladders in which we shall always be back at square one. That is what is happening in local government circles now.
As I have said, we all really want the same things. I can imagine a form of Land Commission probably much more like a New Town corporation, with access to a great deal of money by loan and possessed of a great deal of technical skill, which might be of real assistance to local authorities in the task of redevelopment, and might enjoy all-Party support. The predecessor of this Bill, the Act of 1947. was, up to a point, a Bill which enjoyed a large measure of all-Party support. In fact, I would go so far as to say that had

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the 50 per cent. development charge then been fixed we should be administering that Act with great advantage to everybody and without any necessity for this Bill. The responsibility for this seems to be shared equally by Lord Silkin, who put it at 100 per cent., and my Party, who took it off altogether. I rather wish it had remained at 50 per cent.
But there is in this Bill little evidence of any attempt at a bipartisan approach. In some ways, it might have been deliberately designed to attract the maximum hostility from the Conservative Party as well as from many others, and positively to invite its repeal at the earliest opportunity. I believe that, because of these financial limitations, it will be, much more than has been assumed, what the Chinese call a paper tiger. I feel that it is a pity that from the point of view of the local authorities this merry-go-round looks like going on and on.
5.38 p.m.
LORD MITCHISON: My Lords, the first point I wish to make is one that I am sure will call for the support of every noble Lord here. This Bill may involve some returns being made by citizens. But there are other kinds of returns, too, and I should like to take the opportunity of wishing my noble friend Lord Silkin "Many happy returns!" I am sure that in that I have everybody's support.
If, for one moment, we could forget the necessarily strong Party elements in this matter, we must, I think, recognise that the trouble that lies at the root of dealings in land over many years past is one that has affected the whole country; and Lord Silkin certainly made a notable contribution to its solution. It was one that he himself says was not wholly right (I am not concerned with that), but it was a notable contribution some twenty years ago. And it was a brave contribution. The Uthwatt Committee reported during the war. It was a stiff piece of reasoning. I have always thought that the Uthwatt Report was fundamentally right. To turn it into legislation and to get through that legislation in the early years after the war, the time when it was perhaps most needed, but not the easiest time to get legislation through was, I think, a most remarkable achievement, not only of
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intelligence but of political courage. Therefore, I quite frankly and wholeheartedly admire my noble friend Lord Silkin for what he did on that occasion. I do not ask your Lordships to agree with my views about his Bill, but I think we can all join in the admiration which I feel for him.
On the merits of this matter we have had a good many speeches to-day which, with great respect to those who made them, collected a number of Committee points to be dealt with on a later occasion. I will do my best to pick on the main points which are raised. I will start with the Bill itself. It is said that the Bill is unintelligible, complex, too long and so on. But it is no longer than other Bills about this kind of subject, and it is absurd when the noble Lord, Lord Brooke of Cumnor, who was at one period Financial Secretary to the Treasury and who introduced one Finance Bill after another, complains about the complexity of particular clauses. He ought to look back at some of the clauses in the Finance Bills he himself introduced. This Bill is no worse than those—indeed, it is a great deal simpler. It has a very clear Explanatory Memorandum, and if noble Lords want to read it as bedside literature they will find the Memorandum perhaps more lively than the Bill itself. But they should avoid like poison the Part picked out by the noble Lord, Lord Brooke of Cumnor.
In the absence of right reverend Prelates I may perhaps remind your Lordships that Genesis is supposed to have been written by two authors. One was the priestly author; I forget what the other one was called, but they were known as "P and E". If one looks carefully at this Bill one finds traces of "P and E" in it. There is the man who did the land part, no doubt deriving from the Ministry of Land and Natural Resources, and the man who did the financial part. The language in both cases is rather different, and it is an interesting exercise to trace out the differences. The trouble is that this is a really complex problem. One has only to look at Cases A to F in which there are transactions in land that are said to call for the levy. Cases A to E cover a good deal of ground in necessarily complex language. But at the end of

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the day you must sweep it up with a general case, Case F.
What is the alternative to this sort of complication? One can try to make a very simple Bill. One will immediately get more anomalies in a complicated land system like ours. I suggest that my right honourable friend the Minister was quite right in saying that the first duty of a Government, in a Bill of this kind, is to make clear to people, so far as they can, no matter how complicated it is, what it seeks to do. Then, if need be, they should issue explanatory memoranda, circulars and so on, to add a further explanation of the Bill, or Parts of it. But one cannot avoid dealing with a serious national subject simply because it is complicated.
The second alternative is one that has been taken time and again in cases of this kind; that is, to leave an enormous amount to be done by regulation. Noble Lords to-day have been complaining that there is already too much left to regulation. If one had tried to carry this a stage further, one would then have had a Bill crawling with references to regulation, and nobody would have been able to find out what it was about without looking at regulations. I suggest that one ought not to legislate in that way.
Some noble Lords have been near saying that the problem with which the Bill seeks to deal is in some ways a national scandal. It is certainly a national burden, a question of prime importance to the nation. But we cannot say, just because it is too complicated, that we are not going to deal with it. One cannot admit that; that cannot be right. There must be some other way out of the difficulty.
Taking that sort of stand in the matter, is it inevitable that the Bill should be as complex as it is? I suggest that it is, and the very interesting speech made by the noble Viscount, Lord Gage, illustrated this very well. He began by saying that this was not all a matter of the operation of speculators. And I quite agree. Then he went on to say that a great deal of it was due to the natural rise in the cost of land. It is, and it is these two things, taken together, which make the difficulty.
I would remind your Lordships of the Lavender Hill case. I do not know if
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one would call them speculators, but I do know that as was stated in another place
"Lavender Garden Properties, having bought a plot of land for £7,500, sold it to the London Borough of Enfield for £240,000. But, not satisfied with this, since the borough council later obtained a better planning permission for blocks of flats from my right honourable friend the Minister of Housing and Local Government, the company is now claiming. I believe, a further £150,000 under the provisions of Part IV of the Land Compensation Act 1961."—[OFFICIAL REPORT. Commons, Vol. 728 (No. 19), col. 619; 12/5/66.]
It may not be speculation, but are they not being just a little greedy? Is not the law allowing them to be rather too greedy? Mr. Rachman caused a good deal of trouble in the Paddington area, and he kept within the law. So did these people; but if the law is like that, I suggest that it needs to be the changed. The 1947 Act was repealed, I think, in 1953. We are now in 1966, and until 1964, the Tory Party were in power. They recognised this evil but did nothing whatever to deal with it. The result is that not only private people but local authorities all over the country have had to pay, as they have had to pay in this case, far too much for the property which they needed in order to perform their statutory duties and to carry out their job as local authorities. It cannot be right that that should be so; it does not stand to sense.
I notice that, whatever criticisms noble Lords opposite made of the Bill, they were rather slow to condemn the principle either of the levy or of the Land Commission. I will deal with the two matters as shortly as I can. The levy, in whatever form it comes, is a matter for taxation. Part III would be a Supply Bill if it had been by itself. However, it is not by itself, and therefore there is no technical objection to your Lordships dealing in detail with taxation questions if you think fit to do so. It is a question for the Party opposite, who have a built-in majority in this House, whether they think it right to deal in detail here with what are really taxation questions.
There is this to be remembered, too. It has been said that the levy will involve a large number of offences and a considerable expense, but there is already a tax on capital gains in land. It was actually introduced in the form of a short-term capital gains tax by a Conservative

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Government. It was a recognition that such gains merited taxation. It has now become a capital gains tax and it will need modification in the next Finance Bill in order to ensure that that tax and this tax do not both fall in the same place. It will be taxed once in respect of development value. That is done by this Bill and current use value will be dealt with by a process of separation in the next Finance Bill, as we have been told.
If one is going to say that the Inland Revenue ought to do it all because this involves a whole new step, one ought to remember that the Inland Revenue are coping with a great deal of this; and if one is talking about valuers any valuation will have to be done by the Inland Revenue valuation officers, as it always is in these cases, whether it is a valuation for the purposes of this levy or a valuation for the land element in the capital gains tax.
There are two other objections. One is that I am sure your Lordships would feel it wrong that the taxation machinery should be used for purposes unconnected with taxation if it can be avoided; that is to say, we do not want to tack detailed political considerations on to the collection of taxes. These detailed political considerations are clearly involved in this case, because the levy here is part of the machinery for securing that the proper flow of land continues to come to the market, and for securing that Lavender Hill gains—I go on saying Lavender Hill, because of a very good film about Lavender Hill which I remember seeing—are not going to be made in the future. At present, these people are making nearly £500,000 out of a transaction at the expense of a local authority and the local authority's public requirements. Of course, this money ought to be taxed. It is, in fact, being taxed to some extent by the capital gains tax, but I suggest that that ought to be regarded as part of the whole Bill; that is, as part of the really important part of the Bill dealing with what the Land Commission have to do.
I turn to the Land Commission. It seems to me quite off the point to say that the local authorities could do all of this and that there is no need to have anybody else. There are at least two outstanding difficulties in the way of a local
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authority. A local authority has duties to its constituents, to the ratepayers in the area, and they are local duties. When once the Corporation of Glasgow attempted to interfere in the elections in a neighbouring town—I think it was Rutherglen—they were restrained by the courts from spending Glasgow money on dealing with the affairs of Rutherglen. They were trying to queer the elections. It is a very odd story, but it happened all right. Therefore your local authority cannot necessarily, however well intentioned it is, look beyond the boundaries of its own local authority area.
Surely, nowadays, we cannot say that there are no needs of the country which cannot be met within local authority areas even over quite simple things. Recently this House dealt with commons. There are commons stretching from one county to another. Moreover, there are housing schemes shared between different local authorities, and so on. It is obvious that we want a body which can look on a broader front than the local authorities. Secondly, the local authorities are in no position to buy well in advance of need. That has become increasingly apparent in recent years as something which ought to be dealt with, and I hope that it will appeal to your Lordships for reasons of economy in rates. If you wait till the very last minute, whether you are a local authority or not, you find, oddly enough, that you have to pay a lot more for your land.
I am not going to follow the noble Viscount, Lord Gage, into questions of £45 million or £75 million. If he thinks the amount ought to be larger, well there it is. But leaving that aside, there must surely be a body in a position to buy in advance, and to buy in cases where more than one local authority is concerned. I know that we are arranging for the reorganisation of local government and considering what should be done about it. But the principle must be right.
We have then been told that these are unprecedented powers, and all kinds of things. I thought my noble and learned friend the Lord Chancellor produced a pretty good precedent for all the powers. The ones which appeared to cause most trouble were the special procedure powers. They had been tried in an Act in 1946 directly after the end of the war. They had been tried for five years, and

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we were told—I would certainly accept it—that they caused no great trouble. Why are the similar powers in this Bill going to upset everybody and disturb the universe, if those other similar powers were exercised without causing much trouble?
Then it is said that the Land Commission are going to act on their own; they are going to buy large sections of land which they consider suitable for development; that they ought not to be trusted to consider whether or not the land is suitable; and that there is not enough backing from the Ministry and not sufficient need for ministerial approval. When one comes to look at this, one finds that in the cases where it is not necessary to get ministerial approval in advance, the approval has, if there are objections, to be obtained at a later stage.
Here I call in aid the noble Viscount, Lord Gage. He feels—and I agree with him thus far—that there are a great many matters on which people of all Parties could be agreed. This is particularly true about local government, and I can understand a council being of the opinion, apart from Party, that something ought to be done about such-and-such a site or such-and-such a housing development. In a case of that kind there may well be no objections, but if there are objections then the ministerial sanction and approval come in.
I have looked through the Bill, by and large, and I have read it with some care, but I cannot see that the Land Commission are in a position to be tyrannical, even if they wished to be tyrannical. But why should we assume that a public body such as this, with a chairman whom we have all been congratulating on his appointment—and I should like to add my own congratulations—are going to be tyrants? Would your Lordships prefer to be governed by the Lavender Hill people, who are going to make nearly £500,000 out of Ealing Council? They are a far more effective government, under the chaotic conditions that apply at present on this matter, than could be found in many other ways.
My Lords, if you want chaos and rising land prices, with absurd and anti-social profits made out of them, then of course you must oppose the Bill. But no noble
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Lord has done that so far. We are all agreed substantially, I think, that in principle the Bill is right. I end by saying this to noble Lords opposite. I remember, and so do your Lordships, Bruce Bairnsfather's cartoon with the famous remark:
"If you know of a better 'ole, go to it."
There is quite a good one in this Bill.
5.58 p.m.
LORD HENLEY: My Lords, I pro-prose to go to "a better 'ole", and will leave the noble Lord, Lord Mitchison, with "the Lavender Hill Mob" above ground. I can, however, agree with him that although the details of this Bill are very complicated, the philosophy behind it is quite plain.
I want to say a word or two about the philosophy of this Bill with regard to minerals. No one has said anything about minerals to-day, but I think it is an important point. It was hardly touched on in another place, and I think I am right in saying that it was not even mentioned in the White Paper. I agree there were certain Amendments which brought out the general principle concerning minerals, but the subject was not discussed on Second Reading in another place, nor were the owners of minerals consulted. The operators were consulted, but this is quite different, and it is part of the charge which I make in this context that the Government have considered the mineral operators' case but not that of the mineral owners. I wonder whether originally the Government meant minerals to be covered by the Bill at all.
And why, then, were minerals included at the last minute? I do not myself think they should be there. I think they are irrelevant to this Bill, and I hope to make that point.
I wonder whether it was not, in fact, a mistake that arose because minerals had been in the Town and Country Planning Act 1947. Or, if it was not that, I wonder whether private pressure has been brought to bear on the Government since they wrote their White Paper. It is true that the Town and Country Planning Act 1947 dealt with minerals, but that Act had aims totally different from those of this Bill. It virtually nationalised minerals; and, of course, it was dealing with planning. This Bill is not dealing

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with planning. Planning, particularly in relation to minerals, is dealt with elsewhere. Nor is there any question of nationalisation in this Bill.
The two objectives of the Land Commission Bill are quite different and quite clear. First of all, there is the question of the availability of those minerals; and, secondly, there is the question of betterment. I think that, so far as minerals are concerned in this Bill, both of those questions are irrelevant. First of all, I do not think that betterment really applies to minerals at all; or, in so far as it does apply, it is only to a very slight degree. After all, the mineral remains dormant in the ground until it is required, and once it has been worked it cannot be replaced. It is a wasting asset: its value diminishes as working proceeds. Its presence in the land is not, in fact, a creation of the community; and whereas in the case of surface-developed land a permanent increase in value is created, this does not happen in the case of minerals.
I agree that a case can be made for this not being so with regard to sand and gravel. It can be argued that sand or gravel is unlike the major minerals, in that when it lies near building development there has been a creation by the community of an unearned increment. I think this is so only to a limited degree, and, after all, sand and gravel is still a wasting asset. There has been no permanent increase in value that has been created by the community, except, as I say, to a small degree; and it seems to me, therefore, that any unearned increment (if, indeed, there has been any) is really better treated in this context by the ordinary methods of taxation and not by the levy.
The second objective of the Land Commission Bill is the question of availability. On this point I really cannot see that the Bill is necessary at all. I agree that outside minerals a case for it can be made—and, indeed, I thought that the arguments of the noble Lord, Lord Mitchison, were very forceful and powerful, ones; but I do not see that these arguments apply to minerals. There is already on the Statute Book a brand-new Act dealing with minerals—the Mines (Working Facilities and Support) Act 1966. This is a consolidating Act,
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and it covers, so far as I can see, every Act that has dealt with minerals, from the 1923 Act, which dealt with the Railways and Canal Commission, to another consolidating Act in 1945, and so on. The 1966 Act, which as I say is a consolidating Act but is, in fact, quite new, gives a special form of compulsory acquisition of mining rights, and it releases mineral operators from a great many of the difficulties which they have had. It helps them get out of old restrictions under leases and agreements; and it gives new powers to mineral operators to get agreement where they have not been able to get it before.
The Act gives, indeed, an up-to-date pattern of procedure right through all the difficulties and problems which mineral operators have had to face in the past. It is a pattern of how the mineral-extraction industry should conduct itself nowadays. It is a very helpful Act; and so far as mineral operators are concerned, it is a charter of freedom for them. So much is that so that there is a danger that mineral operators are getting some of that freedom at the expense of other people; that is to say, the landowner and mineral owner.
If I am right in saying that, at any rate so far as the major minerals are concerned the Mines Act of 1966 gives everything that the mineral operator could possibly want, why should one want to go beyond it by putting minerals into the Land Commission Bill at all? In another place the Minister gave an assurance that, so far as major minerals are concerned, he would not use the powers that he hopes to take under the Land Commission Bill until every facility under the Mines Act 1966 had been exhausted. This is an extremely valuable concession. This Bill goes too far. I agree that the Minister, in giving this concession, must feel that he has at his back a long-stop, so that, in the last resort, there is something which gives him an ultimate sanction; but this Bill goes beyond giving the Minister a long-stop. It seeks to set the Land Commission above the law.
Now the present position, so far as minerals are concerned, is that it is the courts which decide what rights an operator ought to have if he cannot get agreement with an owner. I cannot see that it is right that the Land Commission

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should have complete power to acquire rights in land without going through the ordinary law, when the existing law is as effective as it is. If it should, then the obvious, logical conclusion would be to repeal the Mines Act 1966, which has just been passed. That Act recognizes that there is a special law and a special form of procedure for mineral workings. Why should this not be retained and applied to the Land Commission? Because, after all, the Mines Act is new. Is it being suggested by noble Lords opposite that it is already out of date? I cannot believe that this is so. Or is it suggested that it is not powerful enough? This is not the impression that I get from the discussions which appear to have taken place between the Government and the mineral operators. So far as I can make out, they are perfectly happy with the powers, the very extensive powers, which they can get through the Mines Act 1966.
The thing that may be worrying the Government here is that there might be a special case for sand and gravel. I rather doubt this. I cannot help feeling that the sort or arguments that the sand and gravel interests bring forward are very often those arguments for urgency which we hear so often in other connections, such as water, when the mineral operators (or the water undertakers) want to by-pass the ordinary procedure in their own interests. The arguments they use are very often extremely specious ones, with a great deal of talk about the public good and about the importance in this particular case of housing, and so on. What they really mean, very often, is that it suits them personally.
I believe this amounts to a good case for leaving minerals out of the Bill altogether. In the first place, it does not help availability at all, and in the second place betterment is not relevant to minerals. It is interesting to note that minerals are rather more heavily—I will not say, unfairly—taxed than anything else. I think that minerals are not really a fit subject for a betterment tax.
If the Government do not accept this view, if they feel that such a Bill is necessary in order to get availability of minerals, which I say they have, and if they still feel minerals are a subject for
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betterment, I should like to put in a plea that we should have fair treatment under the regulations. I should like to know whether the regulations are yet available. They are very important. Have those regulations in fact been given to the mineral operators but not to the mineral owners? The tie-up with next year's Finance Act will not be clear, so far as the mineral owners are concerned, until we see these regulations. I should be interested to know whether they are available and, if so, whether they have been shown to the operators, but not to the landowners. The Government think they have treated with the industry and seem to be unaware that they have treated with only one side of it.
I realise that the matter of the regulations is partly a Committee point, and after what the noble Lord, Lord Mitchison, said in this context, and particularly because it is a financial matter, I hesitate to develop it. But it raises issues of anomaly with the previous methods of mineral taxation. Normally minerals are treated as income, but under the Land Commission Bill it is proposed to treat them as capital. I think they should always be treated as capital because they are a wasting asset. With modern methods of extraction they are an asset that quickly depreciates. There could be large royalties and heavy taxes in one year, but the asset could soon depreciate to nothing. They should be subject to a depreciation allowance. In the case of the old coal royalties which went on for ever there was a great deal to be said for treating them as income, but I feel that in the case of minerals still in the hands of mineral owners, in view of modern extractive methods, the royalties should be thought of, and dealt with, as capital. Perhaps the Government are moving towards this in so far as they have suggested under the new Bill that they are going to treat them as capital for the purposes of the levy.
My Lords, in conclusion, I would reiterate my points, which are that minerals should not be covered in this Bill; that it is not helpful to the Government's main objectives, from the point of view of either availability or betterment, that they should be in the Bill, and, finally, that if the Government still feel they should be in the Bill then I hope that some effort will be made to

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treat us more fairly than we have been treated in the past, not only with regard to consultation but also with regard to tax anomalies.
6.15 p.m.
LORD ILFORD: My Lords, the noble and learned Lord the Lord Chancellor, introducing this Bill this afternoon, spoke with great confidence of its success and of the success of the arrangements which it proposes to enact. I wish I were able to share his assurance. This Bill is the latest chapter in the long chronicle of attempts to capture development value or, as this Bill calls it, betterment. But hitherto the evasive butterfly of betterment has escaped its captors and is still at large.
From the early years of the 19th century radical literature has resounded with denunciations of the infamous landlord and the profit he took from the land and had not earned. Those were the days of Henry George, of Progress and Poverty. Henry George is a forgotten author to-day, although perhaps some of your Lordships who are a little older, as I am, will recall the power and influence which his book once possessed. I think Mr. Lloyd George was the first Minister to attempt to give practical shape to these considerations. He found it, I think in 1909, a convenient platform from which to abuse his Conservative opponents. He introduced his proposals in the Finance Act of 1909 (I do not propose to enter into them this afternoon), but in the end it was found that the cost of the collection of the tax exceeded the yield, and the whole machinery of that tax was swept away by a Government of which Mr. Lloyd George was the head.
In 1947, the noble Lord, Lord Silkin, entered the field. I regret that I did not hear the noble Lord's speech this afternoon. His Act of 1947 was, I think, the most promising attempt to capture development value and betterment. It came nearer to reality than any other attempts and proposals which had been made. But the Act was killed by the folly with which it was administered. The development charge was fixed at 100 per cent.; even in the case of local authorities purchasing undeveloped land for the purpose of open spaces they were required to pay 25 percent. of the development value, although in fact they
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had purchased the land for the express purpose of preventing it from being developed. The development charge gave rise to such widespread resentment and bitterness that the whole scheme eventually had to be abandoned under a storm of public protest.
While these events had been taking place there was, of course, always the Uthwatt Report which claimed to be a Report of experts. It was for a long time the gospel of betterment. The Committee proposed a scheme which recommended collecting 75 per cent. of the appreciation in land values. That scheme was rejected by the Coalition Government of the day, if my recollection is right, and no more was heard of it.
My Lords, how does this Bill seek to overcome the mistakes which brought to nothing all these previous attempts to collect betterment? It does two things, as I understand it. First, it fixes the betterment levy at 40 per cent., leaving 60 per cent. in the hands of the landowner. It is hoped that the landowner will be ready to bring his land to market for the sake of that 60 per cent. But that is not the end of the story. The 40 per cent. will grow, and before long it is expected that it will be 50 per cent. If the Commission ask, they might ultimately get 75 per cent., and in the end 100 per cent. If that happens I think that the scheme will suffer the same fate as did the scheme of the noble Lord, Lord Silkin.
The other proposal made for overcoming this difficulty is that the vendor is to be the party who pays the levy. Under the scheme of the noble Lord, Lord Silkin, it was the purchaser or the developer. Will it make any difference that the vendor will pay this levy? In my judgment it will make no difference at all. The levy will rouse just the same resentment when it reaches these higher proportions as did the development charge; and it will discredit the whole scheme just as the 100 per cent. development charge discredited the earlier scheme. I do not think that proposal will make the least difference.
This Bill will fail ultimately in its purpose for the same reason that previous legislation has failed, because the collection of development value or betterment is not, in my judgment—based on a good many years of professional experience of these matters—a practical fiscal

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proposition. It may be possible to collect a reasonable tax, but to attempt to collect 40 per cent., or 50 per cent. or more of the development value is not a practical fiscal proposition. It will break down in this Bill as it has broken down in other Bills.
There is another reason, my Lords, why this Commission will fail in its purpose. Certain powers are to be given to the Commission, and to the Minister, which seem to me so unfair and unjust that when public opinion sees them in operation it will insist on their being withdrawn or modified. I do not desire to use exaggerated language in this matter, but the powers of compulsory acquisition after the second appointed day seem to me so unjust and so contrary to the principles upon which English law has always proceeded that I feel that in the end, when the public is more fully aware of these proposals than it is to-day, they will bring complete discredit on the whole scheme. I cannot recall any other Act of Parliament under which a person, whose property is taken compulsorily and against his wish, is refused the right to state his objections at some judicial or semi-judicial inquiry, or even the right to state them to an individual appointed by the Minister. That seems to me so inequitable that public opinion will sweep it away, as earlier schemes were swept away.
The unfortunate owner of land which is taken is not even given the right, for what it is worth, of having a compulsory order confirmed by the Minister. That may not be much protection, but at least it is something. He does not even enjoy that right. He has no right to any legal inquiry, although the Franks Committee reported not long ago that the right to a legal inquiry in these circumstances was an essential element in individual freedom. I beg the noble and learned Lord the Lord Chancellor to look again at this part of the Bill and not to listen too readily to the argument put forward this afternoon that the Land Acquisition Bill 1946 is a good precedent. It is not a good precedent; it is a bad precedent. Because we acted unjustly in the past is no reason why we should act unjustly at the present.
Recovery of betterment is not, of course, the only purpose of this Bill. The
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White Paper described the two main purposes of the Bill as being
"to secure that the right land is available at the right time for the implementation of national, regional and local plans"
and
"to secure that a substantial part of the development value created by the community returns to the community…"
How are the Commission to ensure that the right land is available at the right time? It means that they will be expected to purchase land in advance of requirements. We do not need a Commission to do that. Were local authorities authorised more readily to purchase land in anticipation of requirements, they would be quite ready and able to do so. But how far is this to go? The Commission will have to go a very long way from developed areas for the land which will be needed in order to ensure that the right land is available for the right purpose when the time comes.
Why was it considered necessary to bring this new authority into being? Most of the tasks assigned to them could equally well have been performed by existing authorities. The assessment of the levy could have been undertaken readily by the Inland Revenue Department. In fact, that Department will be making a very similar valuation for capital gains tax, if it is not doing so already. Local authorities could very easily have undertaken the compulsory purchase function which the Commission are to have. They already possess staff highly experienced in these matters. Yet it was decided to bring into being this great new engine of bureaucracy. Staff with special experience and qualifications will be needed, who are precisely the type which existing authorities have difficulty in finding. It is difficult to see why it was considered necessary, with the existing legislative machinery, to bring this new body into being.
We have had a dreadful Bill to examine. I do not think I can remember a Bill of greater complexity thorn this. And the complexity largely arises from the fact that this new body has to be fitted in with existing administrative bodies. With the greatest respect to the noble and learned Lord the Lord Chancellor, I cannot accept his view that the complexity of the Bill is due to the complexity of the land laws. I do not think that it is so. It is due to the complexity

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of our administrative laws and the necessity which has faced the Government of fitting in this new administrative body with the existing administrative bodies and reconciling its position with their position and their powers. It is really because this Commission was not necessary that this Bill, which brings it into being, has become so complicated.
I believe that this Bill, like its predecessors, will fail in its purpose. Until a more modest view of the collection of betterment and development value is accepted, any measure of this sort is likely to fail in its purpose. I trust that as the Bill passes through the Committee stage we shall be able to carry out changes which will give this measure a better chance of success.
6.32 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, judging from what we have read about this Bill in the Press and magazines, from the reception it had in another place and in other quarters, and certainly from the many speeches that we have heard to-day, I can describe the Bill which is before your Lordships as a controversial measure. The noble Lord, Lord Brooke of Cumnor, described it as the worst piece of legislation during the past fifteen years. Well, there may be other opinions than an assertion of that kind. The noble Lord, Lord Wade, said that the country will live to regret this Bill.
I should, if I may, like to add my own adjectives in describing this Bill. I must confess that since I decided to take part in this debate I have wrestled with this Bill, and I frankly say that I do not understand all its technicalities and involvements. But I have come to the conclusion that I can use these adjectives with the utmost of sincerity. I regard it as a useful Bill, as a necessary Bill, and as a long overdue Bill. I was rather fascinated by the speech of the noble Lord, Lord Brooke of Cumnor, because of the criticisms that he had to make of the Bill, but there was no suggestion from the noble Lord of how to tackle the problem—and everybody admits that it is a problem—of the rising price of land. It may be that the noble Lord is reserving his suggestions for another stage of the Bill.
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I should not have taken part in this debate were it not to bring to the notice of your Lordships a particular matter connected with the exemptions that are described in Clause 56. But, with your Lordships' permission, I would start by making one or two observations about the land question and what should be done about it, especially for development purposes. I believe that this is exercising the minds of most people. It is not a new exercise, either. My noble and learned friend the Lord Chancellor, in his excellent explanation of the Bill, made one statement that attracted me. He said that previous attempts—and there have been many over a long period of time—had indicated that this land problem is intractable and that all efforts that had been made to solve it had been frustrated. Yes, on this question of land and its development there are many precedents.
During the last few years, particularly since 1959, when there was brought into being what is described as a free market in land, there has been a one-way traffic for the land speculators, whose profits have risen enormously—astronomically. My noble friend Lord Mitchison made some reference to the Lavender Hill business. May I quote another example, the circumstances of which have had wide publicity? In a Press statement, made perhaps twelve months ago now, a person stated that he had bought a 173-acre farm for £36,000 and recently had sold three of those acres for half the purchase price. He then said:
"I am sitting on a bonanza worth £1 million. It is incredible that such profits can be made."
He said further:
"I intend drawing the attention of the public to this."
Those were strong words, particularly from the source from which they came—not only strong words, but very courageous ones. They were issued to the Press by a Conservative ex-M.P.
Upon the point I propose to make now I do not think there is any argument. There is no difference of opinion about the fact that land for housing, for the making of new roads and for industrial development has not been easy to negotiate and acquire, and it is still difficult. As I see it, one of the purposes of this Bill is to minimise that difficulty. I have many friends in local authorities. What

1139
they say to me is this. When they are desirous of purchasing land for housing and other kinds of development, it is a nightmare to them. They describe it as "paying through the nose". And when negotiations have been completed and the land they require has come into their possession, they say that the epitaph they write is, "Ransom prices".
I have been doing a little research into recent figures of costs of sites for housing in the London area. The figure given by the noble Lord, Lord Silkin, is far in excess of what I found. I understand that in the last ten years there has been a 200 per cent. increase in the price of land in the London area and in the South East, where there is what I might describe as a miniature population explosion. I believe it to be the case (and this is in evidence as a result of researches that have been made), that while the impact has been greater in the London area, no region has escaped. The rise in the cost of building projects, and particularly in the provision of houses, whether by local authority or by developers for owner-occupation, is really staggering.
We have heard to-day, and rightly so, that there is a need for greater productivity. It is not an exaggeration to say that greater efficiency in the building industry is being nullified by increases in the price of land. No one would put up a counter argument to the fact that the need of land is growing; there can be no two opinions about it. If fertility rates continue as they have done for the past few years, a recent estimate has been made by an expert on population trends to the effect that by the end of this century there will be 72 million people living in Great Britain. On this basis, it is estimated that the population increase will mean the equivalent of building a new town of 70,000 people every seven years for the next forty years. If that gives a correct glimpse into the future, it certainly is a staggering thought. The only wise decision which we can take on the expert evidence we have is to plan the land in order to cope with these population trends. Procrastination in providing the first essential in building projects, which is land, would be not only inhuman and anti-social, but possibly in the not too far distant future dangerous as well.
The purpose of this Bill, as I see it, stripped of its technicalities and its legal
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jargon and as outlined in the more simple language of the White Paper, is admirable. It is, first, to secure that the right land is available at the right time for the implementation of national, regional and local planning. Secondly, it is to secure that a substantial part of development value created by the community returns to the community. That, I submit, is quite an ethical proposition. Further, it is to ensure that the burden of the cost of land for essential purposes shall be reduced. I submit that there cannot be any two arguments about the purpose embodied in this Bill, and no public-spirited person would quarrel with such a purpose. As has been explained in another place and in the speeches in this debate to-day, there may be differences as to the kind of machinery to be devised so that those purposes can be realised, and there may be differences as to the means of achieving the end, but this Bill, as I see it, is an attempt to translate into practical form, with the object of achieving, the twofold purpose of the White Paper.
During the thousand years of our history the land question has figured prominently. There have been conflicts, both physical and verbal. As the noble Lord, Lord Ilford, and the noble Lord, Lord Wade, have said, a little more than fifty years ago there was a great conflict between the two Houses of Parliament on the question of land; and this is still remembered. In discussing a Bill of this nature, people of my generation have long memories. I will not quote again the words of the late Lord Lloyd George of Dwyfor, better known in 1909 as David Lloyd George, but his words then (and they were referred to by the noble Lord, Lord Ilford) still have significance. Then in the early post-war years we had the Uthwatt Report which has been referred to, and the Town and Country Planning Act 1947, piloted through another place by the noble Lord, Lord Silkin. But since 1951 there has been a whittling away and a return to a free market in land. It is an economic truth that cannot be disputed that, with a commodity in short supply, in the absence of a social purpose, prices soar. To the purpose of this Bill, as outlined in the White Paper, I give my wholehearted support, and for this reason: that it seeks to destroy, not wholly but substantially,

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the opportunity of acquiring wealth that has been created by the community.
I come now, briefly, to the question of the betterment levy. In principle I think it is very good. There is some doubt whether it should be 40, 45, 50 per cent., or even more. With the maximum of 50 per cent., as stated in the Bill, it still leaves half of the newly created value to the vendor. That, I submit, is not ungenerous. Now a word with regard to the application of the betterment levy. There are exemptions to this levy: local authorities, charities, and operational land or statutory undertakers. The point I wish to raise—and this is the main purpose of my remarks—is with regard to approved superannuation schemes. It will be well known to your Lordships that such schemes are exempt from taxation, but as the Bill stands at the moment they are to be subject to the betterment levy. Now there are many occupational schemes. They have grown in the past few years and they are likely to continue to grow. I have no knowledge of the amount of funds that have accumulated in these schemes which is invested in land, or the global figure arising through development values. My information is that perhaps one of the biggest single occupational schemes is one of the three run by the National Coal Board. I do not propose this evening to spell out the details of the investment by the trustees, but I am informed that the liability under this betterment levy is likely to he in excess of £100,000. Of course, the size of the pension is determined by the size of the contributions and the income from investments. When my noble friend comes to reply I would ask him to deal with this aspect of the Bill: why is it proposed to treat approved pension schemes for this purpose in a different way from the way in which they are treated for taxation?
May I, in conclusion, refer to one of the three schemes which is administered by the National Coal Board and the National Union of Mineworkers? It is the supplementary scheme connected with the Industrial Injuries Act. Some of your Lordships will recall that in Section 82 of the Act of 1946 there was an optional provision that if employers and employees could mutually agree on a supplementary scheme it would have the force of law. That was done by the
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N.C.B. and the National Union of Mineworkers. It is a unique scheme; it is the only one. No other industry has taken advantage of Section 82 of that Act. What is its purpose? It is to provide additional benefits when an accident occurs and incapacity arises there from. Sometimes the incapacity is short and on other occasions it is permanent. Sometimes the accident is fatal, and payments are made out of this supplementary scheme to the unfortunate widow and children who are left. But benefit is paid to all, irrespective of age, who have been injured and disabled by accident or industrial disease.
Whatever arguments there may be for not exempting approved pension schemes—and they may be varied—may I say to my noble friend the Minister that I see no reason why the supplementary industrial injuries scheme of the N.C.B. and the miners should not be exempted. The income is derived from weekly coppers to assist in time of adversity, and because the trustees have invested in land with potential development I do not see why a scheme of this kind should not be exempted. I trust that my noble friend will undertake to bring this particular aspect of the betterment levy to the attention of the Minister.
6.55 p.m.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: My Lords, I listened spellbound to the brilliant explanation of the Bill by the noble and learned Lord the Lord Chancellor, who made it seem for a moment more justified and less bad than one had thought. But with the enormous powers being sought by the Government to take any land, I feel that we require further assurance as to the extent to which they intend to carry out these powers of compulsion, and that they will be used only when and where land is actually needed or about to be needed for development.
Our principal objections to the Bill have been well expressed by other speakers here and elsewhere, and I should like for a few minutes to draw attention to other aspects which have to do more with agricultural land use, ownership and productivity. As an owner of land I declare an interest. I hope that I may be allowed to speak on this and submit that, as an owner managing

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land and actively concerned with the development of all forms of production from the land, my experience may help me to express apprehension about some of the disadvantages and possibly adverse effects of the Bill.
I find widespread agreement as to the difficulty of understanding the Bill, and I hope I shall be excused if my efforts to understand it show that I have not been entirely successful. Much of the argument to-day has been devoted to the valuable building land near the larger towns, and in the towns and cities. But I understand that all agricultural land is also affected, that the Land Commission will be very far reaching in their functions and controls and that everyone will be affected who owns building land or farm land, shops, offices, factories or houses of any description, and that almost every transaction to do with land or a cottage on the land may come before the Land Commission. This, unfortunately, must cause considerable additional work for those responsible for the management of land, work of a very unproductive nature, involving additional cost, loss of time and delays, instead of their concentrating on the work which they ought to be doing.
If I may turn to the financial aspects of land use, one of the principal jobs of an agricultural landowner is to finance all kinds of improvements which will increase productivity, and to provide new buildings and housing. This is a much needed function, especially when changes in agriculture and land use are so numerous and rapid. When land is sold for any purpose, the object is almost always to raise more capital needed for other land still under their charge. I refer to this now because while we see all the time much emphasis on industrial investment, hardly any mention is ever made of additional investment for land use. This has to come from somewhere and it can rarely come from the net revenue from the land. If there are more and more levies, and a tax such as the Land Commission levy, on top of a selective employment tax and the capital gains tax, there is less and less money available. Disincentives to personal enterprise are more visible than encouragement, and it seems that the Government are weakening rather than strengthening the ability to do what is necessary to fulfil the responsibilities towards the land and
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to secure the fullest contribution from it. I hope that I am wrong in any anxious forecast, but I submit that there should be care in the levying of charges on the proceeds of sales when needed and used for reinvestment in land in the same ownership.
It appears that the levy will fall with equal severity whether the land has increased in value because of the public or because of expenditure by the owner. I believe it has been suggested that minor transactions in land should be omitted—say those of under £5,000 or any agreed figure—with much saving in time, labour and cost. This seems to be a sensible suggestion from the point of view both of the benefit of the Land Commission and of the owners. Under the Bill many of the smallest things will lead to correspondence with the Commission and some action from them. And surely, on balance, it would be wiser to exclude them. In many of these small matters local authorities have ample powers and are quite well able to deal with them. In regard to cottages and, on a much larger scale, houses, I think the threat to house-owners and the appeal from them has already been before the Government, and it is to be hoped that more attention will be given to this.
May I also ask for a close examination in regard to the levy on the extraction of minerals, such as ironstone in the Midlands? I will say very little on this subject because it was well covered by the noble Lord, Lord Henley; and I should like to support him in what he has said. The working of the minerals in the Midlands presents unusual problems, and the taxation of these minerals is also peculiar in the way in which it is sometimes treated as capital and sometimes as income. If there is to be an additional Land Commission levy on top of the restoration levy, which in itself is additional to the usual taxation, it will produce a more curious situation in which, as I think the noble Lord pointed out, quite often there is likely to be a minus-result at the end rather than an equal or a plus-result.
Apart from this it will be realised that the value of the land after the minerals have been worked is less than it was with the minerals, and the surface of the land will have deteriorated by either a large or a small percentage, and

1145
there will be a great deal more work of restoration and improvement of the surface as a consequence of the mineral workings. I hope that the noble Lord who is in charge of the Bill will look into this situation in regard to minerals. I think there is more time for it here than perhaps there was in another place, and I feel it is a case where it could be useful if the noble Lord, Lord Kennet, and the noble and learned Lord, the Lord Chancellor could have a few words with the Chancellor of the Exchequer in regard to the taxation of these minerals as it might be combined or otherwise with this levy.
In conclusion, may I just submit that there are points in the Bill where, certainly from the countryman's point of view, some simplification of procedure would be useful in order to avoid work of an unproductive nature and, possibly, to achieve more fairness in the assessment of the levy? In another place a very large number of Amendments were brought in by the Government at the last minute, and I hope that the same principle will be followed in this House.
7.7 p.m.
THE EARL OF KINNOULL: My Lords, it is one of the most interesting features of this debate so far that the objectives of the Bill appear to be common ground; it is on the application of the Bill that we seem to be so far apart. Whatever may be the rights and wrongs of the Land Commission, one thing, in my opinion, is quite certain, and that is that the bulwark of democracy, the local authorities, will surely sense that the setting up of a central Government machine to carry out work that local authorities already have powers to do must surely be a direct threat to their powers and responsibilities. It must surely seem to them that the desire of the Government to have the Land Commission is either a reflection that the local authorities have failed in their powers to provide the right land at the right time or that the central Government simply wish to gain more control over their affairs. To the outsider the problem is perhaps simpler: he sees the Land Commission as no more than a thinly disguised tool for land nationalisation. It is a word which I notice the Government have so far successfully avoided.
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On reading through all the proceedings on this Bill in another place I have tried to visualise, as I am sure many of your Lordships will have done, how the honeymoon will work between the Land Commission and the local authorities. I believe that it will be brief, with immediate separation and divorce proceedings following. No doubt the Land Commission will approach the local authorities and say to them, "You give up your powers of compulsory purchase; we will look after the purchase of any land you require in your area, for we have two great advantages. We have our own finance—unlike yourselves, for you have to go to loan sanction, with consequent great delays—and we also have this advance weapon of compulsory purchase. Then, having bought the land, we are quite prepared to sell it to you at a considerably reduced price for your purposes."
I am sure this seems all too good to the local authorities, and they are bound to wonder where the catch comes. As I see it, the catch is that they will be left to clear up the mess of some clumsy compulsory purchase order which has been made in their area. And they are, of course, democratically elected bodies. Secondly, after the appointed day, they will suddenly find that the Land Commission change their character and are able to gain control of the land throughout the local authority's area without any consent or discussion with the local authority.
The main objectives of this Bill are, as I understand it, first to provide a supply of land, and, secondly, to reduce the cost of land. The supply of land for development is governed by the speed and efficiency of the planning machinery, and, as we all know, this machinery is so overloaded at the present time that it is almost grinding to a halt. The Land Commission, sadly, will provide no planning powers itself to assist the planning machinery, and, what is perhaps more disheartening, it will cause a further congestion by insisting that all developers are to submit applications to the Land Commission, I believe the period is something like six weeks before any development can begin.
In the past, the Government have on many occasions accused owners of land

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of being racketeers in hoarding vast stocks of development land, and, as is usual with such accusations of this Government, they have never once on any single occasion produced any evidence to support this charge. I thought it might be of interest to the House to refer tonight to a brief from the professional bodies, who clearly state that in their view there is no evidence of such land racketeering on any scale. Perhaps the noble Lord could comment at the end of the debate as to what evidence he has of this accusation, and if he has no evidence I suggest he should retract it.
As to the objective of reducing the cost of land, it is clear that the Land Commission can in the public sector subsidise the resale of building land to local authorities. It would appear to me that unless similar subsidies are granted for the private sector the cost of land can never be reduced, and I should like to ask the noble Lord to say, when he comes to reply, how the Land Commission will be instructed to attend to the 60 per cent. private sector market. Do they intend to subsidise it in any way?
Turning to the levy very briefly, I am sure everyone is agreed that this is the most complicated land tax that has yet been devised, and in the view of the professional bodies I am sure it is very much hoped that the next stage of this Bill an Amendment will allow the professional fees charged to those affected by the levy either to be charged to the base value of the property or to be refunded by the Land Commission. The further feature of the levy which appears inequitable is the case of easements and tenancies. As I understand it, the levy will be charged as a capital sum on any new easement or new tenancy, whether or not the owner has yet received sufficient payment to pay the levy.
I turn to the famous Clause 8. One of the faults of the present Government, if I may say so, is that they seem to have an obsession for seeking temporary emergency powers which normally would never be needed except in war time. Clause 8 is no exception to this. This Clause gets perhaps as close to allowing the State to take away a citizen's property without any appeal or protection as it can possibly get. During the whole
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of the Second Reading in another place and during the whole of the remaining stages of the Bill there never once did the Government produce any evidence why they had to take these powers; and this, I believe, is the crux of the point. Again I have taken advice from outside, and everyone is concerned to know why the Government wish to take these powers at the present time.
Turning to Clause 9, I here again feel that hardship will be caused unless an Amendment is made. As I understand it, a compulsory purchase order will be allowed to be served on a householder and completion of the purchase can be up to three years from the date of the compulsory purchase order. This places the dead hand of planning on that property, and should the owner during that period of three years wish to sell he finds his property virtually frozen. I very much hope that some deviation of the system will come into this clause, so that at least the owner may serve on the Land Commission a notice either to purchase the property or to release it from the compulsory purchase order.
Finally, to sum up, the Land Commission in my opinion will be carrying out only one useful purpose, namely, the collection of the levy, and, as has already been stated on many occasions to-day, that could very easily be collected by the Inland Revenue. The effect of the Land Commission over the past year has acted virtually as a freeze on the building programme and has reduced its output to a staggeringly low figure. There is no developer in this country who can honestly say with confidence at the present time what the future holds for him. No one knows how much power the Land Commission intend to use. We can only wait and see, and while we wait and see production sinks lower and lower. The only heartening news I found during proceedings in another place was that when the Party I support returns to power, which I hope will be very shortly, it intends to cast this great bureaucratic, unnecessary machine away.
7.17 p.m.
LORD AUCKLAND: My Lords, there can be few Bills in recent years which have received a more frigid reception in Parliament than the measure we are discussing now. Indeed, as I witnessed

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the closing stages of the Third Reading in another place the look on the faces of the half-dozen supporters of the Government resembled the closing scenes of a tragic Wagnerian opera. Almost the closing words used by the Government spokesman at the end of the Third Reading of the Bill were some words written by John Stuart Mill:
"No man made the land. It is the original inheritance of the whole species."
I do not think that anyone would deny the logic of that remark. But I cannot quite see how that remark can be justified in relation to the present Bill, because the Commission, as has been pointed out, are being enabled to purchase land by compulsion, without giving any reason for it. So I cannot see how John Stuart Mill's words, moving as they are in the ears of some, can possibly apply to this Bill.
I should like to put one specific question regarding Scotland. How does the newly constituted Highlands Development Board fit in with these proposals? Because it seems to me very unfair if a newly constituted Government Board, set up at big expense and a Board which is undoubtedly doing good work, is going to have its powers emasculated by this vast Land Commission. I should like the Government to give some thought to this question, because I am certain that the people in the Highlands of Scotland particularly will be very anxious to know what is taking place here.
While on the subject of Scotland, I should like to quote briefly from an article in a recent edition of the Perth-shire Advertiser in which the Labour Party correspondent tries to justify this Bill. He says in one passage:
"Shorn of technicalities, the purpose of this Bill is easily understood."
That would be true if the Bill had anything other than technicalities in it. He goes on to say:
"The Tories fear that implementation will lead to widespread nationalisation of land, and they are quite right in the case of building land. That is what the Bill is about."
In another place the Government tried their best to convince the people that this was not nationalisation of land. One wonders just who is right, the Government or the gentleman from the Perth-shire Advertiser. But I think that the
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electorate in this country may well draw their own conclusions.
I should like to turn for a moment to the building industry, which has been hard hit by the selective employment tax and by other fiscal measures which have been put on it. The terms of this Bill are going to be additional hardships particularly on the small builder who never quite knows how and when he is going to get planning permission, and who may not know for some time what he is expected to be building, because, as has been said earlier, under this Bill no specific reason need be given for compulsory purchase. I believe that this is a bad thing for the country, since our building industry is one of our most important attributes.
So far as the complexity of this Bill is concerned, I would agree to some extent with the noble Lord, Lord Mitchison, that any planning Bill is bound to be complex. I accept that, but on one condition—namely, that the Bill in question can be proved workable. But I cannot, with the best will in the world, see that this Bill in its present state can really be workable. It is going to be costly to administer. Some 2,000 extra staff are said to be needed. In view of the work and the many aspects of the work which they will have to carry out, I think that is an optimistic estimate.
However, I think the most grievous harm that this Bill does is to give a nasty "black eye" to those who serve in local government. I think that all Parties have rightly paid tribute over the years to the good work done by local councillors, who have been unpaid and have given a good deal of their time. That applies to local councillors of all Parties, whether or not we on these Benches may agree with their views. This Bill is going to deprive them of considerable powers. The chairmen of planning committees on local councils—I have several friends who hold these posts—work long hours going into the whys and wherefors of these matters. They work sensibly, often in relation with county councils. Are the Government prepared categorically to say that local authorities will not by this Bill be divested of many of their powers, particularly in planning matters? There are in local government in this country a number of people, of all Parties

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and of none, who I am sure are greatly worried about this.
May I turn for a moment to a strange part of this Bill, to Schedule 2, paragraph 2(2)(b), which refers to compulsory purchase. Here I quote:
"where he is the owner, lessee or occupier of land which appears to the Commission to be separately occupied, the notice is addressed to 'the owner and the occupier' of the land (describing it) and is either delivered to some person on the land or"—
this is the vital piece—
"if there is no person on the land to whom it can be delivered, is affixed to some conspicuous object on the land."
I do not want to seem facetious, but does this mean that if a plot in Kent is going to be compulsorily purchased, a notice can be affixed to some raspberry cane on some piece of the land if the person concerned cannot be found? I think this is important, because compulsory purchase is a vital thing for that person, and it seems most unfair that he should be communicated with in this way.
I do not wish to go any further into this Bill now, but I hope that between now and the next stage the Government will look more closely into Clause 8, because the provisions are not only complicated, but in many ways are most unjust. I think all Parties are concerned to get rid of the really unscrupulous land speculator—of that there is no doubt; but there is no evidence that this Bill will either bring down the price of land or make more land available for building.
7.28 p.m.
LORD NEWTON: My Lords, I view this Bill with as much distaste as do those of my noble friends who have already spoken in this debate, and I do not relish the task of having to make the final speech on Second Reading from this side of the House. Of course I recognise, as we all do, that the Government claim that the electorate gave them a mandate to establish a Land Commission. But in fact the electors were led up the garden, because they were given to understand that a Land Commission was essential for the purpose of taking profiteering out of land, and furthermore, that the activities of a Land Commission would result in a lower cost of housing in the country. Neither of those propositions
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is even remotely true. So, in fact, the electors were "sold a pup" at the time of the General Election, and furthermore a pup that is going to grow up into an exceedingly savage and dangerous animal.
It is no exaggeration on my part to say that this Bill is the only piece of legislation that I can recall in fifteen years in Parliament which can accurately be described as tyrannical. Indeed, some of its provisions are potentially so oppressive and unjust that it is scarcely possible to comment upon them without recourse to language more immoderate than your Lordships would be likely to find acceptable.
Usually, however much one criticises a Bill—and we do criticise Bills in this House; that is what we are here for—one can find in it some good points which one can mention, and one always tries to do so. But, try as I have, I have not been able to find one single redeeming feature in this Bill. One cannot even say that the Bill is lucid and clear, as my noble friend Lord Brooke of Cumnor pointed out. The noble Lord, Lord Mitchison, seemed to think that it is a virtue in the Bill that the Explanatory Memorandum is what he called more lively than the Bill itself. I cannot remember any Bill in which that was not true, so it does not seem to get one very far. Those, then, are the reasons why I do not particularly relish having to make this speech now. But, fortunately for me, my noble friends who have spoken from this side of the House have put the case against the Bill with such masterly precision, and indeed comprehension, that perhaps it will be sufficient if I merely attempt to summarise our objections to the Bill and our forebodings about it.
We do not, of course, quarrel in principle with the ostensible objectives of the Bill as described in the White Paper of September last year. Of course it is desirable that the right land should be available at the right time for the implementation of national, regional and local plans. But it appears to be the contention of the Government (it is implicit in the White Paper as well as in the Bill, and it was implicit in the speech of the noble and learned Lord the Lord Chancellor this afternoon) that such a state of affairs has not obtained in the past, does not obtain now, and will not obtain in

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the future unless the Land Commission are appointed. That is a proposition which I, for one, am not prepared to accept.
As I understand it—and the speech of the noble and learned Lord Chancellor this afternoon bore this out—the Government base that contention on two arguments. The first is that the existing authorities—that is to say, the local authorities, the New Town corporations, various Government Departments and other official organisations—either do not at present possess adequate powers of compulsory purchase or, if they do possess them, do not exercise them adequately. But where is the evidence that that is so? I am not aware that the Government have at any stage in the proceedings on this Bill offered any evidence to that effect. We did not get any from the noble and learned Lord on the Woolsack. All we get is a very general assertion that that is so.
Supposing the Government are right and that is so, it would follow that, if we had had a Land Commission fulfilling their activities for the last ten years or so, we should to-day in this country possess more motorways than we possess, more towns than we possess, more National Parks, more hydro-electric schemes, and so on. But how can anyone believe a proposition quite so fantastic as that? Then, again, if the Government were right about this it would follow that more houses would have been built in this country in recent years if we had had a Land Commission. But surely nobody, apart from Mr. Willey, can believe that one either.
Certainly, so far as I can recollect, no speaker made that claim, from either side of the House, when at the end of July, at the instance of my noble friend Lord Hawke, your Lordships' House conducted an inquest into the failure of the Government's housing programme. Mr. Willey may believe that in recent years more houses would have been built if we had had a Land Commission, but it would not seem that Mr. Crossman believes it. Mr.Crossman, when he was still Minister of Housing and Local Government, said in the other place on April 28 this year:
"The only limiting factor is the willingness of my right honourable friend the Chancellor
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of the Exchequer to make money available. If we were allowed more money we could achieve records in local authority building year by year."—[OFFICIAL REPORT, Commons, Vol. 727, col. 983; 28/4/66.]
There is nothing there about the shortage of land having anything to do with the building of more houses. It is for those reasons that I personally reject the unproved argument that the existing authorities either cannot or do not exercise adequately their powers of compulsory purchase.
The Government's second argument in support of the contention which I am discussing is that desirable development is frustrated by owners' withholding land from the market in the hope of higher prices. Of course there are people who withhold land from the market, but not for profit. They are people who want to protect their own amenities, people who have acquired a garden and perhaps a field or two around their house in order to give them an open view and so that they may enjoy a degree of privacy. And why not? It is not a crime in this country, or even a sin, to seek to protect one's own amenities. If the private individual does not protect his own amenities for himself, no one else is going to do so. Town and country planning exists, as we know, to protect public amenities: it does not exist to protect private amenities. It is a sad thing if people in this country are now to be deemed to be unpatriotic citizens merely because they decline to develop land which a local planning authority has graciously said they may develop.
As to the withholding of land in the expectation of getting a higher price, the Government know perfectly well, as my noble friend Lord Kinnoull pointed out, that the professional bodies have gone on record as saying that there is no evidence of large-scale withholding by landowners of land for development. It does not strike me as being very surprising if these bodies are right. I do not know how many speculators in land there are in the country, or the scale on which they indulge in it. My noble friend Lord Gage said he was not aware of ever having come across a land speculator. However that may be, there are obviously some people who speculate in land. The noble Lord opposite obviously thinks there are more than a few. I should have thought that a speculator in land,

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like a speculator in any investment, normally aims to get a quick return—a quick profit. The ordinary owner of land who is not a speculator sells when he is offered a price which is such that, on balance, it is more advantageous for him to sell than not to sell. For example, a farmer will sell land if the price will more than compensate him for the loss of his income resulting from the sale. That is not withholding land for the sake of getting a higher price; it is just plain common sense.
In the instances, be they many or be they few—and I should have thought that probably they were few—in which land is withheld from the market for no good reason, then the answer lies in compulsory purchase, or in the threat of it, by one of the existing authorities with powers of compulsory acquisition. One does not need to have a new body to do it for them. The proof of this is to be found in the case, so dear to the heart of Mr. Willey, which he quotes so often, of what happened not long ago in Hertfordshire. So it seems to me that this contention of Her Majesty's Government, that a Land Commission is needed for the purpose of securing that the right land is available at the right time, will not stand up to rational examination.
As to the Government's second objective as set out in the White Paper, I consider that it is right now to make yet another attempt to recover betterment, but not by the method proposed in this Bill. As so many of my noble friends have said this afternoon, betterment ought to be taxed like any other capital gain; and, indeed, as increases in existing use value of land are already taxed and will continue to be taxed. The noble Lord, Lord Silkin, seemed to think that a disadvantage of taxing betterment like any other capital gain would be that it might be possible to set off losses against gains in other directions. If that were so and it were a disadvantage, it would not be very difficult to put that right in the appropriate section of the Finance Bill.
But, to my mind, and trying to look at this from the Government's point of view, it is so silly of them not to realise the point I am trying to make, instead of tying themselves in knots trying to prove what, to me, is the nonsensical proposition: that the Land Commission and the
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levy are like Tweedledum and Tweedledee; that they must go together. The noble and learned Lord the Lord Chancellor this afternoon tried to argue this, and so did the noble Lord, Lord Mitchison, and they were both in their respective way very ingenious in trying to do it, but at the end of the day I am afraid I am no more convinced than before they made those distinguished speeches. It cannot be in the Government's interest to create unnecessary resentment, but this is precisely what they are doing in this Bill by singling out landowners as pariahs, as outcasts, as people who must be treated differently and taxed differently from those who make equally legitimate capital gains in other ways.
It seems to me that the Government are about to make exactly the same mistake as was made in the 1947 Act of the noble Lord, Lord Silkin, which so many people have mentioned this afternoon. That Act was perfectly logical in its conception, but what was wrong about it was its psychology. It failed partly because under it purchasers were required to pay the development charge at the 100 per cent. rate, but also partly because owners, being human beings, just were not prepared to sell their land at existing use value. So I am prepared now to predict that people, being human, will not willingly accept from the Land Commission less than the full market price for their land; in other words, they will object to the Commission's deducting the levy from the price which the Commission will pay when sales are made. On the other hand, I fully share the view, which I believe to be held by the professional bodies, that if betterment were taxed as capital gain, like any other capital gain, then there would not be resentment on the part of those who had to pay it, and land would not be held off the market as I believe it will be if we have the levy in this form.
I venture now to make another prediction, and that is that if the Land Commission or the Government try to impose crownhold tenure to any significant extent, then that attempt will not succeed. Quite obviously, crownhold is not going to appeal to the industrialist or to the shopkeeper, because development will be levied at the 100 per cent. rate instead of at the 40 per cent. rate which is proposed in the Bill for freeholders and

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leaseholders. Nor will crownhold, even concessionary crownhold, in my judgment be likely to appeal to the householder, for the simple human reason that, on account of the restrictions which are a necessary part of crownhold, the crown-holder will be an inferior citizen as compared with a freeholder and a leaseholder. Therefore it seems to me that the more the Government or the Commission try to impose crownhold tenure—and I do not know to what extent they intend to do so—the more they will simply force up the price of freehold land and, therefore, the cost of housing.
This brings me to the Government's third ostensible objective, which is to secure that the burden of the cost of land for essential purposes is reduced. As my noble friend Lord Brooke of Cumnor and others have said, there is nothing whatever in this Bill to secure that, except the provision for concessionary crownhold for housing. But even this is really no more than an intention on the part of the Government that in future some housing will be cheaper than other housing, which is not at all the same thing as saying that in future houses will be cheaper than they are to-day. In fact, as so many of your Lordships have pointed out, all new houses will become dearer as a result of this Bill, because owners are going to pass on as much of the levy as they can to those to whom they sell. In addition, as I have just said, if an attempt is made to enforce crownhold tenure that also will have the effect of putting up the price of freehold land and the cost of freehold housing.
My Lords, I have been discussing up to now the Government's—shall I say?—overt reasons for this Bill. But one finds them so unconvincing that one is driven to look to see whether there are, in fact, any covert reasons. And one does not have to look much further than the speech which Mr. Willey made in the other place on January 31, when he was introducing the original Bill. It is quite obvious from Mr. Willey's lengthy opening remarks that the real object of this Bill is to deliver a mortal blow at landowning and landowners. But it is not the "big boys" who are going to be hurt by this: if anyone is going to be hurt, it will be the humbler folk. It will be
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people like the smallholders who grow strawberries between Southampton and Portsmouth, in my old constituency; small tradesmen who own their own shops; the retired couple who own their own home and a bit of land behind, between the house and the railway. They are the people who are going to be hurt, if anyone is going to be hurt, by this Bill.
Do not let anyone be lulled into a state of false security by the provisions in the Bill to secure that the Commission will not be able to acquire land compulsorily unless there has first been a planning decision. The Land Commission will be able to apply to a local authority for a planning decision in the same way as anybody else. My noble friend Lord Brooke of Cumnor has recently moved from Hampstead to Wiltshire. I could ask his local planning authority for permission to develop his kitchen garden. For that matter, I could ask for permission to develop the Prime Minister's garden in the Scilly Isles, though if I were foolish enough or loutish enough to try to do any such thing I have no doubt at all that the application would be refused.
However, it would be a very different story if the Land Commission made such an application. I do not say that they would, but if the Land Commission made application for such planning permission they would be in a very strong position to bring pressure to bear upon local authorities, or to horse-trade with them. As I understand the Bill, it will be quite possible for the Commission to say to a planning authority: "If you will grant planning permission for a particular stretch of land here to be developed, then we in return will acquire for you that stretch of land over there which you want for your housing programme, and, what is more, we will acquire it under the special procedure of compulsory purchase, which you yourselves cannot use, and thereby save you both time and expense".
My Lords, as my noble friend Lord Kinnoull pointed out, this is a Bill to nationalise the land—not outright, of course, but gradually over the years. Your Lordships do not have to take that from me. This is the view of the Prime Minister himself. After all, the Prime

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Minister said during the General Election, on March 17 of this year, at Chiswick:
"The Bill"—
that is, this Bill—
"will take urban building land on which planning permission has been granted into public ownership".
Public ownership is the same thing as nationalisation. No, my Lords, the powers are in this Bill, and these powers will be exercised not by a body responsible to the electorate: they will be exercised by nine men appointed by the Minister—and, so far as I can make out, they will be no more answerable to Parliament or to the public for their day-to-day activities than the National Coal Board, British Railways or any other of the nationalised industries. What is more, again so far as I can make out, even the Minister or the Ministers will be answerable to Parliament for the activities of the Land Commission only in so far as the Minister or Ministers have given directions to the Commission or authorised compulsory purchase orders.
My noble friend Lord Brooke of Cumnor pointed out very clearly in his speech the more obnoxious features of the Bill, and I am not going to repeat them at this time of night, but I hope that the public at large will begin to realise that these obnoxious features are in the Bill. I go further than that and say that I am of the opinion that if the public had known that these features were going to be in the Bill it would not have given the Government the mandate which they claim. The Bill may well fail in its purpose for the same sort of human reasons that Lord Silkin's Act of 1947 failed. It may fail, as my noble friend Lord Ilford suggested, because people will not be prepared to pay the levy and feel resentment about it. Certainly, if owners decline to treat voluntarily with the Land Commission and so force them in every case to resort to compulsory purchase, then assuredly the machinery of the Commission will break down—and perhaps, my Lords, that is the best thing that could happen.
7.54 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, while it is fresh
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in my mind, perhaps I may take up the last point made by the noble Lord, Lord Newton, about apparent discrepancies between the Labour Party Manifesto, or how it might be understood, and the text of the Bill presently before your Lordships. I would remind your Lordships that the Bill was introduced before the Election, so everybody had a good opportunity to know what was in it.
Now let me take up some points that have been made in the debate. I apologise in advance to your Lordships if I am a little longer than is sometimes the case at the end of such a debate, but the points that have been made are many, contentious and, some of them, important. The burden of the complaint by the noble Lord, Lord Brooke of Cumnor, about the Bill was that it was unduly complicated. That was his first complaint. He soon conceded the principle of a betterment levy, but complained that the way we proposed to go about it was too complex. The first detailed complaint he made about the Bill was—and I quote him:
"It is quite fallacious to suggest you can equitably deal with this difficult matter by imposing a standard charge of 40 per cent."
I assume, therefore, that he would be in favour of a fluctuating or graduated charge in different circumstances, and I wonder what increase in the staff that we envisage he would expect that to entail. Would it be 2,000, 3,000, 4,000 or 5,000?
LORD BROOKE OF CUMNOR: My Lords, if I may deal with that point, I was countering the argument which had been used by the noble and learned Lord the Lord Chancellor, that where there was an element of betterment deriving from the actions of the community that could be equitably dealt with by a flat rate charge. In my speech I pointed out that, though there might well be an element of community betterment, it might range from 1 per cent. to 99 per cent., and it could not be argued that it was equitable to offset that by a flat rate levy at any fixed figure.
LORD KENNET: I imagine it would still take quite a lot of extra staff to sort it out. The noble Lord, Lord Brooke of Cumnor, and many other noble Lords, asked: Why not adapt the capital gains tax to fulfil the purpose of this

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Bill? This is a substantial point, and obviously it was not overlooked. We think we had good reasons for not adopting it—in fact we know we had—and I will give the House three of them. For one thing, the capital gains tax does not touch any value which notionally existed at or before April 6, 1965. The betterment levy, on the other hand, will apply to all development value actually realised, even though it may be argued that it had accrued over a number of years in the past, before that Budget date.
Another reason is that the capital gains tax does not bite on gains made from the sale of business property in so far as they are reinvested in similar property. Thus a farmer who sells 100 acres of land worth £20,000 as such for £100,000—thus realising £80,000 development value—can avoid paying capital gains tax if he invests the money, the £80,000, in buying a 500-acre farm. The levy will catch this, and it is the Government's purpose to catch it. Thirdly, an owner-occupier with a house and, say, three-quarters of an acre of garden, worth, as a house, £10,000, could sell the whole for, say, £20,000 to a builder who would erect several houses in the garden. Under capital gains tax, the unearned development value of £10,000 would escape tax, but the levy, as the Government design it, would catch such unearned value.
I think it is clear that the capital gains tax is one sort of animal and that the proposed betterment levy is another. The capital gains tax is leviable only on values created since April, 1965, and we plan to revise it next year so that it will bite only on increments of existing-use value. The betterment levy, on the other hand, will bite on increments in change-of-use value—that is, development value—and also increments which will go back before April last year.
Then the noble Lord, Lord Brooke of Cumnor, asked: Can the Land Commission buy for one alleged purpose and use the land for another? The answer is that in the second stage of the Bill, after the introduction of the second stage, there are provisions for a change of purpose in land after its acquisition. The provisions are complicated, but quite comprehensible. The noble Lord, Lord Brooke of Cumnor, used for this point
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the analogy of husband and wife. He said, "Suppose a wife said to her husband, 'Instead of the usual £15-a-week housekeeping money this week, I would rather you gave me £50', and suppose she then refused to explain to him why." Or let us say that she said to him, "I want £50 in order to buy a gramophone", and then went straight out and spent it on liquor—that is, she used it for another purpose than the alleged use. I think we all know what the individual citizen would do if this sort of thing continued. He would divorce his wife; and to the extent that a governing Party may be regarded as the wife of the electorate, I think it is perfectly clear that if this sort of thing continued the electorate would divorce the Government at the next Election. One need not fear that the Land Commission which we are setting up are going deliberately to trick everybody. For what ends? Why should they? I do not see it myself at all.
The noble Lord, Lord Brooke of Cumnor, alleged that the Land Commission would be able to sell at any price they liked. Under the crownhold provisions, of course that is not true. The Land Commission can only sell at a concessionary price, a concessionary price being a lower price than the market price. This is the reason why the Commission are there. The noble Lord asked also very specifically, and he repeated it: Is it true to say that, after the introduction of the second stage, anyone who tries to improve his property will lay himself open to having it taken from him? In the ordinary sense of the words, No. The Land Commission do not touch improvements, as we normally use the word, as they would not qualify under the Land Commission Bill as material development; they would not be big enough to attract any of the provisions of the Bill. If, on the other hand, he meant, "Would anybody who developed his own property risk having it taken from him?" my answer is, No, he would not. The purpose of the whole Bill is to encourage development, to render development more orderly and to tax unearned values attached to development. It is not to take land and property away from those who develop it. Far from it.
The noble Lord also asked me whether I could define the relation between the

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Land Commission and planning control. He asked whether the Land Commission would have to apply for planning permission. The answer is, Yes, like anyone else they will have to apply.
I come now to Clause 8 which is a very big issue. The noble Lord, Lord Brooke of Cumnor, pointed out that in certain circumstances a landowner will have no right to a hearing. This is true. But before we take up a position on this let us go through the stages. First of all, the Government hope that the landowner will develop his own land in accordance with the public interest. If he does not want to do that, we hope he will sell his land to someone who will develop it in the public interest, when he will be taxed on the development value. If he does not want to do that, he can sell to a local authority by agreement; if he does not want to do that, he can sell it to the Land Commission by agreement, if the Land Commission are operating in that part of the world for that purpose. If he does not want to do that, then a local authority can exercise its compulsory purchase powers over him. If for some reason or other the local authority is not in a position to do that, or feels that it would not be well advised to do so, the Land Commission may exercise their compulsory purchase powers against him.
In normal circumstances, there will be a hearing in accordance with the familiar drill at present with the local authorities. But we are now at about the seventh or eighth hoop or stage. In abnormal circumstances it is true to say that the Minister will have power to institute what we call the speedy procedure in certain parts of the country for a certain time and for certain types of land only. But here is a landowner who has come through all those hoops without agreeing to the development of his land in the public interest; what sort of person is he going to be? These powers have been taken with the idea in mind of having a procedure to use in the infinitely remote case, I hope—and I hope as fervently as any noble Lord that it will not arise—of an organised resistance to the operation of the Land Commission. It could be—I can just imagine it, a horrible idea—that all the landowners in a given part of the country of a certain
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type and at a certain time would club together, and with their joint resources would hire a skilful lawyer to defeat the operation of this Bill. It is because there is that possibility that the Government felt it would not be responsible to omit this extreme provision.
The noble Lord made an analogy between the landowner in this case who gets no hearing—although let us not forget that he may make written representations and the Minister must consider them—and a murderer who does not get a hearing in court. I think it is a false analogy. In criminal proceedings it is necessary to determine the facts where they are in dispute, and where one of the parties is presumably lying about them. The appearance of the accused in court is thus necessary in order to enable his veracity to be assessed. It is not so in compulsory purchase. In general, the facts are not in dispute. It is just that the seller simply does not want to sell. The issue is therefore solely whether the public interest must prevail over the private interest of the recalcitrant owner, and this according to all our historical constitutional theory is a matter for decision by the Minister.
LORD BROOKE OF CUMNOR: My Lords, the prior question is: What is the public interest?
LORD KENNET: In complicated matters of this sort the public interest is a question that is usually decided by Parliament. I revert to the husband and wife analogy. If the wife—the Government in my analogy—is operating the Bill in a way which is unpopular with the husband, she will be divorced.
VISCOUNT DAVENTRY: My Lords, the noble Lord has had rather an unfortunate experience.
LORD KENNET: My Lords, I do not believe that either the noble Lord, Lord Brooke of Cumnor, nor I have had that experience. The noble Lord asked why it was necessary to include provisions for waiting for six years for the assessment of the levy. Many noble Lords have criticised the Government for not leaving all this to the Inland Revenue. But six years is the standard period in Inland Revenue matters for the assessment of difficult tax issues and we have carried it into this Bill.

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The noble Lord also asked whether we could not exempt small transactions. There are two provisions in the Bill which have that effect. One is the fact that development value up to 10 per cent. is not charged—which accounts for many of the complications which make the Schedules to this Bill look rather absurd. For example, whenever you come across "eleven-tenths" it is the de minimus exemption of 10 per cent. on development value. The other is the rather permissive definition of development which is not material. "Material development" must be something quite real. For a very small change in value, if very small work is carried out, this can escape either under the 10 per cent. provision or under the "immaterial development" provision. The noble Lord asked about the payment of levy in advance in connection with bank loans. If he agrees, I should like to take this point at the Committee stage. I would treat similarly the other point about the exemption of charities.
I see that the noble Lord, Lord Wade, is not here. I will not weary the House with the answers I have prepared to his questions. My noble friend Lord Silkin spoke—and I was delighted with the historical proportion into which his speech put our whole debate to-day. The noble Viscount, Lord Gage, raised the interesting matter on which we had been in correspondence about the relevant operations of the Land Commission, the local authority and others on comprehensive redevelopment. I could give an answer now, but it is rather a lengthy matter. I wonder whether he, too, would be prepared to leave this over until the Committee stage. I am sure he could find a clause on which to take this point, which is a very interesting one.
The noble Lord, Lord Henley, supported to a certain extent by the noble Duke, the Duke of Buccleuch and Queensberry, raised the question of minerals under the Bill. There have been, as I am sure the noble Lord knows, discussions with the Country Landowners' Association about the effect of the Bill on the owners of mineral-bearing land.
LORD HENLEY: My Lords, I am surprised to hear the noble Lord say that, because I have been in the closest touch on this with the C.L.A. I have not heard of these discussions.
LORD KENNET: My Lords, I am informed that the discussions have taken place. The value of minerals can be realised only where planning permission has been granted by a planning decision. The value depends on the demand by the community, and the distinction between sand and gravel and other minerals is, in the opinion of the Government, unreal for the purposes of this Bill. The minerals committee of the Confederation of British Industry do not consider that powers of the Mines (Working Facilities and Support) Act 1966, to which the noble Lord referred, which is a consolidation of old powers and contains nothing new, go far enough. In particular this Act does little to help the sand and gravel workings—a matter which has an obvious importance in the public interest if we are to get the amount that we need of development and public building done in the rest of the century. The Land Commission's powers to acquire such land may, we in the Government believe, be very important and useful. The noble Lord also raised the question of regulations. These are not yet available.
I was about to pay a compliment to Henry George, the common inspiration of the noble Lord, Lord Ilford, and myself, but I see that the noble Lord is no longer in his place. The noble Lord, Lord Taylor of Mansfield, who is present, spoke about the effect of this Bill on land owned by pension schemes. This is a difficult matter. The land owned by such pension schemes is owned as an investment, and if one is to legislate at all to tax land held as an investment, one cannot distinguish between the purposes of one investment holder and another. To do so would lead one into the most difficult complications. I think, therefore, that land held in this manner will have to stand the 40 per cent. tax like other land held by other investors. To have it otherwise would give rise to unworkable complications.
The noble Duke, the Duke of Buccleuch and Queensberry, raised a point about agricultural landowners who sold land at a profit for development but sank the profit in agriculture. I am afraid that the effect of the Bill will be that from now on they will have to make do with 60 per cent. profit. The noble Earl. Lord Kinnoull, asked whether local authorities were not good enough for this

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purpose. Of course, my Lords, many local authorities are; but others, as I am sure the noble Earl will admit, are too small to be able to cause the development we need to be brought about without unacceptable delays. The point has been made in this debate, and on other occasions, that one finds desirable development straddling the area of two local authorities. Much was said about this in the speech of the noble and learned Lord the Lord Chancellor.
The noble Earl raised several other points. The need for six weeks' notice to the Land Commission before development starts was removed on Report stage in the Commons. The period of three years after compulsory purchase, or for which land could be acquired, is common to all compulsory purchase powers of local authorities at present, and I know of no evidence that the prospect of a Land Commission has in fact caused any of the present difficulties in the building industry. On the contrary, it has provided every possible incentive to builders to get on with development, if only they understand it aright. Lastly, the noble Earl asked me to rectify an accusation. I was not quite clear what the accusation was or who was alleged to have made it; or when, and in what terms.
THE EARL OF KINNOULL: My Lords, the accusation was simply that the Government kept on talking about land racketeers who are hoarding these vast tracks of development land, and professional bodies say that they have no evidence of it.
LORD KENNET: My Lords, I have never made any such accusation, and cannot, of course, retract other men's words.
The noble Lord, Lord Auckland, asked whether the Government were ready to say that local authorities would not be divested of planning powers by this Bill. The Government are indeed ready to say that. They will not be.
The noble Lord, Lord Newton, made a spirited concluding speech. It seemed to me that many of his arguments, in the first part of his speech at least, were directed at all kinds of compulsory purchase, or were as valid against compulsory purchase as it now exists as
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against compulsory purchase under this Bill; and also against all possible imaginable forms in which a betterment levy might be brought into operation.
LORD NEWTON: My Lords, I find it hard to believe I gave the impression that I was against any conceivable form of compulsory purchase. Far from it. I went out of my way to say that the threat of compulsory purchase, or actual compulsory purchase, was the way to deal with cases where land is required for the market.
LORD KENNET: My Lords, that is precisely what we plan to do rather more efficiently under the present Bill.
Let me now answer, if I may, in general the criticism which has been levelled at the Commission from noble Lords opposite, the criticism that it is too strong a tiger; that it is a monstrous piece of State capitalism, or creeping nationalisation, which will cow all unoffending little private capitalists into abject inertia so that nothing will ever be built again; or will be built only at the price of gaols overflowing with bewildered owner-occupiers, smallholders and offending nurserymen. All this is good clean fun in the two-Party tradition. It is the kind of opposition that is naturally, and I would say myself quite properly, put up by noble Lords opposite to any increase of Government activity in anything. We on this side—I would say we on the Left of British politics in general, and over the last hundred years—are not simply seeking what we may devour into the maw of State bureaucracy. We can go to bed happy after a day when we have not nationalised a thing. No, for at least a century the British Left has regarded State power as something to be wielded to rectify abuse, to protect the weak against the strong. Is it too colourful a claim to say that the Land Commission, which I hope that the House will approve this afternoon, is to protect the weak against the strong? I think not.
We have heard more than once about the "Lavender Hill Mob". I would ask any noble Lord who doubted this claim to take an observant walk, a field trip into urban values, through the bad bits of one of our cities and so into the commercial centre. He could walk through

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North Kensington and Notting Hill to the empty luxury blocks of Paddington, and so to the West End. Or he could walk through Hackney, Hoxton, Haggerston and Spitalfields into the City of London; or he could take the corresponding walks in a dozen other cities. He would see housing, largely tenement blocks, and streets and conditions the existence of which in a rich country—for we are a rich country—should make him ashamed for his country. And if he thought, as he stood amid the obscene decay and neglect of North Kensington that in this city, as in others, there are landowners sitting on their arses and raking in profits of many hundred per cent. for the land this city needs, I think that he would pass this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FILMS BILL
Brought from the Commons; read 1a, and to be printed.
NEW TOWNS BILL
Brought from the Commons; read 1a, and to be printed.
FAMILY PROVISION BILL [H.L.]
Returned from the Commons, agreed to.
LIVERPOOL CORPORATION BILL
The Queen's consent signified, and Bill reported, with Amendments.

SOLUS PETROL (No. 2) ORDER 1966
Reported from the Select Committee, That the Order should be allowed to proceed: together with a Special Report from the Select Committee; the said Special Report to be printed.
House adjourned at twenty minutes past eight o'clock.