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Orders of the Day — Land Commission Bill

– in the House of Commons at 12:00 am on 31st January 1966.

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Order for Second Reading read.

3.53 p.m.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

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

The Bill is founded on the proposition that the value attached to land by the right to develop is a value which has been substantially created by the community. This is a proposition which has been the subject of political debate for more than 100 years. One hundred years ago five-sevenths of the Members of the House of Commons were drawn from the vast cousinhood of land. Critics then said that The Parliamentary frame is kneaded together almost out of one class: it has the strength of a giant and the compactness of a dwarf. How compact it was was revealed by the so-called Domesday Book compiled by the Local Government Board, showing that 750 persons owned one quarter and 4,500 owned one-half of the total acreage of England. In short, the governing core of the landed class which then controlled Parliament could be comfortably seated in the recently opened Albert Hall. No wonder that the landowners hated to be counted and that so far they have managed to defeat all proposals to bring the records up-to-date. This is a deficiency which my Department intends to remove.

For 100 years this class monopoly has been under attack. The reconstruction of the land system in the interests of tenant farmers and of town dwellers have been central issues in radical politics. But in no area of social life have the Tory Party been so tenacious in defence of privilege and speculative, windfall profit as in the case of land. They repealed provisions in Lloyd George's legislation which were obnoxious to land speculators, just as they repealed Lord Silkin's Act as soon as they had the opportunity.

The major issues in the politics of land have remained unchanged. What John Stuart Mill said is equally true today. He said: What prevents the working classes of the towns from obtaining more space for their dwellings? Not the impossibility of getting the land, for abundance of land in or near towns can be bought and is bought every year; but that the price of it is too high. And why is it too high? Because of the perpetual increase of its value. If this were taken by the State, there would be no motive to hold out for an extravagant price, and land could be obtained on much more favourable terms for the extension of building. This was what John Stuart Mill said, and what Winston Churchill said nearly 50 years ago in defending Lloyd George's proposals is equally true today. He said: The land monopolist renders no service to the community, he contributes nothing even to the processes from which his own enrichment is derived … the land monopolist has only to sit still and watch complacently his property multiplying in value … without either effort or contribution on his part … the unearned increment in land is reaped by the land monopolist in exact proportion not to the service but to the disservice done. These platitudes of yesterday do not cease to be true because they remain platitudes. Today the case is overwhelmingly strong because the use of land for development is absolutely controlled by the decisions of public authorities. A growing population increasingly making their homes in great cities has not only made effective control over land indispensable; it has made finally indefensible a system which has allowed landowners or land speculators wholly to appropriate the increases, frequently enormous, which result from government action, whether central or local, or from the growth of social wealth or community endeavour.

Today the need for this is imperative because Tory Governments have created a situation both intolerable and offensive. As I have said, just as they repealed the Lloyd George provisions, the Tories repealed the provisions of the 1947 Act and did nothing—in fact they refused to do anything—to replace them. The Tories paid lip service to the need for planning but they accepted planning in a bingo Britain only at the cost of the scandal of land prices. They were willing to accept the restraints of planning only if land speculators were able to manipulate the rigged market thereby created by enjoying an unchecked orgy of profits.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

Sir Derek Walker-Smith (Hertfordshire, East) rose

Mr. Wiley:

Under the Tories what was socially necessary was always sacrificed to what was profitable. It is the Government's view, and I make no apology for it, that it is wrong that planning decisions which are public decisions about land use should so often result in the realising of unearned increments by the owners of the land to which they apply and that desirable development should be frustrated by owners withholding the land in the hope of higher prices.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The Opposition have made their protest; it must end now.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The objectives of the Bill, therefore, are, first, to secure that land is available at the right time for the implementation of national, regional and local plans; second, to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.

Some of the critics of the Bill now accept these objectives but say that the Commission itself is unnecessary. In the main, their reasons are either dishonest or misconceived. I am told that I am setting up a bureaucratic machine with a vast army of tax-gatherers, surveyors and valuers. This is nonsense. On principle, I do not believe in duplication where duplication can be avoided. The valuation will be done by the valuation office of the Inland Revenue, and I have taken every practicable step to limit the demands on valuers and other professional staff. I am told that I am introducing a subtle form of creeping nationalisation. Again, this is nonsense. But I am not afraid of the charge. Already, much urban land is in public ownership. I am providing an instrument to facilitate development and to deal with the squalid scandal of land prices. In so far as public ownership is necessary to provide for better towns and cities, the Commission will further public ownership.

Some people tell me that the functions of the Land Commission could be undertaken by the local authorities. I shall deal with this later, but I say at once that most of them would have been horrified if I had proceeded in that way. If the case for a levy is well grounded, obviously the case for a national agency is irrefutable.

I am told that, even if the case for a betterment levy is made out, the Land Commission is unnecessary because capital gains taxation would have sufficed. This is not the present view of the Opposition, who now concede that there is something special about development value which justifies special treatment. But, incidentally, it is quite untrue to suggest that comparable amounts could have been collected through capital gains. Certainly, very little would have been collected in the early period. The reasons for taking a share of the development value are not merely that it provides a convenient source of revenue, that there is need to achieve fairness between one taxpayer and another, or that purchasing power should be mopped up to reduce the risks of inflation. This value more than any other is created by the community rather than by the efforts of the landowner, and it is morally outrageous that he should profit at the expense of the community. The community is, therefore, entitled to claim upon the development value, and the amount is limited only by practical considerations and not by the economic factors which govern ordinary taxation.

Photo of Mr Graham Page Mr Graham Page , Crosby

What does that mean?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

It means that the Land Commission has to pay close regard—this is another reason why one needs a Land Commission—to the supply of land for development.

For this reason, the normal tax system is not appropriate for dealing with development value, and, quite apart from that, as the hon. Gentleman has led me to explain at once, as the levy might result in land being withheld from the market, it is clearly right that the body responsible for the levy should be armed with compulsory purchase powers. All this points to a body separate and distinct from the Board of Inland Revenue as the appropriate organisation for collecting the levy.

This does not mean an increase in professional or administrative staffs. For valuers, the Land Commission will rely upon the valuation office of the Inland Revenue, and staffs for assessing and collecting the levy would in any case have been necessary. In fact, the argument for economy in qualified manpower is conclusive. If the two objectives of the White Paper are accepted, if it is conceded that, in view of the enormous demands likely to be made, a national agency is needed to help reshape our towns and cities by bringing land forward for development, and if it is accepted also that the community should take a substantial part of the development value, it would be wasteful to create two separate bodies when the work can be done much more effectively by one, by the Commission, and the more so when these two functions are in fact inseparable.

This brings me to the Bill itself. Unavoidably, in places it is complex. Its complexities are inherent in any legislation affecting land. They result largely from the need to be fair and to be consistent in dealing with a variety of situations, some of which may seldom arise but nevertheless have to be provided for. The Bill is in four parts, the constitution and finances of the Commission, the acquisition, management and disposal of land by the Commission, the betterment levy, and the usual general provisions.

Part I and the First Schedule deal with the establishment of the Commission as a Crown body subject to such directions of a general character as may be given by the Minister of Land and Natural Resources and the Secretary of State for Scotland. The Commission's activities of acquisition, management and disposal of land will be financed by a fund to which advances of up to £45 million may be made out of the Consolidated Fund. These advances are to provide working capital for the Commission's operations. The amount required will largely depend upon the turnover of land passing through the Commission's hands. Once the Commission gets into its stride, its activities should largely be self-supporting and self-financing and few advances of working capital should be needed. However, the amounts can be increased to a maximum of £75 million by Order if the House so approves. The Commission's administrative expenses come out of Votes.

Part II contains some of the major provisions of the Bill, that is, the Commission's powers of acquisition, manage- ment and disposal of land. The Commission will be able to buy by agreement any land which, in the opinion of the Commission, is suitable for development. Its powers to buy land compulsorily are, however, subject to the limitations set out in the Bill. Before a compulsory purchase order can be made, there must be a planning decision indicating that development of the land is appropriate. It is no part of our policy to set up the Commission as a body to supersede the local planning authorities. Hence, the Bill provides that the compulsory purchase powers can operate only within the framework of decisions of the planning authorities.

Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South

As I read Clause 23, the Commission will have power to buy land without planning permission and apply for planning permission concurrently with the C.P.O. This completely contradicts the Minister's statement that it can buy only where there has been a decision of the local authority.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I was coming to that. It confirms what I have been saying. [HON. MEMBERS: "Oh."] Certainly. If the Commission is to develop, it must be able to obtain planning consent like any other body. If the Commission itself undertakes development, it will have to obtain planning consent even though it is a Crown body.

The Bill confers on the Commission comprehensive powers of compulsory purchase which will enable it to acquire land on which there has been a planning decision, but, until a date appointed by Order of both Houses, the compulsory powers of the Commission will be limited to the purposes set out in Clause 6(4). For the present, therefore, the Commission's powers of compulsory purchase will be limited to the acquisition of land which ought to be acquired by the Commission in order to secure its early development or redevelopment, land which ought to be acquired by the Commission in order to secure its development or redevelopment as a whole, land required by a public authority possessing compulsory purchase powers for the purpose of its functions, and, last, land which is to be disposed of to housing associations, through local authorities or directly on concessionary terms for private housing.

These provisions, which are all contained in Clause 6, set the framework for the Commission's activities. The power to buy land compulsorily to secure its early development is an essential support for the levy. It is impossible to say with certainty what effect the levy will have on the market in land. I hope that the case for a levy is sufficiently accepted for it to have little effect on the market, especially in view of the moderate level at which we intend to introduce it. But, clearly, the Commission must be able to cope with any difficulties that there may be, and, as we said in the White Paper, if there is any risk that sufficient land to maintain the essential building programme would not otherwise reach builders, the Commission will use its powers to bring the land forward as required.

Landowners, in the hope of a change of Government and the disappearance of the levy, may decide to withhold land from the market because they cannot get the price which they want. No prudent Government could afford to run risks of this kind. Clearly, if we impose a levy we must have powers to ensure that development is not frustrated by landowners withholding their land on account of the levy. In fact, if they need to be applied, these powers will be needed mainly on behalf of the private builder who builds houses for owner-occupation.

As I have said, it is argued that local authorities could use their powers to help him and that there is no need to give these powers to the Land Commission. But local authorities have enough on their hands in obtaining land for their own building programmes, and, in any event, the 1,500 or so local authorities differ widely in their willingness and in the effectiveness of their ability to use compulsory purchase powers. No one can say that all the local authorities would have the will to use these powers as promptly and as effectively as may be necessary.

There are other difficulties. For example, with local pressures local authorities would find disposals extremely difficult. This is one of the reasons why these powers have not been sufficiently exercised since the 1947 Act. It is really no part of the function of the local authorities to act as agents for exclusively private development. Furthermore, in areas where the pressure is greatest, and, therefore, where land is scarce and further scarcity would have the greatest effect, the supply of land is a matter which has to be considered on a regional and not a local scale. Apart from this, as I have said, if land were withheld from the market on any scale because of a nationally imposed charge, only a national body such as the Commission, equipped with compulsory powers, can effectively intervene to support the levy.

The other purposes for which the Commission can use compulsory powers are sufficient to enable it to buy land for large-scale comprehensive development whether it is urban land requiring redevelopment or open land required for some major development such as a new town or town expansion, to act on behalf of local authorities, or perhaps groups of local authorities, and to provide land for concessionary disposals for private housing.

The power to buy land for development or redevelopment as a whole and the power to act on behalf of local authorities should enable the Commission to acquire large areas, often crossing local government boundaries, which will be needed increasingly for major expansion schemes. The power to buy land designated for a new town will help to speed up the present procedures and speed up the building of new towns, since at present land acquisition has to wait for the setting up of a development corporation, which may often take a year or so.

The Commission will also be able to buy land and assemble land for central area redevelopment and possibly to act as a holding agency to carry the financial burden until the redevelopment schemes of the local authorities are ready. I go further and say that without advanced acquisition, bringing the whole of the land necessary into a single ownership, satisfactory development on a substantial scale is impracticable.

Photo of Sir Albert Costain Sir Albert Costain , Folkestone and Hythe

Would the right hon. Gentleman confirm that the Bill gives the Land Commission power to buy any land or any building in the country? If not, what are the restrictions on its buying any land or building?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I explained that the Commission is subject to planning consent, and the land that it buys will be bought after full liaison and consultation with local authorities and developers.

Before I leave the scope of the Commission's compulsory powers, I again emphasise that the Commission will operate within planning and facilitate planning, and that in the case of local authorities the Commission's powers to acquire land compulsory for them is exercisable only with the agreement of the local authorities, or, failing that, the agreement of the appropriate Minister.

Having outlined the scope of the Commission's compulsory purchase powers, I will explain briefly some of the procedural aspects as set out in Clause 7. In form, the Commission's compulsory purchase powers will be like those made by those Ministers who have compulsory purchase powers for their own functions. The Commission will make a draft order. If there are no objections to it, the order will be made and will become operative. If there are objections, there will be the usual procedure of inquiry. But, as I have already said, whereas a Minister, after an inquiry, would decide for himself whether or not to make the order, the Commission will obtain the authorisation of a Minister, and in most cases this will be my right hon. Friend the Minister of Housing and Local Government or the Secretaries of State in the case of Scotland and Wales. I repeat that this is because the Commission works within the framework of planning decisions.

Clause 8 and the Second Schedule provide a power which in exceptional circumstances could enable the Commission to act quickly if the supply of land for development failed on such a scale as seriously to threaten private development. It provides for a shortened procedure in which the requirements relating to advertisement and service of notices are curtailed and objections can be considered without the necessity of a hearing. A similar power or precedent—this is the precedent for this power—was provided temporarily in the Acquisition of Land (Authorisation Procedure) Act, 1946, and, during the five years in which it was available, it was used fairly widely. I concede that it necessarily involves some curtailment of the opportunities of the landowner to elaborate his objection, and the Commission will not be able to use it without a ministerial order, which will be temporary, and, if necessary, be confined to certain parts of the country. This is very much a reserve power which would not be invoked unless the Commission were confronted by a serious situation.

Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South

Did not the earlier Measure to which the right hon. Gentleman referred contain a specific provision that the Minister's approval had to be given for this expedited procedure for the particular compulsory purchase order? As I understand it, it is open under the Bill for the Commission to receive a blanket order covering a whole series of acquisitions of a particular type or in a particular locality, which is a very different thing.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The Commission will have to obtain in the first instance the approval of the Minister. We are dispensing with the necessity of an oral hearing. If the hon. Gentleman has doubts about this we can pursue it in Standing Committee. I am asking for emergency powers to meet a particular situation. I am anxious to limit them as much as possible.

I also draw the attention of the House to the vesting procedure which will be normally used when the Commission has obtained a compulsory purchase order. This is dealt with in Clauses 9 and 10 and Schedule 3. The purpose of the vesting procedure is to give the Commission a good title to land so that it can safely dispose of it for development without the delays of the normal conveyancing procedures.

The settlement of compensation proceeds independently of vesting and the Commission will be able, in most cases, to pay out without full investigation of the owner's title. Again, there is precedent for this. The precedent for the vesting procedure is in the Town and Country Planning Act, 1962, where it is available for local authorities carrying out redevelopment schemes. Besides simplifying and accelerating land acquisition after a compulsory purchase order takes effect, it could result in considerable saving in the legal staff of the Commission.

Having dealt with the powers of acquisition, let me now come to the Commission's management and disposal functions, as set out in Clauses 12 to 21. The Bill provides the Commission with powers needed to enable it to manage land efficiently while that land is in its possession, including the power to carry out works such as the layout of estate roads, the provision of services and, with ministerial consent, the provision of houses.

In carrying out any development of this kind, the Commission, although a Crown Body, will be subject to building bye-laws or regulations and to planning control, as I have said. In disposing of land, the Commission will have the widest discretion. For instance, it can dispose either freehold or leasehold. It will he expected to obtain the best price it can unless it is disposing of concessionary Crownhold, which I will come to in a moment, or is otherwise authorised by direction of the Minister or by the Secretary of State.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

As I understand it, disposal by the Commission, except when it is disposal for Crownhold or under direction, must be at top market price. Let us take the example of the Commission wanting to dispose to a local authority land for residential use and housing and that that use does not represent the maximum market value of the land. Would not the transaction between the Commission and the local authority in that hypothesis only be artificial at top market value? If that were so, it would seem to be an important and undesirable restriction upon the Commission's power of disposal.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The Commission will, as I have said, have the widest discretion to exercise its own judgment. It will not discriminate between local authorities and private developers as far as this is concerned. We are taking steps to see that the burden of land costs for local authorities is met in another way. We are discussing it with the local authorities. What the Commission, quite properly, will do is to have regard to the prospective use of the land, and this is relevant also to Crownhold.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

I am grateful to my right hon. Friend for giving way again. This may be a point that can be cleared up in Committee, but does not my right hon. Friend agree that, as the Bill is drafted, it may have the result that the Commission will be able, when it disposes of land, to dispose at a higher price than would be brought by the prospective development value of the land?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I do not see that at all, but if my hon. and learned Friend has doubts about this we can certainly consider it in Standing Committee.

In the case of local authorities, disposal will usually be freehold, and, of course, the Commission may well dispose of freehold equally to a builder for private enterprise housing.

Now I turn to a subject only touched upon so far—Crownhold, which comes in Clauses 17 to 21. The White Paper put forward as the principal objective of the Government's land policy the return to the community of a substantial part of the development value which the community has largely created. But when the Commission is disposing of land it would be inconsistent with our objective if the Commission were not able, if it wished, to reserve the right to future development value which may accrue to the land.

The Commission will be able, therefore, to dispose of land freehold or leasehold, subject to such restrictions as will enable it to retain the element of value attaching to the prospect of development other than that for which it is disposing of the land. For example, the Commission may sell freehold a piece of land for the site of a church at a price reflecting the value of the land for a church. It will sell it subject to a covenant forbidding the development of the land for any more profitable purpose. Such a covenant is provided for in Clause 17(2). It would be a Crownhold covenant.

The provision gives the Commission discretion as to the form of such covenants. One advantage of a Crownhold disposal will be to relate the value of the land closely to the purpose for which it is to be used and this should enable land to be obtained for some desirable forms of development at a much more reasonable price than is now the case.

There is a second purpose of Crownhold—to help the prospective owner occupier of houses. Clause 18 enables the Commission to dispose of land for housing at a concessionary price below its market value. This is one of the ways in which the Government propose to help persons who wish to provide their own houses or the agencies which intend to help such people by providing houses for owner occupation.

The difficulty, of course, in a provision of this kind is to make sure that it benefits the persons for whom the benefit is intended. This is why we have made provisions—and I am sorry that these are somewhat complex—to see that the Commission can recover, and recover only, the concession that it has made. This is what Clause 18 does in providing that concessionary disposals by way of Crownhold can be made when land is to be used for houses to be occupied by the purchaser or lessee, or by persons for whom houses are to be provided by the purchaser or lessee in accordance with arrangements approved by the Commission. Under these arrangements, the Commission will, for example, be able to dispose of land on concessionary terms to housing associations whose rules will ensure that any concession in the land price is passed on to the occupants of the houses or to local authorities who are prepared to build houses for sale or lease with a similar protection for the concession.

I have dealt with Parts I and II of the Bill, which cover the activities of the Commission. Now I turn to the levy, When I became Minister, I soon concluded that, without what might be described as an "instant monopoly" of all land likely to be needed for development, it was not possible for a public agency to buy land at an artificially low price. Such a system would lead to the sort of two-price system with which we were all too familiar about 10 years ago, when it created an arbitrary and unjust distinction between the land owner who sold to the private purchaser and the land owner who sold to a public authority.

The question, therefore, was how to establish that the community should recoup some of the development value created by the needs of the community without the injustice of a two-price system and the fallibility of an artificial market, to which we would have had to resort. The device which we have followed is a levy at a uniform rate on development value realised on all land transactions, whether with a public authority or between private persons. This ensures that the levy—the amount which we take from the development value—falls not on the developer but on the man who realises the profit. When the Commission buys, it will therefore deduct from the price which it pays the amount of the levy. Therefore, landowners will realise the same amount whether they sell in a public authority or a private purchaser. I am convinced that these features of our policy are more acceptable to the public than would have been an endeavour to impose a single authority immediately purchasing all development land.

The levy is a flexible instrument and can be varied according to the supply of land and the Commission's ability to ensure land for development. We have already announced in the White Paper that the levy will be at 40 per cent. initially and that it will be increased progressively to 50 per cent. in a reasonably short time. I am sure that 40 per cent. is a reasonable rate which should not discourage the bringing forward of land to the market. I have carefully examined such figures as are available and I do not have any real evidence that the announcement has caused any discouragement.

The provisions of the levy are contained in Part III and five of the eight Schedules. The Clauses and the Schedules are unavoidably complex, but their basic ideas are quite simple. Three basic principles attach to the levy. First, as far as is practicable it will be charged on the development value and not on increases in the value of land for its current use. Secondly, the development value on which the levy has been made will not be chargeable again.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

How does the right hon. Gentleman decide in equity that if the value of land for its current use increases, no charge should be made on the owner of the land?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

We make a valuation of current use and deduct that from the market value and therefore provide for the element of development value.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

The right hon. Gentleman has not understood me. He has just said that if the value of land increases but its use remains constant no levy will be made. Does he not think that that is an inequitable feature of these proposals?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I know the Liberal Party's views about these matters—valuation and the taxation of site values—but, having looked at this problem, I also know the many difficulties. I make no pretence of going further than to isolate the development value and ensure that a substantial part of it is returned to the community.

The third principle is that the levy is to be payable by the person who realises the development value, and in this the Bill is quite different from the provisions of the 1947 legislation. Development value will normally be realised by the person who sells the interest in the land and the levy will be assessed on the price paid. Disposition of land without consideration, by inheritance or gift, will not be charged with a levy, but if there should be subsequent development, the charge would arise on the development.

The pattern of the Bill is to set out the five cases in which development value is taken to be realised for the purposes of the levy. These are the chargeable acts or events which are listed in Clause 27. Each case has a Clause which describes the nature of the chargeable act or event and the criteria to be established to enable the amount of development value to be determined and the method of calculating the amount.

In simple language, there are five cases: first, the sale of a freehold or lease; secondly, the creation of a lease; thirdly, the carrying out of development; fourthly, the receipt of compensation for the revocation or modification of a planning permission or the discontinuance or interference with development by an order under the Planning Acts; lastly, the grant of an easement, or release or modification of a restrictive right. They fall into two broad categories—that in which the event realises the appreciation of the value in the land and that in which the event depreciates the value and payment is made to compensate for depreciation. The first three cases I mentioned fall into the first and the latter two into the second category.

The formulæ for calculating the development value in each case differ, but broadly speaking they are to establish the market value and to take from it a base value so that the difference between the two values establishes the element of development value. I have used the expression "base value". This in fact can be the greater of two alternatives. The first takes the value of the land for its current use, that is, the value as it is now without any prospect of a more profitable development, and adds a further 10 per cent. which is to make the levy to some extent progressive and thus to encourage the redevelopment of built-up land where the present current use value is high and the levy might be a disincentive. The second alternative is simply to take the price which the vendor previously paid for the land he is selling for development.

There is a "dead" period. We do not take into account the period between the White Paper and the first appointed day for this purpose. We have had to do this because of the risk, or possibility, of collusive transactions with the aim of reducing the amount of chargeable development value. By providing these alternative base values, the current use value and the last market transaction value, the Bill gives effect to the second of the three principles underlying the levy which I have mentioned—that the owner is not charged on the development value for which he has already paid.

The factors for establishing the components of the calculation on which the levy is assessed are set out in Schedules 4 to 8. In essence they lay down the guide lines for the valuers who will have to find the amount of development value and the Lands Tribunal which will determine it if there is a dispute about it.

I have not referred to the sixth case. This has attracted some criticism. The sixth case is intended to deal with other acts and events giving rise to development value which will be designated in regulations made under Clause 34. The sort of matters which it is intended to cover are variations of lease and compensation for depreciation of land under various other Statutes, such as the Public Health Act, 1936. All these cases which we have in mind will be similar to those which I have mentioned, but there are sufficient differences to justify a different provision.

Photo of Mr Norman Wylie Mr Norman Wylie , Edinburgh Pentlands

In Case C where a developer is developing his own land for which planning permission has already been given, do I understand that development must commence not less than 12 months after the intimation under Clause 37(2), but that the assessment of the levy under Clause 44(6) may take as long as six years to work out? If that is the case, is that not a tremendous influence on the developer not to proceed with any development?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

This is an unfair juxtaposition. The hon. Gentleman has called in the usual provisions of statutory limitations. One has to define this in the case of development. This has attracted some attention amongst professional organisations, and there may be more discussion in Standing Committee. One has to define development for the purposes of it being identified and assessed for levy. Following this point dealing with the assessment of the levy there is ample opportunity for representations to be considered and, if necessary, for formal objections to be made to the Lands Tribunal and recourse to the courts. On the other side of the coin there is the Commissioners' discretion to postpone the payment of the levy or to accept instalments if it is appropriate.

The White Paper announced certain exemptions from the levy—for single dwelling houses built for a member of the owner's family on land acquired before the publication of the White Paper; for builders and developers of houses in respect of land with planning permission when they were owned or held under a contract to buy at the time of the White Paper; for local authorities in respect of all land except land held for commercial purposes, for functional and permanent endowment land, for charities, and for operational land of statutory undertakers. All these exempttions are dealt with in Clauses 55 to 62. The Bill goes further than the White Paper in exempting all local authority land and providing for an exemption from the levy of certain transactions of housing associations.

Further exemptions can be provided for by order. When the Commission buys, it will deduct the levy from the price it pays. Clause 64 provides for this and Clause 63 deals with the payment of levy when land is acquired by bodies other than the Commission with the power of compulsory purchase.

Again, this has attracted some attention but a Bill of this character must provide for sanctions. These are provided in Clauses 72 to 74. This is a complex Bill, and I am driven to the conclusion that any legislation about land is complex. However, praise where praise is due. This Bill is a very competently drafted piece of technically difficult legislation, and with care and attention it is intelligible. What impressed me more than anything else when I first tackled this problem of betterment was the long time during which it has been recognised that something ought to be done, that it was imperative that the problem ought to be tackled. It is a tribute to the strength of the landed class in this country, a strength it still retains and exercises, that such a solution has been delayed and sabotaged for so long.

I have deliberately sought a solution which, apart from politicians with bad consciences, will be generally accepted as fair and equitable. It has been a long struggle. I will conclude as I began by quoting Winston Churchill. It is well over 50 years since he said this to his Edwardian listeners. He was a great Liberal then: Such is the proposal about which so much chatter and outcry are raised at the present time, and upon which I will say that no more fair, considerate or salutary proposal … has ever been made in the House of Commons. In the event, his flamboyant optimism was unjustified and the Tories upset the Liberals, just as they upset what Lord Silkin did. They upset it on their maxim that the speculators' freedom is the highest social good. Our recent experience of private good at public expense, the scandal of land prices which we have endured for the past few years, has convinced most people that the result is intolerable. This time I believe that the solution we seek will be permanent.

4.45 p.m.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House, deeply concerned to secure art uninterrupted supply of land for housebuilding and thinking it right that a reasonable charge should be imposed on increased values resulting from the grant of planning permission, declines to give a second reading to a Bill which seeks to set up a Land Commission which, while wholly irrelevant to the collection of a levy, will reduce and make more expensive the supply of building land, so doing serious damage to the housing of the people. The speech of the right hon. Gentleman fell into two parts of rather uneven length. There was a long and I am sure by intention helpful disquisition on the provisions of the Bill. In his own words, it is, no doubt with care, intelligible. This was preceded by a piece of political clap-trap the like of which I have rarely heard even from that Box under the present Government. The right hon. Gentleman at that moment succeeded in doing something which he did not succeed in doing again for the rest of his speech—making one thing absolutely plain. He blew out of the window the two carefully stated objectives of the Bill in paragraph 7 of the White Paper, objectives full of impeccable Whitehall rectitude. He made it quite clear that the real purpose—and his hon. Friends behind him so understood it—of this Measure was an attack on the landed interest, an attack on what he called land monopolists.

He is supposed to be Minister of Land and Natural Resources, and for such a Minister to talk of land monopolists in an age in which 8 million freeholders own their own homes shows that he has not done his homework in his own Department. For the right hon. Gentleman to say that the big landed estates did nothing but sit back and draw their profits is, as he knows, a complete distortion of the facts. One has only to look around this city to see splendid examples of town planning and development which have been undertaken, no doubt at very long-term cost, by some of the big private estates. These represent some of the finest examples of town planning in this or any city. It was a most unhappy lapse for the right hon. Gentleman to talk in this way.

The Minister chided us and said that we had repealed the Lloyd George and Silkin Acts. He might have added that the Lloyd George Act was repealed at a time when the cost of collection and the yield was about the same. If the right hon. Gentleman desired to continue with it in those circumstances it may well be that he will find his own Measure suffers the same fate. He ought also to remember that the Silkin Act was repealed when it became clear, beyond a peradventure, that it was standing in the way of the bringing forward of land for development and that it would not have been possible for Mr. Harold Macmillan to carry out the great housing drive with which his name will always be associated, while the land system was distorted by an attempt to take 100 per cent. of development value into public hands. By not following that course or the 1947 provisions, the right hon. Gentleman is tacitly admitting that they were wrong and that we were right in repealing them.

The Minister departed from the two carefully stated objectives in the White Paper: to secure that the right land is available at the right time etc.; and to secure that a substantial part of the development value created by the community returns to the community and that the burden and the cost of land for essential purposes is reduced". It is our view—and we shall seek to show it in this debate—that so far from making land cheaper and more abundant the Bill will make it scarcer and more expensive. It is also our view that for the purpose of collecting the levy the Land Commission is wholly unnecessary, or, as we say in the reasoned Amendment, "wholly irrelevant".

I do not know whether the Minister has been pleased with the reception his Bill has had outside. It has had the worst possible reception from the professional and expert bodies—from the most knowledgeable sections of opinion. Indeed, The Times in an admirable leading article this morning, refers to it as "looking a bit tattered".

But, apart from the impressive rejection of the Bill by those who are best qualified to speak on these highly technical matters, I wonder whether the Minister realises the harm and damage which its mere publication has done. I wonder whether he realises that the National Federation of Building Trade Employers, in a statement put out on 12th January dealing with the failure generally of the Government's housing programme, gave as one of the reasons: The proposed, Land Commission has already arrested the flow of land for private house building.This added uncertainty is bound to make house builders eke out what little land they have or can get in order to stay in business. How can the right hon. Gentleman, in the face of that, say that he has no evidence that the Bill has had an adverse effect?

I have been making inquiries, and I have come across cases of estates in Buckinghamshire and north-west England which have been withdrawn from offer to developers in the light of and because of the publication of these proposals. If the right hon. Gentleman knows what is happening, he will know that vendors of land are saying that they must add the cost of the levy to their prices. He will know that builders are finding it increasingly difficult to get offers of land for development. This is not as a consequence of the enactment of the Bill or of the cumbrous procession of appointed days proposed under it, but a result of the mere announcement of it. This is simply the right hon. Gentleman's hors d'oeuvres.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The right hon. Gentleman is misleading the House. As he knows, we have a considerable number of figures available and, as I have said, there is no evidence whatsoever from these for the conclusions he has reached. If he puts down a question about this, I will give him an answer.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

If the right hon. Gentleman has no evidence, the reply to the question would not be very fruitful. Does not he take the view of the National Federation of Building Trade Employers as evidence? These people are not landowners but are concerned that the flow of land for development should continue, as we all are. If the right hon. Gentleman does not regard that as evidence, he underlines the futility of putting Parliamentary questions to him.

Let us take the two alleged objectives. First, let me deal with the levy. As the House knows, my right hon. and hon. Friends and I favour a levy on the increased value of land realised as a result of planning permission. I said so as long ago as 2nd March last year to the Conservative Central Council. I shall have a good deal to say about the scope of the levy, but the first point I want to make is that for any levy of this kind the Commission is not required. This is a tax not dissimilar basically from Capital Gains Tax or Estate Duty. Indeed, it overlaps both of them, as the Minister knows. It takes the place, in respect of development value, of the long-term Capital Gains Tax. I understand that the Chancellor of the Exchequer will be amending that in this respect in the Finance Bill.

The levy could be collected by the Inland Revenue. Does the Minister dispute that? Does he dispute that the Inland Revenue is competent to collect the levy? In reply to an interjection by my hon. Friend the Member for Crosby (Mr. Graham Page), the right hon. Gentleman said an extraordinary thing, namely, that one of the reasons why the Commission would have to collect the levy instead of the Inland Revenue was that it would have to take account of the land situation. Does that mean that this is not to be impartially administered as a tax but administered by the Commission with different decisions about the levy in accordance with changing situations from week to week, and is not to be fairly levied, as it would be by the Inland Revenue, as between one citizen and another?

The Minister has said either too much or too little on that matter, but the fact remains that there is an efficient organisation in existence for collecting the levy, and many hon. Members know how very efficient the Inland Revenue is in collecting what is owed to the Crown. The right hon. Gentleman admitted in his speech that the Commission will have to use the district valuers of the Inland Revenue. Therefore, let us get it quite clear that, whatever the reasons may be for having or not having a Land Commission, the desirability of imposing a levy has nothing whatever to do with the case. There is no doubt that the taxing authority which efficiently collects £3,000 million worth of revenue could perfectly well tackle this tax with its alleged gross yield of £80 million a year.

The levy is enormously wide in scope; I do not think that the Minister brought that out. What will be the effect on land prices? As I understand it, when the Commission purchases by compulsion, it will pay the market price and deduct the levy. But paragraph 9 in the White Paper, which is significant in more ways than one, reads: The Government recognises that it would be administratively impracticable for the Land Commission to buy all land needed for development at the start of their operations. Incidentally, that throws a certain illuminating light on the Government's future intentions. It also follows from that that individual transactions between private citizens will continue for some years. As I have said, it is clear that in those cases citizens who sell land will add to the price that they demand something to offset, in whole or in part, the levy which will fall on them. Does the Minister dispute that?

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

Mr. S. C. Silkin (Dulwich) rose

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I will gladly give way to the hon. and learned Member, who has an hereditary interest in these matters.

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

If what the right hon. Gentleman says is true—and I do not by any means accept that it is—does it not apply with exactly the same force to "a reasonable charge", which is referred to in the Opposition's Amendment?

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

No, it does not, as I shall explain when I say a few words later about our proposals.

The levy will undoubtedly be passed on in the case of private transactions. Does not the Minister see that that will affect the market price which the district valuers will have to assess when the Commission buys, because it will be not the Commission which will settle the price it pays but the entirely independent district valuers of the Inland Revenue? If the market price is forced up as a result of the levy, as it plainly will be, it will be forced up not only to the private purchaser but to the Commission buying on a district valuer's assessment. Has the right hon. Gentleman thought that out?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

Of course I have. The right hon. Gentleman does not seem to appreciate what determines prices. The landowner gets this price now. He gets the highest price he can for the land. This depends on the prospective use, the development. The levy is taken from this price. The right hon. Gentleman seems to assume that the other party to the bargain, the developer, is not concerned about this. The developer has to obtain land at a price which leaves him with a profit on his development. This is why it is important. We are taking the levy from the vendor, the seller of the land. There might be an effect upon prices if there were a scarcity of land. That is why the right hon. Gentleman is wrong in talking about the Inland Revenue. The body which deals with the levy must have the power compulsorily to acquire land.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

The right hon. Gentleman has confused two things. The body which will compulsorily acquire will not settle the price. That will he done by the district valuers, independent officials who carry out their duties without fear or favour, and I hope that the right hon. Gentleman is not suggesting the contrary. But when he suggests that this cost will not be passed on, is not he being very naïve? Is he not ignoring the whole effect of taxation? If one raises the Purchase Tax or the tax on beer or whisky, one raises the price. Indeed, the whole purpose of increasing indirect taxation is to do just that. If the right hon. Gentleman's argument that people are already getting as much as they can for the articles they sell had validity, the price would not be increased by imposing a tax. Every year, however, we spend days in Finance Bill debates arguing whether it is right, by increases in indirect taxation, to increase the cost of various commodities by altering the tax upon them. If this tax is imposed right across the board on all the land that is offered for sale, there will be exactly the same effect upon the price of land as there is when a tax is imposed upon the sale of any other commodity.

If the right hon. Gentleman is proceeding in this mood, in the belief that in respect of land, and land only, what in the case of every other commodity is so plainly true as to be a platitude will not apply, it is indeed alarming that the land should be entrusted to a right hon. Gentleman who has such curious ideas upon the effects of taxation. The only alternative to passing on the tax is that land would be withheld and not brought forward. The right hon. Gentleman says, "Very well, I will compulsorily purchase." If, even with the aid of the provisions of the Bill, he seeks compulsorily to purchase all the land needed even for the Minister of Housing's diminishing housing programme, he will find that he has taken on a great deal more than he can manage.

Then we come to the scope of the levy, and I refer to the interjection by the hon. and learned Member for Dulwich (Mr. S. C. Silkin). This goes far beyond the increased betterment value which is realised as the result of planning permission. It will fall upon any disposition of land other than a tenancy of less than seven years' duration. Since last year's Rent Act, how anybody can be sure that any tenancy he grants will not last seven years, I do not know. As the result of that Act, many tenancies will last two generations.

The levy will bite upon the granting of a wayleave by a citizen to the Postmaster-General for putting a telephone line over his land. It will bite, as the Minister has told us, upon the payment of compensation for refusal to develop. It will bite at the beginning of any work on land, even clearing the site or digging a trench to clear the way for building. Then—the Minister was obviously aware of the criticism of this—under Clause 34, Case F, it will bite on "any act or event" that the right hon. Gentleman has not thought of now but thinks up later; it will bite upon a vast number of small transactions. How will the right hon. Gentleman value each and all of these transactions and do it punctually? He brushed aside my hon. Friend's intervention when he pointed out that under the Bill the Commission will not have to make an assessment, if necessary, for six years. Does the Minister, with the shortage of valuers which we know exists and with the multiplicity of these small transactions, really believe that he will be able to give a decision and assessment on them before years have elapsed? In my view, he will need his six years and perhaps more.

The yield of £80 million sounds impressive, but it is a gross figure. Much of it, as the Minister knows, would otherwise have come back in some other tax—in long-term Capital Gains Tax, for example, which it replaces, which itself will be at a rate of 30 per cent., we understand. It would come back in Estate Duty and in the taxation of companies by way of either Profits Tax or Corporation Tax. Much of it would come back by way of Income Tax. By the time that the Minister has paid the cost of collection and has collected all these tiny sums on these vast numbers of small transactions, I wonder whether his Bill, as I suggested a moment ago, may not share the fate of that associated with a very much greater man than himself, the late Earl Lloyd George.

The levy is to fall on agriculture, industry and mining. It is to fall on activities which it is public policy to subsidise. In these respects, it is a purchase tax on modernisation. In agriculture, as the House knows, it has been public policy for years by way of improvement grants from the Ministry to persuade farmers to build new farm buildings and farm cottages for their labourers. A good deal of public money has been paid for that purpose. And yet, as the publication which the National Farmers' Union has sent to hon. Members during the last day or two makes clear, as the Bill stands the levy will fall on those very improvements which the Minister of Agriculture is seeking to subsidise. The Minister of Agriculture is not at the moment, I understand, the farmers' darling, but their somewhat guarded feeling towards the right hon. Gentleman will be further chilled when they discover that he has let the Minister of Land and Natural Resources get at their grants.

The levy will fall upon industry, particularly on the developing and expanding industries. Let me quote a wholly independent authority on this, the Confederation of British Industry, which, as the Minister knows, gives advice and cooperation to the Government in full measure. In a note on the Bill, the Confederation states: A levy at the rate forecast would increase the costs for industrial development at the very time that it is most essential that industry's costs should be kept down. Indeed, it is at this very time that the First Secretary is bringing forward proposals for grants to persuade people to do precisely the things which the Minister of Land and Natural Resources will then proceed to tax with his levy. Can it really make sense to tax activities which are regarded as so vital to the nation's economy that direct subsidies are being given for them? Surely, this is the economics of bedlam.

When we come not only to fooling about with the industry by which we live but to applying this also to agriculture and to mining, we are dealing with cases in which it is not a question, as the right hon. Gentleman said, of value being created by the community. No amount of planning permission will create a mineral if it does not exist. Minerals are created by Providence, not by the planning system. It is extraordinary to be imposing a tax, particularly at this time, on the raw materials of industry.

Let me quote the Government's recent White Paper on Investment Incentives. It states, in paragraph 6: A high level of investment in the extractive industries is also necessary. While the private sector of these industries is small in relation to the economy as a whole, they produce important raw materials for industry, which would otherwise have to be imported. That is what the First Secretary says in a White Paper laid only a few days ago. Here, however, the Minister of Land and Natural Resources is imposing a tax upon that very activity. Is there no co-ordination in the Government? Do not right hon. Gentlemen opposite ever meet each other and discuss policy?

We are told that the object of this Measure is to cheapen housing. The right hon. Gentleman is putting the levy on some of the raw materials of housing, on the extractive industries, on sand and gravel. The tax is falling directly upon them. Will that cheapen housing? Is the right hon. Gentleman, in the extraordinary economics he displayed a moment or two ago, arguing that whereas the duty on whisky puts up the price of whisky, putting a tax on sand and gravel will bring down the price of sand and gravel? The raw materials of building, if imported, already carry in many cases the 10 per cent. surcharge which the Government blundered into imposing 15 months ago. Now, the tax is to fall upon the home-produced raw materials, and this from a Government who, by their investment proposals, are taking away from the building industry the allowances which it gets and are not giving grants in exchange. Is it surprising that in these circumstances the price of a house has risen already by 7½ per cent. in a year and is still rising?

I stress the point that the levy will fall upon industry regardless of whether development is profitable. Other taxes take account in their incidence of whether industry makes profits, but this tax will fall even if an enterprise is unprofitable. It will fall, therefore, to discourage risk taking, the taking of chances and risks which is the function of industry in a free society, because it will impose an additional penalty in the event of failure by a tax which falls on proposals which are failures as well as on those which are successes.

The tax will cause great unfairness, as it stands, to individuals. Take its relation to other taxes. Take its relation to the short-term Capital Gains Tax. The right hon. Gentleman the Chancellor of the Exchequer in a Parliamentary Answer to me a few weeks ago said that this tax would fall on the same gains as short-term Capital Gains Tax, but the short-term Capital Gains Tax would be allowed as an expense to be set against this tax.

I have worked out how this will work out in a moderate case. Take the case where the development value of some property is £1,000 and within a year of its being bought or inherited a compulsory purchase order is placed on it. Short-term Capital Gains Tax, as the House knows, falls at whatever is the individual's rate of tax. I will take the case of a person who is paying the standard rate, 8s. 3d. I take that now; after April, I suppose, it will be 9s. 6d. But let us take this now. If we take it at 8s. 3d. for £1,000 that is £412 10s., leaving £587 10s. Then they apply the levy even at the lowest level of 40 per cent. and that is £235, leaving the owner, out of his £1,000, with £352 10s.—and that is on the most favourable assumption to the right hon. Gentleman that the levy is at the lowest level he contemplates, 40 per cent., and on the assumption that the individual is not liable to Surtax.

I do not know whether the right hon. Gentleman cares whether that hurts this particular individual or not, but surely he must care about the unwillingness which it will generate to dispose of land except by compulsory purchase. Anticipating an interjection by the hon. and learned Member for Dulwich I say this quite deliberately—as the 1947 Act discouraged people by excessive taxation from bringing forward land for development the Government are driving us either to shortage of land or compulsory purchase or both.

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

Without acceding to the right hon. Gentleman's principle of guilt by association, what I wanted to ask him is, if he is criticising the proposed level of the betterment levy, then surely it is right that the House should know what he suggests should be the level of a reasonable charge, so that we can compare the two? May we know that, please?

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

If the hon. and learned Gentleman had paid attention to what I am saying he would have known that at the moment I am dealing with the scope of the levy, as I made abundantly clear.

I notice that the right hon. Gentleman does not challenge my criticism of the extension of its scope.

I appreciate that the Bill as foreshadowed in the White Paper exempts the owner-occupier in the case of one who has already bought land before the 23rd September, on which to put his own house. But what about the person who buys afterwards? Why should that person be exposed to the levy when building a house for himself? In this respect the right hon. Gentleman, who is supposed to be helping housing, is less generous than the Chancellor of the Exchequer, who has exempted the owner-occupied house from Capital Gains Tax because of the social value, as the Chancellor sees it, and as we on this side of the House see it, of owner-occupation. The right hon. Gentleman puts it on the owner-occupier unless he has been lucky enough to get the land before 23rd September,1965. And, when he comes to sell it the levy will also fall on the increased capital value.

Does the right hon. Gentleman realise why a young couple make the sacrifice, the very heavy sacrifice, of taking a mortgage to buy a house—a heavier sacrifice now than ever? It is because of their desire, their deep desire, not only to have a home of their own but in order to create a capital asset which they can hand on to their children, something for which they have made a very great sacrifice.

Here, the right hon. Gentleman comes down not only on the man who buys a house for himself but he comes down on him, when he sells the house in due course, and therefore, I am quite certain, discouraging owner-occupation. Perhaps that is his intention.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I cannot keep on interrupting, but can only interrupt on major errors. The right hon. Gentleman surely knows that the owner-occupier, when he sells a house, does not sell anything with development value. This does not affect ordinary sales which the owner-occupier is going to make.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

Let the right hon. Gentleman pause for a moment. Let him look at the house, the small house with a bit of garden, in his constituency or in mine. When somebody buys that, with perhaps a bit of garden, on the edge of the town, he is buying what will be an investment, because in due course the development value does mature—of precisely those houses. The right hon. Gentleman must know that the problem of the Minister of Housing of providing housing in the great cities would be absolutely insoluble if it were not for development and redevelopment of those little gardens, or the larger gardens, and ultimately of the houses themselves. There is a continuing process of redevelopment of these owner-occupied houses, and they have development value, and if the laying of this imposition is on the hypothesis that they contain no development value, then I beg the right hon. Gentleman to look at that matter again. And I beg him to consult the Minister of Housing—although it is quite true that once when I asked the Minister of Housing if he had consulted his right hon. Friend he said that it was insulting. I rather sympathise on that with the Minister of Housing. But really, the right hon. Gentleman must study these cases. Here again is an example of a basic error on which this Measure appears in one important respect to be founded.

There is another point I want to ask the right hon. Gentleman. What is to happen in the case of joint development, say, of a town centre, by a local authority and private enterprise? If the right hon. Gentleman has followed these things—and his interjections are more and more persuading me that he has not—but if he has followed he must know that town centre development is often undertaken in partnership between the local authority and a developer, which is often the best way of doing it. The local authorities, quite rightly, I think, are exempted from the levy; the developers are not. What happens in the case of such a joint enterprise? Has the right hon. Gentleman thought of that?

What happens, when a company is reorganised, or amalgamated, which has real property, and its development value is realised? Must the levy then be paid, whenever a company is reorganised or amalgamated—which again the First Secretary of State is paying £150 million of public money to secure?

Now, the Commission. What is the need for the Commission? The right hon. Gentleman used an odd phrase. He said objections were either dishonest or misconceived. That was fairly sweeping, I should have thought, considering the width and scope of objections outside. Surely there is a presumption, which the right hon. Gentleman must accept, against an organisation costing £4 million a year, plus £3 million on valuation, and one which will demand scarce skills, the skills, above all, of valuers, whom we know to be desperately scarce. Surely there must he a presumption which it is for the right hon. Gentleman to rebut, rather than insult those who doubt the desirability of his proposals. The shortage of valuers is admitted. The right hon. Gentleman the Minister of Housing has suspended the 1968 revaluation for rating for that reason, and to provide valuers for the Commission. This is a wonderful commentary on this Government's sense of proportion, when they abandon the steps necessary to get right and equitable a tax which brings in £1,200 million a year net in order to take steps to facilitate an organisation which will bring in at most £80 million a year gross.

What is the Commission to do? It is not a planning body. I wish the right hon. Gentleman would tell the Prime Minister that, because the Prime Minister, on Saturday, said that without the Land Commission Bill intelligent town and country planning would become impossible. Really, the Prime Minister. I think, ought, as a matter of ordinary decency, to be informed before legislation comes forward. The Commission has no powers of planning whatsoever. These remain for the local authorities and the Minister of Housing and Local Government.

There is a parallel here. The right hon Gentleman is supposed to be Minister of Land and Natural Resources, but he has no power to control land use or make planning decisions, and no more will his creature the Land Commission have such powers. In both cases the planning functions are in other hands. The Land Commission has no planning powers.

It has enormously wide compulsory purchase powers and, though not a planner, it will be a monster landowner. Paragraph 9 of the White Paper makes it clear that it is the intention that it should acquire ownership in due course of all developable land in the country. After the second appointed day, it will have powers of compulsory purchase of any land in the Kingdom in respect of which there has been a planning decision, such as inclusion, I suppose, in a county or town map as an area for development, without any initiative on the part of the owner. I suppose that it will have these powers where the owner or purchaser has obtained planning permission already in order to undertake a planned development.

In the case of the great estates, it has been their strength that they have planned developments in advance over the years in an orderly way, but the Commission will be able to thwart them and take their land from them.

What is the need to equip this Ministerial creature with these immense powers? There is no limitation as to the time it may hold land, the purposes for which it may use it or the price at which it may sell. It can take a man's land and then, in the scarcity of land and increase of price which follows its own activities, resell it at a profit, although the man has already had the levy deducted from the price paid to him.

Is it suggested that the compulsory purchase powers of local authorities or new towns are inadequate, and therefore that it is necessary to give those to the Commission? If it is so suggested, will the right hon. Gentleman tell us in what respect they are inadequate and why he does not, instead, come forward with legislation to give them the powers that he thinks necessary for them? It is a bitter reflection to many local authorities with plans already made and notices to treat already served which are held up because of the freeze announced by the right hon. Gentleman the Chancellor of the Exchequer on 27th July last. This fell particularly on forward purchases of land. These competent bodies already in existence, with their skilled staffs, are held up for lack of money, but the right hon. Gentleman can apparently find £45 million rising to £75 million with which to endow the new body with its compulsory purchase powers. If the money is now available, why not give it to the local authorities? Let them get on with jobs which in many cases are held up for lack of funds. Let them get ahead with land purchases where planning blight has fallen through no fault of either the authority or the owner. But, no, the money has to be found for this precious Land Commission.

If the right hon. Gentleman thinks that any competent local authority will feel any help from having another compulsory purchase agent in the field, he had better think again.

Then the right hon. Gentleman referred in curious language to the "streamlined compulsory purchase powers" that he proposed to give to the Commission and "some curtailment of a landowner's right to elaborate his case". Has the right hon. Gentleman studied the Clause and the Schedule? Does he see that he is proposing to give to the Commission but not to any responsible local authority—not even a Minister of the Crown, and perhaps he is wise there—these powers of which he has himself admitted the only parallel are war-time or immediately post-war powers?

The Commission will be able, with the Minister's acquiescence—and from the tone of his opening remarks that will be willingly and eagerly given—compulsorily to purchase without giving the owner of the land any opportunity to state his case, without a public inquiry and without an opportunity to argue. Did the right hon. Gentleman consult the Council on Tribunals before putting that in the Bill? Does he realise how that goes right against the trend of recent years which is more and more to give the citizen the right to state his case when his interests are affected and to know what is happening? What is even worse, it seems to me, than the denial of the right to argue the case are the provisions as to notice.

I wonder if the House has had an opportunity to study the Second Schedule of the Bill where, in the second paragraph, the streamlined provisions for notice are. There are three alternative methods under the procedure for giving notice. One is to send a letter to the owner at his usual or last known place of abode. If the Post Office had not so deteriorated under the present Postmaster-General, that might of itself not have been wholly unreasonable. But there are alternatives. Sub-paragraph (b) says: where he is the owner, lessee or occupier of land which appears to the Commission to be separately occupied, the notice is addressed to 'the owner and the occupier' of the land (describing it) and is either delivered to some person on the land or, if there is no person on the land to whom it can be delivered, is affixed to some conspicuous object on the land. "Some person on the land," whoever apparently it may be: a poacher, a Labour Party canvasser hawking the Labour Party manifesto, remaindered edition—anyone who happens to be on the land. Regardless of what he does with it or where he puts it, apparently it is handed to him and that is compliance. If there is no one about, as the Minister hopes there will be, it is attached to some conspicuous object. Has the right hon. Gentleman ever been out of doors in England in winter? How long does he think the notice will endure in the English climate adhering to a tree, an abandoned motor car or even an abandoned Labour Party poster?

It is a denial of justice in an inordinate way. It is the kind of thing which in war, unwillingly but with determination when the nation is in danger, citizens are prepared to accept. It is not a thing which is done in a free country in time of peace. Indeed, it is the distinction between the totalitarian States, whether they be Communist or Fascist, that they apply in times of peace the kinds of restrictions on the citizen and his rights which in this country and the free world we apply only in time of war.

If this procedure is invoked, it is possible that someone's land may be taken from him and vested in the Commission before he has even heard that anything is happening at all. Do not let the right hon. Gentleman and hon. Members opposite kid themselves in the belief that if that happens to a few rich landowners it will not matter. It will not happen to the rich landowners, because they have agents and advisers and their properties are looked after. It will happen to the small man with half an acre of land behind his cottage who has gone away on holiday and who is without professional advice.

It is no good the right hon. Gentleman saying that the Commission must be equipped with these powers. If the compulsory purchase procedure is too slow, let him with his right hon. Friend the Minister of Housing and Local Government get on and have the procedures speeded up. To deny either the right to effective notice or the right to argue to a man before his property is taken from him is a denial of justice, and I am surprised that those societies outside who so often draw attention to injustices to the citizens are strangely silent about it. The noble Lord the Lord Chancellor used to be very vocal on these matters, but that was before he was Lord Chancellor.

What is the Commission going to do when has got the land? How does it dispose of it and at what price? I doubt whether that has been thought out, either. The right hon. Gentleman did not think that it would dispose of it below cost to the local authorities. He said that the local authorities already have subsidies proposed for them, and there is the Housing Subsidies Bill going though the House at the moment, and therefore the local authorities apparently are not going to get land any cheaper. The Commission therefore buys at market price and sells at the same price. What advantage is the local authority getting from the point of view of land prices? But then, apparently, some private builders are to get it below cost. How is the right hon. Gentleman going to select them?

The right hon. Gentleman must know that when Government property is disposed of there are most careful rules, for the obvious reason of preventing the risk of corruption, and for securing by public tender acceptance of the best price. That is the way in which Defence land has been disposed of under this Government, and indeed under all Governments.

How will the right hon. Gentleman select among builders and developers who is to have the fiscal privilege of getting land below cost price? Can the right hon. Gentleman tell us that? How will he avoid either corruption, or the suspicion of corruption, among those who have been unsuccessful, and have not been the favoured clients of the Commission?

If the land is sold at the same price, there is no gain in cheaper land for housing and if it is sold at a higher price, it seems that the Commission, having already charged the levy, has an unwarrantable profit on top of that.

The Commission will dispose of some of this land under this famous system of Crownhold. I object to the dragging of the word "Crown" into this. This is a foolish political expedient and an abortion in our law. There is no reason to drag the Crown into this. A better name perhaps would be "Willeyhold". It is a highly disadvantageous form of leasehold. As the right hon. Gentleman explained, if the Commission becomes a monopoly supplier, and this is done frequently, it will mean the end of new freeholds in this country. It will mean the end of the encouragement of young people who want a freehold house in which they are answerable neither to landlord nor to local council. The land reverts to the landlord as soon as the house has to be reconstructed. All development values go to the Commission. Compared with ordinary leaseholds it is a singularly disadvantageous form of tenure. With the ordinary leasehold, provided that there is no breach of the covenants, the land is held for a fixed term by the purchaser and his successors. Under this scheme the land is held by the most precarious tenure.

How can the right hon. Gentleman propose to introduce this abortion in our law of real property, which will be so disadvantageous to tenants and reconcile it with the fact that he intends to follow this Measure with a measure for leasehold enfranchisement? Present lease- holds, whatever their difficulties, are infinitely more advantageous to the tenant than Crownhold tenure. Is the right hon. Gentleman's view that hardship to the tenant does not matter as long as the landlord is a public authority?

I said that I would say a word about our own views. There is, of course, an immensely difficult and important problem of securing an adequate supply of land at proper prices for building. We are all concerned, as our reasoned Amendment says, to secure this, but we shall deal with the problem of high prices and scarcity in the face of powerful demand only by increasing the supply to meet it.

Hon. Members may ask how one increases the supply of land. The point is that it is not land that is scarce; it is land with planning permission which is scarce. It is scarcity of land with planning permission against a powerful demand that has forced prices up, and no amount of tinkering will deal with that unless we increase the supply. The remedy is to be found not in the right hon. Gentleman's proposals, or indeed in his Department, but in the planning system which is the responsibility of his right hon. Friend the Minister of Housing and Local Government.

I believe that there are many ways in which the planning system, whose main faults are its dilatoriness and slowness, can, and should, be speeded up. First, town and county maps must be brought up to date. There is an enormous amount to be said for setting up organisations throughout the country on the lines of the planning conference on London regional planning which is presided over so successfully by my right hon. Friend the Member for Guildford (Sir R. Nugent), by which, on a purely voluntary basis, with its own secretariat the conference decides the apportionment broadly between the counties of the development which is needed to accommodate population. There is need for quicker work by the local authorities, and for less time waiting for local authority committees to meet, and for less sub-delegation. But we want something even more radical than that, and I throw out one suggestion.

In the case of certain areas of land which are zoned for housing development, we want to lay down in the plan or map broadly the type of development to be permitted, the density to the acre, and broadly the height of buildings. Lay those down, and then provide that any developer who comes forward with proposals which comply with those requirements can get straight ahead with only the grant of byelaw permission, and with permission granted quickly.

We have to tackle the long series of delays involved in so-called appeals of the Minister. I mean no criticism of the present or any other Minister, but it is well known that not more than a minute percentage of appeals actually get to the Minister. They are settled by officials at the Ministry after months of delay. Why should not these matters be settled by a public inquiry being held by a kind of tribunal in the country deciding them and giving a quick decision. These are the matters which are settled by officials, and I would leave the Minister the right to call in any case he wants. Is it not much better to get these planning appeals settled quickly by the officials who have heard the evidence, rather than settled months afterwards by officials who have not?

I stress that the answer to the problem—and no one on this side disputes the existence of a very real problem—is not in the colossal Land Commission. It lies in a radical reform of the planning system so as to expedite it in its work so that land is not sterilised in the interstices of the planning machine, but is brought forward in adequate supply to meet the demand, and in that way and in that way only, will we succeed in getting the price of land held, and perhaps reduced.

This Measure has exactly the converse effect, for the knowledge that if a person gets planning permission he is automatically putting himself at risk of compulsory purchase by the Commission is a discouragement from getting it. The elaborate system of notices is a sort of notice game between those who want to do the extraordinary thing of building houses, and the Commission. The multiplicity of notices relating to quite small transactions and the imposition of the levy on many of them will undoubtedly discourage people from bringing forward land. The imposition of criminal penalties and the imposition of elaborate regulations must be discouraging, as must be the arbitrary powers which the Measure proposes to give to the Minister. The power to make taxable acts which are not taxable at the present time, the power to dispense from taxation, a power which was once claimed by an English sovereign and which resulted in his being sent to the gallows; the taxing of mineral undertakings, of industry and agriculture. There must be a discouragement in the provision of housing, and the bill must, as our reasoned Amendment suggests, so far from reducing the price of land, increase it, make it more scarce, and raise the price of houses.

Where the Bill is not harmful, it is unnecessary and irrelevant. It is a Bill—and this is widely known—of which Whitehall is thoroughly ashamed. It is condemned with striking unanimity by professional and expert opinion.

Why, then, was it introduced? I can offer only three alternative explanations to the House. First, that the Ministry of Land and Natural Resources was set up to produce it, and if it did not produce is it would have been wound up. I would have faced that with stoical fortitude. Secondly, that the Labour Party gave it as an election pledge, and they felt that they might seem less dishonest and it would be a good idea if they fulfilled just one of their election pledges. Thirdly, and this may well be the case, though the Minister's speech did nothing to support it, that this is a calm and clearly thought out method of securing the nationalisation of land without saying so, and in the hope, therefore, of persuading Liberals and others in the country not to oppose it because it is not really what it in fact is intended to be. Those are the three alternatives, and the House can choose.

But whatever else is plain, I think that the description of the Land Commission itself as a colossal white elephant is an exact analogy. The ancient Siamese kings knew a lot about statecraft, and even a certain amount about economics, and when they desired to ruin a subject whom they thought might be too powerful, or presumptuous, they presented him with one of these sacred beasts. The beast was so sacred that it had to he cared for by skilled labour. Money had to be spent on it. It was far too sacred to be put to work. It was beautiful, but it was a menace and a nuisance to those who had to pay for it. A mahout squatted in complacent idleness on its embroidered neck. Wherever it was sent it brought ruin. Let us send this beast back to the zoo—C.O.D.

5.40 p.m.

Photo of Mr Jack Dunnett Mr Jack Dunnett , Nottingham Central

I welcome this Bill. It is the second attempt to obtain for the community at large part at least of the betterment value arising, on the one hand, from the community's needs and, on the other hand, from the very activities of the community. The previous attempt failed because of administrative complexities. This Bill will, in practice, be administered more readily. I myself find it extremely complex—and I can under- stand only small parts of its schedules—but the principle is quite clear.

This is a Measure which will benefit the people of this country at the same time as attempting to secure part of the betterment value for the community. It is an attempt to plan the development of our land in a more orderly fashion and to make more readily available to public authorities land at reasonable prices which they are finding increasingly difficult to obtain. Finally, this Bill will—in due course, at any rate—prevent the rocketing prices of land which have been such a feature of the economy in the last few years.

Rising land prices have been noteworthy in most parts of the country, but most marked of all in the South-East. Between 1959 and 1964, the price of land formerly comprising the London County Council area, rose by 275 per cent. In that part of the Greater London Council area which was not formerly part of the London County Council area the price rose by about 330 per cent. That is a period of about six years.

We have heard of many outrageous cases of increasing prices, but perhaps I may limit myself to what is probably the worst case of all. In 1962–63, a private dealer—he did not even intend to be a developer—purchased 12 acres of land in Enfield. It was then being used as allotments, and he purchased it for £7,500. In a little over a year he sold that same piece of land to the local authority for £240,000. On the basis of the planning permission obtained by the council, this represented a cost of £350 per room ultimately to be developed.

That is not the end of the story. I read in the newspapers this morning that following an appeal to the Minister which has resulted in the Minister giving a higher density, this same dealer is attempting to lift the price from £240,000 to £400,000. This represents, over a period of about three years, a 55-fold increase. We really must have some legislation, if not to curb cases like this, at least to exact benefit for the community from them, because the dealer has done nothing except shuffle bits of land about.

Unfortunately, other parts of the country are following this trend of rising prices; not at present to the same extent, though it will follow unless steps are taken to prevent it. Here I can quote a case a little nearer home. It occurred in an area called Sherwood, just outside my constituency, a few months ago. A plot of land measuring 11,000 square feet—which I calculate to be about a quarter of an acre—with planning permission for one house was sold for £2,500. That price represented almost £10,000 per acre—

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

I am interested in the hon. Gentleman's figures, but does he realise that this Bill has nothing at all to do with what he complains of? The price of land compulsorily acquired under the Bill is more likely to be higher than lower than it would have been before, and in any case is settled by the district valuer. The Bill does nothing in any way to reduce the price of the land but rather increases it.

Photo of Mr Jack Dunnett Mr Jack Dunnett , Nottingham Central

Perhaps the hon. and learned Gentleman will listen until I have finished on this subject of the scandal of land prices, which I am sure we all hope will be ended by this Bill. Between 1958 and 1964, in the country as a whole the average cost of a plot of land rose from £407 to £1,205—a threefold increase. The bulk of these increased prices goes to owners or dealers. The developer who does something with the land—produces something—earns much less, through the sheer force of competition to buy than does the man who merely sells it as and when he pleases.

That position is all the worse when the land is owned by what I call the passive owner—the man who does nothing with the land but waits for someone to seek to purchase it from him. If I have a criticism of this Measure—apart from the fact that I cannot understand enough of it—it is that I think that the passive owner will do much too well out of it. He will hardly be paying any more in levy than the actual developer will be paying out of his profits for producing something that people can use. Perhaps my right hon. Friend will consider this aspect.

I turn now to the question of acquisition of land by local authorities. It is very true that local authorities already have very extensive powers of compulsory acquisition, but the necessary pro- cesses are very tedious and long-winded. They also involve matters of priority in so far as the local authority, where it knows that acquisition will take a long time, has to decide which is the more important. Finance is also involved. In attempting to build up parcels of land for redevelopment a local authority probably has to buy well in advance of the development and has to pay interest on the money laid out. Therefore, if land is kept for five years before redevelopment takes place, that will involve, at current rates of interest, an increase in the cost of the land of one-third and an ensuing rise in the rent that has to be charged or an increase in cost for the service.

Once again, I will quote a case from my own constituency where much land has been lying empty and awaiting development since 1960. The reason why it has not been developed is that the council has not been able to secure all the land needed. Therefore, for six years already—and probably for a year or two more—the council has been paying interest on housing land. This will be reflected in the rents that will have to be charged or in the subsidies that will have to be made to housing revenue account. The Land Commission could buy this large tract well in advance and, on acquisition, make it available to the local authorities. This will prove of the greatest benefit to those who are to be housed there but who cannot afford to pay rents that are unduly inflated by the interest element—

Photo of Mr Graham Page Mr Graham Page , Crosby

Surely, that merely means that the taxpayer will be paying the interest in place of the ratepayer. That may be of some benefit to the ratepayer, but someone must pay for the interest on the money whereby the Land Commission holds the land.

Photo of Mr Jack Dunnett Mr Jack Dunnett , Nottingham Central

But the areas in which the land position tends to be worst are concentrated, and it seems to me a fairer proposition that the community at large should meet that position rather than the small parts so often affected. In central Nottingham, land to replace 15,000 houses should be acquired. On the average for the whole country, based on the 3 million figure, Nottingham should have only 4,350 such houses, but in an attempt to buy this land in advance an undue proportion of the cost would fall on Nottingham Corporation. The Land Commission would mitigate that position.

I hope that some regard will be had by the Land Commission to the requirements of local authorities when purchasing or acquiring land on which those authorities have their eye. After the second appointed day, even if a local authority desires to acquire land, the Land Commission will have priority. Obviously there will be consultation—I think my right hon. Friend made a statement to that effect—but I wonder if he would care to put an actual safeguard into the Bill that there will be specific consultation in a case where a local authority may wish to purchase land?

Clause 6 gives very wide powers of acquisition, but it is not specified that a local authority as a planning authority should be consulted. In practice I have no doubt there will be the fullest consultation, but I should be grateful if my right hon. Friend would consider writing this into the Bill.

I understand that there is a promise, although it is not written into the Bill, that local authorities will derive the benefit of the bulk of the £80 million which, it is ultimately expected, will come from the levy. This would not only enable local authorities, hard-pressed as they are for avenues, to provide services, but would also help the extremely hard-pressed ratepayer.

The Opposition Amendment is based on the belief that this Measure will cause a greater shortage of land and increase the price of that land. I think it true to say that those two factors are interwoven; the effect of the supply and demand means that there would be an increase in any case. Land has been short in supply for many years.

In 1963 a national newspaper carried out a survey applying to planning officers for information and found that land no less than sufficient to build 1 million homes was being withheld by owners. It was withheld for an obvious commercial reason—if they waited one, two or three years the price would go up. There was no taxation then on this accretion of value. Clearly, then, if one had land for 100 houses in one place and released land for only 25 or 50, it was more than likely that the value of the land would rise if one waited for a year or two.

When the Land Commission is in operation it will be able to take an over- all view and release land as and when necessary for public and private authorities. That would deal with the possibility of shortages. In the short run there may be reluctance on the part of present owners to realise their land, but once they find that the levy will rise above the level of the Capital Gains Tax or Corporation Tax, commercially they will feel more inclined to release that land. There is a possible political factor. If they believe, as I do, that this Government will last for many years and that accordingly this land policy will continue, they will not hold on to land in the hope of realising increased prices as they would if they thought the policy were to be altered.

An indirect tax will normally increase the price of most commodities, but land must be distinguished from other commodities. If the price of land were to go up sharply it would not bring in fresh supplies of land, but if the price of other commodities increases it has the effect of bringing in more suppliers. Because of competition only increased costs of production or a tax upon those goods would drive up their price, but this does not apply in the case of land. I do not believe that if landowners at present owning land ripe for development were offered a tax rebate if they disposed of their land now it would have the effect of reducing the price of that land. The landowner, following normal commercial practice for which in that context I cannot blame him, would exact the price for this commodity for which there is always a pressing demand. I do not believe this Measure, therefore, will drive up the price.

In the long run, with an increasing supply of land being made available by the Land Commission, not only will there be enough for all normal purposes, but the price, even if it does not fall, will be stabilised. For that reason the people of the country will welcome the implementation of this Measure and support the efforts of this Government to pass it.

5.55 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I start by saying with what great pleasure I, like I am sure other hon. Members, listened to the brilliant speech from the Opposition Front Bench by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd Carpenter). It was indeed a joy to hear a speech which combined such penetration in the analysis of so complex a subject with such brilliant and witty phraseology.

I feel that I can pay him no greater compliment than to say that the pleasure with which I listened to his speech compensated, as I had thought nothing would, for the pain and distress with which I listened to the speech of the Minister. His speech, as my right hon. Friend said, was divided into two parts. Its polemical part was feeble and fustian, and that part in which he sought to give some description of the effect and purpose of this complex Measure betrayed, I thought, the unhappy fact that he clearly is totally inadequate in natural resources—if I may use that phrase—to deal with this sort of matter. I shall not say more about the right hon. Gentleman or he might think, as is far from being the fact, that I am tempted to reciprocate for his discourtesy in declining to give way to me in the early stages of his speech.

I am glad to have the opportunity to say a word on this Bill because I have taken part in a great many debates on a great many Measures dealing with these subjects over the years in this House and have been closely interested in town and country planning and kindred subjects for what is now a long time. Like the hon. and learned Gentleman the Member for Dulwich (Mr. S. C. Silkin) I have some hereditary connection with these matters, although in a different way. My father both in local government service and in Whitehall was a practical pioneer in town planning. When he came into this House his was the unusual achievement of making a speech on the Town and Country Planning Act, 1932, for an hour and a quarter. For avoidance of doubt and your reassurance Mr. Deputy Speaker, I add that I intend to confine my remarks to a lesser limit of time this afternoon.

This Bill deals with two distinct and separate subjects. There is nothing wrong with that in principle. It happens that a number of Acts of Parliament—the Caravan Sites and Control of Development Act, 1960, for example—deal in a single Act with two quite distinct subjects, albeit in the general ambit of planning law.

Also in my early days at the Bar I seem to remember an Act called the Married Women and Joint Tortfeasors Act, which dealt with two, I hope, quite distinct subjects in the same statute. The difference between that sort of statute and this is that they proclaimed their diversity and duality, whereas this Bill does not. The Bill and the White Paper carry the implication that there is a necessary correlation and interdependence between the two matters dealt with in the Bill, that is to say the establishment of a Land Commission and the institution of a betterment levy. I believe that that correlation depends upon assumption and implication rather than upon any causal proof. I think that a betterment levy could clearly have been instituted without a land commission. Therefore, it becomes necessary to examine these two subjects separately.

Having done so, I come to four main conclusions, which are these. First, a betterment levy is of itself a proper thing in any sophisticated society where planning control is in operation and where public improvements contribute to land value. Secondly, so long as the prescribed rate of levy is relatively modest—that is to say, certainly not exceeding 50 per cent—it has a reasonable chance of avoiding the pitfalls which have beset every effort in this direction in the past. Thirdly, it would, however, be possible to assess and recover betterment without the institution of a land commission. Fourthly, the functions of the Land Corn-mission in regard to the acquisition and management of land are either a duplication of the work of local planning authorities or an unnecessary and undesirable addition thereto and complication thereof. It follows that the Land Commission is likely to be at best a fifth wheel on the town planning coach and at worst, and more probably, a very considerable spanner in the town planning works.

The White Paper refers to the history of betterment and the efforts to recover it. That has really been marked by two characteristics—first, a wide acceptance of the principle of the recovery of betterment and, secondly, a failure to date to make a system of recovery work satisfactorily. I agree with the basic principle that community-created values should accrue to the community. I have always believed in that. I said so in the last Parliament.

Photo of Mr Emrys Hughes Mr Emrys Hughes , South Ayrshire

The right hon. and learned Gentleman will be expelled.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

No. It is Conservative doctrine. That is why I wanted to interrupt the Minister in his highly selective account. I will tell right hon. and hon. Members opposite why. They must look at Section 21 of the Town and Country Planning Act, 1932, which provided for the recovery of betterment; but that Act, as the right hon. Gentleman would say, was repealed by the Labour Government. So it is good Conservative doctrine and is not as the right hon. Gentleman said.

Photo of Mr Julius Silverman Mr Julius Silverman , Birmingham Aston

If that is Conservative doctrine, why did the Conservatives repeal the Town and Country Planning Act, 1947, effectively by the 1959 Act?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

The fact that some recovery of betterment is a proper thing does not mean that any measure, however foolish and frustrating, should be perpetuated for all time in the face of every evidence that it is stultifying development and distorting the market. Of course it was necessary to repeal the 100 per cent. development charges. It was the charges that the Labour Government left behind which made it difficult within the lifetime of the last Government to impose a reasonable system of betterment.

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

I entirely accept the right hon. and learned Gentleman's complete good faith in the point he is making, the fact that he at any rate has always taken the view that a betterment levy up to about 50 per cent. is a reasonable thing. In those circumstances, I wonder if he would be good enough to answer the question which his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) did not answer when I put it to him; that is to say, does he agree that the imposition of such a levy must necessarily involve increased land prices and, if so, does it make any difference whether it is called "a reasonable charge", as in the Opposition Amendment, or whether it is called a betterment levy, as the right hon. and learned Gentleman has called it?

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

There are two elements in the creation of development value. One is the work of the community, and the other is the work of the developer. Ideally one ought to be able to apportion those two and make a charge which is reasonable according to the individual circumstances of each case. In practice, it is very difficult; and it is easier to adopt a method of rough justice by applying some per cent., but the difficulty is to achieve the right percentage. It is easy to see what is the wrong per cent. What is the wrong per cent. was the 100 per cent. in the development charges. It was quite obvious what the effect of that was, because either owners refused to sell at all or buyers paid for the development value twice over—once in the purchase price and once in the development charge.

How far the charge could be passed on to the purchaser will depend on the amount of land avaliable, which in turn depends on our getting our planning machinery and administration right, which I want to come to in a moment. I would say that the optimum is as free a functioning as possible of the land market—not a free market in land, because that there is not and cannot be because of the incidence of planning control; but a reasonably free functioning, so that the flow of land on to the market for proper development is kept in being—together with a reasonable recovery to the community of the values which the community has created.

So far I think that we have not been able to achieve this optimum of combining these two things. I think that it can be achieved, provided that two conditions are met—first, that the rate of levy or charge is not so high that it is a deterrent to the flow of land on to the market, and, secondly, that we concentrate our available resources of manpower and expertise into the improvement of our existing machinery; not divert it, as the Bill proposes to do, into the creation of a land commission, but put it where it is so badly needed—into the present town planning machinery and administration that we have.

I want to make one parenthetic comment here before I pass to the question of how far, if at all, the Land Commission is necessary for these purposes on what one might call the other side of the matter. The recovery of betterment is concerned with the addition of value to land by the community. Let no hon. Member think that every action of the community automatically adds to the value of land, because a good many actions of the community detract in fact from the value of land. The result is what is beginning popularly to be known as "worsenment" but which in the language of the law is called "injurious affection".

At present, the law gives compensation for this sort of injurious affection only in two cases. One is for injurious affection by way of severance, where part of a larger parcel of land is compulsorily acquired, thus diminishing the value of what is left. The other is where there is injurious affection arising out of the execution of works on land acquired, thus diminishing the value of the neighbouring land. What the law does not at present do is to give any compensation for injurious affection arising out of a continuing injury to amenity and thereby a diminution of value, such as by the operation of an airport or a motorway, or the like.

The rights that exist at present for injurious affection stem from Sections 63 and 68 of the Land Clauses Act, 1845, an Act which is notorious for the imprecision of its draftsmanship and which was enacted long before the age of the aeroplane and the motor car. Therefore, the House may think that the law as to compensation for injurious affection should be reviewed in the interests of the citizen and that this is the obvious time to review it, while this radical change is taking place in regard to betterment.

Indeed, at present a public inquiry is going on into the possibility of a third London airport at Stansted, just outside my own constituency. If it did result in the establishment of an airport there, I certainly think that I might wish to come back to this subject in the interests of my constituents who might be injuriously affected thereby.

I pass for the moment to the question whether a Land Commission is necessary for the purposes of the levy. I think clearly not, and it is certainly not so demonstrated in the Bill or in the White Paper. The basic requisite in respect of the levy is in its assessment, and that is a method of skilled valuation according to the criteria prescribed by law. In the Bill the function is given to the Commission but it is only one of three main functions and it is quite obviously independent of the others.

All the three functions of the Commission are separate, and exist in different spheres and call for different expertise. The assessment of the levy under Clauses 44 and 45 is a matter of valuation. The management of land under Clause 12 is an executive or business function, and the acquisition of land under Clause 6 and following is a town and country planning function. The assessment of the levy is a task for valuers—one would think prima facie a task for the Inland Revenue and the Inland Revenue alone.

It was a Labour Government who introduced the principle of the centralisation of valuation in the Local Government Act, 1948, and this is a clear deviation from that principle. It is a bad deviation in my view—bad on administrative grounds and on psychological grounds. Contrary to what the right hon. Gentleman said, I should have thought it was obvious that it is highly desirable that the assessment of levy should have nothing to do with a body with powers of compulsory acquisition of land. I do not accept the argument that it is necessary in order that there should be no holding back of land from development. If there is any marked holding back of land, the reason presumably would be that the levy is too high. But as the levy is to be enforced at a flexible rate we clearly do not need a Land Commission to deal with that.

There is, in fact, no evidence that with things as they are, land is held back from development. Shortages of land arise in certain areas but they arise because the pressure of demand is greater than can be absorbed by the land allocated in the development plans. Where that is so, one of two considerations apply. Either not enough land is allocated in the development plan—and that is a reason for revision and improvement of the town and country planning machinery—or policy considerations suggest that the area in question is one where further development should be discouraged. The Land Commission can help in neither case. It cannot help in the first case because it is a town planning function and this is not a town planning body. It cannot help in the second case because if policy suggests that that is a part of the country where there should not be more development, then the powers of acquisition by the Land Commission to provide for development would run contrary to national policy.

The right hon. Gentleman has told us very little about the Commission or its staffing, and the Bill tells us very little. We are told that there are to be nine members. We are told the grounds on which they can be expelled from their activities. We are told nothing about their qualifications or whether, indeed, they need have any qualifications.

If the Bill is uncommunicative about the members of the Commission it is positively reticent about the staff. Paragraph 5 of the First Schedule and the standard form relating to emoluments is the only information we get. There is no clue as to the components or the balance of the staff and no indication of from whence they are to come. If they are valuers they can only be got at the expense of the Inland Revenue. If they are admnistrative staff, town planners, lawyers, reference clerks or the like they can only be got at the expense of the local authorities. I think all that would present sufficient difficulties and inconvenience even if it was demonstrably necessary—which it clearly is not—that the Land Commission is required for the other functions in the Bill.

I think the other two purposes can be considered together. If the Land Commission is not really required for the acquisition of land, it follows that there will be no need for it to manage or dispose of land. I suggested that the Land Commission's powers are either a duplication of existing local authority powers or an unnecessary and undesirable complication thereof. If one compares the powers of compulsory acquisition given by Clause 6 with the existing powers held by local authorities and others, that view is clearly confirmed.

The House will have seen that there are two main categories of powers of compulsory acquisition—that which follows the second appointed day in Clause 6(3) and that which precedes it in sub- section (4), together with a third and ancillary power under subsection (2) of that Clause. These powers are clearly and obviously repetitive and duplicatory of powers already on the Statute Book—not for operation by the Land Commission but for local planning authorities and other agencies. Clause 6 (3,a,b and c) deal with compulsory acquisition for planning purposes. They give in effect to the Land Commission, which is not a planning authority and is not democratically elected, powers which are already and quite properly available to local authorities which are planning authorities and are democratically elected.

Those powers are there for everybody to see in Section 68 of the Town and Country Planning Act 1962. The words of subsection (1,b) are: Where … it is necessary that the land should be acquired under this section for the purpose of securing its use in the manner proposed by the plan … One cannot have wider words than those. It is, of course, true that the provisions of subsection (3) of Clause 6 would enable the Land Commission to exercise those powers without the prerequisite of designation as is required in Section 68 of the 1962 Act; but as concurrent designation is both permissible and is frequently exercised under the existing procedures the advantages appear to he purely theoretical.

In the same way, the rest of that provision merely duplicates powers already existing under new town legislation and in Part III of the Housing Act. The powers of subsection (4) are again a duplication of the powers in Section 68 of the 1962 Act, but substituting the opinion of the Land Commission for the opinion of the local planning authorities.

There is nothing new either in the powers of making land available for development by third parties. This has long been an important element especially in schemes of urban renewal and central redevelopment. The powers exist in Section 78 of the 1962 Act but, in fact, are as old as Section 19 of the Town and Country Planning Act 1944. In fact, the co-operation between private enterprise and local authorities in the sale of land to third parties for development was promoted by the late Government by means of bulletins and circulars, especially in relation to town centres. These powers have been used in relation to town centres in hundreds of towns in the last four or five years, and all that salutary and beneficent process is likely to be halted or retarded by the slow-up in the administrative machinery consequent on the diversion of effort into this unnecessary Land Commission.

Similarly there is nothing new in the powers of buying land for housing. There is nothing new in the powers of selling land for others to build houses on, or of selling the houses themselves. Old and established powers exist for these purposes in Part V of the 1957 Housing Act, in Section 104 for the disposal of houses and in Section 105 for the sale of land required for houses. There is virtually nothing new in the powers conferred by this Measure, save only for the dubious and suspect expedient of concessionary disposal with no clearly prescribed or clearly unobjectionable principles.

One comes to the conclusion therefore that the Land Commission can do nothing useful which cannot be done under existing powers. If existing powers are insufficiently utilised it is for one of two reasons—the shortage of money or the shortage of administrative staff. The Commission can do nothing to help in either of those two regards, and by being a competitor for administrative staffs is likely to aggravate that difficulty. There seem, then, to be only two possible reasons for going through this elaborate charade and tricking out these old powers in a new guise. One is the more sinister reason that lurking behind the plain purposes of the Commission is the desire to make it the instrument of land nationalisation. If that is it, it has been clumsily done. The Government could have drafted a good deal better if they had had that in view.

I do not say necessarily that it is a purpose which they have not had in view. It may not be the immediate purpose. But quite clearly this may be an ulterior objective, and it may be a standing temptation to the party opposite to seek land nationalisation because they will think that here there is an instrument to their hand. When they find, as indisputably they will, that the Commission is doing nothing useful they may think that Satan finds work for idle hands to do and that work will be land nationalisation. But I am a charitable person and I take the view that this more sinister purpose is perhaps not the main purpose, and that this part of the Bill is only an elaborate piece of presentation adding little of substance but something of showmanship in their efforts to make the quickness of the hand deceive the eye.

Perhaps that is another explanation why we are presented with proposals which are irrelevant to problems which exist today. These problems do not arise from lack of legal powers. They derive from the financial, administrative and logistical realities of the situation, and constructive statesmanship would concentrate upon improving those things within the framework of the existing powers of local planning authorities and Ministers. But of course to follow that course would have one insuperable disadvantage for the Government. It would challenge judgment by actual results, and the results perhaps would not be immediate and would not be spectacular; and to a Government who show by their every action that they prefer the techniques of the shop window to those of the power house such an approach would have little appeal though it would clearly be in the national interest.

The Government therefore have chosen the Land Commission, an unnecessary duplication of powers and an unprofitable distraction of effort. It is a further and unwelcome addition to the accumulating and irrefutable evidence that this is a Government who invariably deal in gesture and gimmick rather than in action and achievement.

6.24 p.m.

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

I welcome the Bill and I congratulate my right hon. Friend the Minister, his staff and the Parliamentary draftsmen on producing from a complex and difficult subject a Measure which for the most part is clear and ambiguous. I believe that when the Bill becomes law it will become part of the permanent pattern of our planning system. I believe, moreover, that even if the 1947 Act of my noble Friend Lord Silkin had not been tampered with, as it was in the years that followed, it would still be found by now necessary to move a step forward from it, and that step would have been in the direction taken by this Bill.

It is always a pleasure to follow the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), whether in this or any other Assembly, and it was a particular pleasure for me to do so this evening, because his speech was a refreshing change from the unconvincing trivialities advanced by his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). It is fair to say that by the time that the right hon. and learned Gentleman's speech ended I knew for the first time in this debate what was the real case against the Bill.

It is a matter of interest, as showing the attitude of the Official Opposition, that one finds such a considerable difference between the attitude of the right hon. and learned Gentleman and that of his right hon. Friend. Indeed, it is clear that on this occasion, at any rate, the Official Opposition are not attacking and cannot attack this Measure, on the grounds now familiar to the House since October, 1964, that we are not carrying out some election promise, because this is a clear fulfilment of our election promise. Nor are the Opposition able to attack it on the ground that action should not be taken at all, because they know very well that action in this field is long overdue.

I thought that they were going to attack the Measure purely on the basis of the Land Commission, as indeed the right hon. and learned Gentleman did, and that the principle of the levy would be accepted by everybody opposite, but when I listened to his right hon. Friend the Member for Kingston-upon-Thames I had my doubts about that. Although in the Amendment the principle of some levy is accepted, the right hon. Gentleman spent a major part of his speech in attacking both the consequences of the levy and the levy itself.

One is entitled to ask how long the party opposite have supported the general principle of a betterment levy. Certainly they did not support it at the time of the 1947 Act, because within six years the development charge was abolished. I concede entirely that the charge was fixed at 100 per cent. The right hon. and learned Member for Hertfordshire, East has criticised it on that basis, but in order to alter a charge which one thinks is at too high a level it is possible to reduce it —one does not have to abolish it. In fact, for purely political reasons, the charge was abolished altogether, and that led inevitably to the 1954 Act and finally to the free market system of 1959.

Photo of Mr Graham Page Mr Graham Page , Crosby

Surely it was quite impossible to reduce the 100 per cent. levy within the structure of the 1947 Act. That was the nationalisation of the whole of development value. The Act was based on that structure. One could not take half or some fraction.

Photo of Hon. Sam Silkin Hon. Sam Silkin , Camberwell Dulwich

With respect, that is untrue. It could have been done within the framework of the Act or if necessary by amendment of the Act. It was quite unnecessary to destroy the whole of the 1947 Act system in order to reduce the percentage of the development charge. When we came to the General Election of 1964 we found that the party opposite were still upholding the virtues of a free-market system, though by then, it is true, one or two were beginning to have their doubts about it. Now, at last, after the General Election had shown what the public think of the matter, we find a complete reversal of that attitude and an acceptance of the whole principle of a betterment levy, as the right hon. and learned Member for Hertfordshire, East has accepted it. Now, at least, my noble Friend the author of the 1947 Act is vindicated to that extent, but the Opposition do it only after they have witnessed the disastrous effect on land prices of their free-market system and indeed on planning generally. That is the Official Opposition. What is the view of the right hon. Member for Wolverhampton, South-West (Mr. Powell) we do not know, and perhaps we shall never hear because fiery individualism on the benches opposite is not at the moment actively encouraged. Indeed, I think that these days it is a little dangerous to come into the garden and wash one's dirty linen in public, certainly in front of the eyes of spectators.

But what of the other Opposition, the official unofficial Opposition, if I may so describe them? Is it really true that before listening to the debate on the Bill they decided to vote against it, and is it really true that they will persist in this, come Hull and low water? It is a sad spectacle, if it really be so, that a radical party should act in that way. One has listened to many speeches from hon. Members on that bench which struck a responsive chord in radical breasts on this side of the House, and it is most unfortunate when one finds them out-Torying the Tories. At least, one can say with certainty that their supporters in the country have shown that they know where true radicalism lies, and they have shown it because they have supported the only true radical alliance.

Two great evils flowed from the dissolution of the 1947 Act system. First, that dissolution created a tremendous incentive to high scarcity land values. This was something bad in itself, but much more important—here I agree entirely with the right hon. and learned Gentleman—it was bad because the community took no share in the values which it itself created. Again, I agree with the right hon. and learned Gentleman that a development charge, betterment levy or reasonable charge, whatever one calls it, could cure that particular evil.

I listened with great care to the right hon. Member for Kingston-upon-Thames to find out what, if anything, was the difference between the reasonable charge referred to in the Amendment and the betterment levy proposed under the Bill. I asked him two questions, one on the level of the reasonable charge, which he did not answer, and the other on what the comparable effect of it would be, which he said he would answer later but did not answer either. The fact is that there would not be a ha'p'orth of difference in the effect which either would have compared with the other. If one of them would increase the price of land, so would the other, though, for my part, I do not believe that either would because, like my hon. Friend the Member for Nottingham, Central (Mr. Dunnett), I do not believe that land owners are persuaded by some great moral persuasion not to ask the highest price for land that they can possibly get, unless a tax compels them to do so. I believe that they will always get the highest price they possibly can.

Although that particular evil could be cured by a betterment levy, the second evil, which, if anything, is much more difficult, cannot be, and this is why I take the view that we would have had to move forward from the 1947 Act system in any event. I refer to the evil of the distortion of the planning system which results from the free market in land. There are tremendous problems of planning today, on a scale which did not exist at the time of the 1947 Act, enormous problems of urban redevelopment which are increased by the spread of the motor car in the motor car age. Today, the problem is, very largely, to wipe out the haphazard piecemeal development of the pre-planning era and to substitute for it the homes, open spaces and roads which give ordinary people a decent standard of life. This inevitably means wholesale change and wholesale destruction because one cannot put homes, roads and open spaces down without first removing the commercial and industrial buildings which are there at the moment.

But this, of course, does not require that the commerce and industry shall disappear. In an expanding economy, it means that those uses shall go somewhere else, from London to the North-East or Wales or to other parts of the country. This means that the problem today is not a purely local problem as it was envisaged as being at the time of the 1947 Act. It is much more a national problem and has to be looked at on a national scale.

Under the free market system, when a planning authority buys a commercial building and commercial land, it pays a commercial price for the property because that is the existing use of the building and the land. Again, when that authority or, perhaps, some other authority 100 miles or more away buys land to relocate the industry or commerce which is being displaced, the free market system requires that it must pay a commercial price for that land, whatever it may be, whether it be agricultural or not, because commerce or industry is going on to that land. Yet, when the authority removes the commerce or the industry and puts in its place the homes, roads or open spaces to which I have referred, for this it receives little or no return.

This is what distorts the planning system. Either way, the community has to pay, and it is only the land owner who gains. This is the reason for the tired compromises which we have seen in, for example, Piccadilly, and—dare I say—in the proposal, now abortive, to deal with Knightsbridge Green. All these compromises have meant that the local planning authority, in order to solve its financial and economic problem, has been compelled to promise and to allow redevelopment planning on a scale which it would not have allowed if it had regard only to the planning needs of the area. This is why local planning authorities have had to resort to half-hearted schemes and to mixed uses, trying, even at the expense of what they regard as sound planning, to make it worth the developer's while, in a kind of mixed partnership scheme such as that to which the right hon. and learned Member for Hertfordshire, East referred, to carry the unprofitable by bribing him with the more profitable. I do not use the word "bribe" in any unfortunate sense, but this is what it amounts to—offering the developer something more than good planning would dictate that he should have so that he will carry the unprofitable at the same time.

This is why densities of office development, for example, far above what would ordinarily be permitted are permitted in mixed schemes. This is why, in order to solve the inherent problems, hybrid uses with mixed residential and commercial elements which no one would dream of if planning considerations alone were in mind, have had to be accepted and promoted.

I believe this to be the vital planning problem of the day, and the Bill tackles it by means of the Commission. As I understand the position, the Commission buys at market price, less the levy, and disposes at the proper market price for the permitted use. My hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) intervened during the Minister's opening speech and drew attention to the doubt as to the meaning of the words of Clause 16, a doubt which I have shared. I am glad to have my right hon. Friend's assurance that it is not intended that the Commission should be forced to dispose of the land at the best price which can be obtained for any use, but that the intention of the Clause is that the disposal should be at the best price which can reasonably be obtained having regard to the purpose for which such disposition is made even if it be not the most profitable purpose to which the land could be put. I hope and trust that at a later stage an Amendment will be accepted to make that absolutely clear if it is not completely clear already.

If that is the intention, it means that when land is purchased at perhaps a high commercial price and good planning dictates that it should be used for something less profitable, the Commission will take the loss on the land because it will dispose of it, whether to a local authority or to a private developer, at a price appropriate to the use permitted. But when the commercial use is transferred to some other part of the country and perhaps placed upon land which is at present agricultural, then the Commission will take the gain. So by evening out the losses and the gains in the different parts of the country it will facilitate a planning which at present is inhibited and prevented.

It may be said that a development charge can equally well do this. But it cannot do it except by a vast subsidy system. I cannot believe that the Opposition would like a vast subsidy system to enable this equalisation to be carried out, a vast subsidy system which would be to the benefit of not only public authorities but private developers as well, because it is private developers who will get the benefit of the Commission system.

How can the system be fairly operated in those circumstances. The Commission system operates fairly and simply because it operates automatically. It operates in such a way that the developer of the land pays the appropriate price for the particular use for which he is going to develop it, whether he be a public authority or a private developer. I suggest that if the Opposition really understood the proposal they would see it as a sensible support for a mixed economy.

The private developer has nothing whatever to fear from it. Indeed, he has everything to gain from the provisions of the Bill. Not only will he gain in the respects which I have indicated, but he will also gain because he will be released by the Land Commission's proposals from the inhibitions created by the landowner, so familiar to us who deal in the property world, who holds developers to ransom for the one piece of land which is necessary to complete a comprehensive piece of redevelopment. The Commission will be able to secure the land at a fair price and so facilitate a comprehensive development in the national interest and in the planning interest. The only people who have to fear from these provisions are those land speculators who for too long now have been battening upon the rest of the community.

The right hon. and learned Gentleman referred also to the problem of worsement. Here again, the Land Commission proposals are the only proposals which can solve that problem in a simple and fair way. The Commission will be buying land at the proper price (less levy if that arises) in its existing use, and this means that, irrespective of what worsement may arise from planning decisions, from a development plan which may, for example, change the use from commercial to residential or even to open space, the landowner will claim from the Commission when that transaction takes place the value of his land for commercial purposes and not, as if he was selling it in the open market, get a value which would necessarily be very much less. This system does not solve the whole problem of worsement, but it goes a long way to solve it.

I do not stay to extol the virtues of the creation of a land stock. It is something which for long has been necessary, and which the Bill facilitates, but to me that is perhaps not the most important, though a very important, function of the Commission. The right hon. Member for Kingston-upon-Thames made certain criticisms of the procedure involved in the Commission system and in the betterment levy system. It is not a simple procedure, and I hope that it will be possible to simplify it, but these are committee points. The main principle of the Bill is one which I unhesitatingly commend to the House.

I began by saying that I believed that the system which is now being instituted will become part of the permanent fabric of our planning system. But, of course, the great enemy of planning is uncertainty, and this is recognised in the Amendment. There the Opposition recognise that the House must be deeply concerned to secure an uninterrupted supply of land for house building. I would add that far beyond house building it is essential that there should be an uninterrupted supply of land.

I believe that the only reason which might induce landowners to refuse to sell their land in consequence of the provisions of the Bill is the hope that a change of Government will enable them to obtain a higher price. As against that, of course, there is the very necessary reserve power of the Commission to step in if it is urgently necessary to acquire land. I also believe, and I hope that I am right in believing, that the policy of the Opposition in support of the levy principle will itself do a great deal to remove the hopes that landowners might otherwise entertain, that somehow if there were a change of Government they would be in a better position because they would get a higher price or a price with less deduction for tax or levy than they otherwise would.

I believe that it is the plain duty of the Opposition—and, indeed, of any Opposition who believe that it is essential to secure an uninterrupted supply of land—to make it clear to the public that if the Bill is passed it will remain on the Statute Book even if there is a change of Government, and that in that event they will operate it conscientiously and fairly and will not seek the sort of short-term political advantages which they sought to obtain in 1953. I hope that the Opposition will put national interest above party advantage, and that before the debate ends they will give such an undertaking to the House.

6.48 p.m.

Photo of Mr John Smith Mr John Smith , Cities of London and Westminster

Mr. Speaker, you and I both owe our position in this House to the same regrettable event. Sir Harry Hylton-Foster, our predecessor, was a man of charm, integrity and distinction, and we miss him. Although he was Speaker for the whole time that he was the Member for the Cities of London and Westminster, I have been astonished as I go round the constituency to find how many constituents he was able to meet, and help, and how warmly they remember him. Now his mantle is divided, and you, Sir, wear one part and I the other. But the division is not absolutely complete, because you, Mr. Speaker, are my constituent. I hope that I shall wear my part of the mantle with the same humanity with which I have already seen that you wear yours.

Our constituency, about which it is customary that I should say a few words on the first occasion I speak here, is the heart and brain of this country. It stretches from the Tower of London in the east to the Round Pond in Kensington Gardens—symbols, perhaps rather inadequate symbols in the present age, of power and pleasure which are two of the characteristics of our constituency. It is bounded on the north by that river of commerce, Oxford Street, and on the south side by the Thames—dirty and far too tidal and about which I hope to have the opportunity to say something on another occasion, but whose inexhaustible stream has carried the wealth and energies and ideas of our constituency—and a lot of rubbish with them—into the oceans and countries of the whole world.

Our constituency includes the "Square Mile" of the City of London, which is not half as "square" as some hon. Members sometimes think and which provides much of the money Parliament spends here. Everything in our constituency is the "mostest", including prices, the rates, the housing problem and the traffic jams. I hope that my constituent, the right hon. Gentleman the Member for Huyton (Mr. Harold Wilson) will help his fellow constituents and me by tackling these ills as he has promised.

As for myself, although 21 members of my family have been Members of this House before me, 20 if them were not Conservatives. Therefore, I am a Tory of horizon blue and not of the midnight blue of a bygone age, and it is in that light that I have looked at this Bill.

On this first occasion, I must not be controversial, otherwise I would have developed the theme that this is an entirely unnecessary Bill, containing an unpleasant element of retrospection, and that its tax provisions would be better dealt with through the existing system of taxation and its compulsory purchase provisions under the existing planning laws.

Moreover, I would have gone on to show that it is actually harmful. Even the estimated cost of administering it is £7 million a year, and that is £7 million of the country's money torn up and tossed into the scale of inflation. In addition, £75 million of capital is needed from the Treasury. Offices will have to be built and in them will sit intelligent and valuable officials sentenced to the slavery of performing a task which they know to be worthless. Valuers are very rare birds and diverting them to this task means not only postponing but actually abandoning the forthcoming rating revaluation, with all that that implies for local authorities and ratepayers. This expense, delay and stagnation, on which I shall not enlarge, will all hamper the progress of building.

The Bill coins a new word—"Crown-hold"—but we do not need a new word. We have met this here before. Crown-hold is simply mortmain revived.

However, I must not go into that on this occasion. But I should like to make five points, two general and three particular, which, because I must not be controversial and because this is so controversial a Measure, must, of necessity, be minor points.

The first is the effect of the Bill on the smaller and humbler property owner who has to pay this tax at the same rate as the richest in the land. Much of the Bill is designed to nobble the ingenious—but the ingenious have lawyers and accountants and often brains and, indeed, they welcome complicated legislation like this because complicated legislation always means loopholes which they will find and dart through.

The people who will suffer are the humble—the smallholders on the fringes of the large towns, the tradesmen with their own premises, the old couple in the Black Country who own their own home and also a piece of land backing on to the canal, and the fairground showmen, of whose trade union I am proud to be a member, who nearly always own their own winter quarters, usually on undeveloped land near the centres of towns. These people, and others like them, cannot possibly cope with legislation as complicated as this, drafted on the assumption that all men are crooks. No one will hear about them. No one ever does. But they are the trace elements of English life which give the final alloy its quality, and we shall miss them.

The next point concerns amenity. The Bill will greatly reduce the effects of chance on our surroundings. Planning powers are quite adequate already without this fresh procedure and the value of a small residual element of chance should not be under estimated. Had there been a Land Commission in the past, Hyde Park, Green Park, Holland Park and Regent's Park would undoubtedly have been built on, lying, as they then did, on the fringes of the town and belonging to rich owners who so unreasonably "withheld them from development", as the phrase now is. Where would Cardiff be without the Bute family? Today, we are extremely grateful to these people.

We need this element of chance. The public know it, or feel it. People do not go to well planned—and they are well planned—Crawley or Harlow to refresh their spirits. They go to unplanned Broadway—I mean the Nabarro Broadway, not the American one—or to York. Total planning produces a well regulated desert—and there are plenty of examples of this abroad which I cannot mention for fear of giving offence. But we should not like it here.

In addition, there are three particular points with which I would deal briefly. The necessary Amendments are simple and I will not detail them here. The first concerns the position of those who have provided mortgages on the full development value of land. I know that bankers are not universally beloved but mortgages are provided by many other people—for example, by solicitors acting for small family trusts and settlements. Such people will be in a fix because the Bill will arbitrarily and suddenly reduce the value of their security. But that can be quite easily dealt with, and I hope that it will be.

Secondly, there is the position of those who have already paid Estate Duty on land subsequently developed. With the levy they could easily be put into the position, unwillingly, of paying a tax of well over 100 per cent. I am sure that that is not the intention of the Bill and an Amendment in that case is even simpler.

Lastly—and this is a point of principle as well—there is the position of charities. For the first time the Bill proposes that they should be taxed. As the Bill stands, their general funds invested in property will be liable to levy. I admire charities. I admire people who, instead of waiting for Parliament to do it at the public expense, get on and improve the human lot by their own voluntary exertions. They should not be taxed, but if the Government wish to tax charities, this new principle should be separately debated instead of slipped into a Bill which deals with quite another matter. A simple Amendment to a simple Clause would put this right and I earnestly ask the Government to look at that as well.

Therefore, as it stands, quite apart from the more controversial aspects, the Bill will oppress the humble, endanger amenity and damage charities. I cannot believe that those are the Government's intentions and I hope that they will have second thoughts about them.

7.2 p.m.

Photo of Mr Julius Silverman Mr Julius Silverman , Birmingham Aston

Following the hon. Member for the Cities of London and Westminster (Mr. John Smith), it is my privilege to congratulate him on his maiden speech. He obviously has eloquence and wit and has clearly gone into these matters with some expenditure of effort in studying the Bill, even while one does not always agree with his conclusions. He follows a very distinguished Member of the House who was highly respected in the House. I do not doubt he will follow still further in his footsteps and we shall be very pleased to hear him on many occasions in future.

I particularly admired his non-controversial speech. The non-controversial speech of the maiden speaker is tending to disappear. I am not sure that that is not a good thing. There are many people who come to the House and who make the most aggressive speeches on the first occasion they speak, hitting out in all directions. Why should they not if they want to do so? Sometimes they are pent up with energy for several months before speaking. The hon. Gentleman adopted the original device of saying, "This is a non-controversial speech, but this is what I would have said if only it had not been a maiden speech". That was very ingenious and I am almost inclined to follow in similar vein and say, "If that had not been a maiden speech, these are the things which I would have said in answer". I shall not do so on this occasion, but I will thank the hon. Gentleman for his very eloquent and sincere speech and hope that we shall hear him again.

I support the Bill, with some qualifications and reservations which are entirely different from those of hon. Members opposite. I would have liked the Bill to have gone further, at least as far as Labour's Land Plan, which is not fully implemented in the Bill, although the Bill may be intended as a major step in that direction. For instance, I do not like the limitation of the betterment or development charge, or whatever it is called, to 40 per cent. and eventually to 45 or 50 per cent. It should be much more than that. The largest part of the increment in the value of land should accrue to the community. There is nothing original about that view. That is what was said in the 1947 Silkin Act and it was said two or three years ago when the Labour Land Plan was issued. It is what John Stuart Mill said 100 years ago, and many others have also said; not just a proportion, but the whole, or at any rate a major part, of the increment in land value should accrue to the community.

This is so for many reasons. One is that this sort of earning is entirely different from other sorts. I happen to believe that what a person earns should have some relationship to the service which he renders to the community. That is a basic principle in which I have always believed. I think that some of the crime we have today is because people do not recognise that principle, and they cannot be expected to do so when they see people making large sums of money without giving any service at all to the community.

A number of examples of this have been given today. One of my hon. Friends referred to a case in Enfield which was related to some Lavender Hill allotments. Many years ago there was a film called "The Lavender Hill Mob", an Alec Guinness picture which showed how a crowd of people got some gold from a hank. It showed their pursuits and how they stole many thousands of pounds and got away with it for about ten years, until at last the police caught up with them. This is a very different sort of Lavender Hill Mob. The amount accumulated is very much more—this is an example of truth being stranger than fiction—and it has all been quite legal. While no service has been given to the community, £250,000 has been accumu- lated overnight. That must be wrong. Not only is it morally wrong, but it is economically wrong, unless one believes passionately, completely and without reservation in the free forces of the market. It is wrong because these values are created by the community.

It is wrong for another reason. The actual decision to permit building nowadays is the planning permission which is given by the community and if that planning permission for residential or industrial development is not given by the community, these people cannot build. Therefore there is every justification, moral, economic and juridical, for saying that the majority of this money should adhere to the community.

I accept that for economic reasons it may not be completely practicable to acquire the whole of that value if free sales are to be encouraged and I am therefore prepared to accept, grudgingly, the concept which was contained in our plan that there should be a certain sweetener, 20 per cent. or 30 per cent, of the value remaining with the owner in order to encourage him to sell freely in order that there should not be any exercise of compulsory powers. But the Bill goes far beyond that. It starts with 40 per cent. and, as far as is now envisaged, that will be only 50 per cent. at the end. To put the matter bluntly, that means that the land speculator will get away with 50 per cent, of the booty, and 50 per cent. is too much. We are trying to put an incomes policy into operation. If we are to have any chance at all of making that policy effective, whichever Government put it into operation, it must be quite clear to the working man, who is being asked to restrain his demand, that a similar restraint is being exercised elsewhere. It is not being exercised here. One is taxing the land speculator but one is not saying to the landowner, "You may not go on increasing the value of your land."

If there is to be any prospect whatever of getting an effective incomes policy, this problem will not only have to be tackled but it will have to be dealt with more vigorously and comprehensively than is now being done. The levy is now taken for granted, even by the other side. It is interesting to observe the attitude of the other side on the subject of the levy. It says that it is not against the idea of a charge, it is only the Land Commission which it opposes. It is an interesting conversion, even if it took place last May, as has been said. It did not take place over the thirteen years of Tory government.

The hon. and learned Member for Dulwich (Mr. S. C. Silkin) mentioned the evidence of the 1947 Act, the Bill which his distinguished father piloted through this House. This measure was demolished piecemeal in two stages, and not only was the whole idea of a charge demolished but nothing replaced it. It is all very well for right hon. Gentlemen opposite to say in their Amendment that they believe in the charge. One must base one's view of the sincerity of the Opposition on what it did during 13 years. Not only did it fail to introduce a charge, but it demolished the existing one. The consequence was that prices rocketed. The Amendment is, therefore, a piece of humbug. The Opposition cannot even make up its mind about it. The Amendment says and the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that what the Opposition objected to was that the Land Commission would make land scarce and would cause the flow of land to dry up. The right hon. and learned Gentleman the Member for Hertfordshire, East (Sir D. Walker-Smith) did not say that at all. He said that the Land Commission was unnecessary, that it was useless and that the councils already could do what the Land Commission would be set up to do. He said that it was a gimmick.

It cannot be both things at the same time. It cannot be only a gimmick and at the same time something which seriously dries up the flow of land. The Opposition has to make up its mind. I suggest that the Amendment is a gimmick. Perhaps there are too many gimmicks, and perhaps the ill-fortune of the other side is due to the gimmicks of which it accuses other people. The Commission is an essential part of the whole of this scheme. It is not true that the levy and the Commission are two separate elements. They must of necessity be tied together. There may be certain difficulties over the levy. One can sometimes get deception, collusion and evasion. The Commission will see that that does not take place. Sir Colin Thornton- Kemsley, Vice-Chairman of the Town and Country Planning Association, whose name is known in this House, speaking at a conference organised by the Association, said that once the levy was imposed a realist must face the possibility that some owners would hold back land hoping for the rescission of the levy or its replacement by something less onerous. It followed that there must be a body possessing compulsory powers, ready to step in and acquire land which was required for public purposes. He did not share the fears that the proposals were only a long step towards nationalisation as the Commission's purpose was not to retain the land it acquired.

Mr. Wyndham Thomas, Director of the Association, also said the same thing. The Architect and Building News said that the levy alone would not be enough, and that the Commission had to be powerful enough to step in and demand to buy land. It added: Although this is, of course, something which local authorities already have the power to do, they often lack both the resources and the inclination. I cannot imagine how the levy—which is acceptable to all political parties—could be imposed without the proposed new powers for twisting the landowner's arm. That is a rather harsh expression, but something like that is necessary. The Commission will have powers which councils, to some extent, do not have. Councils use their powers with the consent of the Minister in limited ways. They use them for obtaining land for municipal housing, for clearance areas and only sparingly even then. In some case they are used for redevelopment schemes. One can think of many schemes, completely outside the purposes for which councils normally buy, in which the land Commission can step in.

There are all sorts of provisions dealing not only with new towns or areas which fall within the periphery of one council or another, in which one local authority is unwilling to act. The Commission can take a broad and comprehensive view of the whole area, not just a parochial view. The Commission also has powers which a council does not possess. It has vesting powers, in which the vesting takes place first and the arguments about price and compensation take place afterwards. Birmingham used these powers when it applied the 1944 Housing Act.

There are similar powers of rapid acquisition. These are important, not only for the rapid acquisition of land but also to defeat the land speculators who step in and push the price of land up. The Commission is an essential part of the whole of this scheme.

I hope that the various stages envisaged in the Bill will be brought into operation very soon. I do not know how soon the Minister intends to do this but I hope that the appointed days will not be unnecessarily delayed, and that the Commission will be exercising its full powers at the earliest possible moment. This Bill can contribute to the housing problem and to the viability of local authorities in providing land at cheaper prices, and through the concessionary Crownholds, provide cheaper land for the person wishing to build his own house. At present there are people in the city of Birmingham having to pay £1,000 to £1,500 for the site alone. This means that in the mortgage payments, before anything else is paid, £2 a week is paid for the land alone. This is not justified. If these concessionary Crownholds are used wisely, they could remove a considerable part of this burden from the back of the house owner. I welcome the Bill and I hope that in a very short time the whole of our promises in this sphere will be implemented. I therefore hope that the House will give this Bill a Second Reading.

7.20 p.m.

Photo of Sir Charles Mott-Radclyffe Sir Charles Mott-Radclyffe , Windsor

I am in full agreement with the hon. Member for Birmingham, Aston (Mr. Julius Silverman) in one respect, and that is in expressing our congratulations to my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) on what I know the whole House will recognise as a really attractive maiden speech. I suspect that I speak for a good number of people when I say that many of us who have been in the House for long time envy his turn of phrase, the crisp humour and the wealth of humanity and knowledge which he displayed. I know that the House looks forward to hearing many further contributions from him.

My hon. Friend explained how he, in one respect, and you, Mr. Speaker, in another, shared the mantle of the late Sir Harry Hylton-Foster. In another context altogether, my hon. Friend happens to be a constituent of mine. Therefore, you see, Mr. Speaker, although you did not know it, that you and I are connected, albeit very remotely, through the hon. Member for the Cities of London and Westminster. I am only too glad, by the accident of good fortune, to catch your eye at this moment and to have the privilege of being the first from this side of the House to congratulate my hon. Friend, since I have had the privilege also of enjoying his friendship for a great many years.

I have the feeling that we are about to embark on a long and tortuous journey as the Bill passes through the House. Having read the White Paper and the Bill, and having listened to the Minister's speech, I am sure that many of us are asking ourselves the question, is this journey really necessary? Certainly nothing that I have heard today from the Government side of the House has convinced me that this long and tortuous journey is necessary.

The Land Commission has several very serious defects. It is not vested with any planning powers; but almost every action which it takes is bound to have an effect on land use planning. That is nonsense No. 1. It cuts right across the powers of local authorities. It sets up a tangled web of administrative uncertainties and anomalies, which follow as night follows day. That is nonsense No. 2. Thirdly, the Commission has very wide powers of compulsory purchase—absolutely unprecedented powers in peace time. I am glad that my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) referred to this.

I wonder how many members of the public who are likely to be affected have read the details of the Second Schedule. When a notice of compulsory purchase is served, if the owner in question cannot be found, it shall be taken to be valid if it has been duly served on anybody hanging about. That would be the layman's interpretation. If there is nobody hanging about, for any purpose lawful or otherwise, it can be affixed to some conspicuous object on the land—I suppose a fallen tree. This is a fantastic procedure for the serving of a compulsory purchase order.

Moreover, local authorities already have powers of compulsory purchase. If it is thought that those powers are inadequate and that they should be strengthened—I do not hold that view, but I can see the argument for it—the tidy and sensible thing to do would be to increase their powers instead of muddling up the Land Commission with the matter. I am not a lawyer but a layman, one of the few laymen taking part in this debate, but I have read the Bill and the White Paper, and I canot see anything to prevent a local authority from serving a compulsory purchase order on the Land Commission. Perhaps the Joint Parliamentary Secretary, when he winds up, will tell me whether that is so. If a local authority could serve a compulsory purchase order on the Commission, this would be one of the best Socialist anomalies which could ever happen.

Take the levy. I see the argument for having a levy on betterment value, as long as it is not so high that it simply dries up the supply of land. But, if the Government want to make a levy on betterment value, the sensible, tidy and easiest administrative thing to do is to put the levy in the Finance Bill and not under a completely different heading in a Bill like this. I do not think that anybody who has any knowledge or experience of the subject—this is borne out by all the professional bodies—believes that this frightfully complicated blunderbuss, this steamroller—nobody knows in which direction the driver is going—will bring down either the price of land or the price of houses. Either the levy will be passed on to the purchaser, or it will create a very undesirable black market, which is more likely to happen.

A point which has been raised from these benches and which I hope the Joint Parliamentary Secretary will deal with is this. If the Commission buys land at the market value, there is no saving If it buys land below the market value, to which of a number of potential developers will it sell the land? Suppose that there is a packet of land ripe for development which has been purchased by the Commission and that A, B, C and D want it. As far as I know, there are only two ways to deal with the situation. Either A, B, C and D bid against each other for the privilege of developing the land which the Commission has bought, in which case the land is simply sold to the highest bidder; or the Commission has to exercise a judgment of Solomon and decide that the land should be sold to B but not to A, C or D. There is no third way. I should like to know how it is proposed the Commission will solve this problem.

His justification for the very wide compulsory purchase powers in the Bill is alleged to be the very high price which land fetches for building, particularly agricultural land. There is something, although not much, in this. The price of land, if it has planning permission, is often purely arbitrarily fixed by the very fact that the county planning officer has given planning permission to plot A, which may go for five figures, whereas he has not given it for plot B on the same or opposite side of the road, which goes for only three figures. Admittedly there is this anomaly.

These allegations about the soaring price of agricultural land should be taken with a draught of water. I do not know whether hon. Members opposite have read the new town corporations' annual report for March, 1965. It makes quite interesting reading. Here we have the new town corporations buying land for the first time on the market value basis plus all the planning assumptions and the rest of it which come under the Town and Country Planning Act, 1959, and the Land Compensation Act, 1961. Therefore, this is quite a good test. The new town corporations of Dawley and Skelmersdale paid, on average, £532 an acre for all the land that they acquired. That was the average price per acre. As that is the average price, it follows that agricultural land went for a good deal less. I understand that at Dawley the price of the agricultural land that was purchased was £450 an acre. I beg the party opposite not to go too far in this game of saying that there are soaring prices in land in all circumstances.

The rules and regulations about how the levy is to be computed are fantastically complicated. No layman could understand Schedules 4 to 7, which run to about 28 pages, and I should think that few professionals could understand them either. Does the Minister really mean that every transaction large or small, every time an easement is granted or facilities are given for, say, a pipeline for the provision of essential services, has to be registered and somebody must work out what the levy might or might not be?

If Mr. A sells a house to Mr. B, does he have to wait six months before he discovers whether there is any betterment element in it? Suppose that Mr. B wants to turn the house which he has bought from Mr. A into flats but Mr. A did not know this at the time he sold it. Would the purchase price have included a betterment element, or whatever the word is? If it did, who pays the betterment element, the purchaser or the vendor? These are questions to which we want to know the answers before we give a Second Reading to this ridiculous Bill.

I am glad that the Minister has now returned, because I want to say a word particularly about agricultural land. The Bill has caused great concern and worry to the agricultural industry. I hope that before long, the right hon. Gentleman will draw a clearer line of exemption than he has drawn hitherto about what sort of agricultural buildings will be included in or excluded from the levy. The right course would be for the Minister to exempt altogether all new farm and forestry buildings, all new farmhouses and cottages and all forestry cottages. They should be exempt altogether from any levy, and I will say why.

First, agriculture represents a basic use of the land. Secondly, there is practically no element of development which arises in its use in the sense that any new agricultural building erected on a farm has any purpose other than to increase the efficiency and the economic management of that agricultural holding. There is no betterment element whatever in the other sense.

Thirdly, and most important of all, as the Minister must know, enormous changes are rapidly taking place within the whole pattern of the agriculture industry. The structural reform is proceeding apace. Indeed, as my right hon. Friend the Member for Kingston-upon-Thames has said, we are encouraged by grants from the Minister of Agriculture to go forward with structural reform and to amalgamate smallholdings into larger units and make them more economic. The Minister of Agriculture even gives grant for new and modernised equipment on farms which are so amalgamated.

All that will be hampered by the Bill if every new building on every new site on every agricultural holding which changes in structure or type is to be subject to a levy. The much-vaunted structural reform of the Minister of Agriculture will go by the board. It would be a supreme paradox of Socialist planning if the grant that was received for certain improvements or new buildings on agricultural holdings was less than the payment of levy for the betterment.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I appreciate the points that the hon. Member is making. His right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) made similar points, but I did not want to interrupt him too much because he was thoroughly enjoying himself and it is irritating to be constantly interrupted. We have the definition of "material development". We exclude from that general development order development which covers a good deal of what the hon. Member has said, and we also make provision for development of any class prescribed for the purposes of this subsection being exempted. In making this provision, we have very much in mind the sort of points that the hon. Member is making.

There are, however, some difficulties about this. To give just one, one might exempt an agricultural house or cottage but it would be necessary to have safeguards against its possible use for non-agricultural purposes. I do not want to interrupt the hon. Gentleman's speech at too great length, but we have powers under the Bill to do this. The reason why we sought such powers was that we have very much in mind the kind of points that the hon. Member is making.

Photo of Sir Charles Mott-Radclyffe Sir Charles Mott-Radclyffe , Windsor

I am grateful to the Minister for clarifying the position a bit. It is no more than a bit. The sooner that these points of substance are cleared up and people know exactly where they stand, the better.

Under Clause 60, for example, there is the exemption for a single dwelling-house intended for occupation by the owner of the land or his family if it was in his possession before 22nd September last, the day before publication of the White Paper. What on earth does that mean? What about the farm partnership or the farmer who has bought a small farm next to his own, has amalgamated it to make it more economic and wants to go into partnership with his son, who is married, and the son wants to build a house to help his father with the management of the holding? It is not a single dwelling-house. What about that kind of case? What about an additional farm cottage for a cowman? That would not be a single unit for a member of the family.

Suppose that a farmer died in October and left his farm to his son. The son might want to alter the farm and improve it a good deal. Is every new cottage or every new building to be subject to a levy because the son did not own it in September, 1965? This is crazy.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Before the Minister intervenes, may I express the hope that we will not have a Committee stage debate? Other hon. Members wish to take part in this Second Reading debate also.

Photo of Sir Charles Mott-Radclyffe Sir Charles Mott-Radclyffe , Windsor

If there is any misunderstanding about these things, I must point out to the Minister that it is largely the Government's fault.

Again, in the Bill there is no reference to agricultural land that is rented. Sixty per cent. of agricultural land in England and Wales is owner-occupied; 40 per cent. is rented. Is every new farmhouse or farm cottage which is built by a landlord for the tenant to be subject to a development charge? If so, it will be very difficult to get landlords to modernise. If there is uncertainty about it, I say straight away to the Minister that it would be very difficult indeed for any landlord and tenant to agree about a new lease or a new rent, because unless the extent of the development charge, if any, is known, it would be impossible to draw up a new lease, if there was a new lease, and one certainly could not fix a new rent. I assure the Minister that these delays will have a serious effect on agriculture.

The Government's relations with the farmers are quite bad enough, but I say this to the Minister. If the agricultural community become aware of the implications of the Bill, unless some improvement is made before the Committee stage I can only say that the relationship be- tween the Prime Minister and Mr. Ian Smith will be as Siamese twins in comparison with the relation between the Minister and those who till the soil.

Lastly, the best forecast of our population trend is that it is likely to increase by about 30 million in the next 34 years—that there are likely to be some 30 million more people living in the United Kingdom. Unfortunately, the size of England and Wales, the number of square miles, does not expand similarly, and there is the sea all around. If anybody were to offer a prize for devising a system which would at once really hamstring all sensible development and ignore almost every sound rule of administration, I am bound to say without any hesitation that the right hon. Gentleman and his colleagues would be awarded the prize.

This is administrative nonsense. This is Socialist theory. It is unworkable in practice, and within a few months the country will understand that very well.

7.41 p.m.

Photo of Mr Edward Fletcher Mr Edward Fletcher , Darlington

The Bill, which I welcome, is the second major attempt of a Labour Government to lay the foundations for a practical and just land policy, and it has been well received by those who are qualified to know something about the intricacies of the land problem.

Perhaps my best starting point may be the reference which the hon. Gentleman the Member for Windsor (Sir C. MottRadclyffe) has just made to the population of this country at the end of the century, because we have to consider this Bill in the context of the fact that in 34 years' time the population of this country will be, it is estimated, 72 million. It is thought that in order to house those people it is necessary for the next 40 years to build every eight weeks a town the size of Darlington, or, alternatively, every 12 months a town or city the size of Bristol. This is the magnitude of the problem which the hon. Gentleman has posed about the population explosion. These people will require land. It will be vitally necessary, if we are to plan for the future, for a commission to be established to allocate land, to purchase land, and, above all, to see that the betterment and enhanced value of the land is returned in increasing amounts to the community. The Commission will see that a substantial part of the development will return to the community, and this Measure will give a very powerful thrust to the housing programme, which will be so necessary in future, and to regional development.

This is the second occasion on which a Labour Government have introduced legislation of this description. In 1947 we had the Town and Country Planning Act. In 1951 this was dismantled by the Tories who were then in office. In 1959 they developed the free market in land. As a consequence of this, land speculation has been rife since that date. Conservative freedom works, they told us. Well, Conservative freedom has certainly worked for the racketeers and land speculators in this country.

One of my hon. Friends has mentioned the Lavender Hill case. I want to refer to the Lavender Property Company, and I want to refer to this because this gives an indication of the speculation which has gone on since the Tories introduced their Measure in 1959.

This piece of land was purchased for £7,500 in 1960. It was derelict allotments. Subsequently planning permission was granted in 1960. Subsequently that company called Lavender Garden Properties Ltd., sold it to the council for £240,000. Here is a capital accumulation from £7,500, in a period of four years, to £240,000, an increase in capital of 31 times.

In a period when the Prices and Incomes Board is asking the railwaymen to accept a 3½ per cent. increase in a year, can any society justify this racketeering and speculation in land?

We have since heard from the other side that the Tories have changed their mind, that they do believe now that there should be a betterment levy which should go back to the community. Indeed, on 18th November, 1963, the former Minister of Housing said: It does seem right that that increase"— that is, the increase in value of land— should be collected by the public. He said that land … should be bought well in advance by a public authority for disposal to private enterprise or to public enterprise as required, both to control and phase the development and to help in meeting the cost of bringing it into development. We may well have to devise new machinery for the purpose."— [OFFICIAL REPORT, 18th November, 1963; Vol. 684, c. 655–6.] Nothing was heard of the bold plan of that Minister, right up to the General Election, and, indeed, until after the election, when an inquest into the reasons why the Tories lost the election took place, and it was thought in some quarters that they had not been vigorous enough in their attitude towards land ownership.

Referring to Lavender Garden Properties Ltd., it appears that after it had applied for planning permission the inspector recommended to the Minister that this property should be open space. But the Minister stepped in. He turned down his inspector's recommendation and granted a residential certificate. The site suddenly leaped into the golden acre category—not my words, but words which appeared in the Evening Standard tonight.

A very distinguished member of the other House, well-known in Fleet Street, once called television a licence to print money. The former Minister not only gave this property trust a licence to print money, he gave it a printing press by this decision. He decided it enhanced the value of this particular piece of land which suddenly went from £75,000 to £240,000 as a result of a Ministerial decision.

This is not an isolated incident, but what has been happening throughout the country. This racketeering in land has been going on ever since the Tories decided that Conservative freedom works.

Land increases in value as a result of two things, the granting of planning permission, or the provision of amenities such as drainage, roads, schools, lighting and other facilities. As for planning permission, there are many instances of plots of land which, because they have received planning permission, have increased in value tenfold or twentyfold overnight, and indeed there has been a lot of criticism by local authorities that developers who have been granted planning permission for parcels of land have not taken up their option but are hanging on to them in order that the land may still further develop in value.

I have had some experience for many years as a member of a local authority and I remember a case three years ago of a developer coming along to the local planning committee and asking for planning permission. He had his house situated in about a couple of acres of ground. He wanted to build some multistorey flats at the end of his garden. The planning committee said, "We are sorry, but we cannot allow you to do this because it would destroy the amenities of the area and would detract from the residential nature of the district," and planning permission was refused. The applicant came back again to the council and said, "I do not want to build flats here. All I want is planning permission to build flats. If you can give me planning permission, I can assure you that I will never build those flats. I want planning permission because the land is held by my bank against an overdraft. If you will only give me planning permission, I can get five times the amount of overdraft from the bank than I could get otherwise. Please give me planning permission, although I have no intention of erecting multi-storey flats."

That is the sort of racketeering that goes on. I wonder if it is possible to estimate the number of parcels of land throughout the country that have planning permission but on which there is no intention whatever to build, and where the existence of planning permission enhances the value of the land so that the owners can go along to a bank, hand in the deeds and get mortgages, overdrafts and credit to the extent of that enhanced planning. Here we have racketeering which has been going on since Conservative freedom allowed the speculators to make these immense fortunes.

One must remember when one gets speculators making these fortunes that the money has to be found by someone, and it has to be found by young married couples who are spending perhaps £4,000 or £5,000 on a house, £1,000 of which is for land charges, and they are saddled with repaying the money for up to 30 years of their lives.

Let me give another quite recent example which affected Sir Frank Markham, the former Member for Buckingham. Last year, he bought a 173-acre farm for £36,000. Now he has got back half the purchase price by selling three acres for housing development and he retains the other 170 acres. He is reported to have said: I am sitting on a bonanza worth over £1 million. It is incredible that such profits can be made, and I intend drawing the public's attention to this racket. It is a pity that he did not draw the Government's attention to the racket when he was a Member of the House. However, probably because of that incident, the electors of Buckingham decided to send a Labour Member to Parliament in his place. But the simple fact is that the Tory Government not only failed to combat the racket in land speculation but created it.

I could give many instances of how these increases have affected local authorities. In the former L.C.C. area, for instance, there have been increases from 1950 to 1963 of 275 per cent. In Greater London generally there has been a 330 per cent. increase from 1959 to 1963. For individual housing sites the L.C.C. was paying an average of £740 per dwelling in 1958. By the end of 1963 the price had risen to £1,550. It had more than doubled, and young owner-occupiers are being held to ransom by the speculators and racketeers.

If I have any reservation about the Bill, it is that I agree with my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) that it does not go far enough. There is to be a 50 per cent. betterment levy, but there is the possibility of increasing it after short intervals, and I hope that it will be increased as rapidly as possible. I want to see the community that creates the value of the land getting the full value returned to them. I hope that a scheme will be worked out so that it can be channelled back to local authorities and to the individual house purchaser. In that way, the Bill is very valuable.

Throughout our long political history, land has been the focal point of political discussions. One has only to think of the peasant rebellions in the 12th and 13th centuries, of the Levellers in Cromwell's time and, in more recent times, of such great Liberals as John Stuart Mill, who said: No man made the land. It is the original inheritance of the whole species". As early as the fifth century, St. Gregory the Great said: … that the land has been given by God to be the common property of all men, and that its fruits ought to be used for the benefit of all and that therefore it is ridiculous for them "— by whom he meant the landowners— to think that they are not robbing others, and plundering, where they are simply retaining what they have got. Between 1860 and the beginning of the present century, the Liberals were the great forward-looking party that wanted land reform. We remember how Lloyd George stumped the country, and how the old Radicals talked about The land, the land,The 'and on which we stand.Why should we all beggars beWith the ballot in our hand. God made the land for the people. The great Liberal Radical slogan was, "The land for the people." Are hon. Members opposite going to crawl into the Division Lobby of the landowners, or is there going to be some echo of those great Liberal traditions entering their souls? I can assure them that they might talk about being radicals, but the electors of Hull have recognised them for what they are.

The people of Hull are the radicals. They recognise that land speculation can only be ended by a Bill such as the present one, and I hope that the Liberals will think back to the great fighters for land reform. It may be said by them that the Bill is not everything that all of us might desire. It is certainly not all that I would desire, but it is a tremendous step forward, and I hope that they will follow us into the Lobby and be true to the principles that they have enunciated in the past.

I realise that others wish to take part in the debate, and I will conclude by saying that I hope that the Bill will get a Second Reading. I know that the Conservatives have changed their minds, but one wonders whether their conversion is really sincere. We have had quite a lot of "me too-ism" over the last few weeks. We had a very fine new principle of insurance introduced by a White Paper a few days ago, and hon. Gentlemen on the other side said, "We were thinking of that before we left office." When the Redundancy Bill was published they said," We were working on that before we left office." Now we have the Land Commission Bill about betterment. "We were thinking of that before we left office", they say. "We were thinking about a betterment charge".

These are the people who supported the racket in land speculation from 1957 to 1959 and onwards. These are the people who have been writing out blank cheques for the property owners who contribute lavishly to Tory Party funds.

We believe that it is a sincere issue of principle that divides us, the people who need land just as we need air to breathe, from the traditional political party of the aristocracy and the land owners. We believe in the social content of the things for which we are fighting here. We have waited a long time for the Bill. It is a tremendous step forward, and I commend it to the House.

8.0 p.m.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

May I preface my remarks by adding my congratulations to those which have been paid by right hon. and hon. Members to the hon. Member for the Cities of London and Westminster (Mr. John Smith) on a truly admirable maiden speech, and one which I think was followed with immense interest. We look forward to hearing from him many times in the future.

It is also right, in accordance with the custom of the House, that before speaking on this Bill I should declare an interest, in that I am a director of a property company.

As has been said by the Minister, the Bills falls into four parts, but I think that for practical purposes we can say it falls into two parts, that is to say, the first part which deals with the Land Commission, and the second part which deals with the betterment levy.

There is a wide measure of agreement on both sides of the House on the need for a betterment levy, a means whereby the community shall share in the appreciated value of any land which is developed. Indeed, as has been pointed out by one hon. Gentleman opposite, this has been advocated by the Liberal Party for more than 50 years, but we have not advocated it in anything approaching the form in which it is presented today by the Government. We have advocated it in the form of rating and taxation of site values, and that still remains not only the most radical, but the most realistic, way in which this problem can be resolved.

It is good to see, too, that there has been some rethinking on the part of the Conservative Party on this matter. We have heard from Front Bench Conservative spokesmen in the past year or two, including the right hon. Member for Enfield, West (Mr. Iain Macleod), the right hon. Member for Leeds, North-East (Sir K. Joseph), and this afternoon the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), in a speech which, if I may say so with humility, I thought was admirable, also from the Labour Party we have heard from the Prime Minister, and from many other leading Members, that this issue of land racketeering and profiteering which has been going on for all too long is something which they are anxious and determined to tackle.

The objection is one of principle to the first part of the Bill, and the objection to the second part, that is to say, the betterment levy, is one more of detail than principle. When the White Paper was published, we on this bench hoped and believed that it might be possible to give the Bill a Second Reading in spite of our rooted objection to a Land Commission. When the Bill was published we set up a working party which has been doing a great deal of research into the prospects of amending the Bill in such a way that it could be acceptable not just to the Liberal Party, but to the basic principles for which we have fought over the years; but I have to tell the House that the weight of evidence against the possibility of introducing Amendments which could reach that target is so overwhelming that we are bound to vote against the Bill tonight.

The reason why we shall vote against it, as I shall point out in more detail in a few moments, is that the Bill is not a radical one. It does not attempt to deal with the problem in anything like the drastic manner which over the years we were led to believe was the intention of the Party opposite when it was in opposition. The Bill is a disappointment to us. It is a disappointment to radicals throughout the country, and I believe that it is a Bill which Her Majesty's Government will regret should it ever reach the Statute Book.

Had we found that even though it might not meet the demands which we have made over the years for a reform of the whole rating and taxation system, and the whole system of acquiring and selling land, it was possible to give the Bill a Second Reading, because it went some distance towards meeting the requirements which we have stated, we should have been glad to do so, but the truth of the matter is that the Bill—and I regret having to say this—is in direct conflict with the aims which we have expressed, and the principles for which we have fought for so long.

Let us consider, first, the Land Commission. At a time when decentralisation is essential, at a time when regional development has been the corner-stone of the Government's policy, they are proposing to set up a Land Commission which will have wide powers, powers which will over-ride those which they have themselves given to regional boards and councils. The Government are not only in conflict with the Liberal Party on this issue, but in direct conflict with their own policies which they have advocated in regionalism, and for which, to give them credit, they have worked during the past fourteen months.

I believe—and I think that I can say this on behalf of my colleagues—that the work of the Commission would be far better if it were carried out by the regional councils and co-ordinated with the Ministry of Land and National Resources and with the Ministry of Housing and Local Government.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

Perhaps the hon. Gentleman will allow me to complete what I am saying on this point.

I can find nothing in the Bill which indicates that it is the intention of the Government to give any powers to the regional councils in respect of the Land Commission. If I am wrong, I shall be glad to give way if the Minister wishes to correct me on that point.

Photo of Mr Allan Beaney Mr Allan Beaney , Hemsworth

Is the hon. Gentleman suggesting that land should belong to all the people?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

We have made it clear that the Land Commission will work through regional organisations, and obviously it will work very much in the field. It is bound to work in liaison with local authorities, in the same way that regional councils do. The hon. Gentleman asks whether this was in line with the development of the regional economic boards and councils. It is, but because we work within a planning framework the Commission will have to work in liaison with the local authorities, regonal councils and developers. This is its purpose.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I am grateful to the Minister for his intervention, but I am sorry that he has not clarified the position, because, a s far as I can see, although he has made it clear that the Commission will work in association with local planning authorities, there is nothing in the Bill which indicates that it will work in association with the regional councils. If there is, I shall be glad to see it, because I must be short-sighted.

Another objection is that this additional burden to the Exchequer caused by the setting up and operation of a new bureaucratic body will largely mitigate any benefit which might be obtained by the betterment charge. The Liberal Party has always opposed a Land Commission. We have opposed it because we believe that it is unnecessary and wasteful. We have opposed it because we believe that it is in direct conflict with our own regional policies, and, as I have said, with those of Her Majesty's Government. Finally we have opposed it because we cannot believe that this can be other than a back road to nationalisation.

It may well be that it is not the Government's intention to use the Bill as a means to nationalisation, but the fact remains that it contains provisions which would make the nationalisation of land a matter of simplicity for any succeeding Labour Administration, because here there are the means of acquiring and developing land throughout the country, and if that is not nationalisation then I do not know what is. To suggest, as the Prime Minister did in his weekend speech, that it would be possible for the Liberal Party in this House, or Liberals in the country, to support a Bill which contains the means of land nationalisation is not only incredible, but positively ludicrous.

I turn now to the rather more complex question of the betterment charge, and here I should like to congratulate the Government on at least making a stab at the thing. But I would ask the Government: why do it so badly? Why do it so inefficiently? The Bill was described to me last week by an eminent Liberal as being a good intention turned into a botch. Unfortunately, I cannot quote this distinguished Liberal in full because he prefaced the word "botch" with the adjective that Bernard Shaw used in his play "Pygmalion". Nevertheless, I think that his description was most apt.

If I were to say one thing to the Minister regarding his quotation from Winston Churchill, it would be this. It is very interesting, incidentally, Mr. Deputy Speaker, to notice that whenever Her Majesty's Government are in trouble, whenever they have a difficult Bill to present, they always call in aid distinguished Liberals of the past. We have had John Stuart Mill, and we have had Winston Churchill—when he was a Liberal; not when he was a Conservative, let it be marked, but when he was a Liberal.

The Minister quoted the late Sir Winston Churchill in one of his speeches made, I think, in 1909—over fifty years ago. I presume the Minister is fully familiar with Section 10(1) of the Finance Act of 1909—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

If the Minister reads nothing else, it is incredible to me that he should have placed before the House this afternoon this extraordinary Bill, because in that earlier legislation there was sensible provision for a betterment levy. It states: Subject to the provisions of this Part of the Act, there shall be charged, levied, and paid for every financial year in respect of the site value of undeveloped land a duty called, undeveloped land duty… This is the kernel of my whole argument.

Why a once-only development charge? Why let the landlords get away with it all the time? Where is this radical Government which wants to bring the land into the ownership of the people, and wants to give the benefit to the people? Why cannot we have an annual charge. That was the very thing which, over fifty years ago, the Liberal Party, as the Government, introduced into this House and yet, more than fifty years later, a Labour Government today still have to learn that the right way in which to bring in a betterment charge is to provide a tax which will fall annually, and which will provide a continuous source of income to the benefit of the people to whom, I agree, the land belongs.

I have tried to defend the principle that the benefit of increased values should in large part accrue to the community, but how much better it would be if this were tied in some way to a new form of rating which would ensure that all land scheduled for development, or actually developed, or capable of development within an agreed line of demarcation should carry an annual tax; should bring an annual benefit to the community and enable us to have a rating system that would not only fulfil the Government's avowed purpose of preventing racketeering but would bring land into the open market, because no one would be prepared to leave land unoccupied and undeveloped if they had to pay an annual rate of tax on it.

Such a system would provide land more quickly. It would provide the rationalisation of land values that we want. Moreover, it would meet the Government's own case of ensuring that there should be a benefit to the whole community as a result of a tax of this kind—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

Perhaps the hon. Gentleman will allow me to finish this part, and then I will give way. It would also prevent the kind of racketeering speculation that has been going on for too long and which all hon. Members are anxious to stop. Finally, it would ease the burden on the ratepayers by an equality in the distribution on the rate burden which would be far better than the system operating today.

Photo of Mr Allan Beaney Mr Allan Beaney , Hemsworth

Does not the hon. Gentleman agree that if the land belonged to the people there would be no exploitation, no need for any discussion of this character—if the land belonged to the people? Will he proceed on those lines?

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

The hon. Member says "if the land belonged to the people"— but what does he mean? Does he mean the land belonging to the people or does he mean the land belonging to the State—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

—because there is a vast difference between a distribution of the land among the people and the ownership of the land by the State, which is nationalisation. But I am grateful for the hon. Member's intervention, because it helps to support the suspicion I have held ever since the Bill was published, namely, that whatever the intention of the Goverment may be at the moment, the Bill holds a dangerous element of nationalisation which could ultimately be used, as I have already said, to ensure that the land became the property of the State—[Interruption.].

Photo of Mr Emlyn Hooson Mr Emlyn Hooson , Montgomeryshire

Perhaps my hon. Friend will give way. Clearly, when the hon. Member for Hemsworth (Mr. Beaney) speaks of the land belonging to the people, he is thinking of the people's railways.

Photo of Mr Allan Beaney Mr Allan Beaney , Hemsworth

I am speaking about everything that belongs to the people.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I want to consider the method of collection of the betterment charge. This has been dealt with at some length by the right hon. Member for Kingston-upon-Thames, but I would add this. I do not think that the Minister would deny that the method proposed is likely to be costly. I cannot see any reason why it should not be done through the Inland Revenue. This would not only assist in the swift and smooth collection of the betterment levy, but it would be bound to assist the actual administration of the scheme, as it would lessen the administrative costs. I hope that the Minister will at least consider this during the Committee stage—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

No, I shall not give way any more, otherwise I shall take too long, and I know that other hon. Members wish to speak.

Another point that has already been raised from this side of the Chamber, and which I would earnestly entreat the Minister to consider further, is whether prospective vendors will be prepared to sell now without a struggle or whether they will not be inclined to put up charges, thus causing an increase in the cost of land. I consider this to be a very real danger. Will they not also seek to withhold the sale of land in the hope that some successive Government may repeal this Measure, so enabling them to avoid a betterment levy?

I know that there are full compulsory purchasing powers within the scope of the Bill, but if the Minister is sincere in his denial of any suggestion of nationalisation, it follows that to exercise those compulsory purchase powers on any wide scale would take very many years—unless it is the intention of the Government to exercise them rapidly and widely which, as I said, would be virtual nationalisation of the land—

Photo of Mr Allan Beaney Mr Allan Beaney , Hemsworth

It is the land belonging to the people—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

Mr. Deputy Speaker, I must seek your protection. I cannot talk across the Chamber to someone speaking from a sitting position—

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

However good the intention of many parts of the Bill the fact remains—and I am sure that the Minister must on reflection agree—that they are sloppy, and sometimes almost unintelligible. There is a very wide measure of agreement by people in all ranks of life, and people who are associated with land, building, agriculture—surveyors and others—that this is one of the most difficult Bills to understand and interpret that has been produced for very many years.

There are, too, some startling omissions. What has concerned me most has been the fact that minerals are not exempt, and will consequently be subject to the betterment levy. This is quite extraordinary, although I say in comfort to the right hon. Gentleman it was a mistake made by David Lloyd George also. But he made it for very different reasons. Although I shall not delay the House or weary it with a further quotation, I refer hon. Members to column 537 of HANSARD for 29th April,1909. The reasons expressed then were because of the considerable victimisation which the mine-workers suffered at the hands of the coal owners, but things are different today.

One thing is quite certain. It is that the presence of minerals in any part of the land is not due to the ingenuity or hard work of mankind any more than is the existence of Niagara Falls, the Sahara Desert or the Thames flowing past this building. These things are there by chance, by the will of God, or through whatever means one likes to suggest. To suggest that these natural resources should be subject to a betterment levy is quite incredible. Quite apart from anything else, as the right hon. Member for Kingston-upon-Thames has already said, it would increase building costs. There can be no doubt about this.

Why mineral rights should not have been exempt is something which in another way illustrates the inadequacies and bad draftsmanship of so much of this Bill. There are weaknesses in the Bill which have been adequately dealt with in the circular distributed by the National Farmers' Union. I do not propose to elaborate upon them because they have been referred to, not only by the right hon. Member for Kingston-upon-Thames, but also by the hon. Member for Windsor (Sir C. Mott-Radclyffe). Anxieties expressed on behalf of the agricultural community are real and should be dealt with in Committee if this Bill is ever to see the light of day in the form of an Act of Parliament.

We on this bench believe that a major part of the Bill is totally unnecessary—namely, the Land Commission. Secondly, the betterment charge, while it is right in principle, cannot operate in this form to bring down the price of land and in any case is being tackled by Her Majesty's Government in a wholly wrong-headed manner. Thirdly, we see this Bill as a tangled, irrelevant pathway which, if it is followed along its tortuous route, can lead only to nationalisation and will gravely injure Her Majesty's Government's avowed intention and, I believe, honest desire to stop racketeering and bring down the cost of land. The end product will be the very opposite of the intentions behind the Bill. The results which the Government have stated they want can be obtained only on a basis of a complete overhaul of our rating system, a complete overhaul of the taxation in relation to land, and carried into effect only through properly freely-elected regional bodies.

None of these oft-stated and oft-repeated Liberal aims is contained in this Bill. Nor are the Liberal aims which were the beginning of the old Liberal cry of "The land belongs to the people" contained in this Bill. Indeed this Bill is the very opposite of Liberal principle, Liberal intention and Liberal advocacy over the years. The late President Kennedy is reported to have frequently used in his speeches a quotation which I believe is an old Chinese proverb, that a journey of a thousand miles starts with a single step. This Bill starts with two steps, both of them backward, back into the dark age of Socialism and nationalisation. I hope that the House will reject it and that we shall one day have a truly radical Bill brought before this House which will kill racketeering, bring down the price of land, make it available for house building and bring about the intentions which have been expressed by the Government, but which are not expressed in this Bill.

8.25 p.m.

Photo of Mr Charles Mapp Mr Charles Mapp , Oldham East

I was reflecting this afternoon about the attitude of the three parties in this House to this vitally important Bill. It will rank not as a Bill or an Act of passing effort, but will be regarded as one of those basic Bills and Acts-to-be of the greatest significance. In 1970 hon. Members opposite who are opposing it tonight, as they did the Welfare State, will be saying, "We were not against the Land Bill of 1966." They are, of course, doing their damnedest to destroy the machinery with which ideas of this kind take shape.

Having heard tonight the contribution from Cornwall by the hon. Member for Bodmin (Mr. Bessell) of the Liberal Party, I think there will be no Liberal Party left in 1970—at least, not an organised Liberal Party. Certainly events in Hull seem to suggest that that is its obvious destiny. Those Liberals in the country whom I know—and I know a number—who are of the real vintage which I remember in a family sense, will be ashamed that in the hon. Member's speech the mechanics were far more important than the principle underlying this Bill.

A good deal of my Socialism arises from moral values. Not once today from the other side of the House has there been any argument that the land of this or any other country has ever been rightly appropriated by anyone including monarchs. If water, air and land are God's gift to people, I still deny in this age the right of any person to procure and sell land in the sense we know it. I accept that in present difficulties I have to live with that problem, but I am prepared to go on working and hoping that in due course man will liberate himself from this mortifying process of usurping for himself exclusive rights in land.

I say that as a small landowner of land on which my house sits, but I recognise immediately that beyond all the furniture of this Bill that is the basic argument. I say to my colleagues that this is the stage when the machinery of dealing with betterment value has to be put in and hon. Members opposite, if ever they come back to pay, will be afraid to dismantle it. At this stage in the sixties we have got over the first major argument. The Tories have been converted. They have accepted, with reservations, the idea of betterment. In the next 30 or 40 years perhaps they will come to accept the idea of land being restored to the people. We shall go on arguing the right kind of machinery and services to secure that land can be appropriately used in the interests of the people.

The Liberal Party, as we heard it tonight—I have not heard it so expressed in the country—seems to go to bed every night, as do the Tories, with the nationalisation argument somewhere in the room. I wish they would get away from this. If I thought that my party was trying to operate the theory of nationalisation in the guise of the Bill, I would disown my party tomorrow. It is not on. We cannot be deceived like that. I gather that the hon. Member for Bodmin was saying, "I want the land problem to be solved, but on my terms"—the terms of nine Members out of 630. He said, "We want it determined on the basis of land values". The hon. Gentleman went on to say, as I shall later, that he thought that there should be regional representation in respect of the machinery. Is this a matter of principle?

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I said, not that I wanted it resolved in terms dictated by nine Members, but in the terms dictated by the Liberal Party, if you like, in 1909.

Photo of Mr Charles Mapp Mr Charles Mapp , Oldham East

I accept the words of the hon. Member's speech, but I will be more straightforward with him. If the Liberal Party had been able to get what their leader has been asking for for the last few months, namely, a process of consultation with the Government before events take place, there would have been no opposition from them this evening. Their opposition now is the result of thwarted horse trading. The hon. Gentleman's second objection was that in some curious way the Commission would mitigate the betterment charge. I could not follow him here.

This afternoon, for obvious reasons, the Minister had to do a lot of explaining of the contents of the Bill. I like to think that I am speaking for the landless people who as yet have not been mentioned. Every hon. Member who has spoken from the opposite benches is interested in some way in the ownership or the exchange of land. Millions of people have no land at all. When they want a little land on which to build a house, they are bled white in the process of getting it.

I want to say this on behalf of ordinary people. I have been through the process of selling a house and buying another one. The House should be ashamed of the amount of legal and professional services which cocoon themselves on any exchanges of land or property. In respect of practically any commodity operations can be conducted with the minimum of red tape, a certain measure of economy, and, above all, a measure of expedition. This applies even to operations on the Stock Exchange, but any normal man or woman who wants to buy or sell a house is wrapped up in the biggest conspiracy by professional people that exists. I hope that the creation in the Bill of Crownhold will provide an opportunity by which in the disposal of land the Commission will simplify, modernise and, indeed, cheapen the processes under which land is exchanged.

Is this a debate or not? Most of my hon. Friends and I will tonight count the heads of those who are prepared to accept machinery which can be improved on in Committee. It would appear that the Liberal Party is not prepared even to accept machinery. The job of the House tonight is to examine and accept or reject the machinery to put the principle of the Bill into operation. The way the House acts tonight will decide the country's attitude to the Bill.

When I first read the Bill I thought that the application of the Bill would be a long process, certainly not dramatic and not as fast as I would like. Then I thought of Sidney Webb's argument about gradualness, and I say to the Minister that I accept the theory of gradualness, provided that it is in a hurry. If this Bill is going to be clumsy in operation and execution, and long-winded in results, there will be a lot of criticism from this side of the House. In the next two or three years I want to see a real out-turn of work done. We want to see this Bill go through the House, through the Committee and all its stages, and we want the machinery to be working effectively and things seen to be done in the country within the next few months, or at least within the next year or so.

May I now come to a point mentioned by the hon. Member for Bodmin concerning a condition of his support for the Bill, namely, regional administration or a link with it. I wish to remind my right hon. Friend that here is a centralised body consisting of nine members. However wisely they are drawn, they can hardly reflect the spectrum of opinions and ways of life in different parts of the country. Whether nine is the right number I do not know, but if the membership is overweighted by professional people this will be the worst day's job the Minister has ever done. Among those nine people there should be probably not more than two professionals, lawyers or whatever they may be. In the main, these nine members should be men and women rich in experience and knowledgeable about things in general. They should know about public life, central and local government, and their minds should function on the basis of good sense and not functional management, however well-intentioned that may be. I would he very disappointed if the chairman or deputy-chairman were professional people. Where the services of professional people are required it should be the job of the Commission to obtain such staff and advice. I hope my right hon. Friend will bear this in mind. In some ways the Bill might have been improved a little if there had been written into it some reassurance on these lines.

I come to the next problem. I presume that the hon. Member for Bodmin was talking about the South-West. I am speaking of the North-West, the North, and that sort of environment. I want to see written into the machinery of this Bill—or, at least, I should like some assurance—that from that great area of Britain, beyond the Trent, if you like, we could have a representation of local opinion from men with knockabout knowledge. I am not concerned with their political opinions, so long as they are known to have reasonably intimate connection with the Commission, men whom one can telephone and meet and with whom one can discuss matters without being immersed in an official attitude, men who can bring to the Commission a real knowledge of events outside.

Finally, I want to make this observation, though I must be very careful in saying it. I do not want to be misquoted or misunderstood. For many years—perhaps our late friend Lord Morrison was the author of the idea, or it might have originated before his time—whenever we have put public utilities together where the social conscience has predominated, for very good reasons it has always been considered right to exclude members of this House from the bodies which have been set up.

We can all readily see the reasons, and I admit that up to recently, until I made some researches, I would have taken that view. But is it so essential that bodies of this and other kinds should necessarily be robbed of the knowledge and ability of hon. Members from either side of the House? It means that these boards —and this Commission will be in the same position—work in a vacuum, reporting to a Minister who ultimately is responsible to the House. If we accepted the principle that hon. Members should not be barred from serving on these boards, the question of payment and that kind of thing could be dealt with quite easily.

The Commission will be a sort of State trading organisation and I take the view that some of our modern utilities might well be enriched both in the business of the boards themselves and in terms of public opinion outside if at this stage such special provision governing membership by hon. Members were not written into this Bill. I am a disinterested party, but, having applied some thought to this matter, I make the point that when we are reviewing the work of some of our major utilities it would be like a breath of fresh air to have responsible contributions from those who are in intimate touch with the mechanics of utilities.

This does not mean that hon. Members on either side of the House would be disloyal to the Minister. Like all board members, they would accept the Minister's final ruling. I do not say that this suggestion will bear fruit in the next few weeks but I submit that there is a case for reconsideration of this point. Nine members are probably not enough if account is to be taken of regional complexities and there are to be regional sub-committees, but whether membership of this body is nine or 15, I leave with the House the thought that the time may well have come when we should recognise the knowledge of some hon. Members who would contribute not only a great deal to the utility but to contact between it and the House. This would be something more than a mere public relations arrangement.

This is a jolly good Bill. I like parts of it immensely, but I would say one thing, probably to the annoyance of the Opposition. We have heard time and time again of the reservations and protections which the Opposition want inserted in the Bill. If in Committee I find—and I hope that this applies to my colleagues—that the Minister has conceded too many reservations to the landed interests and has provided too many escape routes, I hope that we on this side of the House will say that in fairness to its flexible management the Commission should not be encumbered with all these guarantees to vested interests.

I ask my right hon. Friend to keep an open mind on this point. It is all right giving guarantees to people of this sort, but the ordinary common man wants some guarantees, too. One can look to other countries in Europe to see what they do. All the guarantees proposed for this country are not to be found there. In Western Germany, for instance, the procedure is mainly by appropriation, the land owner being dealt with administratively afterwards. I am not suggesting that, but I feel that we have gone to the other extreme and I hope that every Clause will be examined closely on this side of the House to ensure that we do not give all sorts of guarantees which could well be an encumbrance to the Commission later on.

I know that the Bill will be passed. I hope that it will go through Committee without material Amendment, with no concessions made to the other side. The Opposition have all the concessions that they ought to expect. I should like to see the Bill on the Statute Book well before the summer, and I hope that there will be at least some out-turn of work even by the end of this year.

8.46 p.m.

Photo of Mr Norman Wylie Mr Norman Wylie , Edinburgh Pentlands

In view of the late hour, I shall confine my remarks to the provisions of Part II of the Bill. The only observation I make about Part III is to refer to the interjection I made when the Minister was opening the debate with reference to the effect of Clauses 37 and 44 in the Case C situation. In my view and the view of many others, this is a situation likely to act as a serious disincentive to developers. As I understand it, if a developer, an industrialist in a development district in Scotland, for example, intends to expand his premises and his plant, he will have to embark upon that development, possibly, years before he knows what the betterment leavy will be. This situation will be highly detrimental to the kind of development we all want to see especially in development districts such as in Scotland and it runs contrary to the views expressed in the White Paper, "A Plan for Scotland", published only last week.

My primary objection, like that of the hon. Member for Bodmin (Mr. Bessell) and many others, is to the setting up of a Land Commission. It is not necessary. It will not work. Moreover, it will run into head-on collision with the whole system of town and country planning as we have known it over the years. It is true that the Land Commission is not a planning authority, but its activities clash with the activities of planning authorities. It seems to me that this is the most unsatisfactory feature of the Bill altogether.

As I understand from what the Minister said today and what he said in his address to the Royal Institution of Chartered Surveyors in December, as reported in the current edition of Planning Law, the basis for this proposal is that, in some way or another, the existing machinery has fallen down either because local authorities do not have the necessary power to fulfil their statutory obligations or, as I think the Minister put it, they are unwilling to do so because of local pressures. I take it that he was speaking of England and Wales, not of Scotland. If that were the Government's view as regards Scotland, it would be entirely unjustified.

Over the years, I have had considerable experience professionally in planing work, and I have come into contact with many local authorities throughout Scotland. I have never come across a case in which it could reasonably be said that this authority or that was falling down on its statutory obligations or holding back the development of its planning area when there was no proper reason so to do.

We have over 60 planning authorities in Scotland. As in England, they have wide statutory duties. They have the duty to plan the development of their planning areas. They have the progressive and continuing obligation to amend their development plans and to report at least every five years on the development of their planning proposals. These are wide statutory duties, and, to enable them to fulfil them, planning authorities have been given wide powers.

I apologise for referring to the Scottish legislation on the matter. I am sure that it is the same for England, but I am more familiar with the Scottish legislation. Section 35 of the 1947 Scottish Act gives local planning authorities the widest possible powers of compulsory purchase, powers compulsorily to acquire those essential areas in our towns and cities which through obsolete development can be developed only comprehensively. The planning authorities are not going to be blocked, and never have been, by one or two interested landowners holding up the whole development. They have had powers to deal with that sort of thing. I mention that because of what has been said on the other side of the House about how the system is falling down. It is not falling down. Planning authorities have powers to deal with those things.

However, the particular power that I have in mind is that contained in Section 35(2), which gives the local planning authority in every case power to acquire land compulsorily where it is necessary to enable it to fulfil the proposals of the plan. That is to say, if it is ever necessary for a planning authority in Scotland —and also, I assume, in England—to resort to compulsory powers to put into effect the plan which it has proposed, then it has those powers. It is said that the planning authorities may have the powers but are not using them. I should be very interested to know whether a single instance can be quoted of any major planning authority in Scotland which has failed in the exercise of those statutory powers which it has under Section 35.

Even if that happened to be the case, it would not be the end of the story. The Government, in the person of the Secretary of State, have reserve powers. Not only do local planning authorities have entirely adequate powers to enable them to carry out their statutory duties, but if they fail to carry them out, the Government have the widest possible powers to intervene. There is a provision in Section 5 of that Act that if it appears to the Secretary of State that a local planning authority is not taking the necessary steps to propose amendments to the plan when it is obliged by Statute to do so, the Secretary of State himself can carry out his own survey and put into effect his own amendments to the plan. In other words, if the planning authority is falling down in its planning proposals, the Secretary of State has power to step in, take over the whole responsibility himself and put the necessary amendments in to the development plan.

We are told about failure to exercise compulsory purchase powers through local pressure and so on. But the ultimate power of the Secretary of State is contained in Section 96 of the Act, which provides that if he is satisfied that the local planning authority has not properly used its power under Section 35 in the form of compulsory purchase, he may order the authority in terms to do so.

How can it be said in that statutory situation either that the local authorities are falling down in their statutory duties or that the Secretary of State and the Government are unable to do anything about it? I appreciate that it is rather late and that the Joint Under-Secretary is not able to help me at this moment, but I should be interested to know at later stages of the Bill whether the Secretary of State for Scotland has ever had to use his powers under either Section 5 or Section 96. I know of no such exercise.

Finally, how does the creation of a Land Commission fit into this planning position? How do the powers contained in Clauses 6 and 23 of the Bill fit in with the existing planning machinery? It is clearly laid down in Clause 6 that the Land Commission has power compulsorily to acquire any land which in its opinion is suitable for material development. That is a direct exercise of planning responsibilities. What is to happen in these circumstances? Will the Commission go to a city like Edinburgh or a town like Paisley, see an open site and say, "In our view, that is suitable for material development"? In situations like that, there is usually very good reason why land of that nature is still open. Those reasons are not those suggested by some hon. Members opposite —that local authorities are not exercising their powers or are being slow. The reasons usually are considerations of amenity and other considerations which town planning authorities must take into account.

Will the Commission be able to step into this delicately balanced planning structure, into the middle of these carefully laid out proposals which are the result of years of work by planning authorities, and calmly say, "In our view, this land is suitable for material development and it does not matter what your proposals are. We shall ask the Secretary of State, under Section 13 of the 1947 Act, to call in this application and he will grant it."

That is the kind of conflict likely to arise in this situation. It certainly can do so. How will the Commission be qualified to deal with problems of this nature? How will it know the housing requirements and densities, for example, of an area and about other calls on the land resources? Will it be able to carry out the necessary technical surveys of sites to ensure that if, on the face of it, land seems suitable for housing it really can be used for the purpose?

This is the kind of information that planning authorities have and on which they lay out development plans. But it is precisely the kind of information that the Commission will not have. Yet it is to be given wide powers to intervene in what is an essentially planning matter. Of course there are hold-ups—in compulsory acquisition, through the proposal of amendments and alterations to development plans, through public inquiries—indeed through getting the necessary form from the Secretary of State on appeal.

I have discussed these problems with two or three of the most eminent planning consultants in Scotland and it seems that the root problems are not those of powers or the exercise of powers but the problems of finance and, above all, of the shortage of skilled, trained and experienced personnel. Some authorities are better off than others. Paisley Corporation is a perfect example of an authority which has recast and redeveloped the whole of its urban area in a remarkably short time—largely thanks to the skill, ability and experience and training of its technical assistants in the borough engineer's department. But I can think of other authorities with massive problems before them which have fallen down on the job.

There is a critical shortage of town planners and valuers. I cannot see this Bill alleviating those difficulties. On the contrary, it will aggravate them because the new machinery being superimposed on the existing machinery will draw away valuable personnel. This will aggravate the problem of those at present engaged in town planning. The whole proposal to set up a Land Commission with these powers—apart from the problems of the betterment levy and the rest of it—is a thoroughly bad one and, even worse, thoroughly unnecessary.

9.0 p.m.

Photo of Mrs Margaret Thatcher Mrs Margaret Thatcher , Finchley

It is my pleasant privilege to add my congratulations to my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) on his maiden speech. There is only one way in which I can describe it. It was outstanding among maiden speeches in he House both in its original content and in the way in which it was delivered. I am sure that we all look forward to hearing my hon. Friend when he can be more controversial than he was today.

I was particularly glad that he mentioned the subject of charities in connection with the Bill. In my constituency one piece of land was sold at an enormous price which was a tremendous help to an old people's home who happened to own it. It was one and a half acres and it was sold for £360,000 to a development company. Needless to say, the money was a godsend to the home which for the first time in its life was able to provide proper accommodation, a purpose-built home, and a proper endowment. So there are occasions when large prices for land can be of tremendous benefit to charities.

Whether charities would still be exempt under the Bill in a case like that, I, in common with others, have not yet been able to decipher. I have a great deal of sympathy with the hon. Member for Nottingham, Central (Mr. Dunnett) who said that he did not understand much of the Bill. He then concluded that he would commend it. I do not understand a great deal of it and, therefore, unlike him, I am not prepared to commend it to the House

Many major points have been made and I should like to refer to some of them. I shall take the first head, that of individual rights. A number of Clauses are designed to over-ride all individual rights to an extent which we never thought would be introduced by any Government in peacetime. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has already referred to the provisions in Schedule 2 relating to the service of notices. These may be so curtailed that the person whose rights are to be taken away or affected may never even know about it.

Further, under the same Schedule, the Minister can dispense with a public inquiry. The relevant paragraph says: The Minister … shall not be required … to cause a public local inquiry to be held, or to afford to an objector an opportunity of appearing before and being heard by a person appointed by that Minister for the purpose, unless in the circustances of the case the Minister considers it expedient to do so. So the general rule that everyone has a right to be heard has now been changed and the general rule is to be that no one has a right to be heard unless the Minister grants him one. I am amazed that any party could put such a provision into legislation, for this is an arbitrary power, indeed.

Moreover, when notices have been curtailed and when inquiries have been dispensed with, there is a specially expedited planning procedure to hurry things along as quickly as possible. It is true that there has been an expedited planning procedure before. There was one in the Consolidated Town and Planning Act, 1962, but its use was strictly circumscribed. It was to be used only in the exceptional case. Special application had to be made to the Minister for its use in each individual case and he could grant that application only if he considered that it was urgently necessary in the public interest to do so. Under the Bill the Ministry may direct the procedure to apply by order to very large groups of transactions.

Once again we have the spectacle of the exceptional power coming to be used as a general rule against the individual. Once expedited planning procedure has been invoked, an expedited vesting declaration can then be made. Under previous Acts, this again was an exceptional measure for exceptional circumstances. Now one finds that it is not an exceptional Measure, but it may be used, or could be used, by the Land Commission in all cases of compulsory purchase, and that the period is reduced to 14 days. The position was put very well in a letter in The Times dated 8th January, 1966, which summed up the position as follows: After regulations authorised by the Bill have been made the Commission can draft Compulsory Purchase Orders without specifying the purpose for which they require the land, they have no need to advertise and there are less stringent provisions for serving notices. The Minister can then confirm the Compulsory Purchase Order without a public inquiry. The Commission can then vest the land in themselves by a vesting declaration and enter upon it 14 days later. Experience shows that it may be years later before the overburdened Valuation Department of the Inland Revenue can agree the compensation for the party dispossessed in this summary manner. No Bill should contain these sweeping powers.

Turning to the effect of the proposed Bill on industry, the Prime Minister said last weekend, after the Hull by-election, that there was a need to economise in Government expenditure. I did not get that impression from Bills and Papers published before the Hull by-election, but this was so afterwards. He also said that there was an urgent need to modernise industry. This Bill, coming two days after the speech, provides for unnecessary expenditure on the setting up of a Land Commission and for a tax on modernisation. One can conclude that, whatever the Prime Minister said Saturday, the reverse is to be done by the Bill in the House on Monday.

Under the Bill any project of material development becomes liable for the levy. This applies to industries as well as to house building and to development. If the owner of a factory who is successful wishes to extend his premises and obtains planning permission to do so, he becomes liable for a levy as soon as the first trench is dug in order to put in the foundations of the extension. This can only add to the costs of modernisation, and it is quite outside the scope of the Bill, or the reasons existing in the public mind for which this Bill was introduced.

Added to that, when the industrialist has secured planning permission for the extension and, if he is fortunate, an industrial development certificate, he may then be liable, under the powers given to the Land Commission, after the second appointed day, to have the whole extension compulsorily acquired by the Land Commission. One should perhaps say that the Land Commission is generous, for the Bill provides for an industry to serve notice on it so that the industry may check whether it will be liable to a compulsory purchase order.

This is little consolation to a person who has been successful and wishes to expand, who has gone through all the difficulties of obtaining local authority permission and has provided finance. These are just a part of the problems facing industry. The Confederation of British Industry memorandum has this to say about compulsory purchase: With regard to 6(3a) large industrial units are not developed overnight and planning permission may therefore be obtained some time before the stage of development for which it is needed is reached. Industry would be very uneasy if this were made the pretext for compulsory acquisition. Hon. Members will appreciate that after the second appointed day the Land Commission has power to acquire all land on which there is planning permission. That applies to industry just as much as to any other land.

A third effect on industry is that to which my right hon. Friend the Member for Kingston-upon-Thames referred about minerals. When land containing minerals is sold for development, it will be liable, naturally, to the levy. But, as the Bill stands, there will also be a levy when those minerals commence to be extracted. This is not a levy on betterment of the land. This is a levy on depletion of the land. It is absurd to attempt to levy a charge in those circumstances.

So much for the effect of the Bill on industry. Let it be clearly understood that the Minister has brought before the House a Bill which deliberately imposes a tax on the modernisation of industry and which deliberately exposes industries to compulsory purchase by the Land Commission. In one of the Schedules of the Bill there is provision that where part of a factory has been acquired by the Commission the Commission can be asked to purchase the rest. That, too, is small consolation to the successful industrialist.

I turn to the effect on house prices. I take the view that any levy will put up the price of land. Therefore, it is very necessary to keep it down as far as possible. If the Bill eventually gets through, the Minister should consider the possibility of reducing as well as of increasing it. One would think that if he were concerned at the price of land he would take powers to reduce the levy if the first level were to prove too high.

With regard to private house development, it is fairly certain that the cost of land will rise in any event, because as long as inflation and a high demand for housing continue there will inevitably be an increased demand for land. This is so not only in this country but the world over, since land prices rise wherever there are similar conditions. There was a seminar on the cost and price of land in Paris last year. People who read the report of that seminar would have the impression that rising land prices were a problem wherever there was an urban centre and high demand. It is not a problem which it is easy to solve by any particular method.

The special effect on the price of houses for private development will be very much felt in the type of case where there is a large garden attached to a house for which planning permission can be given and upon which a number of houses are erected. I have very much in mind the Victorian house in some of the suburbs in London which often is demolished and a number of flats or houses are put up in its place. This kind of house is characterised by there being a difference between its existing use value as a single house and the site value. A levy based on 110 per cent. of the current use value would take away some of the profit to the vendor. If what he is left with is so small in amount that it is not a sufficient inducement for him to move, the land will not come into the market.

Perhaps an example will make what I have said clearer. The existing use value of the house might be £10,000 and its site value £14,000. I have a specific case in mind when I use these figures. At present the levy would be chargeable on £3,000. The vendor would have £1,800 left when the whole transaction had been completed. I doubt whether that would be a sufficient inducement for him to move to find another place, possibly at greater cost, and to enter into all the expense of moving. I should know because I moved last Monday and I have now become a constituent of my hon. Friend the Member for the Cities of London and Westminster, who today has made his maiden speech, and the costs of moving are always more expensive than one thinks.

Clearly, if not enough inducement is left by the operation of the levy, the site value price will go up so that the vendor will have enough money in his pocket. This means that the price of land for housing will rise. Alternatively, it will not come on to the market. One must not underestimate the tremendous value to the housing programme of land which is supplied in this kind of way. It provides land for a considerable number of houses.

I turn now to the effects upon the commercial developer. There have been a number of hard words today about commercial development. One should recognise at the outset that the commercial developer has performed a tremendous service in partnership with local authorities in redeveloping urban centres. He has often done it without a penny cost to the taxpayer or to the ratepayer and sometimes with great benefit to the ratepayer. One of the great problems affecting the commercial developer is that the development is often only marginal and the profit upon it very small indeed. It could easily be wiped out by the imposition of the levy. The other great practical problem facing the commercial developer is that, as the Bill is drafted, it is practically impossible for him to judge how much levy he will have to pay on the development, which he may have taken years to plan.

I have the impression from the Minister that he thought that many of the tasks of valuation would be quite simple. In the kind of case undertaken by the commercial developer, they will be extremely complicated. He might acquire the land over a large number of years. Various parts of the whole site will be liable to different amounts of levy. There is no provision in the Bill, as there is in the Stamp Duty legislation, whereby the commercial developer or any other developer can ask the Commission to state what amount the levy will be. He is, therefore, in a position of having to embark upon an expensive development, borrowing money at very high cost, without knowing what his liabilities will be. Bearing in mind that margins on some commercial development are as little as 2½ per cent., there is no room for this kind of uncertainty and it may well he that such development will be stopped altogether.

I turn now to the taxation provisions, because the development levy is in reality a tax. It is called a levy, but it is another form of tax. This is a form of Finance Bill, the tax being partly in this Bill and partly in the Finance Bill. It has always been a cardinal principle of taxation law that tax should be payable only where a charge is clearly imposed by Statute. Here, however, whatever there is in the Bill, one thing which is certain is that it is not clear. This is one of the most complicated charging provisions that I have ever seen. It is impossible even for a valuer coupled with an accountant and coupled with a barrister to say what amount of levy would be chargeable. The uncertainty which is being created is tremendous.

There is another serious aspect of the taxation provisions of the Bill. First, they attempt to impose taxation by regulation. I should have thought that had we been a colony, we would set up an illegal régime if the attempt was made to impose taxation by regulation. Under Clause 34, there is a great sweeping up provision—Case F—which is similar in some ways to the old Case VI under Schedule D, but the old Schedule D was clearly defined by Statute. Here, the Minister has said, "There may be other cases where I want to impose a levy. I do not know quite what they are, therefore I will ask the House for powers to impose taxation on these by regulation." Again, one would not expect any Government to bring such powers before this House, bearing in mind that Parliamentary representation and control have always been fundamental to taxation.

The number of sanctions which empower the Minister to issue regulations is very great indeed. Also relevant to the taxation regulations aspect are paragraph 8 of Schedule 7 and paragraph 26 of Schedule 4. I think these provisions are because the Minister knows there will not be enough valuers to do the job properly, and therefore he takes a short cut by providing for valuation by regulation, and not of the event itself. That is quite wrong.

Further he takes powers to exempt certain cases from the levy by regulation. If he starts to take such powers what he is really saying is, "I have already taken powers too great, so I am going to ask you to let me dispense with some of them." He should not take the powers in the first instance.

I have said something about the complexity of the taxation provisions. In addition to the complexity there is also the duty to notify the Commission, and this covers some six pages or more in the Bill. The procedure for notification is different according to the chargeable transaction. I should like the Joint Parliamentary Secretary to give some indication of what sort of levy would be chargeable in a case such as the following, a very common case but one which, I think, illustrates the tremendous difficulties of valuation.

Suppose there is a shop in a commercial centre and it becomes vacant; the neighbouring shop requires it for extension of its premises; a competitor wants that shop in order to compete with the neighbour; the developer also wants the shop. All three attend the auction. Whatever price is paid for whatever use will be the highest price, and it must include development value. That transaction will have to be notified to the Commission. The Commission will have to decide how much levy is chargeable. Perhaps the Joint Parliamentary Secretary will be able to tell us how it will be calculated in a case like that.

Then it will have to go to the Inland Revenue to decide how much Capital Gains Tax will be chargeable. Every single transaction will have to be notified to the Land Commission. It will have to scrutinise it to see how much levy is chargeable, how much Capital Gains Tax is chargeable. Some may be chargeable, none may be chargeable; but the administrative problem will be enormous, and indeed, so great as to make the Bill almost unworkable.

Once the transaction has been notified to the Land Commission the Commission then has to give to the person who has given notice a counter-notice "as soon as is practicable". So one gives notice that there has been a transaction, and the only duty upon the Commission is to give one a counter-notice "as soon as is practicable". So one may go for months without knowing whether any levy is chargeable at all and the Commission may never have to tell one till the end of six years how much. This really is administrative nonsense.

There is, of course, as a number of my hon. Friends have said, a tremendous shortage of valuers. There are now, I gather, some 100 fewer than there were in 1962 in the Inland Revenue office.

According to an article in the Sunday Times on 19th December, each Inland Revenue valuer had to deal with an average of 1,000 cases in 1964. Add to that the number of cases under the pre- sent Bill—and there are approximately 411,000 planning applications each year —and the task is such that it makes the Bill practically unworkable.

I turn now to the Land Commission and the local authorities. My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) pointed out the tremendous extent to which local authorities already have powers of compulsory purchase under Sections 67 and 68 read in conjunction with Section 4 of the Town and Country Planning Act, 1962. They have all the powers that they need in order to see that land is used in accordance with the development plan.

Earlier on in introducing the Bill, the Minister said that he did not believe in the duplication of powers. But that is exactly what he is doing in the Land Commission. He is duplicating every power already in the hands of the local authorities, and that can only be because, sooner or later, the Commission, too, will exercise the powers and possibly usurp the functions of local authorities and clash with them in the discharge of their functions either in seeing that land is properly used under the plan or in acquiring it for the purposes of the plan.

Any further powers that are needed could quite easily be granted by a small amendment of existing town and country planning law or the existing Housing Act, 1957, both of which give the local authority powers to dispose of land, in the one case for urban centre redevelopment and in the other for housing. All the powers are there.

What is needed is not powers but finance. If the local authorities had that, they could very well discharge the duties which it is planned that the Land Commission would discharge. The local authorities are the planning authorities and are the proper authorities to discharge that particular function. They are already very well equipped to manage land and to acquire it, and they are very used to dealing with transactions in land. In 1964–65, for example, local authorities spent some £164 million on land, which is a lot even compared with the borrowing powers of the Land Commission.

Here one has authorities already equipped and well able to do the job. Indeed, at the town and country planning conference a couple of week ago at which the Minister was present—because I sat next to him [Laughter]—there was a paper read by the borough treasurer of Norwich which was highly critical of giving the Land Commission these powers. He pointed out the tremendous powers which local authorities already have and gave a figure unknown to me that loan sanctions in each of the last two years alone had totalled over £1,250 million. So the local authorities are well able to cope with the job.

It follows from what I have said that while most people applaud the objectives of the Bill as defined in the White Paper, the Bill is not the method by which to achieve them. If there is to be a levy imposed, it should be imposed in accordance with the proper principles of taxation and subject to the strict construction and the usual provisions related to the taxation Acts. In other words, we should have it in a Finance Act administered by the Inland Revenue and not in this extra and unusual form of Finance Act. The Bill also duplicates quite unnecessarily the powers of local authorities, and may usurp them. We think that the Bill should be referred back to the Minister with an instruction to reintroduce a levy under the Finance Act and to amend the powers of local authorities, and that that is the best way of achieving the objectives set out in the White Paper.

9.30 p.m.

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

Before I come to the main burden of my remarks, I should like to be associated with all those who have justly paid tribute to the hon. Member for the Cities of London and Westminster (Mr. John Smith). His speech was lucid and comprehensive, rather like the Measure that we are discussing, and he dealt with the subject in the same way. We all look forward to hearing him on many more occasions. The only slightly critical reflection that I permitted myself was to wonder what the hon. Gentleman would be like when he was really controversial, but apart from that we all very much enjoyed his speech.

I suppose it is inevitable that any significant Measure changing the land law in Britain is bound to be complex, and almost certain to be controversial. It is bound to be complex, since our land law has such an ancient lineage, and has become encrusted with the changes and decisions of centuries, although I think it is true to say that since the cleaning up operation of 1925 our English land law no longer justifies Oliver Cromwell's comment that it was: a tortuous and ungodly jumble", still less Joshua Williams's remark as late as 1870 that land law was absolutely worthless: some was absurd and injurious.

Nevertheless, one understands, and I think in a degree sympathises with, the suggestion which was made recently by the Estates Gazette on 15th January that perhaps the Land Commission Bill need not attempt to spell out every possible detail of every possible case. That is a very attractive idea, and rather unexpected from the source from which it came, but I am afraid that we should not be fulfilling our duty as a Government if we did not try in the legislation to make it as certain as we can with the help of the draftsmen. Incidentally, I take some comfort from the fact that, epoch making as I believe this Measure to be, it is a good deal shorter than some others in the same field.

It is equally inevitable that, as long as there are those who believe it wrong effectively to touch the power and the wealth of the large landowner, whether he be an individual or a corporate body, such Measures as this will be controversial. Indeed, I think that hon. Members on this side of the House would be rightly alarmed if at any rate some of the true blue elements opposite did not rush to the defence of the great landlords. Any radical Government—at least I used to think it might be any radical Government, but after the speech of the hon. Member for Bodmin (Mr. Bessell) I am not certain that this is any longer true—are bound to be in trouble if they attempt to interfere with what I might call these fundamental establishments.

I think that I can best serve the House by dividing my time as well as I can to answer the main groups of arguments which have been presented from different quarters. I am afraid that I shall not be able to cover all the points which have been made, but if through lack of time I cannot answer all the points which have been raised, I shall endeavour to do so by correspondence.

I would not be tempted to give a complete answer to the very simple case put to me by the hon. Lady the Member for Finchley (Mrs. Thatcher). I should like a little more notice of that, but, broadly speaking. I do not think that the basic principle is difficult to understand. We are using in valuation throughout market terms, market values, and in that case the levy will be calculated on the difference between the existing use value and the mark et value for which the property finally changes hands. If some individual pays too much for it, this is not a particular function of the Land Commission to investigate. There may be some qualifications in the details the hon. Lady gave that I would like to look at again, but, basically, the method of calculation of the levy is not difficult. I hope that that statement: will go a long way to reassuring the hon. Lady in some of the fears that she and others have expressed.

I should first like to deal with the group of arguments which while conceding that a levy on the profits made from exploiting land is fair and reasonable, suggests that a new land body is unnecessary. I suppose that this is the superficial meaning of the Amendment. The more subtle reason for the Amendment is that the Opposition know that it would be far too damaging for them to vote outright against the principles of the Bill. I find it very much more difficult to answer the very reasonable criticisms put by the hon. Lady the Member for Finchley than I do the much more propaganda effort made by her right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in moving the Amendment. I think it is true to say that the Opposition dare not show too bare-facedly to the public that after almost a decade and a half of themselves doing nothing about the land scandal, they now propose to vote against the Government which have the courage to do something about it.

Incidentally, I thought that the right hon. Gentleman, who moved the Amendment in what was a pleasant and formidable debating speech, completely undermined his own edifice when he was asked by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) if he would tell the House how it was that our levy would be passed on to the purchaser and so make the land dearer, but that his levy would not do so. Although the right hon. Gentleman said that he would do so, and gave a lot of interesting suggestions as to modifying and streamlining town planning procedure, he did not deal with that point.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

If the hon. Gentleman had paid attention to my speech he would know that I went at some length into our proposals for preventing the inflation of land prices by an improvement and acceleration in the planning procedures. If the proposal is, as the Government are now making it, to proceed with a levy while doing nothing at all to deal with the dilatory nature of our planning procedure, they will inevitably get inflation of land prices with the levy passed on. That can only be avoided —[Interruption.]—if the Government take the sensible steps to increase the supply of land with planning permission which I put to them. If the hon. Gentleman is not capable of absorbing that point, he is not competent to be Parliamentary Secretary.

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

The remark at the end of the right hon. Gentleman's somewhat lengthy intervention was, perhaps, a little churlish in the light of the manner in which I gave way to him. The House will realise that, despite my giving way and repeating the question put to the right hon. Gentleman by my hon. and learned Friend the Member for Dulwich, who asked how it was that the conversion of the right hon. Gentleman and his Friends now to the principle of levy was such that if they introduced a levy it would not be added to the cost or price of land, whereas ours would, the right hon. Gentleman has not answered. He said, "Oh, yes, I will deal with that, and answer it." What I have said, and what I now repeat after the right hon. Gentleman's lengthy intervention, is that neither then nor now has he explained that point. The public outside will take a good deal more notice of the Opposition, and perhaps be less inclined to agree with the hon. Member for Stratford-on-Avon (Mr. Maude), when we get straight answers to straight questions of this kind.

One point made by an hon. Member in relation to agricultural buildings was also made by the hon. Member for Windsor (Sir C. Mott-Radclyffe) and several other hon. Members—with the suggestion coming, of course, from the right hon. Member for Kingston-uponThames—that the whole of agricultural buildings are now to be threatened with the levy. My right hon. Friend intervened in the speech of the hon. and gallant Member to point out that Clause 86(2) defines development which is not "material" development and which will not therefore be subject to levy. Broadly speaking, the consequence of that is that Clause 86 already excludes development covered by the General Development Order and by the Third Schedule to the 1962 planning Act. These provisions exclude virtually all buildings used for general farming. I hone that that fact will be of some comfort to the hon. Member for Bodmin.

The Clause also provides for further classes of development to be defined by regulation. The White Paper said that these would follow the pattern of the 1950 "Exemption from development charge Regulations". They will be discussed with the farming interests, but the intention is, first, that they should exempt all agricultural buildings except those which are virtually factories, and, second, that they should exempt agricultural cottages or farmhouses so long as they are occupied by agricultural workers or farmers.

I put this on record because again, after the right hon. Gentleman's introductory speech, I am sure a great deal of unnecessary alarm may have come to farming interests which I hope my statement will remove.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

Can we get this clear? Is the hon. Gentleman saying that these buildings are not affected by the Bill as it at present stands, or alternatively, that they are so affected but it is his right hon. Friend's intention subsequently to exempt them?

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

I do not want to be guilty of tedious repetition. I thought I made it absolutely clear and, although this is important, I want to answer a great many other even more important and significant points.

Clause 86(2) defines development and broadly speaking all agricultural buildings come within that definition. Regula- tions will have to be made in connection with farm buildings and farmhouses to make certain that when they are used for agricultural purposes they also escape the levy.

The basic argument behind the Amendment and the fundamental objection running through the Opposition case and to some extent shared, although not so convincingly put, by the Liberal spokesman, is "Let the planning authorities allocate more land for housing, or whatever development it is, and then we shall have no problem to solve; speed up procedures and that will deal with this matter." If the problem is as simple as that it is remarkable that it was not done a decade ago. It would be quite delightful if the solution to this problem were as simple as that, but I have to inform the House that that is not the case.

I am to an extent fortified in my view that there is not such a simple explanation as this by the hon. Member for Gloucestershire, South (Mr. Corfield) in the very interesting pamphlet he wrote in collaboration with one whom many of us know very well, Mr. Rippon. On page 20 that pamphlet, which is called "Target for Homes", said: there is an urgent need to make more land available for building. Then having gone on to make various suggestions the pamphlet uses an extraordinarily important phrase, although it does not get us very far: for one reason or another, much of the land (already allocated for development) is not coming on to the market. The importance of that phrase cannot be overestimated: for one reason or another, much of the land (already allocated …) is not coming on to the market This is the very heart of the problem with which we are dealing and one of the central reasons why we must have a body such as the Commission. Neither the hon. Member nor Mr. Rippon deals in this interesting pamphlet with the reason why the land, although it is allocated by the planning authorities, is not in fact reaching the market. The Government, with the great demand which will be made for development of all kinds, realise that there is no assurance whatever that if the existing supply of land is left solely to the unregulated workings of the present highly imperfect land market there wi11 be a sufficient or significant increase of land coming on to the market. That is why, as my right hon. Friend said today and during the debate on the Loyal Address, it is imperative to have the Commission and to make full use of its powers where they are required, so as to have the right land available in the right places for national and for local development.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

What about local authorities?

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

I hope that the hon. Gentleman will at least do me the courtesy of believing that I shall deal with the argument about the local authorities. One could hardly not deal with it. I certainly do not intend to evade any of the crucial arguments, so far as I have time.

The House will not expect to take my word for the reasons as to why sufficient land when it is allocated is not coming on to the market, with the effect it might have on prices. The first piece of evidence I should like to give to the House —I will not read the entire extract; I will indicate the source to Members so that they can check it for themselves—is the statement made by Lionel Brett in his interesting book, "Landscape in Distress", published only a few months ago. There in South Oxfordshire he came to the alarming conclusion, after a very close investigation, that planning permissions, conditional or otherwise, had already been given but not yet used for a greater increase of population than the South-East Study thought it necessary to allocate to Oxfordshire by 1981. The point is that land has already been allocated but it has not yet come on to the market. This is a very significant example.

There is, perhaps, an even more striking one which was referred to by the planning officer for one of the home county planning areas—Hertfordshire in fact—which is reported in the Housing Review for a period two years ago. I take this for the simple reason that no hon. Member can say that the land is not now coming forward because we have had the publication of the White Paper. This is what the Planning Officer said to a conference as reported on page 152 of the issue of the Housing Review of 3rd September, 1963: This authority"— that is Hertfordshire— had been pressed to release more land for building to meet housing needs, although there was already land undeveloped for which planning permission had been given. The Planning Committee then decided that in the circumstances the release of further land would not be right, and agreed to the principle of public acquisition. However, it was decided that there should be no direct frontal attack. The position was made known through the local press, and it was explained that if this difficulty persisted the authority would have no alternative but to go for public acquisition. The land then gradually began to flow on to the market. Although it was not known how far this was due to the authority's line of approach, he believed that some of it must have had that connection. Again that is a county with adequate amounts of land already designated in the development plan for which permission—certainly outline permission—had already been granted but the land was not being made available for development. That is case No. 2.

There are other cases which I could quote—I always like to quote—but I will not do so because, owing to my giving way to interventions my time has rapidly gone. There is a very interesting example in a pamphlet by Dr. Denman. Dr. Denman always quotes me, so I like to quote him in return. He shows a similar characteristic in his findings. He says one other thing about which I ought to inform the House because I am sure that it will be accepted by right hon. and hon. Members opposite. It is about the land market which the Conservatives today are saying to the House and to the country ought to remain as it is, that nothing need be done about it except to speed up planning permission. This was all we had from the right-hon. Member for Kingston-upon-Thames. Dr. Denham, who is an extremely experienced and expert land agent, says this: Now and again an agent is instructed to act for the purchaser. Even so, he seldom comes out into the open to let it be known what he is after. A normal approach is a cloak and dagger act, piecemeal territorial acquisition, sinuous manoeuvres to hide the source of demand lest the market is alerted and plays the oyster. Thus the property market is disjointed. Supply is seldom face to face with true demand. It is worth while putting that on the record, because that is what we are asked to support by the Opposition today. Briefly we say to the House that the Government certainly could not discharge their obligations which have been outlined in the Housing White Paper and referred to in paragraph 26 in connection with the functions of the Land Commission without having at their disposal an instrument to assist the local authorities in acquiring the large amount of land which will be required.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

I thank the hon. Gentleman for giving way. He is always very fair. May I point out that I did not base my argument on the powers of the planning authorities. In fact, I based my argument on the rate of taxation of site values. Will not the hon. Gentleman agree that he has made out a perfect case for that particular solution?

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

What the hon. Gentleman has done is to take a little more of my time so that I may be able to deal less fully with what I consider to be the practical difficulties in the way of the 1908 solution, which is not one that I expected to hear put in all the pristine purity in which we had it advanced today.

The second fact is that many owners—and, from the point of view of hon. Members opposite, this is perfectly right—are prepared, as has been shown by the examples that I have quoted from sources which are not Government sources or from Transport House, quite legitimately to hold on to their land as long as they possibly can, or to sell it bit by bit because by so doing they get a very much better price.

Again if any hon. Member doubts that that is the case, I should like to refer him to an investigation which was carried out by the Building Research Station in a paper prepared by Dr. Stone called, "The price of sites for residential building." There among the conclusions given by Dr. Stone were these, taking the London region: In the London region and in the south coast areas it would appear that on average, other things being equal, prices per site acre fell about £250 for each acre increase in the size of the site. He goes on to say that this had less significance when one got out of the Home Counties area.

What this means, if I may put it in simple language to hon. Members opposite, is this. Whereas the owner selling 25 acres in south-east England with planning permission for housing development as a whole can get £125,000, if he sells that land off in, say, five acre lots he may well double the amount of money. This is obviously following normal commercial practice and it is, therefore, obvious that any trustee body ought to follow this principle of hanging on to the land as long as it can. The very simple case of the Government in this matter, and the case for the Land Commission, is that one cannot wait for the ordinary working of the market for the land to be made available for all the developments that have to take place.

There are other examples—I want to quote only one other now—of land being held up. Mr. John Dunham, who was two years ago the President of the Building Societies Association, said: It is nonsense to say that there is a shortage of building land. I know of cases where planning permission has been given for new house building but years later nothing has been done about it. Builders have the land but some of them are just sitting back, doing nothing and waiting for prices to go up. Against this kind of evidence it is perfectly clear that we must have a much more effective instrument. I think it is right to say that only a year or two back an alleged progressive Conservative Minister of Housing and Local Government, in the debate on land on 18th July, 1960, when this very point about the supply of building land was put to him, said: … even if more land than is needed for the next few years could be released it is unlikely that prices … would come down substantially. Developers and middlemen would tend to put the land released into stock.—[OFFICIAL REPORT, 18th July, 1960; Vol. 627, c. 159.] This is again very good testimony indeed from the right hon. Gentleman—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. There is a background of conversation on both sides of the House which is not courteous to the speaker.

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

As I was saying, that is the last testimony I want to give on the need—

Photo of Mr Arthur Skeffington Mr Arthur Skeffington , Hayes and Harlington

I have been very generous in giving way. I wanted to answer these points. No one is sadder than I am that some of the very brilliant replies I have on points about compulsory purchase, and indeed the Liberal case, cannot be given tonight but there will be adequate opportunity in Committee and I shall be happy to take full advantage of it.

The House and the country must be under no illusion about the massive demands that will be made on the comparatively small surface of Britain, both as a result of the National Plan with all its regional consequences and as a result of the greater population and the improvement of living standards. We are already the third most highly populated country in Europe.

Mr. Hugh Wilson, who advises the Minister of Housing on these matters, has pointed out that by the end of the century 72 million people will be living in Britain. He has estimated that this increase in population means the equivalent of building a new town of 70,000 people every seven weeks for the next 40 years or a new Bristol every 12 months.

It is quite clear that we shall not get the land where we require it in the condition that we require it without a central instrument which can buy it. It has been suggested that these proposals

have been very badly received. We have heard one or two rather unrepresentative illustrations of that, but there are equally respectable and responsible testimonies. I have been impressed by the fact that those who really understand the land problem and who are prepared to be fair and reasonable, believe that the Government at long last have got the answer to this problem.

Professor Alan Day in The Observer of 26th September last, under the heading "Land: Labour's Fair Deal", commended both the levy and the work which the Commission could do. The Town and Country Planning Association, while critical of certain aspects which I would have liked to discuss in greater detail—and this will be a lesson to me not to give way so much in future—said, as a most representative body, that the objectives of the Government's proposals are much in accord with the policy which the Association has advanced for many years. I hope that the House will reject this tawdry Amendment and take the next bold step in the second half of the twentieth century.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 299, Noes 291.

Division No. 18.]AYES [10.00 p.m.
Abse, LeoBuchanan, RichardDunn, James A.
Albu, AustenButler, Herbert (Hackney, C.)Dunnett, Jack
Allaun, Frank (Salford, E.)Butler, Mrs. Joyce (Wood Green)Edelman, Maurice
Alldritt, WalterCallaghan, Rt. Hn. JamesEdwards, Rt. Hn. Ness (Caerphilly)
Allen, Scholefield (Crewe)Carmichael, NeilEdwards, Robert (Bilston)
Armstrong, ErnestCarter-Jones, LewisEnnals, David
Atkinson, NormanCastle, Rt. Hn. BarbaraEnsor, David
Bacon, Rt. Hn. AliceChapman, DonaldEvans, Albert (Islington, S.W.)
Bagier, Gordon A. T.Coleman, DonaldEvans, Ioan (Birmingham, Yardley)
Barnett, JoelConlan, BernardFernyhough, E.
Baxter, WilliamCorbet, Mrs. FredaFinch, Harold (Bedwellty)
Beaney, AlanCousins, Rt. Hn. FrankFitch, Alan (Wigan)
Bellenger, Rt. Hn. F. J.Craddock, George (Bradford, S.)Fletcher, Sir Eric (Islington, E.)
Bence, CyrilCrawshaw, RichardFletcher, Ted (Darlington)
Benn, Rt. Hn. Anthony WedgwoodCronin, JohnFletcher, Raymond (Ilkeston)
Bennett, J. (Glasgow, Bridgeton)Crosland, Rt. Hn. AnthonyFloud, Bernard
Binns, JohnCrossman, Rt. Hn. R. H. S.Foley, Maurice
Bishop, E. S.Cullen, Mrs. AliceFoot, Sir Dingle (Ipswich)
Blackburn, F.Dalyell, TarnFoot, Michael (Ebbw Vale)
Blenkinsop, ArthurDarling, GeorgeFord, Ben
Boardman, H.Davies, G. Elfed (Rhondda, E.)Fraser, Rt. Hn. Tom (Hamilton)
Boston, TerenceDavies, Harold (Leek)Freeson, Reginald
Bottomley, Rt. Hn. ArthurDavies, Ifor (Gower)Galpern, Sir Myer
Bowden, Rt. Hn. H. W. (Leics S.W.)Davies, S. O. (Merthyr)Garrett, W. E.
Boyden, Jamesde Freitas, Sir GeoffreyGarrow, Alex
Braddock, Mrs. E. M.Delargy, HughGinsburg, David
Bradley, TomDell, EdmundGourlay, Harry
Bray, Dr. JeremyDempsey, JamesGreenwood, Rt. Hn. Anthony
Broughton, Dr, A. D. D.Diamond, Rt. Hn. JohnGregory, Arnold
Brown, Rt. Hn. George (Belper)Doig, PeterGrey, Charles
Brown, Hugh D. (Glasgow, Provan)Donnelly, DesmondGriffiths, David (Rother Valley)
Brown, R. W. (Shoreditch & Fbury)Driberg, TomGriffiths, Rt. Hn. James (Llanelly)
Buchan, Norman (Renfrewshire, W.)Duffy, Dr. A. E. P.Griffiths, Will (M'chester, Exchange)
Gunter, Rt. Hn. R. J.McNamara, J. K.Ross, Rt. Hn. William
Hale, LeslieMahon, Peter (Preston, S.)Rowland, Christopher
Hamilton, James (Bothwell)Mahon, Simon (Bootle)Sheldon, Robert
Hamilton, William (West Fife)Mallalleu, E. L. (Brigg)Shinwell, Rt. Hn. E.
Hamling, William (Woolwich, W.)Mallalieu, J.P.W. (Huddersfield, E.)Shore, Peter (Stepney)
Hannan, WilliamManuel, ArchieShort, Rt. Hn. E. (N'c'tle-on-Tyne, C.)
Harper, JosephMapp, CharlesShort, Mrs. Renée (W'hampton, N. E.)
Harrison, Walter (Wakefield)Marsh, RichardSilkin, John (Deptford)
Hart, Mrs. JudithMason, RoySilkin, S. C. (Camberwell, Dulwich)
Hattersley, RoyMaxwell, RobertSilverman, Julius (Aston)
Hazell, BertMayhew, ChristopherSilverman, Sydney (Nelson)
Heffer, Erie S.Mellish, RobertSkeffington, Arthur
Herbison, Rt. Hn. MargaretMendelson, J. J.Slater, Mrs. Harriet (Stoke, N.)
Hobden, Dennis (Brighton, K'town)Mikardo, IanSlater, Joseph (Sedgefield)
Holman, PercyMillan, BruceSmall, William
Horner, JohnMiller, Dr. M. S.Snow, Julian
Houghton, Rt. Hn. DouglasMilne, Edward (Blyth)Soskice, Rt. Hn. Sir Frank
Howarth, Harry (Wellingborough)Molloy, WilliamSpriggs, Leslie
Howarth, Robert L. (Bolton, E.)Monslow, WalterSteele, Thomas (Dunbartonshire, W.)
Howell, Denis (Small Heath)Morris, Alfred (Wythenshawe)Stewart, Rt. Hn. Michael
Howie, W.Morris, Charles, Openshaw)Stones, William
Hoy, JamesMorris, John (Aberavon)Strauss, Rt. Hn. G. R. (Vauxhall)
Hughes, Cledwyn (Anglesey)Mulley, Rt. Hn. Frederiek (SheffieldPk)Summerskill, Hn. Dr. Shirley
Hughes, Emrys (S. Ayrshire)Murray, AlbertSwain, Thomas
Hughes, Hector (Aberdeen, N.)Neal, HaroldSwingler, Stephen
Hunter, Adam (Dunfermline)Newens, StanSymonds, J. B.
Hunter, A. E. (Feltham)Noel-Baker, Francis (Swindon)Taverne, Dick
Hynd, H. (Accrington)Noel-Baker, Rt. Hn. Philip (Derby, S.)Taylor, Bernard (Mansfield)
Hynd, John (Attercliffe)Norwood, ChristopherThomas, George (Cardiff, W.)
Jackson, ColinOakes, GordonThomas, Iorwerth (Rhondda, W.)
Janner, Sir BarnettOgden, EricThomson, George (Dundee, E.)
Jay, Rt. Hn. DouglasO'Malley, BrianThornton, Ernest
Jeger, George (Goole)Oram, Albert E. (E. Ham, S.)Tinn, James
Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)Orbach, MauriceTomney, Frank
Jenkins, Hugh (Putney)Orme, StanleyTuck, Raphael
Jenkins, Rt. Hn. Roy (Stechford)Oswald, ThomasUrwin, T. W.
Johnson, Carol (Lewisham, S.)Owen, WillVarley, Eric G.
Johnson, James (K'ston-on-Hull, W.)Padley, WalterWainwright, Edwin
Jones, Dan (Burnley)Page, Derek (King's Lynn)Walden, Brian (All Saints)
Jones. Rt. Hn. Sir Elwyn (W.Ham, s.)Paget, R. T.Walker, Harold (Doncaster)
Jones, J. Idwal (Wrexham)Palmer, ArthurWallace, George
Jones, T. W. (Merioneth)Pannell, Rt. Hn. CharlesWarbey, William
Kelley, RichardPargiter, G. A.Watkina, Tudor
Kenyon, CliffordPark, Trevor (Derbyshire, S.E.)Weitzman, David
Kerr, Mrs. Anne (R'ter & Chatham)Parker, JohnWellbeloved, John
Kerr, Dr. David (W'worth, Central)Pavitt, LaurenceWells, William (Walsall, N.)
Leadbitter, TedPeart, Rt. Hn. FredWhite, Mrs. Eirene
Ledger, RonPentland, NormanWhitlock, William
Lee, Rt. Hn. Frederick (Newton)Perry, Ernest G.Wigg, Rt. Hn. George
Lee, Miss Jennie (Cannock)Popplewell, ErnestWilkins, W. A.
Lever, Harold (Cheetham)Prentice, R. E.Willey, Rt. Hn. Frederick
Lever, L. M. (Ardwick)Price, J. T. (Westhoughton)Williams, Alan (Swansea, W.)
Lewis, Arthur (West Ham, N.)Probert, ArthurWilliams, Clifford (Abertillery)
Lewis, Ron (Carlisle)Pursey, Cmdr. HarryWilliams, Mrs. Shirley (Hitchln)
Llpton, MarcusRandall, HarryWilliams, W. T. (Warrington)
Lomas, KennethRankin, JohnWillis, George (Edinburgh, E.)
Loughlin, CharlesRedhead, EdwardWilson, Rt. Hn. Harold (Huyton)
Mabon, Dr. J. DicksonRees, MerlynWilson, William (Coventry, S.)
McBride, NeilReynolds, G. W.Winterbottom, R. E.
McCann, J.Rhodes, GeoffreyWoodburn, Rt. Hn. A.
MacColl, JamesRichard, IvorWoof, Robert
MacDermot, NiallRoberts, Albert (Normanton)Wyatt, Woodrow
McGuire, MichaelRoberts, Goronwy (Caernarvon)Yates, Victor (Ladywood)
McInnes, JamesRobertson John (Paisley)Zilliacus, K.
McKay, Mrs. MargaretRobinson, Rt. Hn. K. (St.P'cras, N.)
Mackenzie, Gregor (Rutherglen)Rodgers, William (Stockton)TELLERS FOR THE AYES:
Mackie, John (Enfield, E.)Rogers, George (Kensington, N.)Mr. Sydney Irving and
McLeavy, FrankRose, Paul B.Mr. George Lawson.
NOES
Agnew, Commander Sir PeterBeamish, Col. Sir TuftonBossom, Sir Clive
Alison, Michael (Barkston Ash)Bell, RonaldBox, Donald
Allan, Robert (Paddington, S.)Bennett, Sir Frederic (Torquay)Boyd-Carpenter, Rt. Hn. J.
Allason, James (Hemel Hempstead)Bennett, Dr. Reginald (Gos. & Fhm)Boyle, Rt. Hn. Sir Edward
Amery, Rt. Hn. JulianBerkeley, HumphryBraine, Bernard
Anstruther-Gray, Rt. Hn. Sir W.Berry, Hn. AnthonyBrewis, John
Astor, JohnBessell, PeterBrlnton, Sir Tatton
Atkins, HumphreyBiffen, JohnBromley-Davenport, Lt.-Col. Sir Walter
Awdry, DanielBiggs-Davison, JohnBrooke, Rt. Hn. Henry
Balniel, LordBingham, R. M.Brown, Sir Edward (Bath)
Barber, Rt. Hn. AnthonyBirch, Rt. Hn. NigelBruce-Gardyne, J.
Barlow, Sir JohnBlack, Sir CyrilBryan, Paul
Batsford, BrianBlaker, PeterBuchanan-Smith, Alick
Buck, AntonyHawkins, PaulNoble, Rt. Hn. Michael
Bullus, Sir EricHay, JohnNugent, Rt. Hn. Sir Richard
Burden, F. A.Heald, Rt. Hn. Sir LionelOnslow, Cranley
Buxton, RonaldHeath, Rt. Hn. EdwardOrr, Capt. L. P. S.
Campbell, GordonHiggins, Terence L.Orr-Ewing, Sir Ian
Carlisle, MarkHiley, JosephOsborn, John (Hallam)
Carr, Rt. Hn. RobertHill, J. E. B. (S. Norfolk)Page, John (Harrow, W.)
Cary, Sir RobertHirst, GeoffreyPage, R. Graham (Crosby)
Channon, H. P. G.Hobson, Rt. Hn. Sir JohnPearson, Sir Frank (Clitheroe)
Chataway, ChristopherHogg, Rt. Hn. QuintinPeel, John
Chichester-Clark, R.Hooson, H.E.Percival, Ian
Clark, Henry (Antrim, N.)Hopkins, AlanPeyton, John
Clarke, Brig. Terence (Portsmth, W.)Hordern, PeterPickthorn, Rt. Hn. Sir Kenneth
Cole, NormanHornby, RichardPike, Miss Mervyn
Cooke, RobertHornsby-Smith, Rt. Hn. Dame P.Pounder, Rafton
Cooper, A. E,Howard, Hn. G. R. (St. Ives)Powell, Rt. Hn. J. Enoch
Cordle, JohnHowe, Geoffrey (Bebington)Price, David (Eastleigh)
Corfield, F. V.Hunt, John (Bromley)Prior, J. M. L.
Costain, A. P.Hutchison, Michael ClarkQuennell, Miss J. M.
Courtney, Cdr, AnthonyIremonger, T. L.Ramsden, Rt. Hn. James
Craddock, Sir Beresford (Spelthorne)Irvine, Bryant Codman (Rye)Rawlinson, Rt. Hn. Sir Peter
Crawley, AidanJenkin, Patrick (Woodford)Redmayne, Rt. Hn. Sir Martin
Crosthwaite-Eyre, Col. Sir OliverJennings, J. C.Rees-Davies, W. R.
Crowder, F. P.Johnson Smith, G. (East Grinstead)Renton, Rt. Hn. Sir David
Cunningham, Sir KnoxJohnston, Russell (Inverness)Ridsdale, Julian
Curran, CharlesJones, Arthur (Northants, S.)Roberts, Sir Peter (Heeley)
Currie, G. B H.Jopling, MichaelRobson Brown, Sir William
Dalkeith, Earl ofJoseph, Rt. Hn. Sir KeithRodgers, Sir John (Sevenoaks)
Oance, JamesKaberry, Sir DonaldRoyle, Anthony
Davies, Dr. Wyndham (Perry Barr)Kerby, Capt. HenrySt. John-Stevas, Norman
d'Avigdor-Goldsmid, Sir HenryKerr, Sir Hamilton (Cambridge)Scott-Hopkins, James
Dean, PaulKershaw, AnthonySharples, Richard
Deedes, Rt. Hn. w. F.Kilfedder, James A.Shepherd, William
Digby, Simon WingfieldKimball, MarcusSinclair, Sir George
Druids-Parker, DouglasKing, Evelyn (Dorset, S.)Smith, Dudley (Br'ntf'd & Chiswick)
Doughty, CharlesKirk, PeterSmith, John
Drayson, G. B.Kitson, TimothySmyth, Rt. Hn. Brig. Sir John
Eden, Sir JohnLagden, GodfreySpearman, Sir Alexander
Elliot, Capt. Walter (Carshalton)Lambton, ViscountStainton, Keith
Elliott, R.W. (N'c'tle-upon-Tyne, N.)Lancaster, Col. C. G.Stanley, Hn. Richard
Emery, PeterLangford-Holt, Sir JohnSteel, David (Roxburgh)
Errington, Sir EricLegge-Bourke, Sir HarryStodart, Anthony
Eyre, ReginaldLewis, Kenneth (Rutland)Stoddart-Scott, Col. Sir Malcolm
Farr, JohnLitchfield, Capt. JohnStudholme, Sir Henry
Fell, AnthonyLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Summers, Sir Spencer
Fisher, NigelLloyd, Ian (P'tsm'th, Langstone)Talbot, John E.
Fletcher-Cooke, Charles (Darwen)Lloyd, Rt. Hn. Selwyn (Wirral)Taylor, Sir Charles (Eastbourne)
Fletcher-Cooke, Sir John (S'pton)Longbottom, CharlesTaylor, Edward M. (C'gow, Cathcart)
Forrest, GeorgeLongden, GilbertTaylor, Frank (Moss Side)
Foster, Sir JohnLoveys, W. H.Teeling, Sir William
Fraser, Rt. Hn. Hugh (St'fford & Stone)Lubbock, ErinTemple, John M.
Fraser, Ian (Plymouth, Sutton)Lucas, Sir JocelynThatcher, Mrs. Margaret
Galbraith, Hn. T. G. D.McAdden, Sir StephenThomas, Sir Leslie (Canterbury)
Gammans, LadyMacArthur, IanThomas, Rt. Hn. Peter (Conway)
Gardner, EdwardMackenzie, Alasdair (Ross & Crom'ty)Thompson, Sir Richard (Croydon, S.)
Gibson-Watt, DavidMackie, George Y. (C'ness & S'land)Thorneycroft, Rt. Hn. Peter
Giles, Rear-Admiral MorganMaclean, Sir FitzroyThorpe, Jeremy
Gilmour, Ian (Norfolk, Central)Macleod, Rt. Hn. IainTiley, Arthur (Bradford, W.)
Gilmour, Sir John (East Fife)McMaster, StanleyTilney, John (Wavertree)
Glover, Sir DouglasMcNair-Wllson, PatrickTurton, Rt. Hn. R. H.
Glyn, Sir RichardMaddan, MartinTweedsmuir, Lady
Godber, Rt. Hn. J. B.Maginnis, John E.van Straubenzee, W. R.
Goodhart, PhilipMaitland, Sir JohnVaughan-Morgan, Rt. Hn. Sir John
Goodhew, VictorMarples, Rt. Hn. ErnestVickers, Dame Joan
Gower, RaymondMarten, NeilWalder, David (High Peak)
Grant, AnthonyMathew, RobertWalker, Peter (Worcester)
Grant-Ferris, R.Maude, AngusWalker-Smith, Rt. Hn. Sir Derek
Gresham Cooke, R.Maudling, Rt. Hn. ReginaldWall, Patrick
Grieve, PercyMawby, RayWalters, Dennis
Griffiths, Eldon (Bury St. Edmunds)Maxwell-Hyslop, R. J.Ward, Dame Irene
Griffiths, Peter (Smethwick)Maydon, Lt.-Cmdr. S. L. C.Weatherill, Bernard
Grimond, Rt. Hn. J.Meyer, Sir AnthonyWebster, David
Gurden, HaroldMills, Peter (Torrington)Wells, John (Maidstone)
Hall, John (Wycombe)Mills, Stratton (Belfast, N.)Whitelaw, William
Hall-Davis, A. G. F.Miscampbell, NormanWilliams, Sir Rolf Dudley (Exeter)
Hamilton, Marquess of (Fermanagh)Mitchell, DavidWilson, Geoffrey (Truro)
Hamilton, M. (Salisbury)Monro, HectorWise, A. R.
Harris, Frederic (Croydon, N.W.)Morgan, W. G.Wood, Rt. Hn. Richard
Harris, Reader (Heston)Morrison, Charles (Devizes)Woodhouse, Hn. Christopher
Harrison, Brian (Maldon)Mott-Radcliffe, Sir CharlesWoodnutt, Mark
Harrison, Col. Sir Harwood (Eye)Munro-Lucas-Tooth, Sir HughWylie, N. R.
Harvey, Sir Arthur Vere (Macclesf'd)Murton, OscarYounger, Hn. George
Harvey, John (Walthamstow, E.)Neave, Airey
Harvie Anderson, MissNicholls, Sir HarmarTELLERS FOR THE NOES:
Hastings, StephenNicholson, Sir GodfreyMr. Martin McLaren and
Mr. Francis Pym.

Bill read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).