HL Deb 30 January 1967 vol 279 cc787-97

[No. 8]

Leave out Clauses 27–85.

The Commons disagreed to this Amendment, but amended the words so restored to the Bill as follows:

[No. 9]

Clause 49, page 52, line 26, at end insert— ("( )the proceedings on a case so stated and signed are abandoned or otherwise disposed of without a decision being given on it; ( ) an appeal against the decision of the Court of Appeal or the Court of Session on such a case is abandoned or otherwise ceases to have effect or the time for bringing any such appeal expires without its having been brought.")

[No. 10] Clause 52, page 55, line 30, leave out subsection (2).

[No. 11] Clause 59, page 61, line 29, leave out from ("section") to end of line 30 and insert ("208 of the Housing (Scotland) Act 1966")


My Lords, I beg to move that this House doth not insist on Amendment No. 8 to which the Commons have disagreed. This is the Amendment by which this House excluded Part III, which the House of Commons put back. All the succeeding Amendments before us this afternoon are Commons Amendments to Part most of them Government Amendments originating in another place. When I come to them it may be for the convenience of the House, and speed things up, if I say just a word or two about each, to explain what its effect is and why it is there. I beg to move.

Moved, That this House doth not insist on Amendment No. 8 to which the Commons have disagreed.—(Lord Kennet.)


My Lords, it will be quite clear that I shall not advise your Lordships to seek to insist on this Amendment, because it was I who, when I moved it, explained that it was being moved for technical procedural purposes. There was at an earlier stage of the Bill a suggestion that your Lordships' House might be acting improperly in debating at some length these clauses which deal with finance, and therefore I think it is important that your Lordships should know that in another place on Wednesday last Mr. Speaker ruled that the financial privileges of the Commons were in no way infringed by this Lords Amendment. What has happened is that the Commons have put back these clauses in their original form without any of the three excellent Amendments made in your Lordships' House, but with a number of further Amendments, mostly of a technical character, designed to improve the Bill. Like the noble Lord, Lord Kennet, I do not wish to take up time with each of these Amendments, and if I may speak broadly now I will simply say that I believe all of them to be acceptable.

I should like to put on record that had it not been for the action of this House in leaving out Clauses 27 to 85 it would have been impossible for the Government to make these dozen or more technical Amendments in the Bill. In fact, it was the action of the Opposition in first amending Part III, and then moving procedurally to leave it out, that has given the Government the opportunity which they would not otherwise have had to correct some flaws in the Bill and to make some improvements. In exactly the same way, I may say, if there had not been further Amendments on this Paper I should not have had an opportunity, because it is not open to me to speak more than once on a Motion, to answer what the noble Lord, Lord Kennet, said about me a moment ago. I am perfectly well aware that the right of the citizen is to a public inquiry or a private hearing, and normally the citizen has his choice. My concern about the special procedure under this Bill is that the citizen is going to be deprived of any hearing at all.


My Lords, may I interrupt? It may be more acceptable, even with our loose procedure, if I do so now rather than at the end of this Amendment. I must introduce one further refinement of correction. The only citizens who are going to be deprived of their right to public inquiry under the speedy procedure are those who are not householders.


Yes, I appreciate that. I think that the noble Lord and I are probably now in agreement about the technicalities of these matters, though not about the policy. If I may come back to Clauses 27 to 85, I think it is worth mentioning also, particularly to advocates (if there be any) of single-Chamber government, that if this House were to be abolished, as has been advocated in some quarters in the past. it would immediately set up a serious technical problem for Governments which found that Bills had passed through another place with technical flaws in them uncorrected; and it would mean that either Bills would have to reach the Statute Book in imperfect form, or at least a further stage of consideration would be required in another place.

On all these grounds, I submit that we in this House did a valuable piece of work on Part III of the Bill. It is a matter of deep regret to my noble friends and myself that the Government did not see fit to accept our three important Amendments to that Part, concerned with the exemption of owner-occupiers, the complete exemption of charities, and the exemption of small transactions from the levy. In the case of owner-occupiers, I sincerely believe that there is clear inconsistency in the attitude of the Government between their treatment of owner-occupiers in this Bill and their treatment of owner-occupiers in relation to capital gains tax.

In the case of charities, when the Government seek to defend themselves with the plea that the betterment levy is a levy and not a tax, that is a splitting of hairs. What matters is that charities have never been taxed before, and that those who will suffer from this taxation are the eventual recipients of the charity. Charities enjoy their charitable status because Parliament, acting through the Charities Commission, believes them to be serving a public purpose. That public purpose will, to that extent, be impaired, and the recipients will be the sufferers, because the Government have now decided not to accept our Amendment but to tax certain lands of charities.

Finally, with regard to small transactions, I gather from what was said here and in another place that the Government were attracted in principle by the idea of exempting small transactions, but found no means of doing so which would not open the door to evasion. It brings to my mind a case when I was a junior Minister at the Treasury and I was briefed to resist a certain change, strongly pressed upon me, because I was advised that if this change was made it would open the door to tax evasion. Some years later, when I was no longer there, a Chancellor of the Exchequer made that change, and to the best of my knowledge there has been no evasion at all as a result; and I am quite certain that, had the Government fully addressed their minds to it, it would have been possible to have found a method of exempting small transactions from levy without giving rise to evasion.

We did not set any special store by our figure of £4,000 in the Bill. Our purpose was to procure that those transactions were exempted from levy where the cost of administration and collection would in fact have outweighed the revenue from the levy. It was a perfectly sensible approach. I should have thought that, in the Government's view, it would have been more than sensible, because this failure to exempt small transactions will destroy the Commission's administration. It may seem strange that those of us who hate the whole idea of the Commission should have been seeking means to make its administration smoother. However, the Government have decided.


My Lords, the noble Lord knows that I agree with him entirely, and I said so; but would he not agree that it is possible after further consideration still to exempt under what will be Section 63 when the Bill becomes an Act?


Well, my Lords, we shall see what happens. But it is a somewhat strange position, if the Government say that it is not possible by Statute to exempt certain transactions because of the risk of evasion, and then find some non-statutory form of words which does the same thing, but does not leave the way open to evasion.


Which it can easily change, if need be.


My Lords, I am most grateful for the assistance and support that the noble Lord has given on the Bill, and we shall see what happens. I am simply expressing my own personal view, that the Land Commission will curse the day when it was not relieved by Statute of the necessity of dealing with hundreds of thousands of small transactions. While I remember that the noble Lord, Lord Kennet, at one time suggested, or alleged, that property owners might hold up the whole functioning of the Commission by disputing every case, I do not believe for one moment that that would happen. But nothing that property owners can do would be as effective to jam the works of the Land Commission as the action of the Government in refusing to take any action in the Bill to exempt these small transactions. This will be one of the features of the working of the Land Commission that will, as I said on Second Reading, eventually condemn it in the public eye and lead to its abolition. The sooner that day comes, the better!

4.28 p.m.


My Lords, I greatly regret that another place has thought fit to turn down our three important Amendments on owner-occupiers, charities and small transactions. I must be careful not to make myself out of order, but I think I can paraphrase what was said in another place by a supporter of Her Majesty's Government. It was there said that a betterment levy can have only one effect, and that is to put up prices for those who wish to buy their property. We tested this most carefully in this House, in order to try to find out where the betterment levy was going. I do not want to go over all the ground again, but we are quite creditably informed that the majority of the betterment levy was going straight to the Treasury. Therefore, I think that the words of the supporter of Her Majesty's Government are quite right.

It was also said in another place by a supporter of the Government that he was prepared to speak for the Lords' Amendments "despite their source"(that is rather interesting), which is, of course, this side of the House. He went on to say that a great deal of public expenditure goes on another place, and that we are entitled occasionally to have some constructive Amendments sent down to this place. We on this side of the House have tried our utmost to send down some constructive Amendments. We thought that certainly these three Amendments were constructive. They were in no way destructive Amendments; they were in no way on Party lines—they were to exempt charities, or owner-occupiers or small transactions. We were told that probably there would not be any levy on small transactions, but that they have all got to go through the hoop.

Therefore, I much regret that another place cannot see fit to accept these three important Amendments which we made on Part III. I was very pleased to read Mr. Speaker's observations that we did not go out of order at all in doing what we did in excluding Part III from the Bill. It has given Her Majesty's Government the chance to move a large number of technical Amendments, which they said they could not move here, but which they then had to move in another place.


My Lords, I apologise for speaking again, because I know that the House is passionately anxious to get on to decimal coinage. I will not for a moment enter into the merits of these matters, but the noble Lord, Lord Brooke of Cumnor, said something about procedure, and too, should like to say a word or two about it. It seems to me to be somewhat lamentable under the present procedure that we have to have recourse to an Amendment of this kind in order to enable points to be raised in another place, and that when it comes back for discussion anything is in order in these 40 clauses or so of the Bill—that is to say, anything that occurs to the noble Lord, Lord Brooke of Cumnor, when he is speaking. He did in fact discuss a number of matters which had been the subject of previous Amendments. I cannot help feeling that this is a confused procedure.

There lies behind it another matter. It seems to me, speaking as an outsider in these matters, that the position as regards money matters as between this House and another place is somewhat confused, and that that confusion is one of the causes of the prolonged consideration that has to be given to the question of whether this or that point is in order. We have discussed this matter again and again, and I am not going to add to it to-day. I have never personally wished to see this Chamber disappear as part of the Legislature, and I do not wish to see it happen now. But I feel that there are procedural difficulties in connection with a Bill of this character, indeed in connection with Bills generally, which, if they are not resolved, may lead to such an impatience with this place that they may imperil its continued existence.


My Lords, I think your Lordships' House has been trying very hard to listen to the advice of the authorities and act in such a way as not to contravene the privileges of another place. As the noble Lord, Lord Brooke of Cumnor, has pointed out, it was for those reasons that this House on Third Reading moved to delete all provisions relating to the levy. Personally, I think it a rather roundabout procedure, as I said on Third Reading, but there it is. Until the Rules are altered, we must observe them.

I do not think any of your Lordships expected the whole of the levy provisions to be deleted as proposed, but I regret that some of the constructive Amendments have not been accepted by another place. I am still of the same opinion in regard to the collection of land values created by the community; I believe that some part of them should accrue to the community. Unfortunately, the Government have set about this in the wrong way, and I believe that as a result prices will tend to rise. I think that the levy procedure will be appallingly complex, and for that reason I am sorry that some of these proposed exemptions have not been accepted. I think that the £4,000 limit for small, single transactions need not necessarily have led to evasion. In the case of conveyances where the problem of stamp duty arises, there is procedure whereby a certificate is included stating that the amount of the consideration does not exceed a certain amount, either for that or for a series of transactions. A similar way could have been evolved for ensuring that there was not evasion. I believe that we could have had this exemption for small transactions. That would have somewhat lessened the complexity of this levy procedure. I do not think one can go any further into that. Obviously, one cannot press the proposal that the whole of the levy procedure should be excluded.

4.37 p.m.


My Lords, we have had what has amounted to a short general debate on the provisions of the levy and the Schedules. That being so, I propose to take the following Amendments formally. But before doing that, I should like to be sure that there are no noble Lords who have any more general points to make on the Amendments which appear further down the list. If there are not (as I gather is the case), I will reply briefly to some of the points which have been raised.

I think the noble Lord, Lord Brooke of Cumnor, is playing a little fast and loose with the record this afternoon. I have never said that the Government feared that householders, or indeed anybody else, would club together to hold things up by disputing every case for levy. I said that the Government could envisage the possibility of a conspiracy to withhold land from purchase, and that this was the reason for putting the speedy procedure into the Bill. I have also said that we did not want the Commission to accept a form of words on the second appointed day which might itself be open to challenge in the courts on every compulsory purchase order. I have never said—and I must point out to the House that the noble Lord is quite wrong in suggesting that I had said—that anybody would club together to hold things up by disputing cases for levy.

We have been shortly into the merits of the three Amendments to Part III which were carried by this House, and although this is far from the first time we have considered these merits, I must once again briefly state the reasons why the Government—I do not say cannot, but why the Government do not think it would be right to accept them. On the question of the owner-occupier it has been said very often, and I repeat it, that the enormous majority of all transactions will pay no levy. There are, however, owner-occupiers of houses, especially in city centres, who when they get a planning permission for this or that development of their property may find that the development value has increased tenfold over the existing use value of the existing property. If a man has a house and garden worth £2,500 on a corner in a desirable site in some suburban centre, let us say; and if planning permission is given for the erection of a high hotel or whatever it might be, he may very well find that that site is worth £25,000. And it is the view of the Government that, owner-occupier or no owner-occupier, he should pay levy on that tenfold increase created by the community in the value of what is his.

In regard to charities, I think that the point is quite familiar to the House, and it is this. As the levy is a tax, not on property as such, not on land as such, not on any kind of goods or property whatever as such, but solely on the very special case of development value (and it is the specialness of this case that leads us to the use of the word "levy" in the Bill, and to avoid the more usual word "tax" in this case), this being a special kind of tax or levy on a unique kind of value—that is to say, development value not created by the owner—we feel that charities should pay it as much as anybody else. Of course, it is entirely up to charities, as it is up to everybody else in the country, to make what adjustments they desire in their investments when this levy comes into force. We are talking about investment, not about their own functional land on which the charities have their school or hospital or whatever it may be, but simply about property they hold for the revenues they can get from it.

Lastly, may I deal with the question of the small transactions up to £4,000? I do not state, absolutely and categorically, that it would be impossible to find a way of getting over the difficulties and legislating so as to avoid the risk of fragmentation with which the House is familiar, but I do think that it would be extremely difficult. We should have run the risk of doubling the length of the Bill and its attendant Schedules if we had taken that course. Moreover, it does not seem to us worth it, for the very simple reason—and I state this for the third time in this House, though the argument has never been answered by any noble Lord opposite or, indeed, by the noble Lord, Lord Silkin—that 10 per cent. of an increase in current use value is, in any case, utterly exempt. The "material development" definition is such that one can add up to 1,000 square feet to one's house, which is in itself about the size of a three-bedroom house, without paying development value.

The Government have not accepted this Amendment, because they believe that small transactions are already cared for in a manner which makes it impossible to use this as a fragmentation device. It is perfectly obvious that the approach of the Opposition in their Amendment would throw this wide open to fragmentation, and would not achieve any desirable social end for the small man which is not already achieved by the definition of "material development" and by the 10 per cent. de minimis provisions which are in the Bill.

Lastly, I should say a word about what the noble Lord, Lord Brooke of Cumnor, said, when he claimed that the opportunity which has been taken by the Government in another place to introduce certain minor Amendments to this Part and these Schedules was due to the action of the Opposition in this House in first amending and then leaving out Part III. No, my Lords, it was not due in any measure to the Opposition's having first amended Part III; only to its having moved to leave it out—an Amendment which was not resisted by the Government in this House.

In conclusion, I would only repeat what I said before, that the Government neither commend nor condemn the Amendment of the Opposition to leave out these clauses which we are now putting back.

On Question, Motion agreed to.


My Lords, I beg to move Amendment No. 9 formally.

Moved, That this House doth agree with the Commons in their Amendment No. 9 to the words restored to the Bill.—(Lord Kennet.)

On Question, Motion agreed to.


My Lords, I beg to move Amendment No. 10 formally.

Moved, That this House doth agree with the Commons in their Amendment No. 10 to the words restored to the Bill.—(Lord Kennet.)

On Question, Motion agreed to.


My Lords, I beg to move Amendment No. 11 formally.

Moved, That this House doth agree with the Commons in their Amendment No. 11 to the words restored to the Bill.—(Lord Kennet.)

On Question, Motion agreed to.