Orders of the Day — Land Commission

– in the House of Commons at 12:00 am on 12th May 1966.

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Motion made, and Question proposed,1. That a levy, to be called betterment levy, shall be imposed in respect of land; and that it is expedient—

  1. (a) to make provision as to the rate at which betterment levy is to be charged and as to the value or other amount on which it is to be charged, and
  2. (b) in other respects to make provision for the assessment and payment of betterment levy, including provision for the payment of interest on the principal amount of the levy.—[Mr. Willey.]

10.53 p.m.

Photo of Mr Geoffrey Rippon Mr Geoffrey Rippon , Hexham

This is a Resolution on which the question of yield really arises. It arose incidentally on the Money Resolution because the Parliamentary Secretary related his argument as to the administrative costs to the yield and suggested that it was not a high proportion. The Resolution asks us to make provision for a new tax about which all we know is that it has an £80 million gross yield. I will not rehearse all the arguments put before you a short while ago, Sir Eric; I will only say that this is not one of the issues in which the big battalions, in the long run, can dictate the terms.

We certainly had no idea that a situation would arise in which the Government would say that they had in their hands an estimate of the net yield expected from the betterment levy but would not give the figure to the House.

The Parliamentary Secretary has said that the time is not opportune. I hope that at least on this occasion we shall be told when he thinks that it will be opportune. It is all very well to say that the Bill has only just had its Second Reading. We all know that it had a Second Reading in the last Parliament. Since then, about 4½ months have elapsed, so there has been plenty of time for these estimates to be made. We know that the Govern-have gone a long way with regard to staff.

A further point in this Resolution is that it is said … that it is expedient … to make provision as to the rate at which betterment levy is to be charged and as to the value or other amount on which it is to be charged. … That is exactly what we are not doing. We are not making provision as to the rate at which betterment levy is to be charged, because this Committee has no idea what the rate will be. The Bill itself provides that the rate shall be made by Ministerial Order—not a satisfactory way in which to impose a high tax upon the subject, I would have thought. But even accepting that it is to be done by Order, at least the Committee is entitled to some information about the Government's intentions in the matter.

All we know from the White Paper is that it is apparently the Government's intention to prescribe by Order an initial rate of 40 per cent. We are also told that it is the Government's intention to increase the proposed rate progressively to 45 per cent. and then to 50 per cent. at what the White Paper describes as "reasonably short intervals". We have already asked in the debate this afternoon what the intervals are expected to be. Apparently that is not to be the limit, because the White Paper says that the question of increasing the rate will be further examined as acquisitions by the Commission increase.

In our submission, before the Resolution is passed, we should know the Government's intentions of what the rate is to be at which the betterment levy is to be charged, not only initially but as to the future. We also think it quite wrong that we should be asked to make provision of this kind for taxation of the subject with no limit at all. We should have some assurance from the Government that it is intended to put a limit on the amount of levy that can be charged.

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

I will deal briefly with those three points. I am not in a position to help the right hon. and learned Gentleman with regard to the net yield. We give a figure of £80 million because that is a calculation we can make on an estimate of the development value. We cannot make an estimate of the net yield, because that means making calculations of hypothetical circumstances, which would involve a great deal of trouble. We have tried, but we are not able to produce a figure. But I can assure the right hon. and learned Gentleman that there is no question of our being in a position to give him figures of the net yield—

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The right hon. and learned Gentleman can have his opportunity to speak again.

On the subject of the rate, I have nothing to add to what I said in the White Paper. We propose an initial rate of 40 per cent., progressively rising to 50 per cent. over reasonable, short intervals—[HON. MEMBERS: "What intervals?"] Well, reasonable is reasonable.

The question of limits is for the right hon. and learned Gentleman to pursue, if he so wishes, in the Standing Committee.

Photo of Mr Geoffrey Rippon Mr Geoffrey Rippon , Hexham

I thought that the Minister was present when the Parliamentary Secretary replied on the Money Resolution. How can he now say that there is no figure, and that it is all hypothetical, when the Parliamentary Secretary has said on behalf of the Government that there is a figure in existence—an estimate that has been made—which he says it would be inopportune to reveal because it might not prove to be correct?

Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North

The Parliamentary Secretary might make some informed guess, but it would be no more than that. It is a matter upon which, as the right hon. and learned Gentleman knows, we depend on advice. We have the best advice we can obtain, and we are advised that such a figure is not obtainable, and that it would only be obtainable—but not very illuminating—at considerable expenditure of staff time.

11.0 p.m.

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

We are left in an extraordinary position by the Minister's answer. We are now on a Ways and Means Resolution which, subject to your greater knowledge and experience, Sir Eric, is the necessary basis for legislation imposing taxation. We are on what is analogous to a Budget Resolution. The Committee will know that all Chancellors of the Exchequer are punctilious on Budget Resolutions in giving the Committee of Ways and Means their best estimate of the in- tended net yield of the taxation which their proposals embody.

It appears now that the Land Commission is coming into the field of taxation that the Government feel unable or unwilling to follow the normal procedure in matters of taxation, but the historic Committee of Ways and Means has to decide whether the right hon. Gentleman should be allowed to go ahead with a further proposal for the taxation of the people. This goes back for centuries; that this committee is not prepared to grant the right hon. Gentleman such authority unless he is prepared to give to this Committee his own best calculation of what that burden is to be, and what that burden is to be is of course the net yield.

When he spoke a few moments ago, the right hon. Gentleman did not say that it was impossible to give his best calculation. He said that it would cause a lot of trouble and expense to calculate it. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) has pointed out, the Parliamentary Secretary used words on the previous Resolution, which I took down. He said that it was "a temptation to reveal"—I ask the Committee to note the word "reveal"—"the figure". It was Oscar Wilde who said: I can resist anything except temptation In this respect I ask the Parliamentary Secretary to model himself on Oscar Wilde and to yield to temptation.

Ministers think they know what the net yield will be. In discussion of the previous Resolution, the Parliamentary Secretary said that the yield would be reasonable in the light of administrative costs of collecting it. He also said, and I took it down, "it would be substantially in excess of the yield" in its absence, from other forms of taxation. He could not have spoken at the Box without he and those advising him having some idea of what the figure is. The only people not to be told are this Committee on whom falls the responsibility of deciding whether the taxation proposal should go forward. This is not the way to treat this Committee.

It indicates one of two things. Either the whole of the proposals in this Measure are in such a state of chaos and confusion that he and right hon. Members opposite dare not give a figure because they have every reason to believe that it would be wrong and they would have to explain afterwards why they gave it. Alternatively, and this may be right in view of what has been said outside, the net yield will be so pathetic that opinion generally would condemn this Measure if all the expensive apparatus were to be created for the purpose of obtaining so trivial a yield. Either the confusion in the Department is such that they have no idea, or it is so small—there is no third possibility—as to be highly discreditable to the Government and the Minister. It is the historic duty of this Committee to probe this matter a great deal further.

Photo of Mr Eric Lubbock Mr Eric Lubbock , Orpington

There is a great deal in which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has just said, and I, too, appeal to the Minister to think about this again. He put his own interpretation on the words of the Parliamentary Secretary, saying that he, the Parliamentary Secretary, could make an informed guess about what the size of the net yield would be. But what he asks us on this side of the Committee to do is to make an ill-informed guess, because the figures available in his Department, on the Parliamentary Secretary's own admission in the debate on the last Resolution, would enable him to say that the net yield from this tax is substantial.

The word "substantial" can have many interpretations. Speaking of his income, a man might say that £10,000 was a very substantial sum. Speaking of taxation, I would say that "substantial" means something in excess of £25 million.

We know what the gross figure is. I ask the Minister to come clean with the Committee and tell us what figures there are in his Department, to which the Parliamentary Secretary has already referred, which would enable him to give the net figure. It would not be reasonable to pin the Minister down to any exact figure. I ask only that he gives a bracket within which he expects the net yield to lie. I think that the Committee would then be perfectly satisfied. But it will not be satisfied to be kept completely in the dark, knowing perfectly well, from what the Minister himself and his Parliamentary Secretary have said, that these figures are available in the Department.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

The Committee of Ways and Means is being treated with the enormous contempt by Ministers. The Parliamentary Secretary has already said that, in the Department, there is some view about the net yield of the levy, but he does not think that it would be diplomatic—I suppose that that is the right word—to disclose it to this Committee. The only possible conclusion is that the figure is so derisory that he realises that his hon. Friends would wonder why they were being kept here at 11 o'clock at night to bring in a Measure which would produce nothing.

The Minister says that the gross yield will be £80 million. I should have thought that the gross yield figure would be the one most difficult to arrive at. I agree with the hon. Member for Orpington (Mr. Lubbock) that there must be some elasticity in this, but, when the Minister says that the view is that the gross yield will be £80 million, it must be remembered that he knows what other taxes exist, that the Capital Gains and the Corporation Taxes exist. It would be easy to tell the Committee quite categorically that, if the gross yield is £80 million, their estimate of the net yield is £x million.

I believe that, as the Parliamentary Secretary almost admitted, this information is available in the Department, and the reason for its non-disclosure to the Committee is that it shows pretty well that the whole of this tax is cancelled by our already operative taxation structure. In other words, the Capital Gains Tax and the Corporation Tax on the same piece of land would probably bring in just about the same amount of money as is being brought in under the Bill. And that would make hon. Members look a proper lot of "Charlies" when they went back to their constituencies and tried to explain it. Having told the people at the election of the enormous yield which was coming under the Bill, they would then have to explain that it would be no more than a fiddling little two or three millions. Hon. Members opposite would be in great political difficulty in explaining this to their constituents, and that is why the Minister will not say.

This is not the only complaint that I have about this matter. What does "reasonable" mean? The right hon. Gentleman intervened to say that it would be "reasonable". They bring in a Bill in which the initial levy is 40 per cent., to be raised to 45 per cent. and then to 50 per cent. Is "reasonable" six months, 12 months, two years, five years, or 10 years? The right hon. Gentleman has a duty to say, "We may change our minds but at present our view is that in three years' time it will go up to 45 per cent. and in another two years up to 50 per cent.". Or he could say, "In another five years it will be 45 per cent. and in 10 years 50 per cent.". The right hon. Gentleman must be working out the organisation of his Department and he must have some view on this. When he says "reasonable", does he mean the next meeting of the Cabinet or when he is absorbed into the Ministry of Housing and Local Government? "Reasonable" is "reasonable to anybody".

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I hope that the Minister does not mean me, because I am not reasonable at this moment. The way in which he is treating the Committee is disgraceful. He is bringing forward a Ways and Means Resolution, which is the equivalent of a Budget Resolution, and is treating the House with complete and utter contempt. [Laughter.] It is all very well for hon. Members opposite to laugh. What would the Committee say if the Chancellor presented a Budget Resolution in the woolly way in which the right hon. Gentleman has presented this Resolution?

I suppose that this is why the Prime Minister has decided, in the interests of safety and the future of the nation to put someone over the right hon. Gentleman at the earliest opportunity. He is obviously not safe to be allowed out alone. He is to be put under the control of the Minister of Housing and Local Government because the Prime Minister realises that this kind of operation in Committee is not good enough.

Will the Minister tell us what he regards as "reasonable"? He must have made some calculations about the yields of the tax—and it is a tax. The Committee has a right to know his estimate of the net yield as an additional burden on the community, over and about the Capital Gains and Corporation Taxes, which is the purpose of the levy. The committee is being treated with contempt, because it is easy for the right hon. Gentleman to give us this information. The Committee has a right to demand that he does so before the Resolution is allowed to pass.

Photo of Mr Peter Bessell Mr Peter Bessell , Bodmin

The hon. Member for Ormskirk (Sir D. Glover) does himself less than justice when he says that he is unreasonable. I think that he and all hon. Members on this side of the Committee are being reasonable when they seek a piece of information which they genuinely require before the Resolution is passed.

The Minister told us that the Parliamentary Secretary might be able to give an informed guess, and the Parliamentary Secretary said that it was a temptation to reveal a figure. This is simply not good enough, because on the basis of the evidence before the Committee it is clear that some homework has been done by the Parliamentary Secretary, the Minister or their advisers, and they have at least some indication of the possible net yield.

We realise that it would be both foolish and wrong for the Minister this evening to give an exact figure, but we are entitled to know what this substantial profit might be. As my hon. Friend the Member for Orpington (Mr. Lubbock) has said, many interpretations can be put on the word "substantial" It may be 10 per cent. of the cost; it may be 50 per cent., but we should at least have some indication. Unless we know beyond all reasonable doubt that the Measure will provide for the purpose which the Government have stated it will be used—namely, the provision of money for local authorities to clear land to build houses—then there is no purpose behind the Bill, and these Money Resolutions are not only a waste of time, they are perpetrating a deception on the House.

11.15 p.m.

This is something which the Committee should take seriously. I realise that there has been some levity during the discussion, but if the Committee is to be asked to pass the Resolution without any of the information which is normally placed before a Committee of the House of Commons on a matter which is really a budgetary matter, this is a departure which the Committee and the House will seriously regret. It is something quite contrary to the whole purpose behind Parliament.

Therefore, I make a plea that the Minister should give us his informed guess or such information as he has before him. If he does this, there is no question of the Committee holding him to it in future or throwing it in his face if the figure is not reached—we know that he will be working on the minimum possible amount of information—but we are entitled to some sort of figure. If the Minister does not do that, some of us on this side of the Committee will conclude that he is "windy". On the other hand, if he cannot do that, we shall conclude that he is "wet".

Photo of Mr Graham Page Mr Graham Page , Crosby

The right hon. Gentleman has sat there and kept quiet in the face of the reasonable requests from this side to give the figure. I acquit him of holding back the figure because it might be politically damaging to bring it out but this is the conclusion to which a number of my hon. Friends have come. I hope that it is not true that he is frightened to give this figure because it may be so politically damaging to him. If he needs to think about this again—I am sure that it will do him no credit to refuse to give the figure—he can ask the Committee for a form of adjournment, he can move to report Progress and ask leave to sit again, so that he can bring the Resolution back. We on this side would grant him that if the Motion were accepted by the Chair.

But he sits there silently with his lips sealed and flatly refuses to tell the Committee something which the Committee is entitled to know. We are not just niggling at him: this is a serious matter. We are told that £80 million is to be collected from the public, and we have not a clue what that means in real cash. We are not told what the net yield is. If there is some constitutional, political or expedient reason why he cannot give it tonight, then let us adjourn and return to the Resolution at a later date when he can tell us the figure.

But it would be disgraceful for the Committee to let the Resolution go through like this without the information on which it should be based. It is dis- graceful of the right hon. Gentleman to sit there and not tell us the figure, and I am sure that he will be deeply sorry about it when he thinks about it again.

Photo of Mr Geoffrey Rippon Mr Geoffrey Rippon , Hexham

I hope that the right hon. Gentleman will accede to the reasonable request of my hon. Friend the Member for Crosby (Mr. Graham Page) that he might withdraw this Resolution and bring it forward again. He still has not answered the point I raised about the rates at which the betterment levy is to be charged, for this Resolution refers specifically to making provision for the rate at which the levy is to be charged. He has refused to go beyond the statement in the White Paper and we have no idea, therefore, what ultimate gross or net yield he hopes to receive.

I had hoped that we would have serious figures of what the yield would be at the various rates referred to in the White Paper. The whole of our proceedings since 10 o'clock have reinforced the point we have made—that it really is quite unacceptable for provisions for taxation on the subject to be made in a Bill promoted by a Departmental Minister who—as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), with his great experience as a Treasury Minister, said—is not perhaps familiar with the normal budgetary procedures.

I thought that the right hon. Gentleman might have welcomed the opportunity to take this Resolution back and think about it again. It may be that there is a figure which he could and should reveal but about which he might like to take further advice. But what is more frightening still is that, as the Parliamentary Secretary said, it would be a temptation to reveal a figure and so lead the Committee to believe that there is one when in fact there may not be one at all. It may be nothing more than inspired guesswork.

To tax the subject on the basis of inspired guess work is intolerable. If I can coin a phrase, it would be treating this Committee with contempt. In these circumstances, I hope that you, Sir Eric, would accept a Motion to withdraw this Resolution, but such a Motion would come much more gracefully from the Minister.

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

I am afraid that I could not accept a Motion of that kind at this stage.

Photo of Mr Frederick Corfield Mr Frederick Corfield , Gloucestershire South

One is left with the conclusion, if we are to accept the assurances of the Minister and the Parliamentary Secretary, that the Government intend to set up this enormously cumbersome organisation, making tremendous demands on the very

Resolved,

1. That a levy, to be called betterment levy, shall be in-posed in respect of land; and that it is expedient—

staffs and skills that are in the scarcest possible supply, in order to produce a certain result and that, at the end of the day, they do not know whether anyone will be better off or not. That is the conclusion to which we are forced by the Government's deplorable exhibition.

Question put:

The Committee divided: Ayes 119, Noes 34.

Resolved,2. That, for the purposes of any Act of the present Session to provide for the establishment of a Land Commission, to make provision as to the finances of the Commission and to confer on the Commission powers to acquire, manage, and dispose of land, to impose a betterment levy in respect of land, and for other purposes, it is expedient to authorise the payment into the Exchequer of sums required to be so paid by virtue of that Act.—[Mr. Willey.]

Resolutions to be reported.

Report to be received Tomorrow;

Committee to sit again Tomorrow.