COMMONS AMENDMENT (Hansard, 15 October 1981)

Earl Ferrers
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 64, and it may be convenient if I speak also to Amendments Nos. 65 to 70. These amendments provide for the payment of compensation to any landowners who suffer a reduction in the value of their interest in land as the result of an order made under Clause 29. Your Lordships will recall that the Government had previously thought that such a provision was unnecessary in view of the provision which was made for any losses arising from enforced delays. But in recognition of the concern which was expressed in both Houses, we propose these amendments. We do not expect that the proposed orders will in fact reduce land values in any way which has not already been covered by the existing compensation proposals, but the amendments provide that if that does happen, compensation will be available.

§ Baroness White
My Lords, can the noble Lord enlighten us and say whether this will be a taxable or a tax-free capital gain?

Earl Ferrers
My Lords, I should have to take advice on that question.

§ Lord Stanley of Alderley
My Lords, it appears to me that there will be a delay between the time of making an order and assessing compensation. This is contrary to present practice. My other point is that, although subsection (2B) gives guidance to owners and ocucpiers, guidance is really needed on depreciation of a tenant's interest. I do not think that there is any such guidance in the Bill. I will fully understand if my noble friend cannot give me detailed answers to those two points; in fact, it is not really my subject but that of my noble friend Lord Caithness, who would like to thank the Government very much for tabling this amendment. But perhaps my noble friend the Minister will give some thought to the two points I have raised, because I believe compensation law would be breached.

§ Lord Melchett
My Lords, may I make just one comment, which is to welcome what the noble Earl said when introducing the amendment. I was very interested to hear him say that he did not think compensation would be payable under these provisions because it was already covered. I imagine that the 487 explanation for that is that Clause 29 does not actually do anything in the long term to prevent someone destroying an SSSI; it provides 12 months' protection but no more. It has always seemed to me to be stretching the limits of one's imagination and the generosity which we all feel towards farmers and landowners to suggest that that really amounted to a massive loss in the capital value of their land. To have the Government's confirmation of the inadequacy of the protection provided by the Bill in a rather indirect way is always fairly welcome.

Earl Ferrers
My Lords, if I may have the leave of the House to answer those points, I really do think that the noble Lord, Lord Melchett, does have—if I might say so in the most courteous way—a warped mind.

§ Lord Melchett
My Lords, I need to, to deal with noble Lords opposite.

Earl Ferrers
My Lords, all the Government have done in fact is to try and meet the feelings which were expressed in both Houses, and this they have done. When I said that we did not believe this provision would be used very much, the reason was that anyone who has suffered loss because of the SSSI of the management order has to prove that the land without an order and the land with a management agreement is of a different value. If the management agreement is worked out in such a way as it is anticipated it will be worked out, it is not very likely that there will be much difference. That is the reason why I said that this provision has been put in to safeguard any position that may arise, but we do not expect it to happen.
The noble Baroness, Lady White, asked me a question about taxation: I have now been able to refresh my memory and I can tell her that any such gains would he subject to capital gains tax. My noble friend Lord Stanley of Alderley said that there was to be a delay. In fact what one would be doing in this case would be determining at a later date what the value of the land would have been at an earlier date and I think there is nothing new in that principle. He referred to the position of the tenants. I will take into account what he has said about that and will look further at it, but my immediate consideration is that this is the value of the capital land, which of course is the landlord's property and it would not affect the tenants, but I will look into that point.