HL Deb 15 March 1979 vol 399 cc831-50

The Earl of KINNOULL rose to ask Her Majesty's Government whether they are aware of the apparently inequitable basis of compensation payable in cases of compulsory purchase of listed buildings; how this has affected adversely certain charities; and whether they will review the compensation provisions. The noble Earl said: My Lords, after that brief intervention, may I welcome the noble Baroness, Lady Stedman, here, and say that I myself experienced a similar problem about six months ago, but in my case I did not arrive at all. I rise at this very late hour to ask a Question which has a slightly drier note about it than the previous business of the enthralling Committee on the Marriage (Enabling) Bill, but it is one of very great importance, particularly to those who are concerned with these matters.

In essence, the Question is to ask whether the Government are satisfied with the present compensation provisions governing listed buildings, particularly redundant listed buildings, and whether they consider that these provisions are proving fair and equitable, particularly in the light of the change under the 1974 Town and Country Amenities Act. I ask this Question particularly for the sake of Churches of all denominations, who perhaps have more listed buildings, and indeed redundant listed buildings, than any other bodies in the Kingdom. I believe that the Church of England has no fewer than 11,000 listed buildings.

I am glad to see the right reverend Prelate the Bishop of London here, because he has a very special responsibility for these buildings, as chairman of a committee representing many different churches. Indeed, on a number of occasions he has addressed the House about this problem, and I do not think that the church has a better advocate than the right reverend Prelate.

The House will recall that the compulsory purchase and compensation rules are somewhat of a minefield of complexity, not only for the layman but also for the professionals. Compensation is based largely on the Land Compensation Act 1961, but listed buildings and redundant listed buildings come within the Town and Country Planning Act 1971 and, more recently, the Town and Country Amenities Act 1974. The simple basis of compensation—and I hope that I am accurate in putting it in this way—is that if a listed building, such as a church, is in full use but is the subject of a compulsory purchase order, because a proposed motorway is likely to go straight through it, then, if there is a clear demand for another church to replace it and it is built, the compensation will be full reinstatement. I am told that at the present time this figure could be as much as £200,000, or even more.

But if the church authorities decide not to rebuild, but to devote that compensation to improving other existing facilities, then the compensation will be for site value, which is governed by the alternative use granted by the planning authorities. In that case it might be very good news, or it might be very bad news, but it is not full reinstatement and, in a sense, that is rather sad. But if the church is a redundant listed building and, unfortunately, no motorway is likely to knock it down, then the compensation will come under the 1974 Act, and after a recent case, to which I shall briefly refer later, the interpretation of the compensation under that Act—and when I say "interpretation", I mean that the matter is still subject to negotiation—could be as low as £1.

I do not intend tonight to deploy any of the very strong arguments about the Church's work and the need for its support. I know that the right reverend Prelate and my noble friend Lord Gowrie are much better equipped than I to argue that. I know, indeed, that the noble Baroness would not be unresponsive to that. But I should like to question the very simple issue of whether the provisions in Section 6 of the 1974 Act are proving to be as intended, and whether the fears, which were expressed very strongly by the right reverend Prelate at the time of the passing of that Act, have come to fruition. I would add that that Act, which was piloted through this House by my noble friend Lady Young, received very wide support, but because of the pressure of time this House was not able to amend it. Only last night, I looked back at the report of the discussions that took place on this very section that I am now asking the noble Baroness to look into.

The purpose of limiting the area of compensation under the 1974 Act was, I believe, twofold. First, there was the argument that a speculator might enter the field and buy a listed building, and then benefit by a "killing" through the compensation regulations under existing legislation. I would add that there was never any evidence given in either House that that had happened, or indeed that it could happen; and, as a valuer myself, I find it difficult to believe that a speculator would wish to become involved in such a very risky business. But my noble friend Lady Young gave a more practical reason. She said—and I think that she had a lot of support for the general contention—that it was wrong for a local authority to have to pay more than an open market value, because it had to assume that a building could be redeveloped when, in reality, it could not be demolished. I think that that was a reasonable argument.

But what really transpires from this legislation? Perhaps I may use as illustration the case of a redundant Colchester church. This church was built in, I believe, 1770, and it is now in a very high conservation area of Colchester. In 1971, it was listed as Grade II and in the same year it became redundant. For a period of years, discussions took place with the local planners as to what should be the alternative use; and I am sure that in the case of every redundant church it is very difficult to find a suitable alternative beneficial use. Planning applications by the trustees of the church were sought and refused, and an application went to appeal but was refused. Then an application was made to demolish the church and this, too, was refused. Finally, and reluctantly, when all avenues of beneficial use had been explored, the trustees sought a purchase notice from the local authority, which they were entitled to do, but that was refused. The trustees then appealed and won in, I think, 1974. Since then, there has been an argument over the value between the district valuer, acting on behalf of the local authority, and the church's own valuer.

As I see it, the whole matter hinges on the interpretation of the 1974 Act. I am told that, in the view of the district valuer—I shall not comment on the rights and wrongs of this case—this old 1770 church is worth only £1 under the provisions of the 1974 Act. The reasons he gives—understandably, perhaps, in his view—and the assumptions he has made are that it is no more than a liability. On the other side, the other valuers are looking for other cases of redundant churches—not in that area—which have been sold. I understand that they are looking for £25,000 to £40,000, so there is a huge difference between the assumptions.

I know that valuers have a reputation for being argumentative. I am a valuer, but I hope that 1 am not too argumentative. However, I must say that this is a rather sad argument which has arisen between a church and a local authority who are both serving the community. I do not wish to comment further on this case, other than to raise it with the noble Baroness. However, I question whether the provisions of the 1974 Act are working satisfactorily. For instance, when a church is looking for a new site is it right that it should be asked by a district valuer to pay £20,000? On the other side of the coin, when it is trying to dispose of a redundant church is it right that it should be offered only £1? Should the listing of churches have such a grave effect? Have the community not a moral duty to pay a proper site value? These are issues which I hope the noble Baroness will deal with and, indeed, look into.

I believe that the Colchester case is a disturbing example of the possible effects of the 1974 Act. I do not know how many other cases there are, nor do I know whether the noble Baroness can answer that point. Compensation valuations under compulsory purchase orders are never easy. The valuers on both sides have very special responsibilities. They are asked to make assumptions here, to deduct notional figures there, and sometimes to look—particularly in the case of redundant churches—at an almost nonexistent market. I do not suggest that legislation should necessarily be altered by an Act of Parliament but I think that there is a case for the noble Baroness to look into; namely, the working of the 1974 Act, in conjunction with the compensation provisions. I hope not only that her Department will look into it but that they will see whether they can issue a circular and guidance which could assist both valuers and charities.

I have one other very brief point to raise regarding listed buildings. It relates to the system of listing. As the noble Baroness knows, this system was altered some years ago, and owners of buildings were not consulted as to the listing of their buildings. It is now clear, I think, that the listing of buildings has a detrimental effect upon the valuation and management of property, and it is only right and proper that the owners of buildings should be consulted prior to the confirmation of listing. I hope that the noble Baroness can deal with that point when she replies.

I apologise for having spoken for so long. As I shall not have a chance later on to thank my noble friend, the right reverend Prelate and the noble Baroness, Lady Stedman, for staying here tonight, may I thank them in advance for taking part in this debate.

7.55 p.m.

The Earl of GOWRIE

My Lords, despite the lateness of the hour and the intricacies of the Bill which preceded my noble friend's Unstarred Question, I do not think that he need apologise for keeping us. In my view, he did not speak for too long. He was introducing, I would suggest, a proper, interesting and particularly useful subject for this House to consider, since it is for this House from time to time to examine the working of legislation rather than to fulfil a political or other commitment to revise it. In my brief remarks, I am going to play very much the second fiddle to my noble friend—everything that he said I endorse—and I shall simply advance some personal views and also indicate to the House the thinking of the official Opposition on the matter.

May I start with a short reminiscence. I have two friends who live in different parts of the country. Sometimes I am fortunate enough to go to stay for weekends with those two friends. One of them whom shall call John—I shall not give him a "plug" by mentioning his real name—is a prospective Tory candidate in the county of East Anglia, which is notorious for the beauty and quantity of its churches and which is also notorious for the headaches involved in their upkeep. On one such extremely pleasant weekend he took me around no fewer than 14 churches. Each one of them seemed to be more beautiful and more of a statement about the civilisation which had produced it than the last. My friend is quite actively involved in Church affairs. When I thanked him, he said to me, "I agree that we've had a wonderful afternoon, but of course it is wrong to expect that the problems which we as a Church have to face"—he was speaking of the Church of England—"in our pastoral work in the inner cities should have cast around them this intense burden and financial difficulty of preservation".

My other friend lives in an altogether different part of the country. He is a man who owns a pleasant and quite large country house. He is a well-to-do fellow. It so happens that opposite his country house there is a very pretty small parish church which, I imagine, in the days of yesteryear—namely, in the 18th century when it was built—was attached to the house. The village in which my friend lives is barely a hamlet; there is only a handful of buildings. There is no doubt that the church is a very attractive amenity for my friend. It is part of his view and his environment. If he marries a daughter, I think that he may use the church, and he may celebrate Christmas there if he can find a friendly parson to come and help him. Fundamentally, however, the church is non-operational. As he is a well-off and responsible man, he spends quite a large amount of money on the upkeep of this church—and so he should, because he can afford to do so. Furthermore, it is part of his amenities. However, the message of both of these cases must, I think, be that the chief role of the Church—and I believe that the right reverend Prelate will agree with me—is not the maintenance of listed buildings. When I say "the Church", I am using the phrase ecumenically; I mean all denominations. In any case, there are far too many churches for them to be able to do so, even if they were to interpret their role in that way.

Many parishes will have a special feeling for their church as a visible or architectural sign of grace, if you like—just as individual owners have a special feeling for their houses. And the more beautiful the house, perhaps, the more lavish the attention that is devoted to it. There is, however, this question of the difficulties and responsibiliies of ownership and upkeep. We must draw a real and important distinction between a person who takes on a listed building and owners like the Churches and some public institutions—British Rail has been suggested to me in a brief—and, no doubt, private owners who have inherited listed buildings or who owned them before they were listed. A person who acquires a listed building does so, in the main, with his eyes open. He takes on its responsibilities and burdens, but he also takes on the benefits and delights of such an asset. I speak as a person who until recently owned a Grade II listed building. I acquired that building. It was quite a headache to me financially, but it was very worthwhile and rewarding to try to improve it.

The case of the Churches is that they and other such bodies do not take on listed buildings; they are landed with them. A listing notice can become a great interruption of their cash flow, to put it in business jargon—indeed, a disaster. It may mean not only a heavy and continuing liability for repairs—and repairs to listed buildings, particularly to churches, are liable to be more costly than repairs to more modern edifices—but also the possibility, which was raised specifically by my noble friend who dealt with compensation, that they will not be able to realise for other purposes (for pastoral purposes, let us say) the capital value which is locked up in the building and the site. Therefore, I hope that this occasion may be used by the Government to set up, if it can be done, some inexpensive way of monitoring cases—the Colchester case was mentioned by my noble friend—where this kind of imbalance and interference with their proper task could be taking place.

Speaking for the official Opposition, we on this side of the House would like to see the position that where the owner of a church or listed building has handed it over to a local authority for a nominal or peppercorn sum there might be provision later for compensation, should a huge profit be made. It is obviously unfair to sell something for £1, let us say, if later that asset is going to realise many thousands of pounds and the original disposer—particularly if it is a public body or a church body—is not able to make use of its asset.

Before 1974 the owner retained the value of his property and the acquiring authorities suffered even if they had no hand in the listing and did not agree with it. But since the Act the financial burden has been shifted to the owner, even though he might have had no hand—he would certainly have no hand in the listing—and indeed the listing may have taken place only after he acquired the building. So I think my noble friend is quite right to say that where a listing takes place the owner must be involved a little bit in the decision, consulted and given good warning of what his responsibilities and liabilities may be.

That gets us talking about individual owners perhaps a little more in the direction of private houses, listed buildings and churches and although of course our Unstarred Question was particularly concerned with churches my noble friend was right to point out that very many of these cases, and cases where the Act in question might not be working satisfactorily, are punishing to owners. Our philosophy on this side is to try to give financial inducement by way of grants to owners—including, of course, churches, and indeed we pressed for churches to receive help in the Town and Country Amenities Bill and our representations there were accepted. Of course, we would rather do this by easing taxes, by giving deductions than by handing out money, as it would be cheaper in real terms. I think the message coming from this side of the House is that we in no way wish to alter or radically to amend the Act but we are disturbed, as my noble friend has been, about some of its provisions in practice and we are grateful to him for raising them. When we form an Administration we shall look into them ourselves, but until that happy, and perhaps not too far-off day, we look forward to hearing what the present Government have to say.

8.3 p.m.

The Lord Bishop of LONDON

My Lords, the noble Earl, Lord Kinnoull, was generous enough to thank us for staying behind to speak on this Question which he has raised: the boot is really on the other foot, for it is we who are very grateful indeed to him for raising this matter and I should like to express my gratitude to him for it is one which is of considerable importance and one which is creating, and increasingly will create, a sense of injustice. Most of the instances that have been given to us so far have been ecclesiastically orientated, and of course that is understandable because the Church has by far and away the largest number of listed buildings to deal with, but I think we ought to say from the outset that this does not only affect the Church; it affects a great many private owners; and it affects a great many charities who own property of this kind. Nevertheless, in the Churches we are very much affected by it and therefore I speak in this debate as chairman of the Churches Main Committee which represents all the Churches in their relationships with Government.

This debate carries me in mind back to the debate on the Second Reading of the Town and Country Amenities Bill in this House in July 1974. That Bill, which duly became an Act, was generally regarded as desirable and therefore it was welcomed, but there were features about it to which some of us took strong objection and under normal circumstances we should have sought to amend it, but that opportunity was virtually denied us. The debate took place in the setting of a dying Parliament; the Bill was rushed through this House—Second Reading, 15th July; Committee and Report stage, 18th July, three days later; Third Reading 25th July, and Royal Assent 31st July. We were told that, if the Bill were to be amended, no further parliamentary time could be devoted to it and therefore it would be killed. A number of us, including, I remember, the noble Lord, Lord Foot, protested against this virtual denial of the power to amend the Bill, but it was to no avail. So the Bill, which in general terms was acceptable, became law but it contained in it what many of us regarded as a serious flaw and it is a consequence of that flaw which makes this debate relevant and necessary.

The point about which we objected was this. Clause 6 of the Bill (as it then was) amended Section 116 of the Town and Country Planning Act 1971. Under that section, which has now been replaced, provision for compensation to owners of property was similar whether the building was listed or not. In the case of an unlisted building, obviously no listed building consent was needed and the owner would automatically receive the development value of the site. In the case of a listed building the valuer was directed to assume that listed building consent would be forthcoming for demolition and so the owner would receive the development value. Section 116 was thus intended to ensure that the owner of a listed building would receive the same treatment as the owner of an unlisted building—a position which most of us would regard as being nothing more than just.

The Town and Country Amenities Act altered that position. It laid down that in deciding compensation no regard was to be paid to any value which could be realised by demolishing the building. The compensation would be based solely on the value of the land for its existing use. So the situation was created in law that there could be two listed buildings side by side on sites of equal size; one might be a residence and therefore of considerable development value and the other, say a church, of no architectural merit, redundant because people had moved away or it had become redundant through pastoral reorganisation, and because it had no existing use value it attracted no compensation and was therefore virtually valueless.

The noble Earl, Lord Kinnoull, and I pointed out these dangers in the debates in 1974. We were given a great deal of sympathy by the noble Baroness, Lady Young, and by the late Lord Garnsworthy and he undertook, at the suggestion of the noble Earl, Lord Kinnoull, to arrange a meeting of all those involved in order to see whether our fears were well-founded or groundless. Unhappily that meeting never took place owing to the regrettable death of Lord Garnsworthy and to the overshadowing of the issues by the proposals for community land legislation. The fact of this debate today is evidence that our fears were justified.

A relevant illustration is the one which the noble Earl has already mentioned, of Stockwell Congregational Church in Colchester. As the noble Lord has reminded us, over a period of years efforts have been made to find suitable and permitted use for this building. After a public inquiry both the Inspector and the Secretary of State agreed that it had become incapable of reasonable beneficial use to its owners. The site is probably worth £20,000; they were offered £1. On 18th February 1977 the district valuer wrote to the owners, as no doubt he was in duty bound to do, in these words: In this case, however, the Statute provides for certain valuation assumptions to be made and these in effect postulate a hypothetical world for valuation purposes where there is no place for the prevailing use basis of valuation". Earlier he had written: If the property was incapable of reasonable beneficial use in 1974 when the purchase notice was confirmed, it must be still less capable of beneficial use now in 1936 after damage and deterioration. The value of the Church's interest therefore is nominal". Thus, as a result of the Town and Country Amenities Act 1974 this Christian communion, owning a listed redundant church standing on a site which, if it could be cleared and sold free of commitments, would have been worth in the realm of £20,000, is offered the derisory figure of £1. In the debates in 1974, we warned that this could happen, and now we know that our misgivings were justified.

Many ask why it has taken five years for only one hard case to turn up. The answer lies in the slowness of the procedures. The church has first to be declared redundant, and in regard to the Church of England that in itself is a very long process. Then every possible effort has to be made to find an alternative use for which planning permission would be forthcoming. This having failed, the church authorities must then apply for listed building consent to demolish. When this has been refused they must serve a purchase notice on the local authority, which must be upheld after a public inquiry, and then, and only then, can discussions about value begin. In fact, in the case of the Stockwell church, the procedure has been going on for 13 years. Why has there been only one case since 1954? The answer is that this is only the tip of an iceberg. Procedures are long and complicated, and it is very probable that they will arise in increasing numbers in the future.

In any case, apart from actual instances, I would suggest to your Lordships that in this the principle is wrong. As things are at the moment, it is the community which decides that a particular building must be preserved. It is the owner who has to bear the whole financial sacrifice that that decision imposes, and this is clearly unjust and indefensible. What can be done? I suggest that the procedure for dealing with works of art shows us a way forward. Under a recommendation of the Waverley Committee on the export of works of art it is provided that an owner wanting to dispose of a work of art which may go overseas must be assured of a fair price if he is prevented from selling to an overseas buyer. This is not necessarily the international price, but it must be a price that is fair to both parties; that is, owner and taxpayer. So it is laid down that any system of price fixing that is adopted must be relied upon to work fairly in both ways and be such as to satisfy all concerned that justice is being done.

I suggest that a similar arrangement should apply in the case of listed buildings which have become incapable of reasonably beneficial use to the owners, but which it is decided must be preserved in the interests of the community. If, after a public inquiry, it is established that the listed building has become incapable of reasonably beneficial use to the owner, a fair price should be agreed with him, and permission to demolish withheld while that sum is being raised. If, after a suitable interval, the price cannot he raised, then permission to demolish should be granted, and the owner be free to realise the price he would have received if the building had not been listed.

This is a matter of deep concern to a number of people, indeed to any owner of a listed building. But it is of particular concern to the Churches, who are responsible for over 12,000 listed buildings. They are particularly vulnerable because, unlike houses, offices or commercial premises, the existing use value of a church is very low, and yet a great deal of the assets of the Church have gone into the building of it, and often the major assets of a community are wrapped up in church buildings and the sites on which they stand. Often it is necessary for them to move from the centre of their activities to another area. To do so they must liquidate their resources in one place in order to provide churches, church halls, social centres, parsonages in another place. If they have a listed building in one place the value of which they cannot realise, they may well be prevented from opening activities in another place where it is needed.

The provisions in the Land Compensation Act 1961, which purport to deal with this situation, do not really meet the problems of reinstatement, since often the circumstances which must be fulfilled do not fit exactly into the requirements of the Act. So it is that the Churches feel themselves to be in real danger. They think that the provisions of the Town and Country Amenities Act impose a serious injustice upon them. The Colchester case shows the red light, and they look to Her Majesty's Government for a remedy.

8.17 p.m.


My Lords, may I also add my thanks to those of other noble Lords who have spoken, to the noble Earl, Lord Kinnoull, for the very clear and fair way in which he stated his case, and for giving us an opportunity to air this subject. The other speakers who have taken part in this very short question and answer session tonight have all referred back to the 1974 Bill and their memories of it. I regret that I am not able to do that; I was not even a Member of this House at that time, but I have read back on the reports of those debates.

My Lords, the normal statutory basis of compensation for the public acquisition of land, which includes buildings, is market value—that is, the amount which it may be expected to realise if it is sold on the open market by a willing seller, given the planning uses to which it may be put. The market value basis applies equally to listed buildings as to unlisted buildings, so that if a public authority acquires a listed building the owner can expect to receive what he would realise if he sold it on the open market. To the extent that a new planning permission increases the development value of the site above the value in its existing use, part of that value may be recovered for the benefit of the public as a whole through development land tax; in effect, the public authority acquires at market value net of any development land tax.

In the case of certain buildings used for a purpose for which there is normally no demand in the market—and a church is, of course, a classic example of this—compensation may, if the use is to be continued elsewhere, as the noble Earl has said, be paid on the basis of the cost of equivalent reinstatement as set out in Rule 5 of Section 5 of the Land Compensation Act 1961. This is particularly advantageous for church authorities, and frequently applies where their buildings are taken in the course of public sector development or redevelopment.

The right reverend Prelate has said that prior to the Town and Country Amenities Act 1974 there was an anomaly in these compensation arrangements. If a local planning authority wished compulsorily to acquire a listed building in order to ensure its preservation, the compensation had to be assessed on the assumption that consent to demolish the building would be granted. This applied even where it was quite clear that such a consent would not be granted. Where there was an element of development value in the site, the authority were thus required to pay an inflated price beyond that which the owner could expect to get by selling in the market. Owners of listed buildings at that point of time were to this extent in a specially privileged position. The view was held at the time that there was no good reason why the owner of a listed building should get better terms on compulsory purchase than, for example, an owner of an unlisted building who could not realise what might be regarded as the full commercial potential of the site because he would never get a planning permission to do so. In both cases the owners have to accept limitations on their rights for the benefit of the community as a whole. This is the concept which broadly applies across the whole field of planning control, and this was the essence of a number of the changes which were brought in in 1974.

The noble Earl, Lord Kinnoull, has explained that Section 6 of the 1974 Act dealt with the particular compensation anomaly. It removed the automatic assumption of a demolition consent and allowed a listed building to be valued on a more realistic basis which took account of the real prospect of obtaining such consent. The effect was that those owners who previously might have obtained more than market value ceased to do so. The local planning authority would no longer be deterred from acquiring a listed building in order to preserve it by the prospect of having to pay what might have been an unreasonable amount in compensation.

The Department's Circular 23/77 gives further guidance on the interpretation of this clause in Sections 24, 29 and 30. As I read it, during the debate in Committee in 1974 the noble Earl, Lord Kinnoull, expressed certain fears about the position of listed churches and similar buildings, particularly redundant churches. Though it was pointed out at the time that the number of such churches compulsorily acquired for preservation would be very few, and the number where there were no possible new uses within the existing or a suitably adapted fabric fewer still, nevertheless assurances were given that this concern would be brought to the attention of local authorities.

The current advice on this is contained in that same departmental Circular 23/77: local authorities are encouraged to consider relaxing control over land use allocation, density, plot ratio, daylighting and other controls where this would enable a particular building or group of buildings to be given a new lease of life. I know that there are some people who object to this piece of advice because they sincerely believe that once a building has been used for worship, it should not be used for a secular purpose. Obviously, if a church can continue to be used for worship and kept in good repair, that is the best solution, but when this can no longer happen and the building is of architectural interest or makes a contribution to the townscape, I think a suitable new use that enables it to be retained and repaired, should be welcomed.

We have heard reference to the consultation document recently circulated by the Churches Main Committee. As we have tonight, this paper drew attention to a difficult case concerning a redundant listed church in Colchester. The noble Earl, Lord Kinnoull, asked whether the Redundant Churches Fund, which was set up under the Pastoral Measure 1968 and the Redundant Churches and other Religious Buildings Act 1969, could be used in a case such as this. The answer is—unfortunately not in this particular case since Stockwell Church is a Congregational church and the Fund covers only Church of England churches.

The noble Earl also pointed to the change of mind on the part of the local authority about what was practicable within the existing shell. Although past attempts to find an acceptable use for the building had failed, a local firm submitted a planning application for alterations and a change of use to offices, which the council considered were satisfactory. A planning permission, which carries with it listed building consent for the alterations, has now been granted. I would add that the departmental circular I have mentioned encourages authorities to be as flexible as possible in these kinds of case and if in the end this results in some worthwhile use being found for a potentially redundant building, that seems to be all to the good.

The right reverend Prelate also referred to the Main Committee paper, and quite rightly so because he is the very respected chairman of that body. It proposes some special basis of payment for listed buildings broadly analogous to the arrangements by which the export of works of art which owners have sold abroad can be delayed while efforts are made to raise funds nationally. I do not propose to deal with that particular proposal at any length today because I do not regard listed buildings and works of art as analogous in this context. The proposal itself is certainly ingenious, but is really no more than a device for providing additional central Government support to churches and other charities in dealing with their listed buildings. This may not be undesirable or a wrong thing to do, but it is a somewhat separate issue from questioning the normal basis of compensation for public acquisition.

I should perhaps add that during the passage of what became Section 6 of the 1974 Act there was a certain amount of confusion about the extent to which the provision would affect the compensation payable for churches and similar buildings. The view then was that there should be little practical effect in the vast bulk of such cases. If a listed building were to be acquired and cleared by a public authority either they would pay compensation reflecting the market value assumption provided for in the Compensation Code as regards that impending demolition or, where the church was in use and the use was to be reinstated, the compensation would, as I have explained, reflect the costs of the equivalent reinstatement of the church. Even where the building was likely to be preserved, it remained open to the owners to test whether demolition consent would be forthcoming or what other uses might be acceptable, and the valuer would be bound in assessing compensation to take into account any prospects of a future consent being obtained. The provisions in the 1974 Act were also carefully worded to preserve the value of the owner's existing use rights under Schedule 8 of the Town and Country Planning Act 1971. I have explained this again tonight in order to avoid any doubt, because I am not aware of any evidence obtained since to suggest that the confidence felt then about the limited scope of the effect on Church authorities was misplaced.

We are all aware of the burden which the Church authorities bear in maintaining buildings which are so often a very important part of our local environment. But, of course, they are not alone in this. To help, grants are payable. Since August 1977, grants have been available under Section 4 of the Historic Buildings and Ancient Monuments Act 1953 towards the cost of repairs to buildings in use for public worship which are of outstanding architectural interest. For the two years 1977–78 and 1978–79 a total of £l.1 million was set aside for the purpose. When a building is no longer in ecclesiastical use, a grant may still be made if the building is of outstanding interest in its own right, if it forms part of an outstanding group or if it is included in an outstanding conservation area and the work would contribute to the enhancement or preservation of the character or appearance of the area.

Noble Lords will also recall that we provided certain significant exemptions from Development Land Tax, for the land held by these bodies on 12th September 1974—what was referred to as "White Paper Day". In addition, local authorities now have a duty under Schedule 6, paragraph 1 (v) of the Community Land Act 1975 to have regard to the needs and obligations of charities in their areas. We believe that many authorities already follow the convention of providing sites for churches at rates well below the market value. I think that this goes an appreciable way towards allaying some of the general fears expressed by the Churches Main Committee in their paper.

The noble Earl, Lord Kinnoull, also spoke in detail about the concern as regards the United Reform Church at Colchester. That has been brought to the attention of my right honourable friend the Secretary of State as causing particular difficulties. There may now be one further case emerging. It has not reached us yet, but we hear that there may be one other on the way and the right reverend Prelate may be right in saying that this is only the tip of the iceberg.

In the Colchester case, following an inquiry, the local planning authority is obliged to acquire the listed building under a purchase notice served by the Church authorities. As I have said, I gather now that the local authority is in negotiation for the resale of the building, following the granting of planning permission for office use and listed building consent for internal alterations. Negotiations as to the amount of compensation to be paid to the Church authority are still proceeding, and while I am not in a position to say how these particular factors have affected or are affecting those discussions, the valuer will no doubt take them into account. If the Church authorities are dissatisfied as to the amount of compensation, they will still have the right to refer the matter to the Lands Tribunal for determination.

It would clearly give rise to all sorts of difficulties and to other claims for special treatment if churches and charities were to be exempted from the normal market value compensation provisions which were introduced in 1974. I assure noble Lords that the Government are aware of the problems generally which these bodies face and the Department is in touch with the officers of the Churches Main Committee about their consultation document. Whereas, for the reasons I have explained, I cannot give an undertaking that the Government will review the compensation provisions, none the less they will continue to look closely at any practical difficulties which arise from their application. Certainly while I am in post I hope that I shall continue to be informed of these problems as they arise, so that we can see whether it will be a much larger problem than it looks at present, and whether we are really dealing with the tip of an iceberg or just the occasional case.

The noble Earl, Lord Gowrie, referred to the question of tax. In appropriate cases, of course, applications can be made for exemption from capital transfer tax, hut these would need to relate to buildings of outstanding architectural or historic interest. We have adopted a sympathetic approach to charities on taxation. For example, we gave them exemption from the development land tax for land which they owned on White Paper day. It may not be as much as many people would want us to do, but I think we have shown that we are not completely unsympathetic. The noble Earl also referred to the problems for owners which could arise when buildings are listed without prior consultation. There is scope for improvement here; I admit that. I shall certainly undertake to look at a suitable opportunity at the arrangements for prior notification of listing and publicity.

The noble Earl, Lord Kinnoull, asked whether some general advice might not be issued on what constitutes a reasonable value for redundant churches. Valuations are, of course, assessed in the context of the Compensation Code on the basis of market evidence. Inevitably, that means getting down to the facts of particular cases. We believe that there is no easy way by which any general approach or criteria could be formulated. However, if the noble Earl is aware of any specific points of difficulty, if he would like to write to me further on them, we shall certainly look at them and see whether we are in a position to offer any general clarification of our views. I am grateful to the noble Earl for having raised this matter and for having given me the opportunity of putting forward the Department's view.