Orders of the Day — Town and Country Planning Bill

– in the House of Commons at 12:00 am on 1st December 1952.

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Order for Second Reading read.

3.33 p.m.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I beg to move, "That the Bill be now read a Second time."

I have no doubt, Mr. Speaker, that you will allow the scope of this debate to be sufficiently widened as to include a discussion of the proposals in the White Paper which was issued the evening before the formal introduction of the Bill. It has sometimes been the custom in these circumstances first to have a debate upon the White Paper and subsequently, when the Bill was ready, a further debate on the Second Reading; but in this case the course which we are now proposing will, I think, be more convenient to the House.

The White Paper sets out the general plans to deal with the problems which have arisen: the Bill deals only with one stage in carrying out that general plan. Thus, the White Paper is more comprehensive than the Bill. Another and more elaborate and complicated Bill will be required next year to complete the whole operation. Moreover, this Bill, the instrument to carry out certain specific and immediate parts of the scheme, should not be discussed without some knowledge, and in the setting of, the whole conception.

In a short but admirably succinct passage in his speech on the Address, the Prime Minister gave a vivid and, at the same time, objective account of the origin of all this. He reminded the House of the different stages. The first stage was the Uthwatt Report. For the second—the 1944 White Paper during the Coalition Government—we all bear a joint responsibility. For the third, the actual Measure of 1947, founded on that Report, the Labour Government of the day bear the prime responsibility.

The then Opposition were broadly in favour of that Bill, although critical of an important part—the fixed global sum. Nevertheless, in the sense that all this springs from the Uthwatt Report, and the work which we on both sides of the House did together in 1944 as comrades at that time in far greater and more heroic struggles, I think that I should be right in treating all these matters, if not as non-controversial, then as essentially non-party.

The Prime Minister observed that we were all in it together. As a matter of fact, I was less in it than anybody else because during those years I was in Africa, Italy or Greece. It is rather an irony of fate that I should now be in it up to the neck. Hon. Members may perhaps recall Macaulay's story of the criminal in Italy who was given the choice between reading Guiccardini's history of Florence, a long and very ponderous work or going to the galleys. He chose the history, but the first volume was too much for him. He changed his mind and went to the oar.

Something of the same despair almost overcame me when first I tried to cut my way through the tangled jungle of the financial provisions of the Town and Country Planning Acts. What was the position which the Secretary of State for Scotland and I found on taking office a year ago? The Government of the day were committed to the payment of £300 million in the middle of 1953 to those landowners who had put in their claims under the 1947 Acts and whose claims were in process of being agreed or settled.

That was the first consideration. The second was the development charge that was being levied all the time upon almost all developers, including the very class of people upon whom we must largely depend for the expansion of our housing programme. It was clear to us that something had to be done.

I must now make clear the fundamental point in the Government's decision, for it is of great importance. We are proposing certain radical alterations in the financial provisions of the 1947 Acts, but we stand firmly upon broad planning provisions. There is no doubt whatever about that decision; nor do I think that there can be any dispute about it, for it is more necessary now than ever in our history that the limited acres of this small island should be used to the best national advantage.

Planning, therefore, in its broad sense has come to stay to preserve good agricultural land; to encourage the development we want in the proper places; to secure the exploitation of valuable mineral deposits; to restrain the interwar sprawl of the growing cities, and to preserve the countryside. All these are more vital than ever before to our changed economy. Therefore, the Government hold firm by these broad principles first established by a Liberal Government in the Act of 1909, then reinforced by the Conservative Administration in 1932, and the whole conception strengthened and buttressed by the Town and Country Planning Acts of 1947 which were themselves, I think, the outcome, of the Coalition decisions in 1944.

Before explaining in detail the changes which we propose in the financial provisions, it may be convenient to remind the House of what precisely those provisions were. I must apologise, because I know, of course, that they are well-known to certain hon. Members, and especially to those who have given much study to this matter, but I must shortly summarise them, in order to explain the changes which we propose, and in order that the record may be clear.

There are three important features of the existing financial provisions. The first is the £300 million fund. According to the law as it stands, it is the duty of the Treasury to make a scheme to effect payment by the middle of 1953. The fund was intended to meet the claims of anyone who could show that his interest in land was materially reduced or depreciated by the provisions of the Town and Country Planning Acts, 1947. In the intervening years between the passing of the Acts and the date fixed for the payment of the sum, claims were to be put in. They were to be examined, to be agreed, or, if necessary, to be arbitrated upon. There may be a problem in connection with late claims, on which I shall have a word to say later on.

Of course, during this period, there was no knowledge as to what would be the total of the agreed or arbitrated claims. Would they be much less or much more than the £300 million total compensation? This was of considerable importance, and various estimators produced certain calculations of their own. In fact, the total comes to about £350 million. Thereafter—after the payments from the fund—by and large, according to the Acts, no further compensation payments were to be made when planning permission to develop land is refused. The first feature, then, of the financial provisions as they stand is the £300 million fund—an arbitrary global figure, not a sum of agreed claims to be paid out all at once and once for all.

The second feature was the development charge. It was, in a sense, a balancing factor to the first feature—the fund. Perhaps we might call it the reverse of the medal. Whether the financial results were supposed to have any particular relationship to the sum of £300 million I have never been able to discover, but there is absolutely no reason in logic or in fact why they should balance. There was, of course, a moral if not a mathematical connection, for new development can be carried out now without planning permission.

When planning permission is given, there is likely to be an increase in the value of land following on that permission, and, of course, owners under the original scheme might even be entitled to a payment on their claim. The development charge was to be paid on the value of this increase. It was thus an attempt to bridge the gap, as it were, between the agricultural value of land and the building value, or between its value for housing and industry and so forth.

There was a third feature of the existing financial scheme. It is the compulsory acquisition of land at existing use value. Under the Acts, when land is bought compulsorily, all that has to be paid is its existing use value, and that sum, of course, may vary with changing agricultural policies or with changing monetary conditions. Nevertheless, it is always the existing use value, and the reason is that, as described, the development value—the difference between agricultural and building value—is conceived of as already extinguished or purchased by the State out of the £300 million fund.

What, then, is wrong? Why should any Amendment be made? Does not this scheme achieve a miracle of theoretical equilibrium? Owners are to be paid by the State for their loss of development value; that will allow land to pass at existing use value; and then the developers, great and small, are to repay the State for all development which is allowed—the perfect triangle.

When I was a child, one of our greatest delights was to be taken to see a famous juggler by the name of Cinquevalli, who could keep any number of balls in the air at the same time without dropping them. What can be done upon the artificial platform of the music hall, however, becomes more difficult in real life, and in fact this scheme, which sounds so good, just does not work.

Why does it not work? Let us begin with the £300 million fund. What was the object? It was to compensate people whose land had a development value in 1947, and who might suffer damage in one of various ways. First, they might have their land bought compulsorily at the existing use value. Second, they might be prevented from building upon land which was ripe for building. Third, if allowed to build, they might have to pay the development charge. Therefore, of course, all these people must be paid, but only as and when they suffer damage.

Some of this damage, which is that for which they are getting payment, has, in fact, happened between 1947 and today, and we are therefore agreed that all the admitted claims of people who have suffered damage must be paid as soon as possible. Of course, they will come to a substantial sum. Already, many decisions have been taken in order to preserve the "green belts" around the great cities, to protect agricultural land and so forth, and considerable areas have been purchased at the existing use value for present and future housing and for other public authority needs. The great mass of it, of course, will only happen as the years go by, and a great deal of it—and this is the vital point—will never qualify at all.

Under the existing Acts, if they were to be implemented, much of the compensation would go to people who have no present intention of developing their land. Much of it would go to people who have not been refused permission to build, and in some cases it would go to people who did not want to build at all. It might even go to people who have bought land for the specific purpose of stopping building upon it. We all know many cases of that kind, in which land is bought for recreation—innocent pastimes such as golf, cricket or tennis— and sometimes a man may well buy a piece of land in order to add to his garden or increase his amenities. Many of these people have a legal call upon the fund as the law stands, but why should they be paid, because they have no real intention of doing any of the things which would call for payment?

There is another type of case in which-payment ought not to be made, and, as these cases are of some importance, I must apologise for paying a little attention to them. Under the 1932 Act, it was not thought necessary to pay compensation for development which was classed as "un-neighbourly." For instance, one would get no compensation if refused permission to turn a house in a residential street into a workshop. The Act went even further. The position then was that a man had no inherent right to develop land in a way which would give him the maximum profit without any regard to the comfort of his neighbour or the general convenience. For instance, his development must not throw an unreasonable strain upon the local services.

All that was established in the Act of 1932, and 15 years later, as part of the conception of the global sum, the position was somewhat changed, and claims were admitted in respect of depreciation and in respect of maximum exploitation where compensation would not have been paid under the Act of 1932.

Finally, from the point of view of the State, £300 million—which, of course, I admit in war years does not sound very much—is quite a lot of money nowadays. A great deal of it, if paid out, would have a purely inflationary effect, for it is worth noting that of the admitted claims over half by value and nearly 90 per cent. by number are for sums of £1,000 and less. But to me the strongest practical argument is the one I have already stated, and which I must now re-affirm.

Why should the State buy all the development and compensation rights and do the job in one fell swoop when, in order to achieve its planning purposes, it is not necessary to pay compensation until there is damage? Why pay out £300 million now in order to do planning work which may have cost perhaps £40 to £50 million by the time the pay out was due, and which will perhaps not cost more than £100 million in the foreseeable future?

I am reminded of the Charles Lamb's Chinaman who burnt down his house to get roast pork, and who, each time he wanted a fresh meal of this delicious animal, built up his house and burnt it down again, pig and all. So much for the £300 million.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

Is interest payable on the £300 million?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

No, not on the £300 million, but on the sums due. I am afraid this is a somewhat wearisome subject, and I would suggest that if there are any questions which I have left unanswered, they could perhaps be put at the end of my speech or to my hon. Friend the Parliamentary Secretary.

The second problem where something had to be done was the development charge. I know it is an easy thing to say that the development charge is all right in theory but will not work in practice; but I am bound to say that I am sufficiently old-fashioned to believe that if something is really wrong in practice, then it is just possible that there is something wrong with the theory.

People who pay a development charge fall into two classes. Some of them have bought their land recently, and in that case they are supposed to have bought it at present use value, leaving the owner with the claim on the fund. The developer will thus recoup the Exchequer by paying the development charge. That is the first class. But, of course, the second class are those who have not bought land recently, who have, perhaps, owned it for a very long time themselves, or who may even—because it is not prohibited under our laws—have inherited it from a father or a brother. Or it may be an industrial developer wishes to add to his factory on land which he or his company have had for a very long time.

I will take the second case first. Whatever may be the theory, a man who already owns the land deeply resents having to pay a development charge on land in his own possession for which he may have had to incur heavy costs on development in addition to building costs. Moreover—and this is very undesirable—this development charge may be the turning factor in his mind to make him hesitate to make the development at all. It is true that he may hold the claim, but that is not very satisfactory to him if, as is bound to happen more and more as time goes on, this charge, when he comes to pay, is more than the claim.

In the first case, that of the man who has recently bought, he may have bought it from a landowner who had read and decided to follow the advice of the Central Land Board and of the Government of the day, and bought it at existing use value.

Alternatively, he may have had to pay a price which included the full development value. It is more likely, I think, that he paid something in between the two, and thus he is in a very embarrassing position. He feels very bitterly about paying money twice over, for, even in this very highly organised society in which we live, men and women have a greater dislike of paying tax to the State than of paying a fair price to their neighbours.

I know this is a regrettable and reactionary sentiment, but it is strangely true. In other words, what I am trying to say is this: From all the letters I have received from Conservative and Labour friends in this House—and I have received hundreds—I observe that all their constituents object to paying a development charge as a hateful tax. I also observe that the Members who send me the letters, whatever may be their own political persuasion, appear to have a good deal of sympathy with their correspondents.

They are right in hating this tax because, apart from all other disadvantages that I have already mentioned, the proper amount of tax so charged is always a matter of argument. It is exceedingly difficult to assess in any precise terms. The valuers, of course, like all the excellent servants of the State, do their best, but they have less and less to go upon as time goes on because the more the free market—to the values of which they are supposed to relate the charge—recedes into the past, the more difficult the assessment becomes. Therefore, the charge often turns out to be a matter of bargaining; it becomes rather like the haggling of the bazaar. I think it is within the knowledge of all hon. Members on both sides of the House that what I am saying are the facts. I regard this as a bad form of tax, unfair to those who have to assess it, and properly resented by those who have to pay it.

There we are; that is what we found. What were we to do? We have not suffered from lack of suggestions during this last year. They have come from many quarters, and I am grateful for them. I soon became convinced that whatever we did would be subject to criticism and would not please everybody. I have, however, been guided by this comforting reflection. Great as must be the difficulties of any change in respect of undoing what has been done in the last live years, it is much more important to get a system which will work in a practical way in the future.

In thinking about the future, what really is the most important thing in our life today? Productivity, development, effort, expansion. Who are the people whom we must help and encourage? They are the people who do things and those who create wealth; yes, the developers, big or small, the people who do things and who create work, be their sphere humble or exalted. After much deliberation, therefore, and much consideration of any possible alternative or half-way Measure, the Government have decided to abolish the development charge. That is provided for in Clause 1 of this Bill.

I must frankly admit that I was much alarmed at the prospect of a long interval between the introduction of the Bill and its receiving the Royal Assent because in that interval all development would cease. But, by taking advantage of Section 69 of the Town and Country Planning Act, 1947, and Section 66 of the corresponding Scottish Act, my right hon. Friend the Secretary of State for Scotland and I have asked the Board to exercise their power to consent to development without insisting on prior payment. It has, therefore, now been arranged for the Central Land Board to suspend the determination and collection of a charge on new developments begun on or after 18th November this year.

So much for the development charge. Now let me speak about compensation. Basing ourselves on the same principles of something which will be acceptable and likely to prove a permanent settlement, we have taken full advantage of this great national valuation. All the work so ably done by the Land Board will be of permanent value to us. In this great "Domesday Book" there has been compiled the development rights as agreed or arbitrated as they stood in 1947. That work stands. On the basis, therefore, of this valuation the compensation will be payable, but only, so to speak, as it is earned. It will be "Pay as you go." Compensation will be paid either in the case of compulsory acquisition or in the case of refused planning permission when these events take place, with certain exceptions to which I will refer later. The compensation itself will be on the basis of the admitted claim.

Now, of course, it might be argued that values should be paid for as they accrue—in other words, compensation should not be fixed to 1947 value. That is a fair point, but there are two answers to that. First, in many cases these values will have been created by the efforts of the community, and secondly, the land owners have had no expectation of receiving more than the 1947 claim. Therefore, they are by no means worse off except to the extent that claims are postponed or never paid. But where injury is inflicted they will receive what they expected. Indeed many will receive more, for we shall base our payments on the full value of the admitted claim. In other words, we shall pay them 20s. in the £ and pay these sums as and when they are due.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

The right hon. Gentleman talks about this great "Domesday Book" and I think that this is the first time for a very long time that the phrase has been used here. Can he tell us whether in this Domesday Book land value will be declared as quite separate from the developments upon it?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I thought I used a phrase agreeable to hon. Members.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

It is the sum of all the admitted claims, and had this law continued unamended it is the claims upon which £300 million would have been paid out. In future when compensation is paid either for compulsory purchase or on refused planning permission, it will be on the basis not of the value at the day but as laid down in the 1947 valuation. I say that that is a fair thing because of the first reason that I have given.

But, secondly, the owners are not worse off because we shall pay them at the full rate of the claim agreed or arbitrated. In that respect, therefore, most of these owners who really have suffered injury will be better of by 20 per cent. more than they expected to be when the announcement was made that the total claim amounted to £350 million; and, of course, far better off than was the general expectation when many people thought that payment would be 3s. or 4s. in the £.

The third reason, and to my mind an overwhelming one, why we should retain the 1947 valuation is that if compensation had to be paid in future on values as they accrued, unknown and perhaps heavy claims would fall upon the community. Thus the broad principle of the 1947 settlement—no compensation for values which accrue after 1947—has been generally accepted as fair. If that were destroyed, new controversies would arise, and the revival of those controversies, I feel sure, would have been equally injurious to the long-term interests of land owners and those of the general public. When a settlement of this kind between the taxpayer and the land owners has been reached, then, whatever modifications are made in practice, I think that it would be dangerous to overthrow the principle on which it is based.

There are, of course, a number of cases in which we shall not normally pay compensation—for example, compensation for refusal of change of use made in the public interest. But, of course, I ought to remind the House that this carries with it the corresponding advantage that change of use which is regarded as in the public interest will not attract charge. I have always thought that this change of use feature was one of the most mysterious features of the scheme, certainly to ordinary folk. Many people have said that they could understand having to pay a fine for doing something that planning thought was wrong, but they could not understand having to pay a fine for what planning thought was right. All this confusion will be swept away. These provisions for cancellation of the pay-out are in Clause 2 of the Bill.

It may be said that this sounds simple and that there is a catch in it. What is the catch?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

The landlord gets the money.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

My hon. Friend the Parliamentary Secretary will refer to some of the minor criticisms. I will refer to the major criticisms, some of which are singularly inaccurate and some perfectly fair. All these criticisms have occurred to us while we were framing our plan.

First, it has been said that we should never be able to restrict compensation to the 1947 value. Eminent authorities have referred to the difficulties which arose through an attempt to restrict compensation during the war years to the 1939 values. Yes, but that was a very different situation. That compensation was directed against and hit against existing values—not at the way a man might some day use his property but at the way in which he actually was using it very often for his livelihood. And it made it very difficult for a dispossessed owner to reinstate himself. We are proposing compensation, not for taking away a man's existing means of livelihood, but only that the prospective profit should be restricted.

Secondly, it may be said that land not required or acquired by compulsory purchase, or not required to remain compulsorily undeveloped—such as a "green belt"—will be free to change in the open market between a willing buyer and a willing seller. It may even be argued that we could have made the old scheme work if we had only insisted that all land should change by law at present use value. To have made the original scheme work that was the only course of action, but I believe that that is an impossible conception.

Let hon. Members look at what that would mean. I cannot believe that the State, or the Central Land Board acting for the State, could take upon itself to enforce that every transaction between one man and another should be at a particular value. To do so, in the first place, would need an enormous machine to enforce it. Nor could it be applied on any accepted principle. We should have to assess the claim of one man who wanted a piece of land belonging to someone else. How could one assess that claim? It would put the Government or the Land Board in the position of encouraging all the potential Ahabs against all the possible Naboths.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

It that quite correct? There are cases where a development plan is on the point of completion, and the Minister's approval is sought to it, where the use is already laid down.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I was dealing not with general use but with a particular transaction between one man and another. It is true that in a local authority scheme choice has to be made as to who is to have a house and who is on the housing list, and so on. All that is part of the routine of local government, but it is not an instrument to which everyone who wants a piece of land from a particular neighbour can appeal.

I also think that if we tried to do this the free market would be completely and absolutely frozen, and I have no doubt that a wonderful black market would develop. Really this would not do. Nor in my mind is there anything fundamentally wrong that if land is not required for one of these two national or local purposes, compulsory acquisition or compulsory preservation, it should be sold like any other commodity in the ordinary way. Of course, it is quite true that profits may be made, but I would remind many who recall some of the older controversies, that profits are shared to a far greater extent today by the State than when those controversies first arose many years ago. Under present taxation, from any profits realised, in the long run and very often in the short run, the State is a great and sometimes the largest beneficiary.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

May I interrupt the right hon. Gentleman, because, after all, he is a man who is supposed to have some economic knowledge, although he is revealing that he has not. Does he see any difference between created wealth and land values which are created by the community and not by the landlord?

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I do not take offence at the right hon. Gentleman's not very attractive way of framing his question. I know that those to whom the memory of Mr. Henry George is the guiding light in their lives are fanatics, and that is the end of it.

There is nothing wrong that in those cases there should be a free market. It is said that the price of land to private buyers will rise and that, therefore, although we may be trying to encourage development, in the long run we may injure it. Of course, the price of land for development may rise in the first instance, because the owner is to get nothing out of the £300 million and the developer will not have to pay the charge, but I trust that the price will not rise to the point which the development charge might have reached if we had maintained it as a permanent feature in the system.

Indeed, when the market settles down it may well prove to be highly competitive, for many of the individual developers have got their land, as I know well from my records, and many of the builders have got their land for many years to come. Moreover, there has been a great change in the relations between the cost of land on the one side, and the cost of building and developing it on the other, since the days of the great land profits. Now it is not so much the cost of the land which is the main worry, but the high cost of development, building, and all the rest.

But there is another safeguard to which I now come, and that is a point to which the Government attach great importance and which has been foreshadowed in the White Paper. We now have in our hands an instrument which is more comprehensive than in the time of the old land disputes. That is the compulsory purchase order by which land can be bought at existing use value with a fixed ceiling upon its development value, and that fixed ceiling is the 1947 valuation.

An hon. Member opposite has observed that the development plans are coming in from the great planning authorities. They will soon be approved. They will show areas suitable for housing, for industry or for any other development. The areas defined for housing will be suitable partly for local authority and partly for private development. In such a case the land owner will have to sell his land for council houses at the present use value plus the amount of the admitted claim.

But the problem arises, what about the land for private development? It is our firm intention that the local authorities should, where necessary, arrange that this part of the estate should be acquired in the same way and made available to the private developer. The same will apply as necessary should the land be required for industry. Of course, if the land owner or his representatives do not ask more than moderate prices, it may not be necessary to have recourse to this weapon, but the fact that this power exists and will be exercised is an immense weapon to prevent exploitation. I am fairly confident that once this is fully understood, these provisions will have their effect upon the free market price. So much for the first lot of difficulties.

I now come to the second lot of difficulties. The next objection is this: Since the Treasury will have to produce the money for compensation without any revenue from the development charge—I think this is a point that hon. Members opposite intend to take—will not the jealous eyes of future Chancellors fall upon this piece of public expenditure with an unfriendly look? But I ask, what is the purpose of the compensation? It is, of course, partly an amenity purpose, but it is in the main an economic purpose. It is, as I have said, to secure the best possible use of the land in our small island. Even the amenity aspect has an economic value if it secures those conditions of life which improve the happiness and, therefore, the productivity of ordinary people.

I have always observed a curious dualism in the attitude of the party opposite towards the Treasury. Many of them nourish a deep suspicion of the Treasury. They think the Treasury always stint and save upon capital required for economic development. I find it rather difficult to reconcile this with the theme—I think we had it only last week—that only the Treasury or the Government, by enjoying ownership of the great industries, will be ready or able to produce sufficient capital for their proper nourishment. It is like the parking of cars on the streets. On Mondays, Wednesdays and Fridays the Government can do no wrong. On Tuesdays, Thursdays and Saturdays they can do no right.

I do not believe in the reality of this fear. Everyone is agreed that when local authorities had to pay compensation from their own resources there was a danger that they might be unwilling or unable to exercise their powers. Everyone in all quarters of the House has agreed that this planning in the large sense must be done in modern conditions. I cannot see why the Treasury, whatever Government may be in power, should be suspected of refusing to allow it to be carried out.

Moreover, there are two points which the Government will bear in mind, whatever the Government. The cost of compensation is limited always to the 1947 admitted claim. That removes one of the great difficulties of the pre-war years. Secondly, although it is to be paid by the Exchequer, it will he a very niggling Chancellor who does not recognise his gratitude to the Secretary of State for Scotland and myself for having saved him from having to pay out £300 million all in one swoop. We shall be very poor-spirited Ministers if we fail to remind the Chancellor of the Exchequer of this fact month by month and day by day.

Perhaps I may refer to a statement which I saw in the Press, because I think this matter is misunderstood. I would call attention to the following extract from today's "Daily Herald": Under their new Bill, all owners allowed to develop their land would get their profit. That is a perfectly fair point. Then it mentions three other things, all of which are wrong. It goes on to say: Those prevented from developing would still get compensation, largely from the local authorities. They will not. They will get it from the Exchequer. Then it says: Thus the landowners would gain handsomely, and the public's liability for compensation, now limited to £300 million, would become unlimited. That is not so. It will be limited to the 1947 valuation. Worse still, local authorities, to save paying out compensation, would be tempted to give planning consent too freely; and the old evils of bad planning and commercial ugliness—so hard to resist—would once again be upon us. That is wrong for the reason which I have already given. I am not complaining, because this is a difficult thing to understand, but I thought it wise to point out this misconception.

Now I come to the third main criticism, which is that something called betterment will come into being and not be taxed. So far as I have been able to study these matters, I do not think that the main purpose of the 1947 Act was to tax betterment. If it were, it was a very bad way of doing it. Owners who sold their land for development have on occasion kept all the betterment, passing the whole cost on to the developer—in spite of the fact that the developer had to pay the charge—and, moreover, the Acts made no attempt to secure the betterment which accrues to existing use, houses with vacant possession and shops and offices with security values enhanced for that same reason.

All these can be sold at very high prices and the Acts made no attempt to deal with them. The truth is that the real purpose of the 1947 Acts was to facilitate planning in the modern world. They were planning Acts and not taxing Acts. They dealt with the intractable problem of how planning could be financed. I have explained how, in my view, it was not really necessary to buy all development rights in order to exercise some compensation rights.

Betterment may come into being, and if it does it will be taxed in quite a lot of ways under the ordinary taxation system of the country; but whenever land is acquired or developed by a central or local authority, either for its own purposes or to assist a group of private developers—and I make a great distinction between a great group scheme and trying to force a contract upon an individual land owner—or when it is in the public interest to prevent it being developed, the owner will not enjoy betterment because the land will be purchased at the 1947 values, and the area of betterment is therefore considerably reduced. Nor do I think that with the present trend of population and the operation of planning we shall see a repetition of the vast new values that sprang up round London in the inter-war years.

Many people have tried to tax betterment. I have no doubt that some will try to do so again, and if they do I hope that they will bear two things in mind. First, and most important, do not tax the man who has to make the development and be quite sure that any tax which is levied does not ultimately fall on him, because he is the pivot upon which the creation of new wealth depends. Also, do not forget that it is no consolation to a developer to feel that he has an increased value in his fixed assets, because what he has to pay out just at the moment when he is paying all the cost of development is liquid cash. That is what a development charge is.

I am afraid that this problem, as in other forms of taxation, lies in the fact that so much has often to be paid in cash when the profit, if it is made, is in fixed assets. It is true that the developer's land may be increased in value, but if he can only meet his development charge by first building his house on the land and then selling it, why trouble to build it at all? It should also be borne in mind that many distinguished and talented statesmen have set out upon this path, but it has usually been their experience to turn back disappointed half way through the jungle. The road to betterment is paved with good resolutions.

I have now described the plan and the operations upon which we are now decided. This Bill is an immediate instrument to stop the pay-out and stop the charge. Next year's Bills will deal with all the consequential problems. I must recognise frankly that it is a serious thing for one Government to interfere with the obligations of a former Government. On the other hand, I am convinced that the land-owning community, great and small, will recognise the equity of our scheme and try to make it work. They have been very patient and I am afraid that I must ask for their patience still further, because for Parliamentary and technical reasons it is impossible for the compensation payments already due to some, which they were expecting in 1953, to be met until 1954. That answers a point which has already been raised.

However, when they are met, these payments will be met at 100 per cent. and not 80 per cent., where the whole development value is lost, and they will carry interest from 1948. It may be that in some cases the owners of land, relying on their compensation rights, have borrowed money upon them for development purposes for the estate as a whole. I hardly think that this can have operated to any large degree, at least until the total value in relation to the fund was announced this year, for when the expectation was that the claims would not be paid at more than a few shillings in the pound it is unlikely that large sums of money could have been borrowed upon them.

But there is another body of people who also feel aggrieved. I refer to those people who have already paid the development charge. It is difficult, as we all know, in our Parliamentary life—and in any life—to distribute benefits without some corresponding grievances. This has presented the Government with a difficult problem. I am sorry for those people, and they will feel rather badly treated, but I think it is possible to rely upon the argument that the charge is in the nature of a tax, for that is what all of us who have objected to it have always said. It would follow from this that, according to a long-standing tradition of our taxation system, money paid is not refunded because a tax is modified or abolished.

I recognise that this charge cannot be exactly compared with an ordinary budgetary charge or tax. Nevertheless, I think it is impossible to expect any Government to pay the sums collected in this way and going back over the years. We must meet claims where damage has been suffered but it is quite impossible to repay all the charge as well, for in many cases that would be paying twice upon the same piece of land.

The Government stand upon their obligations to meet the claims in the circumstances I have outlined. So far as the man who has paid the development charge is concerned, he will not receive back the charge as such, but in many cases he will have a form of recoupment. In some cases he will be recouped by the operation of this principle, for he holds the claim. In that event the development charge and the claim will be set off one against the other.

It is worth recalling that over the last four years that is exactly what has been done in a great number of cases. Claims and charges have been set off against each other and no money has passed. It may be, however, that for one of two reasons he does not hold the claim. It may be that he has bought the land cheap and left the claim with the owner. In that case, although he will have the disadvantage of paying the charge, he has got the land at a cheap price because the owner has kept the claim. Again, it may be that he has paid some intermediate price between the existing and full development value, in which case we are going to try to arrange that the claim should be fairly divided between the original owner and the developer. But if he has paid the full price he will be entitled to the full benefit of the claim. These general principles were sketched out in the White Paper, and the Parliamentary Secretary will deal with any points which are raised about them.

I should now refer to those who, for some reason or other, had development value in 1947 but omitted or were unable to put forward their claim. It has been suggested that quite a large number of people are included in this category. I am bound to say that up to now the Government have received no evidence that this is so. However, since a contrary opinion has been sustained by high authority, I must recognise that there may be a problem, and if it should prove to be the case we shall do our best, not to re-open a whole system of claims, which would be quite impracticable, but to make some provision in the main Bills to meet this difficulty.

Nevertheless, so far as this Bill is concerned, our chief purpose is to stop the pay-out and stop the development charge. Many of the problems I have been discussing will need further sifting and studying before the Bill is finally drafted. I can only promise the House that we shall try to make the unwinding as fair and equitable as we can. There will, of course, be difficulties and even hardships, and we shall value all suggestions which we receive from hon. Members and from various bodies representing the different interests concerned. Out of their suggestions and constructive criticism, I feel sure we can gain great benefit in drafting our final proposals.

But, as I said at the beginning, great as the burden of unwinding may be, I think the most important thing is to get a workable plan for the future. I claim that in framing these proposals we have embarked on a wise and constructive course. We have tried to protect the Exchequer from paying out large sums before they are due and from paying out some sums which will never be due at all. We have plenty of burdens to carry in this generation without adding to them.

Secondly, we have tried to have regard to what will stimulate and benefit production and ease the burdens upon the men and women in our country who are prepared to take risks and to do something for themselves. Finally, we have tried not to disturb the general settlement of compensation values, the aim of which has been to protect national and local interests. Subject to that, we will allow and even welcome the return to a free market, but if the free market should be exploited, we have in our legislative and administrative arsenals powerful weapons which can be deployed, and these we shall not hestitate to use.

We have been much heartened by the general reception of the plan as a whole. It has been received with great fairness, and I should like to express our thanks for this sympathetic treatment. Nor am I unduly disturbed by the appearance of a reasoned Amendment upon the Order Paper. I said earlier that I hoped this would be regarded, if not as non-controversial, at least as non-party. In my recollection, a reasoned Amendment on behalf of an Opposition is the normal instrument of those who are not quite sure what to do. We suffered from it in our time; I remember it well. It is a double-edged weapon; it indicates a willingness to wound but an unwillingness to strike.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

An unwillingness to kill.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

An unwillingness to kill. It is the boomerang of politics. I am still hopeful, therefore, that after this conventional demonstration, we shall still be able to discuss these problems in a friendly and a constructive spirit.

I must apologise to the House for keeping them so long on a subject which is complicated and complex, but I confidently commend this plan as a commonsense, fair and practical settlement of a difficult and even baffling problem.

4.33 p.m.

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House declines to give a Second Reading to a Bill which provides no means for the recovery by the community of socially-created land values, endangers the effective powers of local planning authorities to check undesirable development and by depriving the Central Land Board of the power of compulsory purchase, exposes the developer to extortionate charges. This is indeed a complicated subject, as the right hon. Gentleman has said, and it no doubt lends itself to much very complicated argument on either side. I shall try to avoid that, as far as I can, and to state in rather simple terms—as simple as I can make them and reasonably briefly, I hope—the grounds upon which this reasoned Amendment, to which the right hon. Gentleman referred in passing, although he did not seek directly to confute it, is moved. I shall seek to explain the grounds upon which my right hon. Friend the Member for Ipswich (Mr. Stokes), my hon. Friend the Member for Wellingborough (Mr. Lindgren) and I have put this Amendment on the Paper, with the support of my hon. Friends behind me.

The right hon. Gentleman suggested that it was not true to say that betterment and compensation had been closely linked as dual conceptions in this legislation. But, in spite of what he said, I think that really is the case, as he will see if he goes back to the Coalition White Paper to which he referred and for which many of us have some degree of responsibility, though this was in more general terms, of course, than the later legislation. If the right hon. Gentleman also considers the Uthwatt Report before that, he will see that there were these two conceptions relating to the values of land under planning. This Bill, I submit, abandons what has come to be regarded by many people as an essential principle in the planning legislation of these times—the link between betterment and compensation.

Very simply, the position is that compensation has been payable for the refusal of permission to carry out some particular development which the planning authority thought was undesirable and against the public interest. For this refusal, compensation was to be paid. On the other hand, betterment represented the increase in the value of the land which resulted from permission to carry out some proposed development when this was judged by the planning authority to be legitimate and proper.

Through all these discussions, it was the judgment of many people that, in order that there should be equity between those to whom planning permission was refused and those to whom it was granted, there should be some levy upon the betterment and some payment of compensation. It is quite true, as the right hon. Gentleman said, that nobody can establish that any particular levy on betterment, however defined, will produce exactly the same sum as is paid out in compensation. Such exactitude obviously is unattainable. But none the less, the broad argument from equity remains.

The betterment provisions—namely, the development charges—are completely thrown away by this Bill. On the other hand, the compensation liabilities still remain, although the payment of compensation is spread over time and in some respects is differently defined. But whereas compensation remains, betterment disappears—and that raises a new inequity which I think is very difficult to justify.

Another way of stating the same point is that this Bill abandons the principle embodied in the 1947 Act—namely, the transference of development values to the nation. That was one of the central features of the 1947 Act, and that is expressly abandoned by this Bill with the repeal of the development charge. To this extent—and it is a very important extent—this Bill therefore tears up the Uthwatt Report, which hitherto has been regarded as almost the scriptural authority on these matters. [HON. MEMBERS: "No."] Indeed it has; it has been for many people one of the holy books. Even the later document, which we may call perhaps the new testament, or among the early books of the new testament—the Coalition White Paper of 1944—has been torn up and flung away by this Bill.

I am trying to put this as simply and as compactly as I can. In my opinion the Bill gives to the private landowner, tax free, the whole of the socially-created value of the land due to development. After all, the development charge was a tax; it went into the Exchequer and it was compulsorily imposed. We have now taken that away and, therefore, under the Bill the landlord gets tax free the whole of the socially-created value of the land due to development. That development, of course, normally increases the value of the land and thereby the socially-created element in that value.

On the other hand, other landowners are paid at the public expense, because the compensation is coming eventually out of public funds. We are going to pay the landowner, at the public expense, the amount of the socially-created value of the land which is not allowed to be created because planning permission has been refused on the ground that development was undesirable in that case.

Therefore, in either case the landowner scores as a result of the Bill. If planning permission is permitted, he scores because he gets tax free an addition to the value of his land. If it is refused, he still gets compensation at public expense, even if after an interval of time, but sometimes with additions—payment in full instead of only at 16s. in the £ which would otherwise have been payable under the scheme, and payment of interest also over a period dating back, I think the right hon. Gentleman said, to 1948. In these respects the landowner to whom permission is refused likewise comes well out of this transaction. Therefore, this is, in my view, a profoundly reactionary Bill. How important it is we will discuss, but its nature is profoundly reactionary.

Development charge can, of course, be perfectly clearly defined. So far as legal definitions go, it is one of the simplest definitions in this garden of logical conceptions. Development value is defined as the difference between the value that the land has when planning permission is granted and the value it would have if planning permission were refused. Nothing could be simpler in conception than that. And the development charge is 100 per cent. of the development value. Very well.

Now, I doubt—and here I am speaking with complete frankness to the right hon. Gentleman—on the one hand whether in fact up to now the development charge has impeded and delayed desirable development to any appreciable extent. [HON. MEMBERS: "Oh."] Up to now, because though any planning system causes development to flow in permitted rather than prohibited directions, we have had pretty full employment of the resources available for development. Therefore, I doubt whether up to now it can be established that there has been any great delay.

But there is no doubt that the development charge, even if its defects have been exaggerated, is not very popular. That is quite clear, and that is partly because the idea behind it has never really penetrated the consciousness of the ordinary person. It may well be that the minds of Mr. Justice Uthwatt and others have moved in a rarefied legal air in which plain men find it difficult to breathe. And the tax has sometimes fallen very heavily upon small people. But, when all that has been said, it has taken for the Government and for the community a certain element in the socially created value of land, and, therefore—and here I come to the terms of the Amendment—we do not feel that this Bill can be defended in so far as it fails to give, or in so far as the Minister in his White Paper expounding the problem fails to give, alongside the abolition of the development charge, some indication that some other form of levy upon the socially created value of land will now be introduced.

If the right hon. Gentleman had said in the White Paper, "It is the intention of the Government at the right moment, perhaps in the next Budget—setting aside the development charge as we intend to do—to impose some other levy which to us seems better contrived and free of the objections to which the development charge is open, and which will bring to the community some part of the values the community creates," then our general approach to the Bill would have been more favourable. But, in fact, the development charge is to be swept away, and there is no hint at all—the right hon. Gentleman only dwelt on the general difficulties of doing anything in this field—that any effort is going to be made to impose any other levy upon socially created land values.

On this subject quotations have been often cited from very eminent men, amongst them the present Prime Minister, who said, "It has been the settled conviction of the most mature minds through many generations"—I think I am quoting him accurately—"that the values of land are specially suited to be levied in the interests of the community," because without the community no land would have any value at all, and because land is limited in quantity and fixed in position, and all the rest of it. That, therefore, is one of our objections to this Bill—that it is inequitable. It sweeps away this one levy without proposing another in its place, or without announcing any intention that there shall be anything put in its place.

With regard to compensation payments, these are to be postponed, and I myself am not disposed—and I do not think my hon. Friends are disposed—to take great objection to that, although we know that many people will be disappointed by this, who thought they were going to receive payment in July, 1953, and in some cases hardship will undoubtedly be caused. As against that there are certainly some solid advantages in postponement which I do not challenge.

But more serious is the second point referred to in our Amendment, namely, the planning powers of the local authorities and the danger that these will be weakened in their effective use. On page 9 of the White Paper the argument is set out very clearly: Payments will become due from central funds on the decisions of local authorities. A prospective developer who is refused permission for what he wants to do may appeal to the appropriate Minister; but he will be entitled to submit a claim for compensation instead of appealing if he chooses to do so And so on. Again: Local authorities have a good deal of discretion in their handling of individual applications, and the Government will look to them to exercise their discretion with due regard to public economy. How this can best be secured is a matter which the Government must discuss with the representatives of local planning authorities. They will discuss it, and I shall be very surprised if the local planning authorities do not declare apprehension regardless of party. In dealing with the local authorities I think the right hon. Gentleman will have the same experience as I had, and that was the remarkable non-political solidarity that there is in confronting the Minister who occupies the office which the right hon. Gentleman now holds and which under another name, I once held. I think that he will find that Conservative local authorities are just as apprehensive as Labour local authorities on this subject, and that they will want to know whether in future they will be allowed to use their planning powers effectively.

There is a risk, anyway. We may speculate, of course, whether the Chancellor of the Exchequer will always be the underdog to the Minister of Housing and Local Government in all controversial issues that arise between them. I have sometimes congratulated the right hon. Gentleman on his Departmental successes over the Treasury, which are becoming a matter of public comment, but how long that will go on no one can be sure. The local authorities can have no confidence that the present regime will be eternal. There will be doubts, and apart from par- ticular personalities, I think it is a dangerous thing that the Treasury will be encouraged to pass in meticulous review the way in which planning authorities are refusing planning permission.

This will mark a new possibility of encroachment by the Treasury—hitherto there has not been very much of this—upon the functions which, if they are to be carried out effectively, must be carried out by the people on the spot—by the local authorities, as distinct from Treasury officials sitting in Whitehall, however excellent the latter may be in many ways. Therefore, we are very apprehensive about this aspect of the Bill.

An explanation has been given by the Minister in the White Paper as to how the local authorities in future are going to exercise their compulsory purchase powers. They will have to pay more in future than in the past. Now they are able to acquire compulsorily at existing use value, but in future, if I have understood the position aright, they will have to pay not only for existing use value, but on top of that they will have to pay development value as at 1947. That is correct, is it not? They gain nothing at all from the repeal of the development charge, which is held out as being of value to developers.

Where the local authority is the developer, the position is entirely unchanged, because they have to pay not only the new existing use value but the development value as well. It is quite true that they do not have to pay the development charge, but they are in no way advantaged. Therefore, whatever may be true of the private developers, local authorities get nothing out of it.

Photo of Mr John Hay Mr John Hay , Henley

Is it not perfectly clear that while local authorities will, in effect, be no better off, they will certainly be no worse off? Whereas in future they will have to pay the 1947 development value plus existing use value, they no longer have to pay the development charge, and the two items balanced each other out. Why should local authorities be in any better position under the new proposals than they have been in the past?

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

The hon. Gentleman has stated exactly what I said, and I am much obliged to him. I said that the local authorities would get no advantage from this change in the law.

Photo of Mr John Hay Mr John Hay , Henley

Why should they?

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

Because I thought one intention of this was to encourage development, including development carried out by local authorities and public bodies, as much of the most effective development is now carried out. It is a complete delusion to suppose that development can only be done by private agencies.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I would just point out that the right hon. Gentleman has stated the position quite correctly as it is now, but the tendency is already for the charge to become larger than the claim, and in the long-run I therefore think that local authorities rather stand to gain.

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

It may be rather a long run. I think it is not disputed that what I have said is true at the present time. Indeed, I am obliged to the hon. Member for Henley (Mr. Hay) for restating the case in other language, but pointing to exactly the same conclusion. I will try to state it in such a way that it is beyond dispute. The immediate effect of this Bill will confer no benefit whatever on local authorities. None. They will not be set free from any burden which they previously bore, because in so far as they are set free from paying the development charge they will have to pay an additional equal amount under their compulsory purchase order, since in future they will have to pay development value as at 1947 in addition to existing use value.

The private developer may be in an even worse condition. True, the development charge disappears, but there also disappear the compulsory powers of purchase hitherto exercised from time to time by the Central Land Board. Let us again speak quite frankly on this matter. The powers of the Central Land Board under the 1947 Act were not perfectly defined. There was litigation on the subject which was going on when I was at the Ministry where the right hon. Gentleman now is. The powers are not crystal clear, and not as strong as they ought to be. That is a common occurrence when compulsory powers are found in Acts of Parliament; at some stage somebody gets hold of the Section and nibbles at it, and in the end the Section is not as strong as it ought to be.

There were several cases in succession going through the courts in my time because the powers of the Central Land Board were not strong enough, and it was my hope, had I remained at that Ministry, to introduce legislation which, among other things, would strengthen those powers of compulsory acquisition and make it quite clear that they could be used much more freely and widely. But with the compulsory powers of the Central Land Board removed, how can the right hon. Gentleman be at all sure that there will not be what he calls complete exploitation of the free market? In other words, how can there be any assurance that a private landlord, subject to no threat of compulsory purchase in favour of a private developer, will not charge the very highest price he can? In the terms of the Amendment: what assurance can we have that the developer will not be exposed to extortionate charges? None at all.

The Minister said there were still weapons in the background; certain powers of compulsory purchase. Yes; but do they not reside wholly for this purpose in the local authority? I am now arguing a case which I should have thought hon. and right hon. Gentlemen opposite would have put in the forefront, the case of the private developer who wants to buy land from another private landlord. He has no safeguard if he is outside the field of local authority activity altogether. He has behind him no safeguarding power of compulsory purchase at fair prices.

Therefore, this Bill, through scrapping these powers of the Central Land Board, opens the way for gross exploitation of all sorts of admirable people who, being private individuals with initiative and a desire to develop the wealth of their own country, will find themselves charged the most exorbitant sums by the passive person who happens to own the land on which they wish to make their development.

I remember when the 1947 Act was reaching a final stage of completion a noble Lord who was a colleague of mine in those days said to me, "Would it not have been simpler to nationalise the land?" That, of course, is a short question to which a long answer might be given, but when he raised the question, a short answer occured to me, as it might to any thoughtful student of public affairs at any time.

This is a small Bill in terms of length and general appearance. We are told that it is only the forerunner of a far more complicated Bill to come later on. But, although it is a small Bill it opens up a number of quite large questions, and two in particular. First, there is the question of taxation and rating of privately owned land values, on which I should be surprised if my right hon. Friend the Member for Ipswich says nothing when he speaks later in the debate. In the second place, it opens up the question whether the time has not come when we should bring much more of the land of this country out of private and into public ownership of various kinds. The more we find these complexities multiplying themselves in this class of legislation, the more we are led to believe, with the noble Lord whom I have cited, that perhaps the simpler way, for part of the field at any rate, will be best. Sometimes we should deviate from the middle way.

I hope that I have indicated certain legitimate grounds for doubt as to whether this Bill should today receive a Second Reading. This Bill has been presented by the Minister with great skill, and in such a way as to seek to remove all possible objections that might be taken. But I repeat that in our view it disturbs certain balances of equity which we set up in previous legislation; it creates the danger of very serious interference with the effective use of their powers by local authorities; it exposes private enterprise to grave handicaps, through excessive land charges in the future; and it raises doubts in our minds as to whether more far-reaching and fundamental Measures would not better serve the national interest.

5.0 p.m.

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

I think that everyone will agree that there has been very reasonable discussion of an extremely difficult subject, and I beg the indulgence of the House to dot the i's and cross the t's of one or two of the general observations of the Minister before I come to answer one or two of the objections which have been so seriously argued from the Front Bench opposite. The first point, which, I think, already becomes quite evident, is that the Government cannot in this case be accused, as they have frequently been accused in connection with some of their other recent legislation, of doing something unnecessarily to disturb the existing situation. It is quite obvious, in the light of what has been said already, that something had to be done.

In the first place, I must make a few observations on the inflationary effect of the pay-out of the £300 million. Even though, as will probably be the case, the bulk of that sum would have to be borrowed with an interest charge of about £13 million a year, it is quite certainly not possible to draw that vast sum at this time from real savings by borrowing at any practicable rate of interest. The situation, therefore, would certainly be that, in order to avoid inflation, a very substantial increase in the below-the-line expenditure next year would be involved, with the inevitable consequence of a serious increase in taxation. On this side of the House, I think that that in itself is a most serious argument for making us willing to consider, at any rate, an amendment of the 1947 Act.

But, of course, the whole of the 1947. Act has in fact on its financial side broken down. I do not want to spend time in what I have to say to the House in dealing with the most obvious aspect of that, namely, the complete arbitrariness of the actual determinations of the development charge which has been one cause of the very grave unpopularity of that Act. There is, however, one comparatively small instance which, I feel, I must mention to the House, and which came to my personal knowledge in dealing with one of the large charitable funds with which I have to deal.

We were, at first, faced with a very considerable claim for development charge for a certain piece of work. After long correspondence, this charge was brought down from the original substantial sum to a matter of £100 or £200—I forget the exact figure—and my estate agent said, "Don't you think that it is not worth bothering about any more; let's pay it." My blood was up, and I wrote a final letter, putting the reasons why I thought that there should be a nil determination, and almost by return of post, I received a letter from the Central Land Board, saying that they had reconsidered the matter and they had decided not to make any charge. I make no accusation against anyone. No doubt my success was due to the cogency and pungency which always characterise my interventions on financial matters. But I cannot dismiss from my mind the somewhat entertaining coincidence that my successful letter was written just after the General Election, and so was the first letter on the file written on House of Commons notepaper.

I think that any situation of that sort, when it is dealing with what is in effect a tax, is particularly undesirable, but, of course, the matter goes much further. We have had reference to the Uthwatt Report as a holy book, and I am afraid that the speech of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) confirms the grave deterioration in the study of the scriptures that is going on. More people quote that Report than read or remember it. I must, at this early stage in the debate, make three observations upon it, which have considerable relevance to the speech of my right hon. Friend opposite.

Firstly, of course, in the light of experience, the whole of the Uthwatt Report is based very largely on a fallacy in its conception of floating value. If that were a true conception of course all fire insurance would become impossible. The whole of insurance rests on the principle that while one never knows which house is going to be burned down, one can make a reasonably accurate estimate of the probability, and the same thing applies to development values in land. Incidentally, this is confirmed by the fact that the conception of "postponement," has resulted in the valuations of the Central Land Board turning out not to be too far adrift from the original global figure, which was introduced by the right hon. Gentleman the Member for Bishop Auckland.

The second point is that I think the right hon. Gentleman's memory was clearly at fault. There have been enormous variations between the 1947 Act and the Uthwatt Report. He referred to the Uthwatt Report as holy scripture, but the Report in terms, and for sound reasons, pointed out that to apply the proposed system to developed land would be a grave mistake and reported that it ought to be excluded.

Another important variation was made in the 1947 Act which has had equally disastrous consequences. The definition of development in the 1947 Act was far narrower than the definition contained in the Uthwatt Report. I have it here, but I do not want to delay the House by reading it. The Uthwatt Report points out that no owner occupier should ever be prevented from making alterations in his own premises, and that is what he is prevented from doing under the 1947 Act. Finally, I do not think that everybody is quite sufficiently aware of the extraordinary implications of the land system envisaged by the Uthwatt Report, and upon which the 1947 Act was based. I will read two passages from the Report. On page 28 the Report states: Although the administrative requirements are considerable in the early stages they are mainly concerned with the initial tasks of ascertaining the property concerned and distributing the compensation. What follows is important: Once these matters have been carried through the administrative necessities will in the main be confined to the relatively simple and straightforward tasks of effecting legal transfer to the State of the fee simple as and when the progress of development requires. … In other words all developments will always take place and only take place by compulsory purchase by a public authority.

On page 32 the Report goes on to state: Where lands are required either for public purposes or for private development the 'owners interest' will be purchased by the Central Planning Authority under compulsory powers. If that is not totalitarianism run mad, I do not know what is. In fact, the fundamental objection to the situation which we faced is that we were well on the way to the worst of all possible land systems—the system in which ownership would be in private hands without any responsibility or incentives to develop, and the only power for development and supervision would be in the hands of a body without any of the responsibilities of ownership.

I think that we may say that, broadly speaking, this Bill is justified on the one straightforward principle that it restores so much and only so much of the development rights as will restore a free market in land. That is all that this Bill sets out to do, and for that reason alone it will be justified. I say at once that there is no perfect solution and there never will be. Land, by its nature, never disappears—it goes on for ever—the interests in it go on for an enormous length of time, and from time to time considerable and fundamental changes in the land system are inevitable. We need only remind ourselves of the settled land legislation of the 80's which fundamentally altered the position of life tenants of settled estates. We must also bear in mind that under the Bill, as proposed, further changes may well become necessary in course of time.

Whether or not it is written into the major legislation of next year, that is quite clear, on any grounds of equity—I do not think this will divide the House. If it be the law that development rights as at 1947 are to be paid out but may not be paid out for, perhaps, 50 years, then, if the value of money in the meantime has completely changed, some revision of the total sum must be allowed. The equity of that is so obvious that I do not believe there will be any division, and right hon. Gentlemen opposite practically accepted that consideration when the Labour Party was in office, for in the Eve determination 40 per cent. was added to the 1939 values.

It may be argued that in course of time some new development rights may have to be written into the "Domesday Book." The suggestion sometimes made outside the House for a periodical revaluation would probably be unwise, for, apart from anything else, it would certainly lead to a sort of super Purchase Tax difficulty, for in the last year or two before any revaluation all development would be held up. Nevertheless, as was pointed out in a letter to "The Times," which no doubt right hon. Gentlemen have seen, in process of time the difference between the value of the land to a local authority with compulsory powers and the value to a private developer would become so great that some provision for amending it might turn out to be necessary.

I merely raise these points because it is very important that we should not claim too much for our legislation. Anybody who sets out to get a completely perfect and tidy solution is bound to fail. There is one further point that I should like to put to the Minister at this early stage. We cannot tie ourselves completely to what he described as the "Domesday Book," for the reason that claims under that are claims for interests in land. His suggestion is that these should all be written up against the fee-simple, but, unfortunately, the total claims for interests do not reach the value of the interest when the interests presumably merge in the freehold reversion.

I have in mind an instance of an agreed claim in respect of a very large block of flats in London. The sum involved is nearly £500,000. That is all right under the Bill. If and when permission is refused for turning the flats into offices—that is what the claim was about—the £500,000 will be payable. But if there had been on the other side of the road a similar block of flats and in between the freehold and the sitting tenants there had been introduced a chief rent, what would have been the position? Under these provisions the freeholder would have no claim at all because the reversion would have been too small in relation to the capitalised ground rent. The chief tenant would have had no claim because there would always have been a covenant against turning the flats into offices. So no claim will be chalked up in the "Domesday Book" against that block of flats, and when in 1980 or whenever it is all the interests become merged in the fee simple and both people come along and say, "We want to turn these flats into offices," one of them will get £500,000 and the other will not get a penny. That is intolerable.

There are plenty of other possibilities of the same sort. For instance, land may be affected by statutory tenancies. There the equity of the argument is even stronger. It could be argued, "It is bad luck, but you voluntarily entered into the tenancy and now you will have to put up with it," but with statutory tenancies the man has no option at all. There are other more complicated forms of the same problem. I would merely say that, in principle, the Government scheme is wise in that it restores sufficient of the development rights to make it possible to have a free market in land. The scheme can be worked, but it will involve very careful consideration in the major legislation in order to avoid serious inequity.

I turn now to one or two of the objections raised by the right hon. Member for Bishop Auckland. The first thing we must all bear in mind when we discuss any question relating to obtaining betterment for the State is that it is an immense job. In the light of the experience of the country, now going back for nearly a century, I should say that in an old country like this, which has been developed over centuries, it is a complete will-o'-the-wisp to endeavour to determine accurately enough for taxation the pure economic rent of land. In practice, it is unworkable.

Four valuations have had to be made for the "Domesday Book": existing use value, unrestricted value, Clause 85 prevailing use value, and our dear old friend Clause 52, the notional lease, without which how many estate agents would be able to afford a car? None of these would be of the slightest use, nor, incidentally, would be any of the valuations under the Rating and Valuation Act, which has itself already broken down. The new valuations which will be required if we are ever to proceed along the lines of a betterment tax are far more difficult and theoretical than any of these.

I would remind some hon. Members of the sort of thing in which we got bogged down before. There was a famous case of some valuable agricultural land in Lincolnshire. The unfortunate valuer had to try to determine its value without the relevant improvements. One of these improvements was the sea wall which prevented the land being flooded from time to time, and the sea wall was built by the Romans in B.C. something or other.

That is the kind of complete absurdity with which one is faced when one endeavours to value land, in a country like this, on pure site value without any of the improvements which may have been due not, as the right hon. Gentleman persistently seemed to suggest, solely to the State and the community. The right hon. Gentleman always suggested that the betterment values were due to the community. That is not true. But whomever they are due to, an attempt in a country like England to separate the value of the land as it is now from its pure economic rent, and, as theorists determine it, is a complete will-o'-the-wisp.

But this Bill does not leave the matter there. It is not completely negative. It says, in effect—and in our opinion, quite rightly—that the builders, developers, farmers and estate owners have something more useful to do than to chase this will-o'-the-wisp, but it is not true to suggest that nothing is done in the Bill and by the further legislation which is in contemplation to deal with the betterment problem.

First, we have the much more practicable suggestion that where specific improvements are made by large public works, such as the building of a new railway station, the purchase of the land for recoupment is a far more practicable way of bringing the values into the public exchequer where they can be reasonably well determined. But the Bill, in a very sensible compromise, does not do what the right hon. Gentleman seemed to suggest and what his Amendment certainly suggests, and that is, throw away the whole principle of keeping development values in public hands.

That is not so. A large part of them, and, as time goes on, an increasing proportion of them, are kept by the State. Only the development values which already existed when the 1947 Act came along are restored, for the very good reason that I have pointed out, namely, that that is the only way we can get a free market for land; but the future ones are kept, and that in itself is a conclusive argument against what was thrown out, in passing, by the right hon. Gentleman: the suggestion that rating of site values might be a necessary corollary of the Bill. Quite apart from difficulties of valuation, it would obviously be ridiculous and unfair to tax or rate a developer for values accruing at the same time that make it impossible for him ever to enjoy them.

The remaining point on betterment is that so far from leaving the developer in a position where he might be more exploited by the normal free market—and why the free market should always be treated on the assumption that the price arrived at was not the right figure I do not know—it certainly is not true that this Bill will leave him in a worse position. That is because, as has been pointed out in some learned journals, there is little doubt that the provisions of the Bill, other things being equal, do lower the market value of land in areas where substantial development has taken place, particularly for housing.

That is for the obvious reason that as a large part of housing development will be conducted by local authorities in areas set aside by the plan for that purpose, it will be impossible for the free market value to go very far from that because the local authority may step in and buy. It is certainly not true that the whole of some extortionate betterment is handed over by this Bill to the private owner.

The next point will, perhaps, show that hard-headed Tories are not always anxious to see money going, without very strong grounds, into the hands of landlords. I think there is one part of the proposals of my right hon. Friend which requires justification and at least reconsideration. That refers to those cases where land has passed at more than existing use value. We all agree that the seller must have his claim and he has already received part of that in the higher value of land. He will get only the balance out of the Exchequer, but the Minister proposes to refund to the purchaser the difference between existing use value and the price the purchaser paid.

I was rather surprised that even those whose chief occupation is chasing landlords have not taken that point. I cannot quite see why the purchaser has any claim. He voluntarily decided that it was worth his while to buy that land at rather more than existing use value. He has developed it and thought it was worth while doing so.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

He has done something else as well; he has paid the development charge, which he did not know about when he purchased the land.

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

Yes, but there is no question of repaying him the development charge as development charge. He will get the claim back whether he paid the development charge or not. It is a refund of claim which may be more or less than the development charge. I submit that it is by no means clear that in any case a man who has willingly paid more than the existing use value of the land and decided that it was worth while continuing although he had to pay development charge should now have part of his purchase price refunded to him.

If we are to do that we should look at some of the complications. He may have passed the land on. Suppose he has leased the land to someone else. Certainly, he will take into account the fact that he paid more for his land than existing use value. Suppose he lets it; certainly, he will take into account in the rents he charges the fact that he has paid more for the land. Are we to refund the difference to the fellow to whom he has let the land? By this provision we are complicating the matter and paying out more than we need, and I am not convinced that the developer has any genuine claim on the Exchequer. I think that at least that point might be reconsidered.

I have one or two observations to make on the financial provisions relating to planning. It is very difficult, indeed impossible, to decide how far the Exchequer will benefit or lose by these provisions. The interest charges on the £300 million will be about £13 million, if all is borrowed, and they will be losing £8 million a year in development charges. On the face of it the Exchequer will be several million pounds to the good, but for all the reasons put forward by the Minister a very large part of the £300 million will probably never be paid at all. As it will be spread over a generation the present value of the capital will be far below the £300 million and they will make, in addition, a substantial capital saving.

It is at least arguable that it is a good bargain, even for the Exchequer. But, even supposing it were not, even supposing some small extra charge came on the Exchequer from the fact that they were losing development charges in the future, I cannot see why it should be considered a tolerable arrangement that where claims have to be paid they have to paid by the only one who does anything—the developer.

That is still more obvious if we consider the owner-developer. Here, there is no question of development values being produced by the community. The community never entered into it. The owner-developer built the house on his own land and any increase in the value of the land did not arise out of the community, but out of the private development. That he should be mulcted to pay claims for other people seems an extremely doubtful proposition. If there were to be some loss to the Exchequer by these provisions, which is by no means certain, I submit that in the public interest it would be a good thing to do.

If we look at each of the points raised in the Amendment the answer is extremely simple. We are first told that the Bill abandons the principle of public acquisition of development land. It does not. We are told that it abolishes the development charge without imposing an alternative levy but that is a good thing because the development charge is undesirable and alternative levies are impracticable. We are told that it will hinder local planning authorities in checking bad development. There is no reason why it should do so at all, because the Exchequer will be paying them in order to make the planning possible. I have dealt with the remaining point—the possibility of extortion by the private landowner.

On the contrary, I think that this Bill is soundly to be commended on very straightforward grounds. It deals with a situation which has already broken down and has grave inflationary possibilities. It preserves the necessary planning powers, but makes possible the free market in land where responsibility for the development will rest on the only people who are ever likely to exercise it. It protects the interest of the Exchequer by putting an upper limit to the claims upon them. It reduces the cost to the Exchequer by cutting out a whole lot of unneighbourly claims which ought not to be made and enables the local authority to carry on with planning without being faced with impossible demands.

For all those reasons, I think that the Bill will receive the support of this House and of the country.

5.30 p.m.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

Having heard the hon. Member for Oldham, East (Mr. Horobin) speak in this House on several occasions before, I am not surprised that the Uthwatt Report should seem to him to be the product of a revolutionary Red. Listening to the hon. Gentleman's obviously well-thought-out and carefully argued speech, and remembering the constituency which he represents, I was more than a little sorry that he never came to the reason why we are discussing this question of compensation in connection with town and country planning at all.

I have not been in Oldham for some time, but I have a very vivid memory of the grey drabness of those cobbled streets and of the overcrowded housing conditions of the people living in the hon. Gentleman's constituency. The whole reason for discussing this matter today is to try to bring an opportunity for a better life to the people of the hon. Member's constituency. I hope his constituents will note the careful, technocratic arguments of the hon. Member, and his complete ignoring of the humanitarian problems which are so vitally necessary in bringing a better life to the people in his constituency.

I will not make any further comment on his speech. I would rather come at once to the speech of the Minister of Housing and Local Government. That is much more relevant to the discussion. The right hon. Gentleman made great play with the removal of the development charge. He excited a great deal of support from his own benches as a result. After listening to his remarks about the development charge, it can at least be said that if the right hon. Gentleman did not move, he at any rate danced. That gave us pleasure. He went on to talk at some length about future policy, excusing himself by prefacing it with a long discourse upon how complicated this whole subject was. At the risk of being unpopular on both sides of the House, I say that I do not think it is complicated in its basic essentials. In its detailed administration, as the hon. Member for Oldham, East made clear, it is, of course, complicated, but in its basic essentials it is a simple subject.

All this talk of complication is a kind of mumbo-jumbo that has been thought up by the lawyers to confuse the rest of us. Basically, it is a kind of lawyers' propaganda to excuse the inefficient majority of the legal profession, and at the same time to make some money for the efficient minority of the legal profession, to keep the subject from being discussed by ordinary, simple mortals such as myself.

The whole question of the tenure of land, the rights of people over property, the rights which men exercise over land, what they can do with their land, and the point at which the community can step in and say, "Nay" to any specific use of land, are in the basic rules of all human society. This is not just a subject for the lawyers or for the technocrats. It is a subject for everybody, and for the social philosophers in particular. I hope that no one will think that I am preaching if I say that the simpler we can make the rules of society the more likely it is that society will be durable, and that the simpler we can keep the rules for working society the better it will be in the interests of everybody.

It is fashionable in these days to denigrate the Silkin Act, but a good deal was said in its favour at the time it was passed. It is fashionable to forget some of the speeches that were made in support of that Act when it was introduced into the House in January, 1947. The Silkin Act never had a chance from the word "go." In the first place—and of course this is to some extent an indictment of the Ministry of the day and of the chairman of the Central Land Board also—not enough effort was made to publicise the provisions of this Act and to get the general public to support its provisions. There was far too great a sense of complacency among those who were responsible for administering the Act after it had gone through its stages in this House.

Secondly, not nearly enough was done to ensure confidence in the £300 million. A lot of people went round the country saying that we were only going to get 6d. in the £ as a kind of dividend, and nothing was done by Sir Malcolm Trustram Eve or the Central Land Board at that time to check that lack of confidence. Land changed hands at a price which was far in excess of the existing use value because land owners naturally wanted to see the colour of their money. If they were only to get 6d. in the £, they wanted to get the value out of their land. I do not want to make an attack upon someone who is not here and is not in a position to defend himself, but at that time Sir Malcolm Trustram Eve had shrouded himself in the mists of a kind of self-created Olympus in the Central Land Board, and it was difficult to get any contact with him.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Sir Malcolm Trustram Eve held public meetings all over England at the time, explaining these matters, and particularly tried to induce people to sell land at the existing use value. I have been to several of these public meetings. It is no use the hon. Gentleman saying that Sir Malcolm Trustram Eve shrouded himself in some holy mystery.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I know. I helped to organise some of them. But nearly all those meetings were for professional societies. They were very seldom meetings for the general public, and the speeches were very seldom couched in language that the general public could understand. But I do not wish to plead that the Act did not produce a Garden of Eden because the Minister was seduced by Eve. I do not think that would be fair play. It might be slanderous. The Act could not have worked as it was then. I accept that argument wholly.

The point was that the provisions of the Act sought to nationalise the development value of land, leaving the land owners with their existing use value while seeking to ensure by means of the financial provisions of the development charge that the development value was left in the hands of the community. It did not accept the Uthwatt Committee's recommendation of a central land purchasing agency for all development, whether public or private. The Silkin solution was a fiscal proposal. It sought to do by fiscal means what ought to have been done by physical means, if its proposals had been logically accepted. That was the failure of the Silkin Act; that was why it failed to work. It is a lesson that we should not fail to learn. We cannot do by fiscal means what we must do by physical means, if we are seeking to go to the logical conclusion.

Photo of Mr Graeme Finlay Mr Graeme Finlay , Epping

Is the hon. Gentleman advocating nationalisation of the land now?

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

Perhaps the hon. Gentleman will not mind my coming to that point presently and kindly ensuring that I shall have at least an audience of one. We are being asked to repeal some Sections of the 1947 Act, so perhaps it comes best from one who never thought that the 1947 Act would work that some tribute should be paid to that bold and serious attempt to tackle the very difficult problem of land use and planning in this country. It should go on record that the Town and Country Planning Act, 1947, was the first serious, comprehensive attempt to tackle this problem. In the years to come, when we look back at it, it may well be that that Measure will take its place as one of the most important Measures of that great Parliament of 1945–50. I should like to pay that tribute, in passing, to Lord Silkin for the work that he did.

I now come to the new proposal which the Minister has brought before the House. We should ask ourselves whether it meets the difficulties, at the same time preserving the administrative successes of the Silk in Act; whether the proposal remedies the defects of the development charge while retaining intact the planning machinery. That will be the acid test of whether the right hon. Gentleman's proposals are worth while.

Immediately, I come to the question of compensation under the 1932 Act. As the right hon. Gentleman said, compensation for planning had to be paid by the local authorities, who were inhibited from preparing any effective schemes because it was a serious charge on their local finances to do so. Under the proposals which the right hon. Gentleman has brought forward, that liability for compensation is transferred from the local authority to the central Exchequer.

My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) referred to the payment of these funds by the Exchequer on the refusal of planning permission by the local authorities, and like him I want to refer to paragraph 40 of the White Paper. Will the Parliamentary Secretary tell me the meaning of the words: … the Government will look to them to exercise their discretion with due regard to public economy. The reference there is to local authorities. Do those words mean that when the Minister of Housing and Local Government sends estimates for his annual expenditure to the Treasury, he will have to include a certain sum to be paid out for compensation for planning restrictions by local authorities? Is it an administrative possibility that the Treasury can send back that estimate, say that it is too large and that it must be cut down?

Is it possible for the Treasury to veto any estimate which the Minister of Housing and Local Government makes regarding any provisions that he is making for the payment of compensation? I want to know that, because if it is not possible, then what is the meaning of that sentence? On the other hand, if it is possible for the Treasury to veto it, it means that the central planning authority ceases to be the Minister of Housing and Local Government and it is once again those troglodytes in the Treasury who decide.

This is a serious point because it is a dangerous constitutional step. It is giving all power yet again to the Treasury. We could not run a football club on rules of that kind. Why is it that the treasurer of a football club is one of the least-sought-after offices? It is because all administrative decisions are taken by the secretary or captain or team selection committee. That is how it should be in the national economy. At the same time if we introduced those rules we might get some less controversial figures as Chancellors of the Exchequer. Therefore, I want to know what those words mean and whether compensation is absolutely automatic on the refusal of a local authority to give planning permission.

Now I come to the second question which the Minister mentioned, the 1947 valuation as being the ceiling of all the compensation paid. To my mind, the right hon. Gentleman gave a totally unsatisfactory answer in that respect. As there is no provision for the collection of betterment, what will happen as time goes on? At the moment it may be all right but, as time passes and as cities expand, we shall find that some people are allowed to develop their land and will reap 100 per cent. of development value for their own private gain while at the same time others will find themselves restricted in the development of their land by the refusal of planning permission, and in 1957 the development value of their land will be very different from what it is now under the 1947 valuation.

What the Parliamentary Secretary will find is that in five years' time we shall begin to get a good deal of pressure by a lot of people who feel that they have a genuine grievance against this provision. In 10 years' time all these compensation proposals will be as dead as the dodo and we shall have paid out our £350 million, or a great proportion, for our mess of pottage without getting the mess of pottage. I warn the House and the country that this solution is in no way a permanent one. It is a kind of temporary Danegeld, to put off for a further period the basic decision which will have to be taken at some time or other. At what price?

Again there is the question of betterment. This raises problems which are far beyond the question of the collection of betterment. It raises problems of land use planning as well, because if we have no means of collecting betterment, if we are not prepared to bring in any form of betterment levy, we shall create a new incentive to take agricultural land on the fringes of big cities in order to build on it. We shall get pressures from those areas on the part of people living in the locality and the farmer tilling the soil with slow returns from a hard and difficult job will be confronted with land "spivs" flashing rolls of bank notes from their pockets for a quick return. So there will be a new incentive to take the precious food-producing land of Britain for betterment, and this can operate locally without the Minister being aware of what is happening.

In those circumstances a great many of the propaganda campaigns we have had from the National Farmers' Union about saving our good agricultural land will be quietly forgotten. A number of farmers, short of capital because of the fiscal policy of this Government and the credit freeze, will look for a quick return to enable them to get money just in order to farm efficiently. And this will be the easiest way in which they can raise the money, and it is also one way in which our precious food producing land will be taken for purposes which may not be in the national interest.

What is the solution? We have to get back to the analysis of the Uthwatt Report despite the fears of the hon. Member for Oldham, West—

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I must apologise, I meant the hon. Member for Oldham, East. There is a vast difference not only of shape and position but theologically—

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

And ideologically, too. As I say, we must get back to the Uthwatt Report, which is the most satisfactory analysis of the position that has yet been made. Whilst we need not necessarily accept all its conclusions, it is important to look at it in order to see how to dispose of the question of compensation in order to have efficient land use planning.

Briefly, these were the solutions in the Uthwatt Report. First, a global sum, which was accepted by the Silkin Act. Secondly, a central land purchasing agency for the acquisition of all land for public or private development. Thirdly, a periodic betterment levy on developed land. In addition, the Uthwatt Report thought about some other things as well. Paragraph 39 said: Our analysis up to this point has led to the conclusion that for a solution of our problem a measure of unification of existing rights in land is necessary in order to overcome the effect of shifting value and to eliminate the conflict between private and public interest. Later, in paragraph 47, it said: If we were to regard the problem provided by our terms of reference as an academic exercise without regard to administrative or other consequences, immediate transfer to public ownership of all land would present the local solution, but we have no doubt that land nationalisation is not practicable as an immediate measure and we reject it on that ground alone. Of course, the Uthwatt Report was to a Minister of Works and Planning by the name of Lord Portal, and we can see that they did not consider it a practical proposal when he was the holder of that office. However, it looks as though some members of the Uthwatt Committee were nevertheless in favour of land nationalisation—

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Is the hon. Gentleman suggesting that they trimmed that Report on account of who was the Minister and did not give an honest Report of what they thought was the true position?

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

The hon. Gentleman is only trying to draw a red herring across the trail. The terms of reference excluded the question of land nationalisation. They were to produce a solution to this problem for immediate application after the war, so obviously, if they were realistic in regard to the situation at that time, they had to give some thought to the fact that the party opposite were in power.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

Was it the terms of reference or the party in power?

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I will leave the hon. Gentleman to work that out.

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

Will the hon. Gentleman read the terms of reference, because they do not cut out land nationalisation.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

The Uthwatt Committee say in their Report that it was outside their terms of reference, and, as far as they are concerned, they removed it. I am simply stating what they say in their Report. If only the hon. Member for Oldham, East will look again at the Report—I do not want to read it to him again because, obviously, it is a very sore point with him; it may cost him a night's sleep—

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

Where does it say in paragraph 47 that their terms of reference cut out land nationalisation?

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I apologise to the hon. Member. I withdraw unreservedly. I have had the ground completely cut from under my feet. Nevertheless, the fact remains just the same that they regarded it as not immediately practicable. Although, at the same time, there was a suspicion in the Report that a lot of the people on the Uthwatt Committee thought that this might be the most sensible solution that might be brought up, they ruled it out because they said that they did not consider it practicable as an immediate measure.

Photo of Mr James MacColl Mr James MacColl , Widnes

I think that my hon. Friend will find at the beginning of paragraph 46 the statement of the Uthwatt Committee's views on land nationalisation and their terms of reference.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I am grateful to my hon. Friend, who has saved me. Paragraph 46—I thought I had read it somewhere—says: Land nationalisation as a matter of general policy clearly lies outside our terms of reference. …

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

It is equally clear that it did not, as the hon. Member will see if he reads the terms of reference.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I will not argue any longer except to say this. Some members of the Uthwatt Committee seemed to think that land nationalisation was a possible solution. Undoubtedly, if we take their analysis to its logical conclusion, we must remove this conflict between the private interest and the public interest in land. It may even be necessary in the public interest to prevent somebody from developing good food-producing land, which, in the private interest, may be the most profitable game which the individual owning the land might be able to pursue. That, therefore, is the essential problem which we must face in dealing with the whole question of the land law in relation to town and country planning.

That brings me to the other possible solution other than the Uthwatt solution, which is land nationalisation. When I speak about land nationalisation, I do not necessarily mean a central authority. I do not want a great army of bureaucrats sitting in London or Whitehall—there are enough of them as it is. I could well talk of municipalisation. I simply mean public ownership of land, whether it is local or national. This used to be one of the generally accepted points of view of large sections of the Liberal Party, at least when there were some Radicals sitting on these benches representing them. It has been a kind of skeleton in Labour's cupboard, to be referred to only at election time by hon. Gentlemen opposite as a kind of last-minute scare.

How often those of us who have contested rural constituencies have heard the story that if only old so-and-so gets in, the land will be nationalised, and then the Lord will help them. Well, he may help us, and hon. Gentlemen opposite may find that they have said it once too often and that the land has been nationalised. That is a very dangerous situation which they could create for themselves, and large sections of the Liberal Party will still support us on this question.

Lord Simon of Wythenshawe, when a member of the Liberal Party, in his book "Rebuilding Britain," writing with all the experience and authority of Chairman of the Manchester City Council Housing Committee, said: The only satisfactory solution to the land problem is national ownership of all land in and around cities. Then it was David Lloyd George who said, "Who gave the land of Britain to 10,000 people as a perquisite and made the rest of us trespassers in our land of birth."

Let us, therefore, look at this skeleton in Labour's cupboard. Let us dust it and see whether its framework stands up, whether the joints creak, whether it is worth putting some flesh on it and some life in it, and say whether this really can bring some solution to the problem which faces us. Until we settle this question of how we are to control the land, we cannot possibly seek to bring any hope of any decent life to our people living in our crammed and crowded cities, or any opportunity of checking the drift from the countryside and the decayed towns. If we could do that, land nationalisation would be a small price to pay.

I hope that some of my right hon. and hon. Friends, considering this matter at one of their week-end conferences, when the National Executive of the Labour Party meet, will give some thought to this aspect, because it is a possible solution if it is administratively workable. Above all else, it is very important for us to remember what we are seeking to do.

We are seeking to create a system whereby it is possible to preserve the farm land of Britain from being taken by the highest bidder and, in the national interest, to preserve the limited amount of food-producing land. We are trying to create a system in which British industry can function properly. Any far-sighted industrialist knows that production does not begin and end at the factory gate. The journey to work of his workers, the sources of his raw materials and the means of distribution of his manufactured products, are all equally vital parts of his administrative organisation.

If the Parliamentary Secretary wants a perfect illustration, he can go to Covent Garden any morning and see the jam which takes place there, with trucks and lorries unable to get anywhere near the firms to which they belong, and people humping their vegetables for long distances in large boxes through crowded pavements and wasting a good deal of time and money at the expense of the British housewife, who has to pay large sums of money for her fruit and vegetables. That is the most crass, crazy chaos which I know. If ever there was an example of mass masochism in a great distributive centre, that is it. We must solve that, but we cannot do it until we settle the question of compensation and betterment.

Above all else, what we are seeking to do is to try to create a system which can bring an opportunity of fresh air, health, happiness and life to people living in the slums—Hackney, Hoxton, Platting and Clydeside, for example—and all the other crowded, crammed industrial cities of Britain. That is the basic aim of town planning legislation. Town planning in that context does not owe its impetus mainly to long-haired Bloomsbury architects, but to the reformers of the 18th and 19th Centuries like Edwin Chadwick, who sought to bring decent living conditions to the people. That is, or should be, the aim of the legislation that we are discussing today.

This is the most human and yet the most fascinating of all subjects. It is not the dry, arid, dreary thing that some dreary members of the town planning profession would have us believe. It is living and vital, if we only get down to the job. In my view, nothing could be more interesting than the history of our communities that have gone by and of our buildings and cities. The struggles and passions, the failures and the hopes, of men and women now long dead are congealed in the bricks of buildings, the stone in the streets all round us.

Our generation has a better contribution to make than any that have gone before for a better society and better living conditions. I warn the Parliamentary Secretary that the solution which his Minister has brought forward is no solution at all. It is only a temporary stopgap. It may turn out to be nothing better than a land "spiv's" bauble. I urge the hon. Gentleman to withdraw the Bill and to bring us something better. If he is unable to do so, let him and his right hon. Friend resign and give way to a Government who are prepared to take the courageous decision that is necessary in the interests of the people.

6.0 p.m.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

While all of us will have great sympathy with the peroration of the hon. Member for Pembroke (Mr. Donnelly), it is singularly unrelated to most parts of his speech. He was very successful in dealing with the broad questions of sentiment, although I might say that the history of our country is not merely written into the streets of our cities but into the farms in our countryside, and will not be improved by those farms being taken over by some piece of chicanery or other by the Central Land Board and under the pretext that to nationalise them is the only way to deal with the re-organisation of Covent Garden.

When he descended to details, the hon. Member did not attempt to deal with the carefully thought out and very moderately put case of my hon. Friend the Member for Oldham, East (Mr. Horobin). I will not go into the points with which he found himself completely at sea particularly in the reading of the Utthwatt scriptures, and from which he had to be rescued by a lawyer. Indeed, the hon. Member does not even read his own writings. I have in my hand a very interesting document which arrived this morning. It is the "Town and Country Planning Magazine," and I see that one of the associate editors is Desmond Donnelly. When I heard him speaking about a builder going out into the country and, by flashing a bundle of notes, being able to buy a piece of land on which to build a house, I read with interest the views of Mr. Desmond Donnelly. In this magazine he said: The 'Food Lobby' might better turn its attention to this subject. That was the increase of home food production which, he was advocating, could be increased between 50 and 100 per cent. over a period of years. A little bit of 'self criticism' will do them no harm. We must all remember that Britain will remain a mainly industrial country and that its industrial population needs a fair share of amenities, the most important of which is space. That is what he was saying when he was writing to this journal direct. But he speaks differently when addressing the House.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

Perhaps the right hon. and gallant Gentleman did not read the scriptures himself, because at the beginning he would have seen that a balance had to be kept.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

I have not nearly-finished with the scriptures. I listened to the hon. Member's commentary on them, and, as not infrequently happens, the commentary was widely at variance with the text. In the pages of the journal he makes a vigorous attack on food production. But when speaking as the hon. Member for Pembroke he refers to the danger in the country of encroachment on agricultural land.

The hon. Member's views on Lord Silkin's Act will astound many. The hon. Member said that he was one of those who never really expected the Act to work. And, by the way, it has now turned in the Silkin Act; it is no longer the Labour Government's Act. Lord Silkin is made the scapegoat. All the sins of the people used to be placed upon the shoulders of the goat and the goat was driven out into the wilderness. In this case it is the House of Lords, and all the sins of the Labour Government are placed on the shoulder of Lord Silkin who has now been sent to the House of Lords. Lord Silkin appears in the role of the goat. In this article the hon. Member said: It is true that the 1947 Act has not worked out in every respect as successfully as had been hoped. … The principle underlying this part of the Act is quite simple in theory. All his argument is quite simple in theory, but what we are discussing this afternoon is a question of practice. What we desire is an improvement and betterment in the conditions of the people spreading out of the towns, and the destruction of the slums which the charges under the Silkin Act have definitely and specifically worked to prevent. We desire to sweep that away. They have worked to lower the amount of the land available for building and to herd the people closer and closer into these towns and slums about which the hon. Member spoke.

The hon. Member must not merely confine himself to beautiful thinking but to practical steps, for this is a legislative chamber. How are these practical steps to be brought about? They are quite simple in theory. The hon. Member, in his article, goes on to say: Where the Act has proved ineffective is at the point of sale to a possible developer. That is exactly what we are saying. There is an old saying in the mining community which the hon. Gentleman the Member for South Ayrshire (Mr. Emrys Hughes) will remember. It is a very practical one, "It a' comes aff the point of the pick." All these things come to this very point of possible development. That is what this is all about; and where the Act has proved defective we propose to remedy it.

The hon. Member says, in this argument: The Act did not fix the percentage of the charge … Lord Silkin"— not the Government— unexpectedly fixed the charge at 100 per cent., and neither of the two provisions for purchase has been used on any scale. The Central Land Board were, to some extent, inhibited by a long legal wrangle. If hon. Members opposite pass a Bill without studying the legal implications a little, it is inevitable that they will get mixed up in a long legal wrangle. This is a legislative chamber and to make a law, which has to be interpreted by the courts, it is not enough to say, "This is what we desire." We have to ask ourselves, "How shall we bring that about?"

Then the hon. Member said: The local authorities, for their part, received no encouragement from the Government to undertake large-scale land purchases on behalf of private developers. My right hon. Friend the Minister of Housing and Local Government gave a very striking example of that from the Scriptures, where King Ahab brought the machinery of government into practice to deal with land purchase for a private developer. He wanted to add Naboth's vineyard to his estate for the purpose of building and developing thereon. Naboth had great objections to this, but the King put the machinery into action and acquired it. I cannot think that he was better off for that; indeed, a heavy vengeance fell upon him when the dogs licked his blood in the ground where Naboth's vineyard had stood. I wish that the hon. Gentleman had read his article to the House instead of indulging in some of the flights of rhetoric in which he indulged.

The purpose for which we have met this afternoon is, first, to repeal a tax. Surely that is a thing that all of us should greet with delight. Secondly, it is to repeal a tax upon, of all things in the world, building, and, there again, that is a thing which the whole House should greet with delight. Thirdly, it is to repeal this policy of a synthetic landlord, brought newly into existence, and from whom the country would never be able to escape. Is not that a good thing in itself? It is a thing which we in outlying parts of the country, in Scotland, certainly, and, I should believe, in Wales, resented very bitterly when it was set up. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) said that it was not very strenuously opposed. I can tell him that from Scotland it was opposed vigorously. I do not wish to detain the House, but I have here some samples, which I could read, of the vigorous and strenuous opposition which we made to it.

Not only did the Bill bring into existence a synthetic landlord, but it brought into existence a synthetic landlord sitting in Whitehall. It the hon. Member thinks that Wales is better developed by a synthetic landlord in Whitehall than by the local authorities there then he should go to Wales and tell the people that, making it an issue at the next Election. The synthetic landlord has proved to be completely out of touch with events. He is not able to make the adjustments which are necessary, and when the hon. Member for Pembroke suggests to my hon. Friend that he should explain some of the machinery which can be brought into action again, he has not read the papers, as he has not read the Uthwatt scriptures. He certainly has not got them off by heart.

The White Paper states that the local authorities have all these powers to buy land for private developers for housing. It is possible they can do these things, and if the House will forgive my Latin the vis a tergo which will come into play is when a man is considering whether it is unreasonable to hold up his land. He can make a bargain with a private individual. But behind the private individual it is agreed that there are other personalities—the spectre of the local authority buying for its own use or even for a private builder. It will bring these compulsory powers into existence on a very much less generous basis of compensation.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

I have no recollection of making that point. I am not complaining about the compulsory powers in the hands of local authorities. I am well aware of them, and I never made the point at all that land would not change hands at a reasonable price. I was only saying that there was an incentive to take farm land because it provided the quickest return to farmers who were short of capital.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

It may well be that was not in the hon. Member's mind, but I think he will find it in his words when he looks at them. I do not need to go further than the right hon. Member for Bishop Auckland, who not only made that point but danced on it, brandished on the Floor of the House—that some unreasonable fellow would hold on to land and prevent development.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Surely the right hon. Gentleman will agree that the Bill takes away from the Central Land Board the power of compulsory acquisition.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

I will come to the right hon. Gentleman, I hope only in passing as I do not wish to enter into discussion with him on that vexed question of the taxation of land values. We have all known a dog which is a good dog, but which cannot stand postmen, and which, whenever it sees a postman, barks itself silly. Whenever the right hon. Gentleman hears the words "land values," I regret to say that—I will not use the whole quotation—he begins to bark. [Interruption.] That may well be. I am sure that we shall hear the right hon. Gentleman barking loud enough to split the welkin; but I fancy that it will not have to do with whether the charge at present levied should or should not be repealed.

I was only saying, and the right hon. Gentleman would have heard it if I had been speaking on some other subject, that so far as compulsory it is applied by the local authorities it will be done, I think as vigorously, and certainly will be much more flexibly applied, than by a synthetic landlord sitting in Whitehall—Ahab bringing into existence the power of the State to buy up Naboth's vineyard for nefarious purposes of his own. We have repealed a tax by a synthetic landlord on development. We are to some extent restoring, and only to some extent, a free market in land.

Again, I think that is a good thing; because I cannot understand the contention of hon. and even right hon. Gentlemen opposite that everything a public body does is bound to be right, and everything a private individual does is bound to be wrong. Many great examples of private development are known to us. In my own country, there is the new town of Edinburgh, the town of Helensburgh, and there are many in other parts of the country.

Bath is mentioned, certainly. That is some time ago, and I do not want to go too far back because hon. Gentlemen are willing to consider that decent and honourable men existed in the past, but believe that after the Middle Ages they all disappeared. Bath is an example. There are noble and beautiful buildings about Westminster here which owe a certain amount to the initiative of private individuals.

I say that public bodies also may go wrong. I have complained before, and complain again, about the gross and bestial piece of defacement of a national treasure which is going on now under the authority of planning—the destruction of the whole of the accessibility of the strata of coal measures laid out in Bilston Glen, which is being carried out now by a public body, the National Coal Board, in the teeth of the utmost vehement protests by all the most reputable scientists of the country. It is being done in the face of the fact that alternative land exists where this spoil could be tipped and development could be carried out cheaper.

It is not being done for cheapness' sake but for wantonness of defilement. A hundred thousand pounds are being spent in destroying this treasure. The figures have been run through the proper set of catches and slots, and worked out, and, click—out comes the result, and down go the axemen to cut down the trees, here come the tippers to tip out the refuse, and here come the people covering up 3,500 feet of coal measures laid out like the leaves of a book, which scientists come from all over the country to see. That is being done in the teeth of the scientists' views, and is being done by two public bodies.

The idea that public bodies are infallible, all-wise and all-knowing is not borne out by the facts. I remember the Minister of Agriculture being able to stop some public property on the Downs being used to make a motor racing track out of land given to the public. I had control, as trustee, of an approach piece of land which enabled me to hold up access to it and I squashed that project. Private individuals can sometimes do good and public bodies can sometimes do harm. Let private and public development go on.

Development will go on certainly under the provisions of the Town and Country Planning Act. The only thing I fear is that we have tightened the thing up too rigidly, with the multiplicity of forms which one has to fill up. I wished to break out a dormer window overlooking the Cheviots, in a shepherd's cottage. I had to fill up a form in triplicate and these had to be sent to Edinburgh. Moro people looked at that picture than were ever going to see that window once it was in existence.

Only recently I had a demand for a development charge because I was putting some road metal on a green road leading to a shepherd's house. When I protested, the demand was not persisted in, but the machine which was producing these unreasonable demands exists and was bringing pressure on public servants to commit these acts of interference and regulation. There is a danger that these faults will take place and this House should be on its guard against them.

This Bill is a step towards freedom, towards allowing, in some instances, at any rate, the experiment of individuals proceeding with a certain amount of development to see what they will make of it, and under the conditions where that can properly be tried. That is a good thing, not a bad thing. This is a good Bill, not a bad Bill. It will have my heartiest support and, I hope, that of the whole House.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

The right hon. and gallant Gentleman told a moving story about forms in triplicate for a dormer window. Can he say whether there will be any difference in that respect as a result of the Bill?

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

I do not wish to delay the House. I fear that the general planning provisions are in danger of being too close and meticulous. But the provision with which we are dealing is the one which has done most harm. Let us get away quickly from this at least and see whether, as a result, Englishmen, Scotsmen and perhaps even Welshmen may perhaps be trusted to do a little more for themselves than they have been allowed to do in the immediate past.

6.20 p.m.

Photo of Mr James MacColl Mr James MacColl , Widnes

The right hon. Gentleman the Minister of Housing and Local Government has absolved himself of responsibility for the planning part of the Coalition Government by reminding us that at that time he was earning the gratitude of the nation by being in other parts of the world.

In a very much humbler way, and with much less good reason, I can absolve myself of any responsibility for the Labour Government's Act of 1947, as, like my hon. Friend the Member for Pembroke (Mr. Donnelly), I was not a Member of the House at that time, and had nothing to do with the Act. Therefore, I hope I approach these problems in quite a dispassionate way, without feeling myself called on to protect a vested interest or to uphold the honour of a revered and noble colleague.

I have looked at this White Paper and the problem which is presented by the series of minds which have been brought to bear on the problem, and have asked myself whether this White Paper and the Bill which is part of it represent a workable alternative to the 1947 Act? The then Minister founded the 1947 Act on the Uthwatt Report, but I think that is not altogether the whole story. After all, the Uthwatt Committee was a technical committee set up to deal with the problem already expressed and described in much broader terms by the Barlow Commission.

The problem we are discussing this afternoon is really the problem which the Barlow Commission first posed. It is no use establishing an authority with planning control of the allocation of industry and the planning of new towns and so on, unless we are prepared to face the financial implication of what we are trying to do.

The right hon. Gentleman was perfectly fair, although some of his hon. Friends have not been quite so fair, particularly the right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot), who has a happily short memory. The Minister was quite fair in pointing out that the main ideas behind the 1947 Act were expressed in the Coalition White Paper in 1944. That White Paper was presented to the House by a Minister of Town and Country Planning whose clarity of mind and lucidity of exposition we have since learned to appreciate in quite different fields. It was a remarkably clear statement of the problem we are regarding today.

In paragraph 5 of the White Paper on the control of land use, it was said that after the passing of the 1944 Town and Country Planning Act of the Coalition Government, there will still remain to be corrected what is generally agreed to be the defect which most of all prevented or distorted good planning before the war—namely, the state of the law regarding the payment of compensation to landowners affected by planning schemes, and the collection of 'betterment' from those who benefit therefrom. The right hon. and gallant Member for Kelvingrove was Minister of Health. I think I am right in saying that he was responsible for planning, and I think he shows a rather short memory about the success he was able to achieve in working the 1932 Act. If ever there was a lamentable failure, it was not the 1947 Act, but the 1932 Act which the right hon. and gallant Gentleman failed to make effective, and it lies ill in his mouth to pour scorn on the attempts which have since been made to salvage some of the damage and the mess with which he left us.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

Will the hon. Member mention just one instance of damage or mess—one instance, that is all?

Photo of Mrs Jean Mann Mrs Jean Mann , Coatbridge and Airdrie

May I reply to that? May I be allowed to supply the instance?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

Order. We must keep the debate in order.

Photo of Mr James MacColl Mr James MacColl , Widnes

I have quoted the views in the White Paper of the Government of which I think at that time the right hon. and gallant Gentleman was a member—[HON. MEMBERS: "No."] The right hon. and gallant Gentleman pops in and out of office so often—I am sure I do not want to be unfair to him—that I thought he was a member of the Coalition Government during the war.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

No. The hon. Gentleman does me too much honour when he says that I "pop in and out so often." On the whole it is more "out" than "in." Anyway, I am one up on that just now.

Photo of Mr James MacColl Mr James MacColl , Widnes

I apologise to the right hon. and gallant Gentleman. That was the view expressed by his colleagues on reviewing his achievements dispassionately in his absence. It is the view formed by the Barlow Commission and by the Uthwatt Committee, so that on the whole the balance of evidence about the failure of the 1932 Act is pretty impressive.

Photo of Mr Walter Elliot Mr Walter Elliot , Glasgow Kelvingrove

Will the hon. Member do me the justice, at any rate, of remembering that when I was Minister we were building 357,000 houses a year, which is a great deal more than his Government were able to do.

Photo of Mr James MacColl Mr James MacColl , Widnes

What the right hon. and gallant Gentleman was doing was allowing ribbon development. And if, like an even greater builder, Sir Christopher Wren, the right hon. and gallant Gentleman wishes his memorial to be seen by looking around us, I do not think we need to go very far along the Great West Road to see a memorial around us of his failure to exercise proper planning control over housing estates.

I agree with my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) that it is fair to say that what we are defending at the moment is an unpopular Act. It is curious that we should be doing that, because an opposition are normally accused of adopting popular cries in order to embarrass the Government. It is curious that we should now be defending the carrying out of land use planning, knowing quite well that it is not a particularly popular thing.

It is bound to be unpopular, because the advantages of planning will always come in the long run and the disadvantages will always come in the short run. It is in the short run that people are irritated by having to obtain permission before building a garage. It is in the long run that they see their children growing up in the fresh air in properly planned towns with properly sited schools. Anyone looking at the short-term impact of co-ordinated planning will always experience a feeling of irritation and annoyance.

Any weak Government which are not in a position to be able to afford to face hostile criticism are always bound to give way on an issue of that sort, and to feel that they must play up to popular feeling and not run the risk of annoying their friends. They feel that the best thing to do is to retreat, and that is one of the great difficulties about democratic planning. We are always in the position that we may be let down by a Government who have not the courage to face the implications of what is to be done.

I do not agree that the real indictment is of the Town and Country Planning Act, 1947. As my right hon. Friend reminded us, there have been other factors. There has been the fact that we have not been able to get the resources to build houses, even if we wanted to build them. Therefore, a considerable amount of discontent has been voiced about planning restrictions, when in fact the trouble has been the emergency shortage of building resources and the restrictions placed upon us accordingly.

There is the fact that the Central Land Board were held up until the FitzWilliam decision. They were not in a position to carry out an essential part of the scheme of the 1947 Act, the compulsory purchase of land where people were trying to sell at more than the existing use value, until they had a decision in the FitzWilliam case. Now that decision has been given, it is surely time to use it. It is a terrible thing to think that when the green light has been given by the courts, the red light is shown by the right hon. Gentleman in a Bill in which he proposes to prevent the use of the power of compulsory purchase by the Central Land Board.

Another matter which I think a very important psychological factor is that nobody has yet had a bite of the £300 million. People are cynical about all Governments, whether of the Right or the Left. They like to see the colour of their money, and this postponement of compensation will make that much worse. I feel that if people had seen compensation given, or even if they had had a bit of it, they would have been much more reconciled to having to pay development charge.

The right hon. and gallant Gentleman the Member for Kelvingrove talked about getting rid of the tax. That is a wrong approach to the problem of compensation and betterment. The 1947 Acts did not impose a tax. Their object was to acquire for the State the development values. An extraordinary feature of this Bill is that the right hon. Gentleman is still acquiring for the State development values which cannot be used: but instead of taking development values which can be used—to re-sell again to the developer—he is making a present of them to the land owner.

He is taking what, from the point of view of the State, is the worst side of the bargain. He is buying development values in order not to use them and abandoning those that will bring a return. He is leaving with the land owner the right, without any payment, to develop where the development plan allows him. That is entirely illogical. From the point of view of the Government it is extremely extravagant and foolish, and from the point of view of justice it is absolutely wrong.

The scheme in the 1947 Acts may be criticised, but it was a kind of rough justice. A man might be annoyed if he had to pay development charge; on the other hand, it was recognised that other people were only getting compensation limited to the global sum. Equally, a man might be annoyed by the feeling that he was not being given a fair crack of the whip by way of compensation; but he knew that the man who was lucky enough to be able to develop would have to pay development charges on his right to develop.

Under this Bill people prevented from developing by the plan do not get compensation unless they can prove that their land was, if not dead ripe or near ripe, at least potentially ripe—perhaps that would be the most appropriate jargon. The Minister would argue that a person who has a private golf course ought not to be allowed compensation because he does not intend to use the land except for playing golf, and therefore does not intend to develop it.

I should have thought that the party opposite who believe so strongly in the sanctity of private property would have realised that people die and the property goes into other hands. Somebody might want to change the use of the golf course, but they will not get any compensation for that. I should have thought that in the case of people who believe in a property-owning democracy that would have had aroused in them the greatest possible indignation. Under this Bill the owner of the golf course will see his next-door neighbour, who has been lucky in the plan, being given the green light to go ahead and develop—and, if he can find a private purchaser, there is no limit to what he can charge for the land which he sells.

The 1947 Acts altered the system of compulsory purchase on 1939 values. I can well remember in the early days of the new towns, when I was a member of one of the new town corporations, how many people were indignant. They said that they were being compensated at the 1939 level and that when they bought a house to live in they would have to pay the 1948 or 1949 value. They thought that that was unjust. That is the position which the Minister is restoring.

Photo of Mr James MacColl Mr James MacColl , Widnes

The Minister is basing compensation for compulsory acquisition on 1947 prices, but leaving it to the private developer to go into the open market and to buy at whatever may be the market price at the time.

Photo of Mr Harold Macmillan Mr Harold Macmillan , Bromley

I attempted to deal with this matter in my speech. I said that there was a great difference between the position where there was a question of the existing use value being taken and a man deprived of a home or a farm, and this question of a potential profit. They are two absolutely separate points.

Photo of Mr James MacColl Mr James MacColl , Widnes

I do not think that the right hon. Gentleman has taken my point. I was suggesting that if a person is displaced by compulsory purchase, because of development carried out by the new town corporation, he will be compensated on the 1947 basis, but when he gets an alternative site on which to develop he will have no protection given him. He will have to buy in the open market. That that is in the right hon. Gentleman's mind is clear from the White Paper, which says: One result of the changes so far outlined is that there would be a free market in land, in the sense that anyone would be able to offer land for sale at whatever price he thinks appropriate without the fear that his action might result in compulsory acquisition. The right hon. Gentleman's policy is based on the assumption that by freeing land and by allowing the land owner to get the best price he can in the market, he will help his policy of developing a property-owning democracy. In his speech the Minister spoke of people who do things, people who create values. The people who do things and create values are the developers, not the land owners.

The Minister's policy is giving freedom to the land owner to get as much as he can for something on which he has done nothing, at the same time giving no protection at all to the man who wants to do things, the man who wants to create some value. The latter is thrown on the tender mercies of the open market.

A certain amount of scorn has been poured on the reasoned Amendment suggested by my right hon. Friends, in that the word "extortionate" is used. That word comes from the White Paper. The right hon. Gentleman himself says that there is a danger that private developers might be held to ransom and that he is determined to stop it. This is a magnificent example of locking up the stable after the horse has flown.

Photo of Mr James MacColl Mr James MacColl , Widnes

Land prices, under this administration, are likely to become horses that fly. The Minister will find it difficult to introduce further town and country planning legislation. We know from the mess into which the Government have already got, with their rather small legislative programme, that the chances of the right hon. Gentleman being allowed to introduce another Town and Country Planning Bill during the lifetime of this Government are small, though he is optimistic enough to think that he will get this Bill through in 1953.

If he finds then that extortion is taking place, he will not be able to introduce legislation to prevent it. I do not think that he knows precisely what kind of legislation he would like to introduce. It is said that there is no ground for complaining that the powers of compulsory purchase are being taken away from the Central Land Board, because the local authorities have power. Nobody has outlined for the benefit of the House what this power is. I should have been grateful if I had been told. It would have saved a certain amount of research. I do not know whether the reference was to the power of the housing authorities or the planning authorities.

If the allusion is to the power of the housing authorities, it should be remembered that many are exceedingly small authorities where the product of a penny rate is very small. In such cases their chances of launching a big scheme, or buying land and re-selling it, are negligible, especially now that the Minister has introduced a restriction to prevent borrowing from the Public Works Loan Board.

In order to assist the local authority in carrying out its powers of protecting the developer from an extortionate price by compulsory purchase, the Chancellor of the Exchequer has raised the rate of interest, and, therefore, increased the cost of borrowing money, and thereby placed a heavy burden on local authorities, who are likely to be very reluctant to sink money in buying land in order to re-sell it to the private developer. It really is astonishing that the party opposite, who are always so anxious to protect the private developer, should, in this ruthless way, expose all private development to the dangers against which they were given protection in the 1947 Act.

The moral I would draw from the attitude of the Government and the party opposite to the 1947 Act is this. There are undoubtedly practical difficulties, and undoubtedly hardships are caused, but I still think that that Act can be made to work, though, if it cannot be made to work, it is quite clear that this is not the way to get round the difficulty. This way is going to be unjust and unfair to both the developer and the local authority, and the logical implication of the criticisms raised against the Act are that perhaps, after all, as my right hon. Friend said, the attempt to find a middle way was a mistake, and that the only thing that can be done now, in order to make sure that the profit from developing land goes to the community, is to provide that the community should own the land.

There is one other point to which I should like to refer in reply to the hon. Member for Oldham, East (Mr. Horobin). The hon. Member said how unfair it was that a person who owned houses should have to pay the development value, because he was the person who had created that value, and not the community. That is very often not true. It is the community which has provided him with a road to the school to which his children go, and it is the community which prevented a smelly factory being built at the bottom of his garden, and which has preserved the local amenities by the right kind of planning legislation. It is by the action of the community that the value of developed land has been increased.

It is not just a question whether or not we take away from the land owner the value which is inherent in his property. What the Government are doing here is making a present to the land owner of the value which the action of the community has added to his property by stopping development of neighbouring and contiguous properties, which seems to me to be extravagant and improper.

I therefore suggest to the House that this Bill is a paltry running away from the problem. It is true that the difficulties are great enough, but they should be settled with realism and creative courage, and not by this miserable piece of escapism in this Bill.

6.42 p.m.

Photo of Mr Graeme Finlay Mr Graeme Finlay , Epping

I want to give a broad welcome to this Bill as the prelude to a better system of planning of land use which will encourage the developer. It is only a holding action, so to speak, before a larger and more effective Bill is produced in 1953.

First of all, I should particularly like to congratulate the Government on declaring their intentions and on allowing time for people to think about this matter, because if ever there was a subject—I know there is a difference of view about the complications of it; the hon. Member for Pembroke (Mr. Donnelly) thought it was easy, though I do not myself—which requires time, and which can produce an infinite number of permutations and complications, then it is town and country planning. Therefore, I congratulate the Government on allowing time to go into it.

If we refer to the time taken for the passage of the earlier Act through the House, we find that the formal First Reading took place on 7th January, 1947, the Second Reading on 30th January, and that the Bill reached the Committee stage on 18th February, and only three weeks were spent on it in Committee. After that time had elapsed, a Business Motion was proposed and carried, and, under the Time-table, it was speeded up. By that means, all the Government Amendments were accepted, while all the Oppo- sition Amendments collapsed and fell to the ground.

In the result, that Bill became law with many of its 120 Clauses undiscussed, so far as the House of Commons is concerned, and the same applied to six out of its 11 Schedules. If Sir Malcolm Trustram Eve, after the experience of a life-time, declined, after seven days, to express a final opinion upon the effect of a White Paper, I think it is only reasonable that we should take our time about it.

This Bill does three things; it abolishes the development charge, it stops the paying out of the colossal sum of £300 million, and it affords compensation for certain planning restrictions. With regard to the abolition of the development charge, I am quite certain that this decision will be received with widespread relief on the part of the public, because, surely, the very name stinks in their nostrils. Why should we impose a charge on what, after all, we are trying to encourage—the valuable form of activity which is known as development? In its very name, it arouses suspicion from the start.

It is quite obvious that the hopes expressed about the 1947 Act have not been fulfilled and that the Act does not work. Lord Silkin, who must be given the credit for the parentage of the Act, although the hon. Member for Pembroke seemed to make him the scapegoat, declared, during the Second Reading, that the following would be the result of the Act, and I am quoting from his Second Reading speech: When the Bill becomes law, a developer will acquire his land at the existing use value. This will, of course, be lower than today's market price, which will include the development value. On getting consent from the local authority to build, he will then negotiate the development charge with the Central Land Board. As I have explained, this charge will be a sum which will not exceed the actual development value. In other words, for his land and for the right to build, he will pay an aggregate sum which will not exceed and may well be substantially less than today's market price. He cannot, therefore, be worse off; he may be better off."—[OFFICIAL REPORT, 29th January, 1947; Vol. 432, c. 984.] That simply has not come to pass. Any hon. Member who receives a wide correspondence, as I do, will know that it just has not happened like that. The White Paper calls attention to the tremendous gap between the theory and practice of this Act. It is all very well to promulgate the theory, but, in fact, people have dissociated the land they purchase from its abstract development rights vested in the State, and this is a case of bringing into force a theory which people cannot understand.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Is not the hon. Gentleman saying that all that has been happening has been that the landlord has been able to sell land at the existing use-value plus the development value?

Photo of Mr Graeme Finlay Mr Graeme Finlay , Epping

All I am saying is that members of the public did not understand, from the theory of the 1947 Act and its complications, that they cannot dissociaate the development rights in land as an abstract matter from the actual land acquired physically. In the result, whatever the theory, the development charge has been imposed—

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

May I put this point to the hon. Gentleman? Even assuming that under the Government's Bill the developer will still pay the equivalent of a development charge, he will pay it to the seller.

Photo of Mr Graeme Finlay Mr Graeme Finlay , Epping

I do not think the hon. Gentleman understands my point. What I am saying is this. In effect, the development charge is a deterrent to a free market in land. We might go on to complain about the capricious way in which the development charge is assessed, but I should like to refer to one or two cases in which the development charge has depressed rather than encouraged development.

For example, there is the case where an assessed charge of £2,300 was made on a town council which converted four acres of land into a public garden on the occasion of the Festival of Britain. That is a very festive way of encouraging development of that kind. On the other hand, we see the thing reaching quite Gilbertian restrictive limits when a charge of £400 is levied for the change of use of a shop owned by a Co-operative society when the change consisted only of the erection of a counter so that the front part of the shop could be used as a Co-operative bank.

I cite these two instances as examples of the present effect of the development charge on development. It is quite obvious from what was said by the hon. Member for Pembroke that in his mind, and probably in the minds of other hon. Members opposite, there is the intention to nationalise the land. That sticks out a mile. Lord Silkin is reported as saying that perhaps a more objective way of carrying out the intentions of the 1947 Act would be, instead of a subtraction of development value, the actual nationalisation of the land. I know only too well what the constituents of the hon. Member for Pembroke, who have valuable early potato-growing land, would say to him if he went to his division and spoke his mind.

Any Government which embarks upon the taxation of land values embarks upon a literal quagmire of difficulty, and the 1947 Act is no exception. The late Earl Lloyd-George's attempt to raise this tax from land cost more than the actual tax which resulted, which is an illustration of how difficult the question is.

Hon. Members opposite have talked about betterment and the so-called socially-created land values. I have heard of betterment, of course, but I have never heard of worsenment, if I may coin that phrase. It does not follow that building on a housing estate inflates the value or the amenities of other housing next door to it. It might make it considerably worse. It does not follow that the provision of a waterworks improves other amenities that may adjoin it, or that the erection of an electricity generating station or of a sewage disposal works would be entirely beneficial in the result. There is such a thing as worsening, but that is not taken into account.

If it is said that betterment of land values should be taken into account, then, I submit, compensation should be awarded in respect of this subtraction of value of property. Moreover, it is a difficult matter to apportion and to decide to what extent the improvement in the land has been the result of public activity and to what extent the result of the enterprise of the private land owner.

In my submission, the enterprising developer has every bit as much moral right to the reward derived from developing his land as the public have to expect from the betterment of publicly created values. If the speculation of the private developer does not succeed, then he has to face a possible loss. He takes the risk, and he may land in the bankruptcy court. The State will not intrude to protect him. He is going to stand the loss himself.

It is also true that the question of betterment is very much less arguable today than it was in 1909 when it was first brought up. The taxation of profits and the incidence of death duties have now very largely changed all that. It is all very well for the right hon. Member for Bishop Auckland (Mr. Dalton) to say that this is a Bill to give land owners tax free socially created land values. Are they tax free? Can anyone seriously contend that one can hold land and not pay taxes? Taxes, rates, and death duties have to be paid on it. Therefore, from that point of view, the argument does not hold water.

I welcome the Government's intention to retain full planning control. That is highly desirable, having regard to the haphazard manner in which development took place in the last century. One can say that quite sincerely, and yet, at the same time, maintain a great number of reservations about the satisfactory working of the planning machinery. For example, one could say that the planning machinery should bind the strong as well as the weak, and that the Government Departments and local authorities should set an example as planning authorities and should not build on green belt land as they have done in the past.

One could say that they have themselves infringed the principle that planning should be restrained by law. One could also say that the procedure for public inquiry is defective where the acquisition of land is concerned. The so-called "blowing off of steam," the term in which the right hon. and learned Gentleman the former Attorney-General referred to the procedure in this respect, is surely a travesty of a quasi-judicial process.

The parties who stand to lose their property have to go to their legal advisers, bring witnesses and go before an inspector to state their case, a process characterised as "blowing off steam." In my view, it is a mere charade, and it does not lie in the mouth of anyone to call it a true quasi-judicial process.

The Minister, moreover, is often an interested party in land dealings, and, in such circumstances, the Minister may be judge in his own cause, which is a very unsatisfactory position. I submit that there should be some kind of independent inspectorate set up, quite divorced from the Department concerned, to consider these matters. It is a bad principle for an inspector to be appointed by a Minister who is himself interested in acquiring land. Moreover, all Government Departments should deploy their case in public. I cannot see why, except, for example, on grounds of security, a Government Department or local authority should be on any more privileged ground than the subject who, after all, has much less weight on his side than has a powerful Departmental machine. There are many instances too where an appeal on a point of law arising out of a planning matter should be allowed to go to the High Court for decision.

This Bill has many clear virtues. First of all, it frees the market in land and enables development to take place. That is a very valuable thing at the present time. Secondly, it stops the paying away of taxpayers' money in cases where that is not justified. How can anyone suggest that a payment out of the global sum is justified when, perhaps, the man concerned has bought the land with the very intention of not developing it but of protecting amenities adjacent to it, or without any present intention of developing it? That is just throwing away the taxpayers' money, which is not warranted today.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

Is the hon. Member aware that whether that can be done or not depends upon the development plan in the area? That is not left to the individual to decide.

Photo of Mr Graeme Finlay Mr Graeme Finlay , Epping

I do not think that the hon. Member has quite grasped my point. I was saying that if there is already an accepted claim upon the development fund it may well have been promoted by a landowner who has no present intention of developing at all. Therefore, it is a pure hypothesis whether he does intend to develop eventually.

Finally, this Bill gives us time to think before there is further legislation. On a subject like this I do not accept the contention that the legal profession make confusion worse confounded. They put an extremely difficult pattern into some kind of coherent form, and I was interested to see the chivalry with which the hon. and learned Member for Kettering (Mr. Mitchison) helped out his hon. Friend the Member for Pembroke. It is valuable that we should have time to think before we proceed with the main Bill, and I welcome this holding Measure with conviction.

7.1 p.m.

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

I feel that much of the debate today has been wide of the general points of the Bill. The fact is that this Bill cuts at the very roots of planning. We have had almost 50 years' experience of the gradual development of planning and fundamentally this Bill takes us back to even a worse position than the position before the 1932 Act.

Perhaps I shall be considered to be a little controversial by hon. Members opposite, but I must say that during wartime they and their friends are always prepared to say that the things that happened before the war will not happen again. They are prepared to have inquiries and even to prepare programmes. They did that during the last war. But whenever they make programmes they never intend to keep them, and this Bill is part of a Tory Party scheme to undermine the whole social legislation which has taken place since the war.

We had the Beveridge Report to deal with social insurance, the 1944 Education Act to provide a more liberal system of education, the Dudley Committee to ensure a higher standard of housing, the Scott Report on land utilisation, the Barlow Report on the distribution of industry, the Uthwatt Report on compensation and betterment, and the Reith Report on new towns. All these Committees were set up by the Coalition Government during the war for the purpose of finding out what would happen when the war finished and what should be done to prevent the social ills that existed before it.

Quite frankly the Tory Party never intended to implement those promises if they had come to power in 1945. It is to the everlasting credit of the Labour Government of 1945–50 that they implemented every one of the war-time promises made by the Coalition Government. The real purpose of a considerable piece of Tory legislation in this Parliament is to go back on the social progress which has taken place since 1945. This Bill is part of that process.

We have had planning since 1909. We had the 1909, 1919, 1925 and 1932 Acts. All those planning Acts failed miserably becaused they did not tackle the problem of compensating the person who was deprived of the right to develop. Payment of compensation where a person was denied the right to develop was left to the local authority; and there was no local authority in the country, including even the greatest municipality in the world, the London County Council, which could afford to pay compensation for depriving the owner of development tights. The result was that they were not deprived of those development rights, and we had the general haphazard development which we experienced in the inter-war years.

It was to deal with that problem that the Coalition Government during the war set up the Uthwatt Committee. What did the Coalition Government say when the Uthwatt Committee made their Report? Even on page 3 of the Introduction to Cmd. 6537, which was the White Paper issued by the Government to indicate their intentions about future legislation on the Scott, Barlow and Uthwatt Reports, they said: In particular, between 1909 and 1932 the new concept of planned use began to take legislative shape in successive enactments. Nevertheless wrong use of land continued to result in much loss, both to individuals and to the nation, of well-being, of time and of money. Good agricultural land was unnecessarily wasted, and the appearance of the country spoiled, by sporadic and unsightly building; … If the Bill now before us is put into effect, we shall go back to that state of affairs. Later in my speech I will give reasons why I think that will be the case.

On page 5 of this White Paper, dealing with compensation and betterment, the Coalition Government said: but the peculiar value of the Report lies in its masterly analysis of the abstruse problems lying at the root of any effective system of town and country planning. The Government are greatly indebted to the Committee for this notable contribution. The 1944 Government admitted that compensation and betterment were fundamental to effective planning. That is true. Finance and planning go hand in hand, and if one divorces finance from planning, then planning goes by the board. It has been suggested by the right hon. Gentleman the Minister of Housing and Local Government that the financial provisions of the 1947 Act are very complicated. I do not think they are. They are simple.

What are the principles? First of all, that the existing owner continues to enjoy the existing use value of the land, that if the land is sold it is sold at existing use value. If there is development, a development charge is made. If there is a refusal for development, there is compensation, and that compensation is an overall, once-for-all purchase. That is where the £300 million to which so many references have been made comes in.

Hon. Members opposite have referred to this as a tax, but what are they doing? Purchasers of land are going to pay just as much as before. In fact, they are going to pay more. They will hand to the land owner the development value of the land. It has been said that development value is created by the community. I have not had a great deal of experience in the purchase and sale of land but I have had experience of local government. I am associated with an area where land was bought for £40 an acre in 1919 and part of it was sold in 1939 for £6,000 per acre.

How had that change of value come about? Not by anything that the landlord had done, but by the mere fact that to that area there came to settle 15,000 people with factories, workshops and so on. That fact determined a value of £6,000 an acre for a particular piece of land to a particular person. Are hon. Members opposite really prepared to say that the landlord is fully entitled to take without any hindrance whatever, those values which are created by the community? I ask our friends in the Liberal Party. After all, they used to sing a song once; I am too young to remember it being sung, but I heard my father talking about it. They used to sing "God gave the land to the people." It would not be very loudly sung by the choir if it were sung here today, but I hope the Liberal Party still hold to those principles.

I am prepared to admit that the 1947 Act has not quite worked out in practice as that simple theory to which I have referred. It has not worked out because landlords are law breakers. The 1947 Act said that if any landlord sold land he was to sell it at its existing use value. [HON. MEMBERS: "Where?"] The 1947 Act said it. [HON. MEMBERS: "Where?"] Do not get excited. The 1947 Act said that if the existing use value of land remains, the person who enjoys the land continues to enjoy it at the existing use value. The Central Land Board were to buy the future development rights by paying compensation from the £300 million, and if anyone wished to sell the land he was to do so at the existing use value and to collect what he lost out of the £300 million.

Many landlords, as the Minister has admitted, have kept faithfully to the law and have sold at existing use value, but many others have not kept to the law and they have sold at the development value. The Central Land Board still require the purchaser concerned to pay a development charge, and therefore the individual who has purchased land for housing, to build his own house, has paid the development charge both to the landlord and to the Central Land Board. He has, therefore, paid twice.

Photo of Sir Cyril Black Sir Cyril Black , Wimbledon

Can the hon. Gentleman answer this question? He says that the law has been broken by land owners who have sold their land at too high prices. Does he know of any case in which the law has been broken? If so, has he notified the authorities in order that proceedings could be taken, and if not, why not?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

I am not a lawyer, but I will say this; they break the intention of the law. [HON. MEMBERS: "Ah."] Well, I can give an instance. After all, one has to keep to the law. Surely, hon. Members opposite are not going to say that they are now the champions of the "spivs" who look for holes in Acts of Parliament in order to evade the law.

I will give a case which happened in my constituency, where a person wanted to buy a piece of land, but thought that the price was too high. He went to the Central Land Board who near enough told him that the existing use value of the land was £40 and that there would be a development charge of £100, which would make the total £140. The landlord refused to sell except at £140, so the person had the choice of not buying the land or of paying the development charge twice.

When my constituent came to see me, I suggested to him, "Ask through your solicitor for the existing owner of the land to assign to you the rights under the £300 million," and the landlord refused to assign those rights. The landlord was going to charge the full development value. My constituent was to have to pay the development charge and the landlord was going to keep the compensation as his.

Photo of Mr John Hay Mr John Hay , Henley

Does not the hon. Gentleman realise that nothing that he has been saying is illegal under the 1947 Act? The whole point is that the Act has not worked, simply because the spirit which was behind it was never actually put into the Act itself, but was left to the public at large to define in some way. Will the hon. Gentleman now withdraw the charge that all land owners have been lawbreakers?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Well, they may not have broken the law, but at least it has been robbery so far as I am concerned. If there is an Act of Parliament the intention of which is accepted and known, and a person evades that law and overcharges for the value of the goods, if that is not robbery, surely it is swindling. There are all sorts of words for it, but I am not dealing with it on a legal basis; I am dealing with it on a general basis of social conscience.

Photo of Sir Geoffrey Hutchinson Sir Geoffrey Hutchinson , Ilford North

May I put this question? The hon. Gentleman has been giving the House some very interesting particulars of a case which he has experienced. May I ask him whether in that case the Central Land Board exercised their compulsory powers of acquisition, or whether he recommended his constituent to apply to the Central Land Board to do so?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Yes, and at the end my constituent refused to buy the land at all. I am coming to the Central Land Board in a moment.

Photo of Sir Geoffrey Hutchinson Sir Geoffrey Hutchinson , Ilford North

The hon. Gentleman did not answer my question. I asked him whether the Central Land Board were invited to exercise their compulsory powers and whether he suggested to his constituent that he should apply to the Central Land Board to do so?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Let me say quite frankly that the Central Land Board were most helpful. They entered into negotiations with the land owner, but unfortunately they did not come to any satisfactory conclusion.

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

Order. The hon. and learned Gentleman has risen twice already to interrupt.

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Yes, and it is hindering others who want to speak.

To complete the picture, the incident came to an end by this person getting an offer of some other land, the owner of which was inclined to be more reasonable. It is equally true that for that same reason there were many landlords who were not willing to sell at existing use value, and whilst they could not or should not have got more, they would not offer their land for sale. That was always envisaged, and it was even envisaged in the Coalition Government's White Paper of 1944. The last sentence on page 21 of that White Paper, Cmd. 6537, suggests that, whilst it is true that the existing use value of the land should be obtained, there would be many landlords who were not willing to sell it at that price and that there should be compulsory powers to enable the purchase to take place.

The reason we have not been able to get along, with the Central Land Board having the full effective powers of compulsory purchase, has been stated by my hon. Friend the Member for Widnes (Mr. MacColl). As soon as we have an Act of Parliament which is designed for the protection and the benefit of the public, then of course land owners try to attack it, and the legal profession assists them in that. The lawyers and the land owners try to prevent the effective use of the 1947 Act.

The outstanding case is that of the Wentworth Estate—not the small land owner who has got only two or three pieces of land, but the large-scale land owner who takes the case right up to the House of Lords to test whether or not the Act of Parliament really gave the Minister or the Central Land Board the power that is suggested. That case was won by the Minister, or rather the decision was in favour of the Act of Parliament, and it is now quite clear that so far as the 1947 Act is concerned, the powers of compulsory purchase are there. In my view, they ought to be much more freely used. The power ought to be given to the local authorities so that they have even greater powers than they now have for the compulsory acquisition of land.

Let us put it in ordinary plain language. This Act gives the green light to the land owners to go ahead with the old speculation in land. It gives them a free hand to sell land—it says so in the White Paper—at whatever price they can get. It is just the old, complete speculation. It means increased profits for the landlord. Even if the remaining provisions of the Act are effective and a person is deprived of the right to develop and to sell his land, who is to pay compensation? It is the taxpayer. This Act gives freedom to the landlord to exploit land values and if any compensation is to be paid the taxpayer pays it.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

Who does the hon. Member suppose was to pay for the £300 million scheme?

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Those who paid the development charge. Surely the whole theory was that where there was sanction to develop there was payment of the development charge and where the power or opportunity to develop was taken away there was a payment of compensation; but this Act gives the landlord complete freedom to exploit land values and the taxpayer has to pay the compensation.

The Minister suggested that some of my right hon. and hon. Friends are a little suspicious whether compensation would be paid by the Treasury. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was once at the Treasury and I say—while he is still on the Front Bench—that even when he was at the Treasury, benevolent though he is, I always felt that the Departments with which I was associated did not get a fair crack of the whip as regards the finances that should have been available. I am not certain that every Minister does not think that about the Treasury.

As one who has had a considerable amount of local government experience, I say that no one who has given any time at all to local government really thinks that under this provision, if a local authority deprive a land owner of the right to develop and they go to the Treasury and ask for compensation to be paid, the Treasury is going to agree. Past experience tends to show that the Treasury would say, "No, we do not want to give compensation. Vary your decision. Give them the right to develop." In fact, the White Paper says so in paragraph 40. It says that the local authorities, in refusing permission for development, must have a sense of responsibility and not expect the Treasury to keep paying out moneys.

So we are going back to the days of 1932, when a local authority could not stop development because it could not afford to pay the compensation itself. If the payment of compensation is transferred to the Treasury, the local authority is in no stronger position, because the Treasury will not pay.

This Bill is wrong. It is tragically wrong. I ask the Government even now to take it back and have a look at it again. I agree that the 1947 Act had defects, but it is a first-class Act of Parliament. Indeed, it would be strange if, in this field of planning, an Act of Parliament of such magnitude and with only four years of operation did not show one or two defects that needed remedying.

The major defect in the 1947 Act, and to my mind practically the only major defect is that the compulsory purchase powers were not sufficiently effective. If the Government will come forward with fuller and more effective compulsory purchase powers for the Central Land Board and local authorities, I and the vast majority of my colleagues will wholeheartedly support them.

It is going to be easier for the Government now than it was in 1947. Apart from the experience of the working of the Act, there is the fact that the development plans under the 1947 Act are either with the Minister or coming in to him. The county borough plans are quite detailed as to future trends of development and, so far as the county councils are concerned, the big overall picture is painted and the local town maps for the larger centres of population are being created. So we know what the general trend of development is likely to be, and on the basis of that trend the Central Land Board and the local authorities should have compulsory purchase powers to purchase and re-sell at one inclusive price.

The only thing which has really worried people about development charges is that they have had to pay two amounts. If the land had been bought by the Central Land Board in the first instance and sold to the developer at a single price, we should not have had this problem with regard to development charges, when the buyer has to pay twice—first to the landlord and then to the Central Land Board for something else. Folk think that that is not as it ought to be.

Strengthen the 1947 Act, by all means, and so far as we on this side can help in that, our services are at the disposal of the Government; but do not let us go back to the haphazard planning of pre-war years. Do not deprive the people of this country of the bright lights which were being held up to them for the future. The control of land development and its general use in this small island is very important, not only for actual production in the field, factory and workshop but for the general life of our people.

Even though they may think I am a little provocative I say to Tories opposite, "Do not go back to the old Tory idea of being the advocate of exploitation of land values or the advocate of the land owner getting and doing everything he likes. Remember that you represent the nation as a Government and that the people have a right to the fullest use of the land and should not be exploited by greedy landlords as they have in the past."

7.27 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertford

The House has listened to many remarkable speeches on this difficult subject, and by no means the least remarkable were the speeches of the hon. Member for Wellingborough (Mr. Lindgren) and the hon. Member for Pembroke (Mr. Donnelly). Both found some comfort in the fact that they are not lawyers, but hon. Members, having listened to the flounderings and inconsistencies of those two speakers, might well have come to the conclusion that there is something to be said for legal training after all. After listening to the manifold mistakes and misinterpretations which were compressed into their speeches, they might well have formed the view that if those two hon. Members had succeeded in passing their necessary legal examinations there would be no danger of the doors of their chambers being unduly darkened by the shadows of clients.

It is not worth replying in detail to much of what has been said by the hon. Member for Wellingborough. He went far and wide in order to try to find some justification for his text. But there is one point—the challenge which he threw out to begin with—which I cannot let pass. The hon. Member said that these proposals would cut at the roots of planning. That is entirely untrue. It cannot be said too clearly that Conservative opinion admits and asserts the necessity for planning control. Planning control derives from the necessity of resolving in the public interest the conflict of land use, and the smaller and more crowded the country the greater the necessity for a degree of planning of land use. Of course we on these benches have that point of view. It is really nothing more than an extension into the public sphere of the ancient doctrine of private property law—so use what is yours as not to harm what is another's.

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Would the hon. Member not admit that, at least until the 1947 Act, all previous planning Acts had failed completely because we had failed to deal with the problem of compensating the person whom we deprived of the right of development?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertford

That is often said, but, as those who are familiar with these matters know, it is very difficult to draw those broad inferences from the workings of the 1932 Act by reason of the fact that there was not sufficient time of operation for any clear conclusion to be gained.

So far as planning is concerned, though we are concerned today primarily with the financial aspects, it should not be thought that because the case for planning control is admitted, there are no improvements to be made in the planning aspects. This has been touched on by my hon. Friend the Member for Epping (Mr. Finlay) and by my right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot), and there are, of course, two main requirements for improvement in this sphere.

The first, as my hon. Friend has said, is that planning control must bind the strong as well as the weak—the Government Department, the State monopoly board and the powerful local authority, as well as the private citizen. There must be no more biting into Green Belt land, no more "pepperpot" development by local authorities, and no more sprawling by great cities into adjacent rural areas in conflict with planning principles. That is the first basic requirement for improvement on the planning of land. The second is the improvement of the actual machinery in the exercise of planning control. There is not time to analyse that now, but I hope to put forward some suggestions to serve as a basis for discussion and possible action in the next Session of the present Parliament.

Now, I come to the financial aspects of the problem. They are, of course, complex. Nobody denies that, and therefore no undue blame attaches to any Government for failing to provide a perfect solution to this problem in a short time. Complex as the financial aspects are, however, it is a matter of continuing surprise how unerringly the 1947 Act made the worst of all worlds; how at the same time it managed to provoke unpopularity and suspicion among developers and irritation to the general public at the feeling that inflationary and unnecessary burdens were being put upon the public purse.

The hon. Member for Wellingborough said that finance and planning go hand in hand. Surely the real object of the financial provisions of any town planning Act must be to secure the best basis on which planning can function. In considering the function of planning, one has regard not only to the negative aspect, which is the restriction of undesirable development, but at least as much to the positive aspect, which is the encouragement of desirable development.

The two fundamental and inescapable defects of the 1947 Act were, first, that it was calculated to impede desirable development and, second, that it was designed to serve a taxation object and not a planning object. That being so, there are two main objections to development charges as we have known them, either of which of itself would be fatal.

The first is the deterrent aspect. It is quite true, as I think the right hon. Member for Bishop Auckland (Mr. Dalton) said, that the deterrent aspect of development charges may not have been as great in practice as was expected, because the primary deterrent in post-war years has, of course, been building licensing restrictions. But in an easier capital investment position, to which we look forward, there is no doubt that the development charges would have turned out to be a potent and primary deterrent indeed.

The second fundamental objection to development charges as we have known them was that they were based on a fallacy in regard to development value, the fallacy that all development value of its nature belongs to the State. There is or may be in any given case two elements of development value. The first is that which is known as betterment, which is the value that arises from the action of a public authority; but there is also a second element in development value: that which is created and realised by the foresight, enterprise, initiative and risk-taking of the developer. It is those qualities which are necessary to the maintenance of a free society, and that part of development value belongs in principle to him who is able to create it.

That being so, in my view development charges had to go, quite apart from the question of impracticability as stressed in the White Paper. They had to go because they were based on a fallacy; and as development charges had to go, of course the £300 million Fund had to go too. Human nature being what it is, there may have been some who hoped against hope that the charges could go and the Fund could stay, and that they could eat their cake and have it. Quite clearly, however, the £300 million Fund was the consideration paid for the sale of development value to the State, and there could be no conceivable point in paying the price when the sale had been cancelled.

I want to say a word in regard to betterment. There is much to be said for the proposition that in principle it is a matter of regret that it has been found necessary to abandon the effort to collect betterment. But it is, and always has been, extremely difficult to segregate the element of betterment from the other element of development value. If a further attempt had been made to do it, it would have necessarily involved something far more complex and difficult than the scheme which is put forward in the White Paper, which has the virtue—and it is a sovereign virtue in these matters—of comparative simplicity from the point of view of transactions in land.

The Government would probably accept that the onus is upon them to show that the collection of betterment is impracticable and not worth the effort. If they accept that onus, they have many factors in their favour to encourage them in its discharge. They have the fact of the persistent failure in the past of efforts to collect betterment—for example, way back in the last century, local Acts to collect local betterment; the 1909 Finance Act, to which reference has already been made; the effort of Mr. Chancellor Snowden and then, of course, the 1932 Act itself. None of these has resulted in a successful collection of betterment.

There is, however, a further factor which may encourage the Government in this regard. That is that in the circumstances of today, the considerations of shifting and floating value, which played so large a part in the Uthwatt analysis, of which we have heard so much today, are far less potent now as factors in this problem than they were in the conditions of the 1930's, on which the Uthwatt Report was based. Therefore, I certainly accept and approve the approach of the Government to this problem.

I want now to voice one or two misgivings in regard to certain parts of the proposals in this scheme. I refer, first, to the question of the assessment of compensation. A study of the White Paper shows that there are three main limitations on the payment of compensation. First there is to be no compensation where the refusal of planning permission is made solely on the ground that development would be premature. No issue arises as to that. Everybody, I think will accept that that is an appropriate limitation. The second is the exclusion of compensation for restrictions based on what is called the principle of good neighbourliness. The third is that compensation will be paid only for past development value and not future development value; that is to say, for development value as assessed at 1st July. 1948.

It is in regard to these second two limitations that I want to say a word. The exclusion on the ground of good neighbourliness sounds very well, but it may be a good deal more difficult to apply in practice than it sounds on the Floor of this House, because the good neighbourliness test is undoubtedly a very wide one, including, as it does, change of use in a building.

It is said that the 1932 Act provides a good precedent for this, but I am bound to say to hon. Members that the 1932 Act is a very imprecise guide in these matters because of the very limited experience of its operation. My right hon. Friend said that the "good neighbourliness" phrase came in the 1932 Act. I do not think that is right. I think that the phrase came originally in the Uthwatt Report. What, I think, may be a better test would be this: does refusal of planning permission depend on considerations generically analogous to byelaw restrictions? If it does, then there is no compensation. If it does not, there should be a prima facie case for compensation.

In regard to the third limitation on past development value, hon. Members will appreciate what is the method of the ascertainment of development value. In the 1947 Act development value is what remains after subtracting the restricted value from the unrestricted value; that is to say, the value as it would have been if the Act of 1947 had not passed: and that being so hon. Members will appreciate that it is necessary to have regard, or it was necessary for the computation of development value to have regard, to the prospects of development at 1st July, 1948, taking into account previous planning control, and also the restrictions on development of other kinds in the postwar years. So far as previous planning control was concerned, that was rather a hypothetical matter, since only 5 per cent. of the whole country was covered by operative planning schemes; all the rest by interim development control, varying widely in its exercise from district to district.

Therefore, the proposal in this regard is this, that for an indefinite period the maximum compensation to be paid is to be governed by a calculation made in 1951 or thereabouts of what development value would have existed on 1st July, 1948, computed by reference to prices existing at 7th January, 1947, and based on the interpretation of frequently imprecise planning proposals probably formulated between 1935 and 1939; and not only that, compensation will also be excluded if in 1948 or 1949 no claim was made because the claimant did not know about it, or if, knowing about it, he did not think it was worth while making a claim because of the then very strong current feeling that the dividend payable would be derisory.

It is true that the White Paper says there is no perfect solution. In the light of that analysis of that proposal the proposition is, perhaps, self evident. And I may say that I was reinforced in the misgivings that I had when I saw the conclusions come to, quite independently, by my friend, Sir Malcolm Trustram Eve, in the letter he wrote to "The Times" with all his great authority and cogency in these matters. The truth is that compensation over late years has been bedevilled by the introduction of artificial and arbitrary dates. We had it in the War Damage Act, we had it in the Town and Country Planning Act, 1944, and in both the Requisitioned Land War Works Acts, and it is peppered all over the 1947 Act, and it is, in my submission, a matter of regret that it is found necessary now to perpetuate it in new and permanent legislation. Therefore, I would, with respect, join forces with Sir Malcolm Trustram Eve in hoping that a less arbitrary and more realistic basis can be evolved for assessing compensation on compulsory acquisition of land and on refusal of planning permission.

I hope that thought may be given to this. My right hon. Friend has said that thought will be given to these matters, and one of my hon. Friends—I think the hon. Member for Epping—said that one of the advantages of this way of going about things was that time was given for thought on this complex problem. I hope that thought will be given to that problem, and also to what I called in the first part of my speech the planning problem—the problem of the machinery and exercise of planning control.

Meanwhile, the Government are entitled to the congratulations of the House and the country generally for the bold, broadly practical and comparatively simple approach to what is a complex problem. It has resulted—and in this we certainly rejoice on this side of the House, and a great mass of opinion in the country—in the final determination of a system at once unpopular and unsatisfactory, as impracticable as it was detrimental to the public good.

7.47 p.m.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

I can assure the hon. Member for Pembroke (Mr. Donnelly) that I do not claim to be a skeleton in the Labour Party's cupboard, although some of the views that I may express will, perhaps, not be so unacceptable to him as he appeared to anticipate. Before proceeding, I should like to refer to another remark of the hon. Member for Pembroke, who cast some doubts on the attempts to make known the terms of the Act to the general public. I think it is only fair to that distinguished gentleman, Sir Malcolm Trustram Eve, to read from his own letter in "The Times" to which reference has already been made. In that letter he said: During that period the Central Land Board did all in its power to tell the people of the right to claim. I myself took the lead in this by broadcasts, Press conferences, lectures and addresses in many places. He went on to say that in spite of that he knew they did not reach everyone, but I think it is fair to say that a very serious attempt was made to make the Act fully known.

I think it is a matter for regret that only one day is available for debating the Second Reading of this Bill, because it is impossible to discuss the Bill alone without referring to the wider issues raised in the White Paper. Whatever one's views may be about the proposals in the White Paper, I think it is clear that they are important and may be very far reaching in their effects; but, in fairness to other hon. Members who wish to speak, I shall limit my remarks to one or two general observations.

I agree with the statement in the introduction to the White Paper that The experience of four years has revealed serious practical difficulties in the working of the financial provisions. I think that that is a remarkable understatement. But more serious than those practical difficulties, more serious than the appallingly complicated nature of this legislation, is the fact that the development charge has discouraged development. In this respect, I think, there is a fundamental difference between the development charge and the taxation of land values. I do not think this is sufficiently well appreciated. That fact was brought home to me by a comment of the present Financial Secretary to the Treasury, when in opposition, in March, 1950, and when I had been a Member of this House for only a few days. I should say that I have generally found his remarks appropriate and to the point, but perhaps this was an exception.

The occasion was as follows. My hon. Friend the Member for Orkney and Shetland (Mr. Grimond) had asked whether the Minister of Town and Country Planning would consider abolishing the development charge on new houses built for owner occupation in rural areas, and in a supplementary question he asked the hon. Member for Wellingborough (Mr. Lindgren), who was then on the Government Front Bench: to bear in mind that in places such as Orkney and Shetland the effect of this charge is not to stop speculation or to raise revenue, but simply to hamper people in providing themselves with houses in the only way open to them? The present Financial Secretary then asked: Will the hon. Gentleman also bear in mind that that Question and the supplementary question both indicate the abandonment by the Liberal Party of their belief in the taxation of land values?"—[OFFICIAL REPORT, 21st March, 1950; Vol. 472, c. 1753.] Obviously that was not so. This was clearly a case of a non sequitur; the hon. Member's reasoning was quite illogical, because there is all the difference in the world between a development charge which discourages development and the taxation of land values which were designed to encourage development. I am sorry to say that at the time I let the point go by default; I had been in the House only a few days and had not made my maiden speech, so I thought discretion was the better part of valour, but on hearing this remark my innocent faith in the infallibility of Members of Parliament was somewhat shaken.

I do not propose to re-state the case for the taxation of land values. Perhaps that may take place later this evening. I think it would be fair to say that those who advocated, and still advocate, a policy of taxing land values have a three-fold objective. The first is that the values created by the community should accrue to the community; the second is that development should be encouraged, and that owners should be deterred from holding their land back from development with a view to making a profit in the future; and thirdly, that the system of taxation and rating should be so modified that those owners and occupiers who improve their property should not be penalised by increased rates and increased taxes.

It would appear to me that the 1947 Act was an attempt to achieve the first of those objectives; in a very roundabout way, but that was the purpose. It failed completely to achieve the second and third, and for that reason, quite apart from the other reasons which have been stated in this debate, quite apart from the inflationary effect of the distribution of the Fund which would take place if this Bill were not passed, I think the development charge should be abolished. The case against it is overwhelming, and for that reason I think that this Bill should be supported. I do not see that it would serve any useful purpose to reject the Bill and retain the status quo. I therefore think that the Bill should be supported as a first step to altering the existing law. But the problem arises, and the question which has to be asked is: what is to come next?

There are several respects in which I do not feel happy about the proposals in the White Paper. The most disturbing features, I think, are these: First, the intention to abandon the policy of collecting betterment; secondly, the distinction which will arise between those owners who have to sell under compulsion to a local authority or a Government Department and those who are free to sell to an individual in the open market. It would appear that there will be a very marked difference between the one and the other, and that is bound to create a sense of injustice, and I hope that the Minister will reconsider this aspect of the White Paper.

In my own view, the only way to achieve any degree of justice, is to adopt some new method of recouping part of the betterment which was intended to accrue to the community under the Act of 1947. If I may again quote from Sir Malcolm Trustram Eve, in his letter to "The Times" on 26th November he said: I think his scheme"— referring to the proposals in the White Paper— can be made to work, though surely the Chancellor will see to it that some elements of betterment are taxed, either locally or centrally. Now, I feel sure that, whatever the Minister may think of myself, he would not call that distinguished authority a fanatic. I am bound to say that I would put a great deal of weight upon those words: that some elements of betterment are taxed, either locally or centrally. If that is not done, and if things are allowed to remain as envisaged in the White Paper, I believe that there will be many injustices—perhaps as many injustices as exist under the 1947 Act.

In the first place, there will be an injustice to the community, which will lose some of the betterment, some of the values which have been created by the community. After all, those gains are capital gains and are not subject to Income Tax. Therefore, the State only recoups on the death of the owner and not during his lifetime. Let us face the fact that betterment will continue. Where electricity is brought to an area or new roads are built, that increases the value of the surrounding land even where planning is adopted and a green belt created, the land around it, the land facing on to the green belt, is enhanced in value by virtue of that planning.

As I understand it, the only remedy proposed, upon which the Government rely, is the power of compulsory acquisition. If that is followed to its logical conclusion then all such land of which there is improvement, where there is betterment, must be compulsorily acquired. That might please those who favour a policy of nationalisation, but it seems to me rather unexpected from a Conservative Government.

To use an expression used in the "Economist" on 22nd November, it appears that these proposals will introduce what they call "The rule of the dice box." The fortunate owner who does not have his land compulsorily purchased will be in a very different position from the unfortunate owner who has to sell under a compulsory purchase order, and it will be very largely a matter of chance—the rule of the dice box.

If I may, I will give one example to illustrate the sense of injustice that has already occurred. I have had correspondence with a constituent acting professionally for the owner of land in the East Riding of Yorkshire. The land is being purchased for housing under compulsory purchase; the compensation from the global Fund was determined at nil in 1947 and there is, therefore, no question of gaining anything from the Fund; all that is paid will be the existing use value. In other cases, perhaps not far away, land may be sold at the full market value, and it is inevitable that there will be a sense of injustice so long as that happens.

Perhaps I might give one other example, because I think the difficulties are shown more clearly by quoting examples with which one is personally acquainted. In this case it is really the reverse—of the land owner selling at a higher price than the existing use value, and the unfortunate purchaser having to pay that price and then having to pay a development charge. In this case that I know of—the land was sold at the existing use value. In fact, everything was done within the spirit of the Act. It may be a little difficult to prove this, because a house and grounds were sold with the land which is intended to be developed.

In that case, I do not know whether under the terms of, I think, paragraph 49 of the White Paper, the owner will be able to recover the compensation from the Fund that was agreed. It is not clear to me whether the compensation is dependent on whether the purchaser makes a claim for planning permission, which is refused. In any case, the vendor has no say in this matter. He has sold at existing use value and made a claim on the Fund, but it not clear whether he will be paid or not. But the purchaser is in a fortunate position because he bought the land at existing use value, and is now free to sell it at full market value, and may make a substantial profit.

There are many other similar cases. I think that if we examine them, we shall find that they arise very largely from the abandonment of the principle of retaining betterment value for the community, except in certain cases of compulsory purchase. The fact that the 1947 Act proved unworkable is no proof, in my opinion, that no other method is possible. I think that the time has come to consider carefully whether there is not some other method, and whether, perhaps, the best and simplest method is not something on the lines of the taxation of land values.

I realise that circumstances have altered since the beginning of the century, and I appreciate that town planning has eliminated much of the speculation that was possible 50 years ago. I also recognise the fact that the burden of taxation is very much greater and has risen to an extent that our forefathers would hardly have dreamed of, even in a nightmare. Therefore, it may be impossible to raise all taxes by this one simple method; but the principle is still sound, and I think that very serious consideration should be given to its application. I hope that in considering that suggestion, careful thought will be given to the Minority Report on The Rating of Site Values which contains some very interesting information, and which is all the more relevant now that the development charge is to be abolished.

I said earlier—and I have to keep my eye on the clock—that I would not enter into the pros and cons of the taxation of land values, but I was reading the other day a speech by the Prime Minister—a very eloquent speech—in support of the taxation of land values. It was delivered at Manchester on 9th December, 1909. In the course of his speech, the Prime Minister stated that the Liberal proposals had been assailed with a storm of abuse and insult, with howlings and ululations.

I looked up the meaning of "ululations" in the Oxford Dictionary, and I found that it means—to howl; wail and lament loudly; a wailing or howling; troops of jackals. The Prime Minister continued: I am not at all disturbed. … Here in England we have long enjoyed the blessings of free trade and untaxed bread and meat; but, on the other hand, we have to set against these inestimable boons an unreformed system of land tenure. We still have not a perfect system of land tenure. There have been changes, but there are still many anomalies. I do not suppose that we shall ever have a perfect system of land tenure, but I think that improvements can be made, and that some of the anomalies which exist, and which may be increased by the proposals in this White Paper, can be eradicated if the Government would set themselves two tasks.

One is to remove this artificial and, I think, unjust distinction between the owner of land who is compelled to sell to a local authority or to a Government Department, and the owner of land who is free to sell to an individual or to a private firm. The second task, which is even more important, and, in my view, is not inconsistent with the first, is to strive to ensure that the community reaps the benefits of those values which the community creates.

8.6 p.m.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

I listened with very great interest to the Minister of Housing and Local Government when he was moving the Second Reading of the Bill. I think that his remarks were very clear and lucid on an extremely complex subject. Although many of us would disagree with him on some of the conclusions to which he came, I think that we would all agree that he put the Government's case in very clear and understandable language.

I think that it is generally true that all of us on this side of the House are opposed to the Bill. We are opposed to it because it strikes at a fundamental principle which was embodied in the 1947 Act. That principle was first enlarged in the White Paper of 1944, for which the previous Government were responsible Completely to take away from the 1947 Act the provision for compensation for loss of development value and completely to abolish the principle of the development charge, we believe, is quite wrong.

It is quite true that when the 1947 Act was passed, many of us thought that with the passing of time it might be necessary to revise some of its provisions, and had the Act been based entirely on the Uthwatt Report, I believe that it would have fulfilled its purpose, and that its apparent failure is due to the fact that the land owners have not responded to the spirit and the intention of the Act. They have worked against it, and they have succeeded to some extent in preventing the Act from making a positive contribution to our problem.

The Uthwatt Report recommended that land should be purchased through the Central Land Board, and the fact that the recommendation was not included in the 1947 Act, in my opinion, proves its weakness. The hon. Member for Oldham, East (Mr. Horobin) gave a very fine and interesting talk on this subject, but very few of us on this side would agree with his conclusions. He characterised the principle of the Central Land Board being the central authority through whom all land should be purchased, as a totalitarian act. That surely cannot be a correct description of the principle.

Hon. Members opposite must realise that we are moving into very different times. The whole country has now been planned for development purposes. Scarcely a part of the country has not been covered by a county development plan which has been sent to the Minister for his approval. In a sense the right of a private land owner is restricted, and I am sure everybody will agree that restriction is absolutely necessary in the interests of the community.

We must go one step further. Assuming that we accept the principles of the 1944 White Paper in its basic conception, we must lay down the principle that land should in future be purchased through the medium of the Central Land Board. Had that been done, the 1947 Act would have worked quite well. After all is said and done, if a person wants to buy a piece of land and develop it, he must first find out whether the local planning authority will consent to his developing it in the way he wants to do it. That is his first hurdle. Assuming that he gets the consent, I can see no reason why the application for purchase should not then be made to the Central Land Board so that the Board could then negotiate with the owner of the land and would arrange for the land to be sold at its use value to the developer.

Photo of Sir Ian Horobin Sir Ian Horobin , Oldham East

I want to understand the interesting argument which the hon. Member is putting to the House. Do I understand him to say that the Central Land Board should have power to do this without the consent of the vendor? Is there not all the difference in the world between a transaction between somebody who wants to buy and somebody who wants to sell, and doing it through the Central Land Board solely at the request of a purchaser? The whole point is that at the existing use value the owner does not want to sell at all.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

Here we are up against a very difficult problem. The hon. Gentleman would undoubtedly say that it is right for a private individual to refuse to sell his land although in the interests of the community he ought to dispose of it for development in accordance with the plan. I can understand my argument being anathema to the hon. Gentleman if he believes in the absolute right of a private land owner to refuse to sell land although it is necessary in the interests of the community that he should do so.

On the other hand, I believe that the Central Land Board should have the power to decide if the application complies with planning consent and if it is necessary in the interests of the community that the development should take place. Indeed, the Central Land Board already has a limited power but it has failed to use it. The hon. and learned Gentleman the Member for Ilford, North (Sir G. Hutchinson) interrupted one of my hon. Friends and asked why he had not referred his constituent to the Central Land Board to request it to exercise its powers of compulsory purchase. I entirely agree with him. Undoubtedly he is of the view that the Central Land Board should have that compulsory power. At any rate, he gave me that impression.

Photo of Sir Geoffrey Hutchinson Sir Geoffrey Hutchinson , Ilford North

I certainly did not say that. I said that the Board possesses the power now.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

The Board already possesses the power to a limited extent, but has not used it. Now that it has been made quite clear by the courts that the Central Land Board undoubtedly has that power, it is important that the 1947 Act should be strengthened to enable it, if necessary, fully to use the power of compulsory acquisition.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

If the Board has the power, let it use it.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

The Board's failure to use it is the cause of the weaknesses which we now see in the operation of the Act. This would be a very effective solution to the problem that we are discussing. The Central Land Board should have wider powers to effect the transfer of land from the seller to the buyer on the basis that the development is in conformity with the development plan and that it is eminently desirable that it should take place.

The right hon. Gentleman referred to a change which has to be made in connection with the Treasury now becoming responsible for the payment of compensation to land owners where planning consent is refused by the local planning authority. As many of my hon. Friends have pointed out, the Opposition fear that that is a very bad step to take. When exercising its planning powers, a local authority may be over-ridden by the Treasury on financial grounds.

Unless the Treasury consents to pay compensation and supports the decision of the local authority, a refusal would make nonsense of any development plan, as it obviously means that the Treasury will have power completely to override the planning proposals of the local authority. If the Treasury decides not to pay compensation in such cases, we cannot very well refuse the applicant the right to his development. Therefore, if the Treasury is to be given the right to determine whether a local authority may or may not refuse planning consent to development, the power of the local authorities in these matters is completely negatived.

Another interesting theory was developed by the hon. Member for Oldham, East. There is a wide gulf between that side of the House and the Opposition. We believe the interests of the community should be paramount in relation to land use and betterment, whereas hon. Members opposite evidently believe community interest is secondary. We take the view—it is the correct view—that development value in land arises wholly as a result of the activities of the community. The hon. Member said that, if a person acquired a piece of land and built a house on it and it acquired a development value, it was nothing at all to do with the community, as the man was the creator of the development value.

It is nothing of the sort. The man could never have carried out that development without the aid of the community, without the aid of bricklayers and the makers of bricks and a whole host of other people concerned in the construction of the house. The man, his wife and their children living in the house are completely dependent on the community for their daily wherewithal.

As my hon. Friends have pointed out, it is the community which has to provide access to the house and also, I presume, water and drainage, because I do not suppose the man would wish to live in a house without modern sanitation. Again, a school would have to be provided for his children, and a whole host of other activities have to be undertaken by the community at large. But for the community, there would be no house built and no development value would have arisen. Therefore, the principle of development value being created by the community is an absolutely sound one and incontrovertible.

The Government have shown, as they have done in other Measures, particularly in connection with transport, that they are marching backwards rather than forwards, and throwing overboard the evidence of people who have studied this problem for a long time. I do not myself believe that the principles embodied in the 1944 Coalition Government White Paper are just so much nonsense and eyewash. I believe there is great substance in those principles and even the right hon. Gentleman's friends have subscribed to them.

In case we may not be very conversant with the essential principle in the proposals of the White Paper, I have here a very short quotation which embodies the principle which stands today as valid as it did then. About betterment the White Paper said: In the view of the Government"— of the Coalition Government, and the right hon. Gentleman has got to take as much responsibility for this as anybody else— the greater part, at any rate, of these increases in value should accrue to the public purse. There are two reasons for this. In the first place it is intended that fair compensation shall be paid out of public funds to the owners for the loss of development value which had attached to their land at the 31st March, 1939. Unless such shifted development value is collected, wherever it reappears, it will accrue to other owners to whom it does not in equity belong, whereas it ought to be available to reimburse the State for the expenditure incurred on compensation. In the second place, it would be clearly inequitable as between owners if some were prevented from making a profit out of their land and others, merely because their land had been selected as the most appropriate for development, were enabled to reap the benefit. It might indeed be argued that the whole of these increases in value ought fairly to be collected for public funds. Those are the principles that we stand on here tonight. Those are the principles that the right hon. Gentleman and his Friends have completely thrown overboard.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

The Minister was a member of that Government.

Photo of Mr Joseph Sparks Mr Joseph Sparks , Acton

The right hon. Gentleman has already explained that he was not here at the time and that this policy was agreed to in his absence.

Let us be clear about this. Hon. and right hon. Gentlemen opposite are clearly misleading the people of this country if they wish to convey to them the impression that the end of development charges and compensation is going to provide land for the developer at a lower price than he is paying at the present time. It will be found that the reverse will be the case.

The right hon. Gentleman is afraid of that, because if he is not there was no need for him, in the course of his remarks, to use the kind of threat that if he found that land was, in fact, not being sold at a reasonable price he had the power and the armoury available to deal with that sort of thing. He and his friends must know that the failure to recoup the community for the development value in land is merely confirming the monopoly which in past generations has proved to be bad for the country. He is confirming the landowner in his monopoly of ownership of the land, and he is compelling the developer to pay a much more than reasonable price for the land he requires for development.

Hon. Gentlemen opposite may believe that principle to be a good one, but we on this side of the House most heartedly disagree with that conception. We certainly believe in the theme advanced by the Liberal Party in its earlier days and which has been referred to earlier tonight that God gave the land to the people. He certainly did not give it to a few landlords, neither did He intend that it should be a personal and private monopoly. The land is really the people's and should be used in the interests of the people. No man, no matter who he may be, has a right to exploit the people or the community or the value which has arisen as a result of communal activities and interests.

There is a very clear and sound case to be made, not for some new principle, but for the same principle as has been argued and agreed to by the Coalition Government—that the community are entitled to the increment in the value of land arising as a result of the community's activities. The 1947 Act was intended to recoup that for the community. It is quite true, as has been admitted on both sides of the House, that the Act contains weaknesses, but that is no reason for scrapping the fundamental principle of the Act itself. It is a sound reason for amending the Act, and the Act can be amended to make the main essential principle more real in the affairs of the nation.

In my opinion that can be done by giving the Central Land Board the powers which the Uthwatt Report recommended for it, that all land transactions should be conducted through the Central Land Board, who thereby would be able to secure for the community the development value of land and pay to the land owner a fair compensation for his loss. There is no one on this side of the House who desires to confiscate from the individual what he is entitled to, even though he may be a land owner. If the Act of 1947 is strengthened in the way suggested, I think it will solve many of the difficulties and problems which have arisen in the operation of that Act.

8.30 p.m.

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

In view of the lateness of the hour, it must be clear that many of my hon. Friends who have solid and impressive claims to be heard on this subject will have to go away disappointed. I wish to make such contribution as I can to allow as many as possible of my hon. Friends a chance to address the House, so I shall jettison half of what I was going to say and reduce the rest into a telegraphic form which I hope the House will excuse.

The hon. Member for Acton (Mr. Sparks) had said nothing which is not in the official Opposition Amendment He said it in a different way and in a different order. I wish to take two sentences from the Amendment and examine them briefly. The Bill is condemned, in the words of the Amendment, because it provides no means for the recovery by the community of socially-created land values… the old question again of the recoupment of betterment. That may well be so, for the Bill does not make that provision at all.

In order to understand the position, let us look at the proposals as a whole upon the assumption that what is in the White Paper will in due course be placed on the Statute Book, for it is on that assumption that we proceed with this debate. What will be the position? First, there will be no more development charges. I venture to believe that no single action taken by the Government is more popular in the country than the abolition of the development charge. Its disappearance, as speaker after speaker has testified, will remove one of the great impediments to development.

Second, a free market in land is to be restored. The transfer of land at its full market value will once again provide the incentive for owners to sell their property for development in accordance with the provisions of the development plan. When development of any sort or kind takes place in this country, the developer is at risk for the amount of capital he has invested. If he is unsuccessful he bears the loss. The State does not come to his aid. If, on the other hand, he is successful and his development is profitable, the local authority or the State, through rates or taxes, takes a large slice of the profits.

I have thought about it a lot, and I do not believe there is any form of development to which this does not apply. If a man builds a house, he creates a rateable value, as the result of which money is extracted from him by the local authority. If he extends his business, or develops his factory, or builds a shop, he increases his capacity to make a profit. If he is a builder or an estate developer, the profit arises directly from the development carried out. The State takes a share of these profitable activities and increases by taxation the revenue from which compensation will be payable to those adversely affected by planning decisions.

I am certain that many of our old arguments about the need for the recovery of betterment have been outmoded by the rapaciousness of latter-day Chancellors of the Exchequer. Nor was it proposed in any of the abortive proposals in the past for the recovery of betterment that the amounts received were to be retained in a separately identifiable fund. The intention was always to recover from the owner who benefited by the plan a sufficient proportion of the profit from his development to cover what the official Amendment calls "socially-created land values." With the tax-gatherer's net spread as widely as it is today, and with taxation of enterprises of every kind at its present level, there is no doubt that that is fully achieved.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Mr. Joseph T. Price (Westhoughton) rose

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

I should like to hear the hon. Member for Acton again, but he spoke for a long time and I cannot give way now.

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

The hon. Gentleman is mistaken. He made the point that the Chancellor will come along with a big cap in which to gather the profits made by the developers or the persons who sell the land. Will he answer this question? Where land was, for rateable purposes, £8 an acre before de-rating and was then sold by landowners for £400 an acre, would the hon. Gentleman suggest that the £392 per acre increment would be taxable by the Chancellor?

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

I am not suggesting that at all. I am developing a separate argument. I apologise to the hon. Gentleman for mistaking him for the hon. Member for Acton. He is sitting in the place from which the hon. Member for Acton made his speech.

The second phrase on which I want to comment is where the Amendment says: … endangers the effective powers of local planning authorities to check undesirable development. It took me a long time before this debate to understand what that meant. I could not imagine how this might be. But since the debate has been opened I have understood that it is because there is the fear, expressed by the hon. Member for Acton and before him by the right hon. Member for Bishop Auckland (Mr. Dalton), that the Treasury, because it is paying out the compensation, will take detailed control over planning decisions whigh ought to be in the hands of the local authorities.

Let me examine that. There are three points I want to make. I do not think that anybody would suggest, not even the hon. Member for Pembroke (Mr. Donnelly), that planning alone should be exempt from the need for economy in the public interest. All expenditure for public purposes, whether it is upon rearmament, education, the social services or planning, must be looked at and regulated in accordance with our ability to afford it. As in private so in public life a failure to relate our spending to our earning capacity can only lead to national bankruptcy.

The second point is that this suggestion is made in ignorance of the kind of machinery which is employed. My right hon. Friend, when his proposals are on the Statute Book, will frame his Estimates in the normal way. After consultation with planning authorities, he will allow what he considers to be a sufficient amount to enable him to pay compensation through the local authorities where compensation is due. If he feels that the Treasury is not allowing him sufficient money with which to fulfil his functions as planning Minister, there will be open to him the normal operations of argument, expostulation, appeal and, in the last resort, resignation.

My third point is that good planning is in the interests of the Treasury. The proper purpose of town and country planning must be to make the best possible use of our limited land area with as little hurt as possible to our priceless natural amenities. Good planning has an important part to play in fostering business efficiency and the most economical employment of our national resources.

Let me give one or two examples. Building development on first-class agricultural land is often an indefensible waste of a national asset. Badly planned residential areas lead to ill-health and to the lessened efficiency of the workers. As the hon. Member for Pembroke pointed out earlier in the case of Covent Garden, the bad layout of market approaches often increases the cost of goods to the consumer, while traffic congestion owing to badly planned road systems imposes intolerable delays. For all these reasons, good planning is in full harmony with Treasury aspirations, and will, I am sure, be encouraged and not hindered by Government action.

I apologise for skating so quickly over the surface of a very small part of this Bill, but may I say in conclusion that the Minister has not lacked counsellors on this subject, as my right hon. Friend himself pointed out. His difficulty has been that no two advisers have given him the same advice. He reminds me of a conjurer who mixes a number of ingredients together and then produces quite different articles. My right hon. Friend has produced the unexpected; he has produced in these proposals a much more drastic solution to the financial provisions of the 1947 Act than many of us have expected. He is much to be congratulated on the fact that these proposals are simple, understandable and sensible.

8.42 p.m.

Photo of Mr Gilbert Mitchison Mr Gilbert Mitchison , Kettering

I hope that the hon. Member for Angus, North and Mearns (Mr. Thornton-Kemsley) will excuse me if I do not follow him too far in his attempt to pour some partisan oil on the troubled waters of this debate. I should like to say, first of all, that I must confess to having recently agreed a small sum due by way of compensation, but that, of course, has no effect on what I am going to say.

It seems to me that this Bill is, from one point of view, a cheap Bill, and, from another point of view, an expensive one. I regard it as a cheap Bill because I cannot help tracing its origin to the imperative request of the Chancellor of the Exchequer to be relieved of his obligation to cough up £300 million fairly soon, and I can see the reasons for his reluctance to do so. It is not the habit of Chancellors of the Exchequer to disperse such large amounts at all freely or happily.

However, I regard it none the less as a cheap Bill for another reason. What it does is to remove the development charge; that is the first phase. I quite agree with hon. Members opposite that the development charge has been unpopular. Whether or not we call it a tax, it is, at any rate to the ordinary man, pretty well indistinguishable from a tax, and I have never yet known a tax which was popular. Indeed, a little later on in the Parliamentary year, when we come to the Finance Bill and the Budget debate, I am sure that, not only in other people but in ourselves, there will be a certain reluctance to be taxed; but no one for a minute denies that some taxes are neces-

sary. It seems to me a little cheap to take such a pride and to find such justification in removing the development charge, if that is all there is to be said for the Bill.

Next, of course, the Bill not only removes the development charge, but removes compensation, in a very large measure. It may be said that the one will balance out the other, and that it is not really cheap to free people from the development charge if at the same time we deprive them of getting compensation. One trouble about compensation has always been that, in great part, compensation has not actually been paid out.

The ordinary man in the street has regarded it much in the same way as he regards Post-War Credits, as something on a bit of paper that some time or another he may hope to get paid by somebody. Of course, if he is relieved of a burden which he understands and is deprived of a benefit in which he disbelieves, that is undoubtedly doing something which will appeal to him; but whether by so doing one is doing the right thing must, I suggest, depend on a little further examination of what is going to happen next.

From another point of view, I said that this was an expensive Bill. Let me first deal with the financial side of it. After all, the intention of the 1947 Act was that compensation and development charges should, in the long run, not merely equal one another, but should result in an addition to the public purse. That, I believe, was bound to happen for this reason. Compensation, of course, was to be paid out within a short time, while development charges were to come in year after year.

But, on the whole, the history of the value of land in this country—and who denies it—is that it has persistently increased with the persistent fall in the value of money from one generation to another and with the consequent persistent rise in the value of land. Therefore, in the long run, what was going to be received by way of development charges was to more than counterbalance the capital sums paid out by way of compensation.

At any rate, in so far as there was a difference between a capital payment, on the one hand, and receipts year after year on the other, the matter could be met by borrowing. I do not believe that the Chancellor's foolish reluctance to pay out £300 million at this time was any more than reluctance to face the borrowing of that sum, with the knowledge that the interest on it, and more than the interest on it—its ultimate repayment—would be met by development charges.

What, in fact, has happened? The present position is that development charges are abolished and are to stand abolished. Compensation is now to be paid out of public funds, but not, of course, to anything like the original amount. The net result seems to be that the Chancellor—if I may so identify the Treasury in whatever Government it may be—will actually permit very considerable payments out of public funds, whereas if the 1947 Act had been kept to in this respect, the net result would have been a gain rather than a loss to public funds.

From a party which sets such a high standard of economy to itself and is so anxious that there should be no undue call on public funds, I find this particular departure from these admirable ideals somewhat disconcerting and exceedingly surprising. That is the financial side of the expenditure, but, of course, the social expenditure is a far more serious matter.

I have heard one or two hon. Members opposite say quite definitely, as is, in fact, the case, that this Bill represents the abandonment, if I may use the words of the hon. Member for Hertford (Mr. Walker-Smith), of the efforts to collect or tax betterment. Exactly the same thing has been said by other hon. Members. Let us for a moment have a look at what betterment means and, very shortly, at what the history of this business has been. The hon. Member for Hertford divided the growth in the values of land into two parts. One part was due to the foresight, enterprise—and there followed a long string of commendatory words—of a man known as the developer. The other part was admittedly betterment and admittedly due to the efforts of the community.

I find myself wholly unable to accept that the first of those two has been proved. I see no particular foresight in the purchase of land. I see a considerable element of risk, but surely the risk in itself has no particular merit. I certainly see no kind of enterprise. The land owner quintessentially sits there and does nothing. That is his function as I see it. He may have other functions. He may be an agriculturist and carrying on business as such but, in so far as he is a landowner, he has no function except to sit.

Even if, by some perverse ingenuity, one were to find some function in that, then surely the rewards he has had for the exercise of that function are quite incommensurate with the rewards for any particular endeavour. I noticed in a newspaper the other day that the Estate Duty on one large London landowner's estate had been assessed at £7 million. I find it impossible that that man or his ancestors, any one of them or more, could have possibly rendered any service to the community, undertaken any risk or shown intelligence comparable with a reward of that sort.

The hon. Member for Hertford pointed out to us that attempts to collect or tax a betterment—however one likes to put it—had begun many generations ago and, difficult though they are, admittedly, have been persisted in continuously. I thought that indicated that there was an old-established well-founded feeling in ordinary people that no one ought to make so much profit out of the business of merely owning land and of holding it.

It is not due to that. It is in the truest sense not due to the local authorities, to whom the hon. Member for Hertford ascribed it, but is due, as my hon. Friend the Member for Wellingborough (Mr. Lindgren) pointed out, to the actual movement of the community in its growth and in its active life. It is due to the movements of population and the movements of industry that accompany or precede those movements, due to the growth of the civilised community that we claim to be.

Surely the conceptions that inspired people who have striven to tax or collect betterment for so many years have not been particularly strange. On the contrary, they have been ordinary simple conceptions—that that which comes from the community ought not to go to the individual, that it does not depend upon his individual merit or intelligence but is rightly the property of the community and tax ought to be collected for it. That is the simple conception behind these attempts to collect betterment.

The development charge happens to be the latest of these attempts, and what I object to in this Bill is that the development charge is being thrown overboard. As has been said from the benches opposite, attempts to collect or tax betterment have been definitely abandoned and nothing whatever is being put in their place. It seems to me stupid that a Government which has introduced some legislation, the urgency of which certainly does not appeal to me at all—and I mention particularly legislation for the benefit of the brewers in the new towns—and a Government which has had quite a time to think about this, should now introduce this Bill to kill these charges, to put this burden on the Exchequer and, as far as I can see, to bar the way to any advance to social justice in this matter, whilst at the same time saying that the legislation is incomplete, that they cannot think it out in time and that they really do not know what it all means.

If we look at the White Paper, what is proposed in the future merely consists of quite minor matters about the principle of the application of compensation. No doubt, they are difficult and important matters, but they will not take us one step further along the road towards collecting for the community the advantage that at present, unjustifiably and wrongly in the eyes of any ordinary sensible person, accrues to particular landlords in particular circumstances.

I heard the hon. Member for Huddersfield, West (Mr. Wade), who sits in the Liberal corner, say that he was going to support this Bill because it removes development charges. He professed to be, and showed himself to be, a convinced advocate of taxing land values. I say this to the hon. Member and to the Liberal Party generally: when you open the door you had better know what is behind it. Behind it is apparently the Tory Party determined to do nothing whatever about this business except to give to the landlords an advantage which they had not before, to give to the community a loss which it had not before and to give to the Exchequer a burden that it had not before. None of those are Liberal principles.

A man must be taken, at any rate, to face the consequences of what he is going to do, and if the Liberal Party go into the Lobby to support this Measure simply on one part of the negative part of it, they must have their share of the responsibility for what represents the complete abandonment of any Liberal ideals and principles in this matter.

I say this to the Government. I know there have been difficulties about development charges. Everyone must recognise that there have been difficulties. I think they have been enormously exaggerated, and I attach little or no importance to what is said about the deterrent effect on development. Development has been deterred, not by that, but by the physical difficulties of having to find building labour and building materials, and the imperative need to build more council houses in this country.

If hon. Members recognise that, as they so confidently say they do, then indeed they should not attribute to development charges what has been the effect of something much more simple and much more obvious in our present difficulties. If they are going to abandon that, if they really can find no alternative road towards the social justice that in the past, at any rate, they have from time to time recognised, and that some of them, I believe, recognise still, then they will find themselves and the community forced towards some much more sweeping effort to do what the conscience of the community knows to be the right thing.

I am no great believer in the nationalisation of the land for its own sake, but let those who sit opposite remember that the Uthwatt Report and all that followed from it, including the 1947 Act, were introduced because of the difficulties that were foreseen in so sweeping a measure as the nationalisation of the land. If that which was right before remains right still, and this particular method of getting it is found not to have worked, then they must be prepared, in the interests of the people and having regard to the conscience of the people of this country, to face something much more sweeping which they themselves and their friends the landlords will dislike far more bitterly than they have ever disliked the whole business of development charges.

9.0 p.m.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

When my right hon. Friend moved the Amendment this afternoon, he dealt fairly adequately with the Minister's speech. He made it clear that we did not object to the removal of the development charge, which we admit has worked out wrongly. It was not a bad conception but it has worked out wrongly because the landlords did not do what was expected of them, namely, dispose of their land at existing use values; so that, in consequence, the developer found that he was paying more than he ought to have paid for the land and the development charge to the Central Land Board as well.

What we object to—and what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has just made clear—is that the Government have not suggested anything to put in its place. We welcome the fact that the abuse inflicted on the developer by rapacious landlords has been taken out of the way. That was never intended by the 1947 Act. But there is no indication of what the Government intend to do, despite the Prime Minister's assurance on the 4th November, to quote his own words, that: Before the end of the month the Government's full proposals on this subject will be presented to the House of Commons …"—[OFFICIAL REPORT, 4th November, 1952; Vol. 507, c. 27.] Although the White Paper gives a little indication of what is to come, it does not give us a very clear indication of what is to take the place of the development charge. In particular, the Bill does nothing to acquire for the people the values they themselves have created. I shall say something more about that matter in a minute or two.

In his speech the Minister—I am sorry he is not here at the moment—slid gaily over the fact that the Tory Government, away back in 1932, repealed the land value provisions of the 1931 Act. I would remind the House that that was done in the interests of economy. In my view, it was one of the biggest swindles ever perpetrated on the people. The whole effort to collect the tax would have cost something like £2 million and the ultimate collection might have been of the order of £1,000 million a year. To say that it would not pay to collect it was too ridiculous. It was done simply in the interests of economy.

What is more, when the Minister was talking about his "Domesday Book" and I pressed him on the matter, he would not admit or agree that his "Domesday Book" should have a separate value for land as distinct from the improvements on it. He ignored the fact altogether that was so well made in the letter, which has just been referred to, of Sir Malcolm Trustram Eve, in "The Times" on 26th November, referring to the impossibility of doing what I call assessing land values backwards. The Minister sticks to the idea of the 1947 Act and does not appreciate that on past experience it just does not work out.

Before I get to my main theme, I want to say a few words about what some hon. Members opposite have said. One of the most extraordinary proposals was made by the hon. Member for Oldham, East (Mr. Horobin). He suggested to the Minister that as money values will probably change between now and 50 years' time, when some of this compensation ultimately gets paid, the Minister ought to put something in his ultimate Measure to compensate for the fact that money values have depreciated. That seems to me to be a most comical proposal. I do not know whether the hon. Member would propose that people who invest in gilt-edged securities should be compensated if those securities depreciate. I hope the Minister will do nothing of the sort.

I welcome the fact that the Government have decided not to pay out the £300 million. To me there is all the difference in the world between paying out compensation for physically created wealth—such as that which was paid to the colliery owners when the coal mines were nationalised—and paying out of public funds compensation to landlords for something they never created. I know that we passed the Act. I was in the minority who protested at the time. I am glad to see that compensation provision out of the way.

What I am disturbed about in the White Paper is that there is no clear indication that the Government have any figure in mind as to what they are likely to pay out under their scheme. I still fear that it will be quite a substantial sum—perhaps even something of the order of £100 million. I hope that the Parliamentary Secretary, when he winds up the debate this evening, will give some indication of what this figure will be.

There is another point on which I should like to be clear, although the White Paper would seem to indicate that it is all right. There has been quite a bit of speculation in what I call the acquisition of compensation prospects. There are people about—speculators—who bought rights in the £300 million as it was, so to speak, at a discount. Now that it is not being paid out, I take it we can have an assurance that there will not be any funny business when the Act is drawn up which will compensate them for having bought a pig in a poke. The White Paper seems to indicate that the point is all right, but I hope that the Minister, to whom I gave prior notice on this subject, will confirm that it is so.

I want to deal with the question of the acquisition of the values which the community have created, and I want to call the attention of the Minister particularly to the Rating of Site Values Report by the Departmental Committee. I do not much bother about the majority Report—[Laughter.]

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

—for this reason: that it was mostly hot air anyway, and now it is not even hot! The Bill simply washed it out of the way. With respect to the hon. Member for Edinburgh, South (Sir W. Darling), whom I see here and who sat on the other side of that Committee, I must say that he ought to have known better, because at one time he understood this problem, whereas that Report which he signed is really a disgrace to his intelligence.

It is the minority Report that matters. It is drawn up and is signed by three men who really understand the problem, as do many of my right hon. and hon. Friends. It provides the means whereby under the existing legislation land values may be recovered for the people, and I urge the Government at least to take the necessary steps to enable a proper rate or tax on site values to be brought in, if thought desirable, as, indeed, it will be in my estimation, by providing that an extra column, showing the separate value of land, shall be put in all the valuation schedules now being drawn up under the 1948 Act. There is no reason why it should not be done.

It is quite impossible to arrive at the valuations which are now being arrived at without valuing the land and the improvements; and it would save a great deal of trouble in the end, and it would help us all along to the thing which I particularly want, if the land value is shown in a separate column. I hope that the Parliamentary Secretary will say that he has already consulted his right hon. Friend and that they will agree to do that.

We all know how landlords block development, and particularly do we know it on this side of the House—for example, people like my hon. Friend the Member for Clapham (Mr. Gibson), who is on the London County Council. We have all had hard experience. I do not want to quote details, except simply to have it on record. To remind the House, I should like to quote the example of the great 1930 Charing Cross Bridge scheme. It is well to remind people of what happened. That scheme was estimated to cost £17 million, of which £11 million was to be paid out in compensation to landlords. The thing was absolutely ridiculous and, of course, the London County Council refused to go on with the scheme.

To take a small example nearer home, and one which is more alive in hon. Members' memories, let me refer to the buildings on Horse Guards Avenue, which I once had the privilege of occupying—of course, the value went shooting up at once! The buildings there were first estimated at a cost of £1,750,000, but the compensation paid out for the ground was £1,300,000.

Everybody complained about the cost of the buildings, but not a word was said about the cost of the ground. Of course, the cost of those doors, about which I got into trouble, fades into insignificance when one compares the amount poured away into the pockets of the landlords for doing absolutely nothing except sitting with their feet up on the mantelpiece and raking in the "dough."

My right hon. Friend the Member for Bishop Auckland was quite right when he said that I should probably talk about this, and I want to suggest to the House that it really should have a look round the world to see what a vivifying effect taxation of site values has. The Government ought to consider this, and not regard it as a political issue. It is a factual one. God made the land for the people, and they created the values, not the landlords. What has happened?

In Australia, in Sydney, one of the most beautiful cities in the world, where every house has sun and air around it, the whole rates are on site values. In Johannesburg it is the same. I believe they started too late, and have got to catch up. There are some pretty nasty places there now, but at least in the middle the development value is so high now, and the rates accordingly high, that it does not pay to keep the uneconomic buildings there. They are being torn down, and fine new buildings put up.

Going north, we find in Denmark, primarily an agricultural land, where every acre produces the maximum, that they have got the effect of taxing site values. It does indeed provide just what one wants here. It relieves the farmers on the marginal land, by taking rates off farm dwellings, it stimulates the farmers on the good land and it just does not pay the farmer not to use his land to the best advantage. It has the added advantage that they do not have money paid into the pockets of well-to-do farmers who do not really need assistance at all, which is what we do by propping up the marginal farmers by subsidies and other means which go to the well to do as well.

Let me remind the Minister that no fewer than 279 county and borough councils up to May, 1947, bad applied for the right to rate site values, and if he is not content with all this, I should like to quote one or two things that the Prime Minister has said in his past life before he forsook the paths of rectitude. Now that he has, so to speak, eaten his way to the top of the Tory Party, perhaps he may do something about it. I think his speech has been quoted earlier today, but I have another bit of it. He said at Drury Lane in April, 1907—[Laughter.] Hon. Members laugh, but principles do not alter. People may prostitude them, but principles remain the same. I am only saying that at one time in his early days of erudition and some knowledge, before he got messing about with the gold standard, he really did a job; and he said, talking of land monopoly: We have to face all the resources of a great monopoly, so ancient that it has become almost venerable. We have against us all the modern money power. There are only two ways in which people can acquire wealth. There is production and there is plunder. Production is always beneficial. Plunder is always pernicious, and its proceeds are either monopolised by a few or consumed in the mere struggle for possession. The present land system hampers, hobbles and restricts industry. They"— the Liberal Party, I suppose he meant in those days— are resolved if they can to prevent any class from steadily absorbing, under the shelter of the law, the wealth in the creation of which they have borne no share, wealth which belongs not to them but to the community, wealth which they can only secure by vexatious obstruction of social and economic progress, far more injurious and wasteful than can be measured by their own inordinate gains. That was not just a fluke, just for luck. He went on like that for quite a few years, and two years later he was still true to the cause: It is quite true that the land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies. It is a perpetual monopoly, and it is the mother of all other forms of monopoly. Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs 100 miles off in the mountains, and all the while the landlords sit still. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare. He contributes nothing even to the process from which his own enrichment is derived. He concluded by saying, That they"— that is, the then Government— should be prohibited"— and I hope the Tory Party will listen to this— by Tory bluster and Tory bluff from embarking on this great and fertile field of social reform, which offers perhaps the brightest promise of future developments of Liberal and Radical progress was to his mind unthinkable. I am sorry the right hon. Gentleman could not be here. I told him I was going to quote him at length; he asked me from which speech, and I said there were so many I was not quite sure.

I do not want to keep the House very long tonight, but I do want to say just this. This Bill might very well be termed the "Speculators' Charter." It is simply a permission to plunder. Everything is sacrificed on the altar of unearned income, and, if the Measure receives our assent tonight, quite certainly unemployment will rise and wages will fall. [HON. MEMBERS: "Oh!"] Certainly, in the end, because as unearned income goes up earned income must fall. That cannot be helped; we all know that—although there is profound ignorance on the other side of the House on this matter.

The fact of the matter is that everything this Government does is topsy-turvy. I could use a ruder phrase, but I should be told I was unparliamentary, so I had better not. They ask a man who earns his income to show proper restraint—the man in my workshop and elsewhere—and in the public interest to be reasonable and keep his income down; but incomes which are not earned are encouraged and increased. Already the Government have forced up interest rates, and now the land speculator is to be unleashed just to help himself.

Of course, this Government will tax anything except the publicly-created value of land. They tax a man for earning, they penalise traders for trading and manufacturers for manufacturing. They regard a man's earnings by his individual efforts as a proper source of public revenue and the value of land which the community creates as a source of revenue for private interests. If that is not topsy-turvy economics, I do not know what is.

We object to this Bill and move this Amendment, not simply on the ground of the removal of the development charge. As I explained, we are glad to see it go in the form in which it was abused. [Interruption.] Well, it was abused. Perhaps I had better repeat it. What was intended under the original Act was that the landlord should sell his land at the existing use value and the developer should pay a development charge to the Central Land Board, but what has happened is that the landlord does not sell his land at the existing use value and charges much too much, so the developer gets stuck twice. That is why we are glad to see it go.

We are moving the Amendment also because insufficient time has been given for the discussion of this very important Measure. Very few hon. Members have spoken today. All this is crowded into one day. Despite the fact that the Government waste day after day introducing Measures which nobody wants, which are not even supported by most of their own back benchers, on an important Measure like this we do not get enough time. Secondly, we object because insufficient information is given about what the Government propose to do. Thirdly, as the Amendment says, because nothing is being done to acquire for the public use the values which the people themselves have created.

This is where I really come to my main point. I say to hon. Members opposite, and to my hon. Friends as well, that there are only three ways of doing this. Either we can confiscate the land values, which I do not think anybody will stand for here—I certainly do not; it is unjust and unacceptable—or they can be bought out, but before starting on that game we had better work out what it will cost.

I should put the figure, mildly, at £20,000 million for land alone, without any improvements on it at all. Then what a millstone will be round the people's neck! If on the £20,000 million, which I put as a low land value, the Chancellor levied a tax of 10 per cent. per annum he could make away with half his present Budget without having to put burdens on the efforts of the workers in indirect taxation and the like. In fact, what we are going to do if we pay £20,000 million is to buy out the robbers. We are going to pay them for something to which they have no right at all. To tax and rate the site value is the only fair way.

For these reasons, we have moved the Amendment, and we shall divide the House, so that people may know that we on this side are a party which fights for their rights and interests, while the other side—under the deception—the very typical deception—of removing injustice, perpetuate the greatest of all iniquities, without raising a single finger to recover for the people their rights—the land values which they themselves and not the landlords created.

9.21 p.m.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

The House has just listened to a characteristic, robust and entertaining speech from the right hon. Gentleman the Member for Ipswich (Mr. Stokes), whose return to the Dispatch Box we all warmly welcome. It was indeed interesting to get to know the official Labour Party's view on site values, because if that is their official view as given from the Dispatch Box, it is time that it was put in their programme, and that the country knew that it was their official view. I shall be replying to the points made by the right hon. Gentleman later.

I should like to say that the Prime Minister has asked me to apologise to the House for not being in his place, but he has duties in connection with the forthcoming Conference, and he hopes that the House will forgive him for being absent.

The right hon. Gentleman the Member for Ipswich said that the Opposition had not had sufficient time to discuss this particular Measure. They never asked for even an extra hour from my right hon. Friend the Leader of the House.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

We asked for two days; an extra hour was not worth while.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

The right hon. Gentleman wanted two days—the first to discuss the Bill; the second to count it out.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

May I cap that one? Surely the Minister will understand that that would entirely depend on how successful the Chief Whip was in keeping the Tories here.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

And also on how many were in ambush.

I should like to answer the serious point which the right hon. Gentleman made. He asked, "What is going to happen to the acquisition of compensation claims where speculators have bought claims on land?" If no claim is payable on the land, the speculator will get nothing. If there is a claim on the land, he will get exactly what is paid for it, no more and no less. There will be a claim on the land, firstly, if there is a compulsory purchase order at existing use; secondly, if permission to develop is refused; and, thirdly, if a development charge has been paid; in other words, when the owner of the land is hurt. That is stated in paragraph 52 of the White Paper, and I think that the right hon. Gentleman can rest assured on that point.

Unlike the hon. Member for Pembroke (Mr. Donnelly) and the hon. Member for Wellingborough (Mr. Lindgren), I do not find that this is a simple subject; I find it extremely complex. I think that today's speeches have been remarkably well-informed, considering the intricate nature of the Bill, especially from those Members who had the good fortune to take part in 1947 in the long discussions on the then Town and Country Planning Bill.

A great many questions have been asked, and I will do my best to answer all of them, but I may not have sufficient time. The subject falls under three headings. Firstly, betterment; secondly, compensation, and thirdly, compulsory acquisition. It will be for the convenience of the House if I answer hon. Members' queries under those three headings. I will take betterment first. The right hon. Member for Bishop Auckland (Mr. Dalton) and the hon. Member for Wellingborough asked, "Why do we not collect some form of betterment; it is vital to planning?" Those were the words of the hon. Member for Wellingborough.

The collection of betterment has traditionally been linked with the payment of compensation. The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) also made this point. In the 1947 Act there is a basic notion of compensation and betterment as a sort of pair of Siamese twins, but there is no necessary connection at all between the payment of compensation and the collection of betterment. There are no real grounds for saying that those who happen to be allowed to develop should be made to pay for those who are not so lucky. Betterment accrues to a great many people besides those who develop their land. People who own existing shops, cinemas, hotels and speedway tracks all have betterment when their areas are built up. Therefore, if land is to be taxed specially, one might ask why they are not sorted out and also taxed specially.

It is also not true to say that both payment of compensation and collection of betterment are vital to planning. Plan- ning can take place without betterment being levied, but it cannot, in common justice, take place without compensation being paid to owners who are being hurt. In his opening speech, my right hon. Friend pointed out that this is a planning Bill and not a taxation Bill. The merits of any form of collection of betterment as a fiscal issue which does not arise on this Bill.

I want here to refer to what the right hon. Gentleman the Member for Ipswich said about the speeches of my right hon. Friend the Prime Minister in 1907 and 1909. I thought that was not a very inspiring effort at facing the future, because it 1952 betterment is not the serious problem which it was in 1909, either financially or morally, for three reasons.

First, in 1952 we have compulsory purchase orders on a substantial scale for any land the public wants, and it can be purchased at a price which excludes betterment. This method does two things. First, it makes certain that no landlord can hold up development if the public wants the land, because the land can then be taken. Second, it makes sure that the local authority and the community do not pay too much for the land, because the basis is the existing use value plus the 1947 claim. Thus, in 1952 this instrument has radically altered the position.

The second reason is that annual taxation—that is, Income Tax, Surtax and other taxes—is far greater in 1952 than it was in 1909. The area of the problem of betterment has shrunk a lot because of the exercise of compulsory purchase, and the amount of money which accrues to fortunate landowners is very smaller because of taxation. The right hon. Gentleman spoke about 1909, and I should like to give him an example on this point. If a person had an income of £5,000 a year in 1909, he would have paid 1s. 2d. in the £, which would have amounted to £300. Today the effective rate of both Surtax and Income Tax is 11s. 1½d., which would mean the payment of £2,799 out of the £5,000 income.

Photo of Mr Desmond Donnelly Mr Desmond Donnelly , Pembrokeshire

Is it not a fact that capital gains are not taxed?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

It rather depends on the number of transactions. It is on the second or third transaction—

Photo of Mr Thomas Price Mr Thomas Price , Westhoughton

Answer the question. The hon. Gentleman knows they are not taxable.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

It may be on the second or third transaction that the man is held to be carrying on a trade or business and is assessed accordingly.

The other matter is that of Estate Duty. Let us take what happens to a man's property when he dies. The point made by the right hon. Gentleman was not a true one, but we will assume that it is. That being so, when an estate of £300,000 passed in 1909 the duty would have been 11 per cent., or £33,000. In 1952 it would be 60 per cent., or £180,000. Therefore, the problem really is very much smaller than it was in those days.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Really, this has nothing whatever to do with what I was saying. I was talking about re-acquiring for the people the land values which they themselves had created. I was not talking about buying and selling land.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

The right hon. Gentleman quoted speeches by the Prime Minister in 1907 and 1909. He may like to know what Mr. Lloyd George did.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Mr. Lloyd George got it wrong.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

Mr. Lloyd George successfully carried out a campaign against the Tories of the day. Land was wanted for a torpedo range at Rosyth for the Fleet, and he accused the Tories of asking £1,000 an acre for land worth £10 to £20 an acre. That was the campaign in 1909 and 1907. Under the proposals of my right hon. Friend today, the Admiralty would get the land for the existing use value plus the 1947 claim. That would be about £10 or £20 an acre, which is the existing use value. I have no doubt that in 1907 and 1909 some distinguished gentleman made speeches that motor cars were offensive, slow and inefficient. So they were in 1907, but they are not slow in 1952. The right hon. Gentleman must do a little better than that if he is going to make out a case.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

I do not see any relevance in it at all.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

All right, I will deal with this question of rating of site value, which I am certain the right hon. Gentleman would say had some relevance. I notice this is now the official line of the party opposite, but—[HON. MEMBERS: "No."] Perhaps I should ask, is it the official line of the party opposite or not?

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

May I tell the hon. Gentleman that it has been in every election address I have written ever since I first stood?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

Our difficulty is to know whether it is the official party line or the unofficial party line. One thing is quite certain, the weight of opinion has always been that the rating of such values is impracticable. [HON. MEMBERS: "No."] The Erskine Simes Committee of 1952 made a recommendation in their majority Report against the rating of site values.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

They were hopelessly out.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

All I can say is that it was the majority view and the majority view generally is taken in this country unless it is on the second ballot. Hon. Members should read the Report of the Kempe Committee in 1914, which sets out the pros and cons in quite a masterly way. There the Committee found against site values by two to one. Therefore, I do not think it is a powerful point the right hon. Gentleman has made.

I come now to the question of compensation. The 1947 Act provided for £300 million as a global sum to be paid for the loss of development rights. It was to be a once-for-all payment made in the summer of 1953. Our proposals are to pay compensation only to those people who suffer and to pay it as and when they suffer. In other words, the Government pay as they go along and the landlord only receives benefit as he suffers.

The right hon. Gentleman the Member for Bishop Auckland, the hon. Gentleman the Member for Wellingborough and the hon. Member for Pembroke raised one point. They said, in effect, that planning will be thwarted because the Treasury will be reluctant to pay compensation for planning development.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

They will refuse planning permission. Our answer to this criticism is, we do not accept the proposition that the Chancellor of the Exchequer is an independent personality. This country has the doctrine of collective Cabinet responsibility. The Chancellor is but one voice of many, and it would be a reflection on the Government of the day if they failed in their duty to see that proper planning was carried out.

The second point is that my right hon. Friend is saving the Chancellor paying out £300 million next summer, and in all probability the total compensation will be no more than £100 million spread over a generation or so, which is a very different kettle of fish to £300 million next summer.

The third point is that the Government will have accepted the broad planning of the country as shown by the development plans. Once those plans have been approved the Government of the day will be tied in principle to the broad lines of development, and therefore they cannot escape the corollary that compensation must be paid to implement the planning which they have approved.

The fourth point is a very vital one, because it was raised by the right hon. Member for Bishop Auckland. They asked—

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I cannot give way. We were asked what we mean by paragraph 40 of the White Paper regarding the amount of control which will be exercised over local authorities when they refuse planning permission. The Government intend that effective planning control is to be maintained in the hands of the local planning authorities. On that there is no compromise. When claims for compensation are presented, following the local authority decision that development must be refused, the Government will expect to be satisfied that the decision is sound in all the circumstances.

This does not mean that the Government will seek to interfere with the proper tasks of the local authorities by a central planning administration in Whitehall. Curiously enough, in paragraph 40 there is not a single reference to the Treasury. It really amounts to this, that because the right hon. and hon. Gentlemen opposite are afraid of the Treasury, they are saying to us, "Pay out £300 million in one fell swoop next summer," and we really cannot accept that. We intend only to pay about one-third of that sum by instalments. But I will give this assurance to hon. Gentlemen opposite, and this is a serious point, that we have no intention of affecting the quality of the planning provisions. I hope that assurance will be sufficient for them.

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

To get the matter clear, may I ask if it is intended to make any change at all in the present practice in this matter, which I assume is substantially the same as when I was Minister, in the relationship between representatives of the Ministry and representatives of the local authorities in the exercise of their planning powers? Is there now to be a closer investigation, case by case, of refusals of permission to develop exercised by the planning authority? Is there any change at all?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

My right hon. Friend will be the person responsible. The responsibility for planning decisions ultimately rests with the Minister of Housing and Local Government. What it means is that we are paying as and when people suffer. That will give an opportunity to look at the value of land. One of the weaknesses of the 1947 Act, especially for industrial purposes, was that there was scarcely time to look at what was happening.

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

I was not seeking to put a question about compensation at all. I was only putting a question about the practice by which the Minister and his officers will in future seek to put a tighter rein on local authorities when those authorities wish to refuse planning permission. Will the planning permission be held up or supervised in any way under this regime in any different manner from what has happened hitherto?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I should have thought not. My right hon. Friend will always act in a quasi-judicial capacity in judging refusals of planning permission by local authorities, and there is no reason why the present procedure should be altered—at any rate, so long as my right hon. Friend is in office.

The hon. Member for Widnes (Mr. MacColl) raised the point that the 1947 values were not really fair. He drew an analogy with the 1939 scheme which, he said, was unfair to a person who had to sell his house at the 1939 value when he came to buy a house in 1950 or 1954 and had to pay more money for it. The answer is that it is wrong to compare the two, because this scheme is not the same as the 1939 scheme. If property under this scheme is to be compulsorily acquired, say in 1960, the owner would receive a sum comprising two elements, first the development value and second its existing use value. The development value will be at 1947 value, but the existing use value will be at the existing use value of the day—that is the 1960 existing use value. That means that he may gain in two ways. Under the 1947 Act he was to receive compensation for loss of development value at possibly 17s. or 18s. in the £. Under our proposals he will get 20s. in the £. To that extent he will be better off. So far as existing use is concerned, he will receive the 1960 and not the 1952 existing use value. Under the 1939 scheme a man would receive in 1960 only the 1939 existing use value.

A letter which Sir Malcolm Trustram Eve wrote to "The Times" put an argument that this ceiling might well receive the fate of other ceilings. That argument is not well founded, because earlier ceilings tied existing use as well as development value to a date in the past. But if costs of construction are increased or reduced, one cannot successfully tie the existing buildings to the 1939 or 1947 values.

Photo of Mr James MacColl Mr James MacColl , Widnes

I appreciate that the hon. Gentleman is trying to deal with my argument. If he is right when he says that a person who had to buy at 1960 values but was compensated only at 1947 values would be no worse off, there would be no point in having written paragraph 30 of the White Paper which explains why compulsory purchasing authorities must avoid paying high prices for sites. That is what the White Paper says.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

The hon. Gentleman has got it wrong. If he looks at the OFFICIAL REPORT tomorrow, he will see that the 1939 scheme is not comparable to the proposals of my right hon. Friend.

I come to the question of compulsory acquisition, which is the third heading. The 1947 Act provided for the compulsory acquisition of land by the Central Land Board. Our proposal is to use the local authorities for compulsory purchases. The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) thought that these powers were not sufficient. I should like to show the difference between the ways in which the Central Land Board and the local authorities would work their compulsory purchasing powers.

First, how many times have each of them used compulsory purchase orders? The Central Land Board have issued 26 compulsory purchase orders in four years. The local authorities have made literally hundreds of compulsory purchase orders for housing, industry and open spaces. I grant that the Fitzwilliam case did not make it easy for the Board. I concede that to hon. Gentlemen straight away. But broadly speaking, the Central Land Board was not really effective when it came to use compulsory purchase orders.

Secondly, both have a different object when making orders. The Central Land Board make the orders to force prices down to try to make the 1947 Act work. But the local authorities in the past used them for promoting development and for planning. I have just visited Birmingham where the local authority have bought 1,000 acres. They intend to re-develop the area and to lease or sell some land to industrialists, and for shops, offices and so on.

The third point is, from whom do they buy and to whom do they sell? This is the difficulty, because, generally speaking, the local authority buys a large area of land from many people and it will then sell or let parcels of that land to many separate individuals. The Central Land Board are placed in an invidious position. They buy from a specific individual because another specific individual asks them to. It is extremely difficult to ask a body like the Central Land Board to do such a job. If three people ask for a compulsory purchase order on a site in Central London, on what principle do they base their award of that land to one speculator or developer? It is asking too much of a body like the Central Land Board to undertake that invidious task.

The hon. Member for Widnes asked whether compulsory purchase orders would operate under the Housing Acts or under the planning powers, and the answer is that it will be both. The planning authority has wider powers, and, if I may summarise them, they can acquire land for promoting and developing, and, in a great many cases recently, they have both acquired land and disposed of it. My right hon. Friend intends to look closely into this matter when he meets the local authority associations shortly, and to strengthen and simplify, if necessary, the present compulsory purchase order powers. He will, if necessary, widen or strengthen them, according to whatever is wanted.

Now may I come to the Amendment which is on the Order Paper. My right hon. Friend, when he opened this debate, said that a reasoned Amendment had dangers. That is so, because some of the reasons may vanish before the debate takes place. Although the hon. Member for Wellingborough and the hon. Member for Widnes said they thought this was a simple Measure, it is interesting to note that the Opposition have put two Amendments on the Order Paper. The first reasoned Amendment came on the Order Paper, I think, on 27th November, and then they had another thought or two and decided to remove that Amendment from the Order Paper.

Today, there is a second version of the reasoned Amendment on the Order Paper. [Interruption.] It is even worse than that, because part of the speeches of the right hon. Gentleman the Member for Bishop Auckland and the hon. Member for Wellingborough were based on the points which have been omitted from the second version of the reasoned Amendment, and all that I am now wondering is whether or not the Government should put down a Motion of censure on the Opposition.

Photo of Mr Richard Stokes Mr Richard Stokes , Ipswich

Yes, but we should not get counted out.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

Let us examine the logic of the reasoned Amendment. One point which appeared in the first Amendment and has been omitted from the second, was expressed in these words: The Bill abandons the principle of the public acquisition of development values. The right hon. Gentleman the Member for Bishop Auckland deplored that in his opening speech, and so did the hon. Member for Wellingborough. Why do they deplore it? It is because they consider it wrong that a landowner should make a profit by selling his development value to an individual. They consider that he must sell his property at existing use value, but that is precisely what he refused to do under the 1947 Act, and that Act left him free to charge the developer exactly what he liked.

The hon. Member for Wellingborough, who is almost always courteous and reasonable as far as I am concerned, was on this occasion very courteous but wrong in the arguments he put forward. I am sure he will be the first to withdraw if he finds that he was wrong, but he made the accusation that landowners were lawbreakers because they did not sell their land at existing use value. Those were his exact words. Landowners can only be law breakers if they break the law, and there is no law which forces them to sell their land at existing use value that is all.

Photo of Mr George Lindgren Mr George Lindgren , Wellingborough

Surely, the hon. Gentleman will admit the intention was that land should change hands at existing use value, and that, if it did not, it should be taken over by compulsory purchase order?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I would not like to conduct negotiations with the inspector of taxes on the hypothesis which the hon. Gentleman has just laid down.

The hon. Gentleman went on to say that it was "a robbery and a swindle," but the party opposite—and they have got to face it—allowed the landlord to get twice the development value from one parcel of land. He was paid twice, the first time by the private person, and the second time from the State. Although the State acquired the development value, they let someone else pay as well. It may be a swindle and a robbery, but who per—petrated it? That was part of the old Amendment which had been deleted from the Order Paper.

Now we come to the Amendment that is on today's Order Paper, the first part of which provides no means for the recovery by the community of socially created land values. That phrasing replaces the old phrasing, which was that the Bill abolishes the Development Charge without imposing any alternative form of levy on socially created land values.

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

What is the difference?

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

The right hon. Gentleman asks, "What is the difference?", in which case I ask him, why did he alter it?

Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

In order to save some words.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

I have also shown that the betterment factor has shrunk and that heavy and penal taxation has altered the problem. But there is another aspect, which is that no one has as yet successfully devised a method of levying this charge, and it is important to notice that.

To be successful, a betterment charge must do five things: firstly, it must fall on the owner and not on the developer; secondly, it must not stop development; thirdly, it must not stop land passing from one person to another; fourthly, it must avoid creating injustices greater than those it set out to solve, and, fifthly, the revenue collected must be a reasonable amount compared with the cost of collection.

Photo of Mr Ernest Marples Mr Ernest Marples , Wallasey

It is excellent sense whoever said it.

Past experience has shown that the collection of betterment has never been successfully accomplished. The hon. and learned Member for Kettering said it was a simple theory that underlined the 1947 Act. That is true, but his remarks reminded me of what Marshal Foch said of the art of war, that it is simple enough in its conception, but unfortunately complicated in its execution; no one has yet found a method of putting that simple theory into practice.

The insistence of hon. Gentlemen opposite on this point is rather hard to understand, because when they were in power they had a shot at collecting betterment by way of 100 per cent. development charge, and, quite frankly, it was a complete failure. This Bill abolishes the present mischief. What the hon. Member for Pembroke really wanted—and I think he let it out of the bag—was nationalisation of the land. He found a new name for it; he called it "municipalisation." He has a very fertile and agile mind when it comes to coining new words.

He started by saying that the 1947 Act would not work, and afterwards he went on to refer to it as the "Silkin Act," not the Socialist Act. That was not a very good reward for the noble Lord. As I say, the hon. Member really wants nationalisation; that is what he is after. I only hope that his constituents in Pembroke will read his speech tomorrow.

The third part of the Amendment says that the Bill endangers the effective powers of the local planning authorities to check undesirable development and by depriving the Central Land Board of the power of compulsory purchase, exposes the developer to extortionate charges. Anyone reading that would think that the power of compulsory purchase is being abandoned. It is not. The local authority will still have the powers of compulsory purchase, as I have explained.

How can the Opposition really say that with this extensive use of compulsory purchase the mere 26 orders which the Central Land Board have made will be missed? Somebody asked whether the local authorities really meant business with their compulsory purchase orders. We made inquiries a few months ago and we found that 200 to 300 local authorities were using or thinking of using their compulsory purchase powers under the Housing Acts to make land available for development after servicing. The local authorities have indicated that they intend to use the compulsory purchase orders.

The House may well ask if this Government really mean business. I think that that is in the mind of the hon. Member for Wellingborough. I might tell him that this Government passed the Town Development Act, Section 18 of which provides that when local authorities buy land they can sell it freehold. Prior to that they had difficulty in selling it freehold and could only do it in certain exceptional cases. Therefore, the Act which the Conservative Government passed is making it easier for land to be freely sold after a compulsory purchase order.

What does this Bill do in the case of compulsory purchase? It provides for a local, democratically elected body to take over powers instead of a centrally appointed body. The real reason the Opposition do not like it is their passionate belief that all powers should be centralised. We differ. We think that both power and property should be as widely dispersed as possible. If this Amendment were carried and the Bill defeated, it would mean a return to the 1947 Act. That Act, put on the Statute Book by a Socialist Government, collected money from poor people who intended to do something and gave it to people who intended to do nothing.

Let me illustrate that. If in a village a man wished to use the front room of his house as a shop, the Central Land Board charged him £40 for the privilege. The money went towards the £300 million compensation which the Socialist Government decided to pay, a large part of which went to two classes of landlords who were undeserving. The first were those who sold it to the developer and in so doing collected development value twice—once from the Government and once from a private individual. The second were the landlords who never intended to develop.

My right hon. Friend and I have already had letters from Members of Parliament. One letter came the other day from an agent representing a rich landlord, and I will read a sentence or two to the House. He says:

"My client is very perturbed that the Government is going to alter the claims on the £300 million Fund. The reason he is perturbed is that he has no intention of building and thus he will get nothing."

What a shame. He gets nothing for doing nothing; but if the 1947 Act stays he gets £1,000 for doing nothing.

Do the Opposition really want that? The 1947 Act, under the Socialist Party, really did line the pockets of the undeserving landlord with a hefty slice of that £300 million. If hon. Members and right hon. Members opposite go into the Division Lobby tonight against this Bill they will go down to history not as the landlord's friend—as they accuse us—but the undeserving landlord's friend and the small developer's enemy. My right hon. Friend and the Secretary of State for Scotland, with the greatest confidence, hope that this House will reject the Amendment and will give the Bill a Second Reading.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 303; Noes, 273.

Division No. 27.]AYES[10.0 p.m.
Aitken, W. T.Browne, Jack (Govan)Drewe, G.
Allan, R. A. (Paddington, S.)Bullard, D. G.Dugdale, Rt. Hn. Sir Thomas (Richmond)
Amery, Julian (Preston, N.)Bullock, Capt. M.Duncan, Capt. J. A. L.
Amory, Heathcoat (Tiverton)Bullus, Wing Commander E. E.Duthie, W. S.
Anstruther-Gray, Major W. J.Burden, F. F. A.Eccles, Rt. Hon. D. M.
Arbuthnot, JohnButler, Rt. Hon. R. A. (Saffron Walden)Eden, Rt. Hon. A.
Ashton, H. (Chelmsford)Campbell, Sir DavidElliot, Rt. Hon. W. E.
Assheton, Rt. Hon. R. (Blackburn, W.)Carr, Robert (Mitcham)Erroll, F. J.
Astor, Hon. J. J.Carson, Hon. E.Fell, A.
Baker, P. A. D.Cary, Sir RobertFinlay, Graeme
Baldock, Lt.-Comdr. J. M.Channon, H.Fisher, Nigel
Baldwin, A. E.Clarke, Col. Ralph (East Grinstead)Fleetwood-Hesketh, R. F.
Banks, Col. C.Clarke, Brig. Terence (Portsmouth, W.)Flatcher-Cooke, C.
Barber, AnthonyCole, NormanFort, R.
Barlow, Sir JohnColegate, W. A.Foster, John
Baxter, A. B.Conant, Maj. R. J. E.Fraser, Sir Ian (Morecambe & Lonsdale)
Beach, Maj. HicksCooper, Sqn. Ldr. AlbertFyfe, Rt. Hon. Sir David Maxwell
Beamish, Maj. TuftonCooper-Key, E. M.Galbraith, Cmdr. T. D. (Pollok)
Bell, Philip (Bolton, E.)Craddock, Beresford (Spelthorne)Galbraith, T. G. D. (Hillhead)
Bell, Ronald (Bucks, S.)Cranborne, ViscountGammans, L. D.
Bennett, F. M. (Reading, N.)Crookshank, Capt. Rt. Hon. H. F. C.Garner-Evans, E. H.
Bennett, Sir Peter (Edgbaston)Crosthiwaite-Eyre, Col. O. E.George, Rt. Hon. Maj. G. Lloyd
Bennett, Dr. Reginald (Gosport)Crouch, R. F.Glyn, Sir Ralph
Bennett, William (Woodside)Crowder, Sir John (Finchley)Godber, J. B.
Bevins, J. R. (Toxteth)Crowder, Petre (Ruislip—Northwood)Gomme-Duncan, Col. A.
Birch, NigelCuthbert, W. N.Gough, C. F. H.
Bishop, F. P.Darling, Sir William (Edinburgh, S.)Gower, H. R.
Black, C. W.Davidson, ViscountessGraham, Sir Fergus
Boothby, R. J. G.Davies, Ft. Hn. Clement (Montgomery)Gridley, Sir Arnold
Bossom, A. C.De la Bère, Sir RupertGrimston, Hon. John (St. Albans)
Boyd-Carpenter, J. A.Deedes, W. F.Grimston, Sir Robert (Westbury)
Boyle, Sir EdwardDigby, S. WingfieldHall, John (Wycombe)
Braine, B. R.Dodds-Parker, A. D.Harden, J. R. E.
Braithwaite, Sir Albert (Harrow, W.)Donaldson, Cmdr. C. E. McA.Hare, Hon. J. H.
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)Dormer, P. W.Harris, Frederic (Croydon, N.)
Bromley-Davenport, Lt.-Col. W. H.Doughty, C. J. A.Harris, Reader (Heston)
Brooke, Henry (Hampstead)Douglas-Hamilton, Lord MalcolmHarrison, Col. J. H. (Eye)
Brooman-White, R. C.Drayson, G. B.Harvey, Air Cdre. A. V. (Macclesfield)
Harvey, Ian (Harrow, E.)Maclay, Rt. Hon. JohnSavory, Prof. Sir Douglas
Harvie-Watt, Sir GeorgeMaclean, FitzroySchofield, Lt.-Col. W. (Rochdale)
Hay, JohnMacleod, Rt. Hon. Iain (Enfield, W.)Scott, R. Donald
Head, Rt. Hon. A. H.Macmillan, Rt. Hon. Harold (Bromley)Scott-Miller, Cmdr. R.
Heald, Sir LionelMacpherson, Maj. Niall (Dumfries)Shepherd, William
Heath, EdwardMaitland, Comdr. J. F. W. (Horncastle)Simon, J. E. S. (Middlesbrough, W)
Henderson, John (Cathcart)Maitland, Patrick (Lanark)Smiles, Lt.-Col. Sir Walter
Higgs, J. M. C.Manningham-Buller, Sir R. E.Smithers, Peter (Winchester)
Hill, Dr. Charles (Luton)Marlowe, A. A. H.Smithers, Sir Waldron (Orpington)
Hill, Mrs. E. (Wythenshawe)Marples, A. E.Smyth, Brig. J. G. (Norwood)
Hinchingbrooke, ViscountMarshall, Douglas (Bodmin)Snadden, W. McN.
Hint, GeoffreyMarshall, Sir Sidney (Sutton)Soames, Capt. C.
Holland-Martin, C. J.Maude, AngusSpearman, A. C. M.
Hollis, M. C.Maudling, R.Speir, R. M.
Holmes, Sir Stanley (Harwich)Maydon, Lt.-Comdr. S. L. C.Spence, H. R. (Aberdeenshire, W.)
Holt, A. F.Medlicott, Brig. F.Spens, Sir Patrick (Kensington, S.)
Hopkinson, Rt. Hon. HenryMellor, Sir JohnStanley, Capt. Hon. Richard
Hornsby-Smith, Miss M. P.Molson, A. H. E.Stevens, G. P.
Horebin, I. M.Monckton, Rt. Hon. Sir WalterSteward, W. A. (Woolwich, W.)
Horsbrugh, Rt. Hon. FlorenceMorrison, John (Salisbury)Stewart, Henderson (Fife, E.)
Howard, Gerald (Cambridgeshire)Mott-Radclyffe, C. E.Stoddart-Scott, Col. M.
Howard, Greville (St. Ives)Nabarro, G. O. N.Storey, S.
Hudson, Sir Austin (Lewisham, N.)Nicholls, HarmarStrauss, Henry (Norwich, S.)
Hulbert, Wing Cdr. N. J.Nicholson, Godfrey (Farnham)Stuart, Rt. Hon. James (Moray)
Hurd, A. R.Nicolson, Nigel (Bournemouth, E.)Studholme, H. G.
Hutchinson, Sir Geoffrey (Ilford, N.)Nield, Basil (Chester)Summers, G. S.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)Noble, Cmdr. A. H. P.Suteliffe, H.
Hutchison, James (Scotstoun)Nugent, G. R. H.Taylor, Charles (Eastbourne)
Hyde, Lt.-Col. H. M.Nutting, AnthonyTaylor, William (Bradford, N.)
Hylton-Foster, H. B. H.Oakshott, H. D.Teeling, W.
Jenkins, Robert (Dulwich)Odey, G. W.Thomas, Rt. Hon. J. P. L. (Hereford)
Johnson, Eric (Blackley)O'Neill, P. R. H. (Antrim, N.)
Johnson, Howard (Kemptown)Ormsby-Gore, Hon. W. D.Thomas, P. J. M. (Conway)
Jones, A. (Hall Green)Orr, Capt. L. P. S.Thompson, Kenneth (Walton)
Joynson-Hicks, Hon. L. W.Orr-Ewing, Charles Ian (Hendon, N.)Thompson, Lt.-Cdr. R. (Croydon, W.)
Kaberry, D.Orr-Ewing, Ian L. (Weston-super-Mare)Thornton-Kemsley, Col. C. N.
Keeling, Sir EdwardOsborne, C.Tilney, John
Kerr, H. W. (Cambridge)Partridge, E.Touche, Sir Gordon
Lambert, Hon. G.Peake, Rt. Hon. O.Turner, H. F. L.
Lambton, ViscountPerkins, W. R. D.Turton, R. H.
Lancaster, Col. C. G.Peto, Brig. C. H. M.Vane, W. M. F.
Langford-Holt, J. A.Peyton, J. W. W.Vaughan-Morgan, J. K.
Law, Rt. Hon. R. K.Pickthorn, K. W. M.Vosper, D. F.
Leather, E. H. C.Pilkington, Capt. R. A.Wade, D. W.
Legge-Bourke, Maj. E. A. H.Pitman, I. J.Wakefield, Edward (Derbyshire, W.)
Legh, P. R. (Petersfield)Powell, J. EnochWakefield, Sir Wavell (Marylebone)
Lennox-Boyd, Rt. Hon. A. T.Price, Henry (Lewisham, W.)Walker-Smith, D. C.
Lindsay, MartinPrior-Palmer, Brig. O. L.Ward, Hon. George (Worcester)
Linstead, H. N.Profumo, J. D.Ward, Miss I. (Tynemouth)
Llewellyn, D. T.Raikes, H. V.Waterhouse, Capt. Rt. Hon. C.
Lloyd, Rt. Hon. G. (King's Norton)Rayner, Brig. R.Watkinson, H. A.
Lloyd, Maj. Guy (Renfrew, E.)Redmayne, M.Webbe, Sir H. (London & Westminster.)
Lockwood, Lt.-Col. J. C.Remnant, Hon. P.White, Baker (Canterbury)
Low, A. R. W.Renton, D. L. M.Williams, Rt. Hon. Charles (Torquay)
Lucas, Sir Jocelyn (Portsmouth, S.)Roberts, Peter (Heeley)Williams, Gerald (Tonbridge)
Lucas, P. B. (Brentford)Robertson, Sir DavidWilliams, Sir Herbert (Croydon, E.)
Lucas-Tooth, Sir HughRobinson, Roland (Blackpool, S.)Williams, R. Dudley (Exeter)
Lyttelton, Rt. Hon. O.Robson-Brown, W.Wills, G.
McAdden, S. J.Rodgers, John (Sevenoaks)Wilson, Geoffrey (Truro)
McCallum, J. E.Roper, Sir HaroldWood, Hon. R.
McCorquodale, Rt. Hon. M. S.Ropner, Col. Sir Leonard
Macdonald, Sir Peter (I. of Wight)Russell, R. S.TELLERS FOR THE AYES:
Mackeson, Brig. H. R.Ryder, Capt. R. E. D.Mr. Buchan-Hepburn and
McKibbin, A. J.Salter, Rt. Hon. Sir ArthurMr. Butcher.
McKie, J. H. (Galloway)Sandys, Rt. Hon. D.
Acland, Sir RichardBlackburn, F.Carmichael, J.
Adams, RichardBlenkinsop, A.Castle, Mrs. B. A.
Albu, A. H.Blyton, W. R.Champion, A. J.
Allen, Scholefield (Crewe)Boardman, H.Chapman, W. D.
Anderson, Alexander (Motherwell)Bottomley, Rt. Hon. A. G.Chetwynd, G. R.
Anderson, Frank (Whitehaven)Bowden, H. W.Clunie, J.
Awbery, S. S.Bowles, F. G.Coldrick, W.
Bacon, Miss AliceBraddock, Mrs. ElizabethCollick, P. H.
Baird, J.Brockway, A. F.Corbet, Mrs. Freda
Barnes, Rt. Hon. A. J.Brook, Dryden (Halifax)Cove, W. G.
Bellenger, Rt. Hon. F. J.Broughton, Dr. A. D. D.Craddock, George (Bradford, S.)
Bence, C. R.Brown, Thomas (Ince)Crosland, C. A. R.
Benn, WedgwoodBurke, W. A.Crossman, R. H. S.
Beswick, F.Burton, Miss F. E.Cullen, Mrs. A.
Bevan, Rt. Hon. A. (Ebbw Vale)Butler, Herbert (Hackney, S.)Daines, P.
Bing, G. H. C.Callaghan, L. J.Dalton, Rt. Hon. H.
Darling, George (Hillsborough)Jones, David (Hartlepool)Roberts, Goronwy (Caernarvonshire)
Davies, A. Edward (Stoke, N.)Jones, Frederick Elwyn (West Ham, S.)Robinson, Kenneth (St. Pancras, N.)
Davies, Ernest (Enfield, E.)Jones, Jack (Rotherham)Rogers, George (Kensington, N.)
Davies, Harold (Leek)Jones, T. W. (Merioneth)Ross, William
Davies, Stephen (Merthyr)Keenan, W.Royle, C.
de Freitas, GeoffreyKenyon, C.Schofield, S. (Barnsley)
Deer, G.Key, Rt. Hon. C. W.Shackleton, E. A. A.
Delargy, H. J.King, Dr. H. M.Shawcross, Rt. Hon. Sir Hartley
Dodds, N. N.Kinley, J.Shinwell, Rt. Hon. E.
Donnelly, D. L.Lee, Frederick (Newton)Short, E. W.
Driberg, T. E. N.Lee, Miss Jennie (Cannock)Shurmer, P. L. E.
Dugdale, Rt. Hon. John (W. Bromwich)Lever, Harold (Cheetham)Silverman, Julius (Erdington)
Ede, Rt. Hon. J. C.Lever, Leslie (Ardwick)Silverman, Sydney (Nelson)
Edelman, M.Lewis, ArthurSimmons, C. J. (Brierley Hill)
Edwards, Rt. Hon. Ness (Caerphilly)Lindgren, G. S.Slater, J.
Edwards, W. J. (Stepney)Lipton, Lt.-Col. M.Smith, Ellis (Stoke, S.)
Evans, Albert (Islington, S. W.)Logan, D. G.Smith, Norman (Nottingham, S.)
Evans, Edward (Lowestoft)MacColl, J. E.Snow, J. W.
Evans, Stanley (Wednesbury)McGhee, H. G.Sorensen, R. W.
Ewart, R.McInnes, J.Soskice, Rt. Hon. Sir Frank
Fernyhough, E.McKay, John (Wallsend)Sparks, J. A.
Field, W. J.McLeavy, F.Steele, T.
Fienburgh, W.MacMillan, M. K. (Western Isles)Stewart, Michael (Fulham, E.)
Finch, H. J.McNeil, Rt. Hon. H.Stokes, Rt. Hon. R. R.
Follick, M.Mainwaring, W. H.Strachey, Rt. Hon. J.
Foot, M. M.Mallalieu, E. L. (Brigg)Strauss, Rt. Hon. George (Vauxhall)
Forman, J. C.Mallalieu, J. P. W. (Huddersfield, E.)Stross, Dr. Barnett
Fraser, Thomas (Hamilton)Mann, Mrs. JeanSummerskill, Rt. Hon. E.
Freeman, John (Watford)Manuel, A. C.Swingler, S. T.
Freeman, Peter (Newport)Mayhew, C. P.Sylvester, G. O.
Gaitskell, Rt. Hon. H. T. N.Mellish, R. J.Taylor, Bernard (Mansfield)
Gibson, C. W.Messer, F.
Glanville, JamesMikardo, IanTaylor, John (West Lothian)
Gooch, E. G.Mitchison, G. R.Thomas, David (Aberdare)
Gordon Walker, Rt. Hon. P. C.Monslow, W.Thomas, George (Cardiff)
Greenwood, Anthony (Rossendale)Moody, A. S.Thomas, Ivor Owen (Wrekin)
Greenwood, Rt. Hon. Arthur (Wakefield)Morgan, Dr. H. B. W.Thomson, George (Dundee, E.)
Grenfell, Rt. Hon. D. R.Morley, R.Thorneycroft, Harry (Clayton)
Grey, C. F.Morris, Parcy (Swansea, W.)Thurtle, Ernest
Griffiths, David (Rother Valley)Morrison, Rt. Hon. H. (Lewisham, S.)Timmons, J.
Griffiths, Rt. Hon. James (Llanelly)Mort, D. L.Tomney, F.
Griffiths, William (Exchange)Moyle, A.Turner-Samuels, M.
Hale, Leslie (Oldham, W.)Mulley, F. W.Thornton, E. (Farnworth)
Hall, Rt. Hon. Glenvil (Colne Valley)Murray, J. D.Ungoed-Thomas, Sir Lynn
Hall, John (Gateshead, W.)Nally, W.Usborne, H. C.
Hamilton, W. W.Neal, Harold (Bolsover)Viant, S. P.
Hannan, W.Noel-Baker, Rt. Hon. P. J.Wallace, H. W.
Hardy, E. A.O'Brien, T.Watkins, T. E.
Hargreaves, A.Oldfield, W. H.Webb, Rt. Hon. M. (Bradford, C.)
Harrison, J. (Nottingham, E.)Oliver, G. H.Weitzman, D.
Hastings, S.Orbach, M.Wells, Percy (Faversham)
Hayman, F. H.Oswald, T.Wells, William (Walsall)
Healey, Denis (Leeds, S.E.)Padley, W. E.West, D. G.
Henderson, Rt. Hon. A. (Rowley Regis)Paget, R. T.Wheatley, Rt. Hon. John
Herbison, Miss M.Paling, Rt. Hon. W. (Dearne Valley)White, Mrs. Eirene (E. Flint)
Hewitson, Capt. M.Paling, Will T. (Dewsbury)White, Henry (Derbyshire, N. E.)
Hobson, C. R.Palmer, A. M. F.Whiteley, Rt. Hon. W.
Holman, P.Pannell, CharlesWigg, George
Houghton, DouglasPargiter, G. A.Wilcock, Group Capt. C. A. B.
Hubbard, T. F.Parker, J.Wilkins, W. A.
Hudson, James (Ealing, N.)Paton, J.Willey, F. T.
Hughes, Cledwyn (Anglesey)Plummer, Sir LeslieWilliams, David (Neath)
Hughes, Emrys (S. Ayrshire)Popplewell, E.Williams, Rev. Llywelyn (Abertillery)
Hughes, Hector (Aberdeen, N.)Porter, G.Williams, Ronald (Wigan)
Hynd, H. (Accrington)Price, Joseph (Westhoughton)Williams, W. R. (Droylsden)
Hynd, J. B. (Attercliffe)Price, Philips (Gloucestershire, W.)Williams, W. T. (Hammersmith, S.)
Irvine, A. J. (Edge Hill)Proctor, W. T.Wilson, Rt. Hon. Harold (Huyton)
Irving, W. J. (Wood Green)Pursey, Cmdr. H.Winterbottom, Ian (Nottingham, C.)
Isaacs, Rt. Hon. G. A.Rankin, JohnWinterbottom, Richard (Brightside)
Janner, B.Reeves, J.Woodburn, Rt. Hon. A.
Jay, Rt. Hon. D. P. T.Reid, Thomas (Swindon)Wyatt, W. L.
Jeger, George (Goole)Reid, William (Camlachie)Wheeldon, W. E.
Jeger, Dr. Santo (St. Pancras, S.)Rhodes, H.Yates, V. F.
Jenkins, R. H. (Stechford)Richards, R.Younger, Rt. Hon. K.
Johnson, James (Rugby)Roberts, Rt. Hon. A.
Johnston, Douglas (Paisley)Roberts, Albert (Normanton)TELLERS FOR THE NOES:
Mr. Pearson and Mr. Allen

Question put, and agreed to.

Committed to a Standing Committee.