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I beg to move Amendment No. 243, in page 50, line 27, after 'is' to insert:
'the later of the following dates namely (a)'
Would it be possible to consider at the same time, Mr. Speaker, Amendment No. 199—in page 50, line 28, at the end to insert:
(b) the date on which the person liable to pay the levy receives the consideration or compensation or other sum in which the net development value or part thereof or other amount upon which the levy is chargeable is comprised; and if the consideration or compensation or other sum aforesaid is payable in more than one part the levy shall be apportioned in accordance with regulations to be made by the appropriate Minister or Ministers.
I am obliged. During the debate on Clause 50 in Standing Committee, several hon. Members, including my hon. Friend the Member for Hornsey (Mr. Rossi), commented on the difficulty of understanding the Clause. Having listened to my hon. Friend's extremely clear exposition on an equally, if not more, abstruse point last night, I feel that the Clause must be extremely complicated if he says that it is. I do not suppose that it is any good at this stage protesting against the complexity of the Bill.
In Committee, the Opposition tried to get clarification of various points. On 28th July the Minister said this:
that is, the developers—
would like some assurance that in normal circumstances, when the parties are at arm's length, certain consequences would follow, not merely to have to assume that the Commission will act reasonably and sensibly. We will consider whether it is possible to remove any uncertainty in order to help the purchaser and developer."—
I should like to repeat the final sentence:
We will consider whether it is possible to remove any uncertainty in order to help the purchaser and developer.
To the best of my knowledge and belief, the Minister has been unable to do so, otherwise I imagine that the Government would have tabled Amendments to the Clause. However, to be fair to the right hon. Gentleman, he said earlier in the same column of the OFFICIAL REPORT:
We will consider how far we might use the power of issuing general directions to remove the uncertainty…"—[OFFICIAL REPORT, Standing Committee E, 28th July, 1966; c. 647.]
We should like to know whether the Government have found it possible to do this. If not, I think that the Minister is subjecting his own Commission to complexities, and that leaves out of account the interpretation of the Bill by the public and their advisers. I suggest that the Government accept the Amendment in order considerably to help the developer.
As the Bill stands, when a sale is completed and a notice of levy is given, the date of assessment of levy is the date when the notice of levy was given. That is my interpretation of the Bill. To my mind—to a small mind, let me admit—this illustrates the complexities of what we are trying to enact.
The Amendments, in effect, rewrite subsection (2) and make provision for payments of levy to be made when they should sensibly be made. If a man lets his house, he will be charged a levy based on the rent which he obtains for the house over seven years. The levy becomes payable on the date on which the contract is signed. It is, therefore, conceivable that the man letting the house will have to pay the levy and thus completely negative the receipt of a whole year's rent. In other words, he will have to go a whole year without receiving a penny piece in rent from his tenant. If the payments were made to the Commission on an annual basis or some other method, it would be much fairer to the man letting the house. This applies to any rented premises, whether houses, factories or anything else. In Scotland, it equally applies to incomes from feu duties.
We propose that the levy should be payable when the development takes place. If it is not possible to lay down conditions by regulation, then I suggest that the Government should accept the Amendment. A number of my hon. Friends and I think it essential to make the position clear to the public by Statute and not by regulation. In essence, that is what we are requesting—that the payment be made only out of the money received.
As the hon. Member for Banff (Mr. Baker) has reminded us, this is a matter which we have discussed. He has raised an important point. Once the system of the levy is established, ways and means will be found to secure the levy. In effect, the hon. Gentleman is saying that the levy should be paid only when the monies have been received.
The difficulty about this is twofold. Administratively it would be almost impossible to provide for it. Second, it would be enormously expensive to create machinery to trace the payments. What we can do is to expect the Commission to use its powers about postponement and payment by instalments.
The hon. Gentleman asked what I envisaged would be the procedure. I expect that the Land Commission will devise rules of practice. These will be known. They will be rules of guidance as to circumstances in which the Commission is likely to resort to these powers. As I said in Standing Committee, there will be an opportunity, if it were thought necessary——
As I was saying in reply to the hon. Member for Banff, I can only repeat what I said in Standing Committee. Certainly this would be a matter which we would consider as being appropriate for the use of the power to make directions. One would first, however, as I am sure that the hon. Member would agree, see whether the Commission thought it fit and proper itself to make rules of practice regarding this.
This is a very important Amendment, certainly from our point of view. We raised the point many times in Committee and on occasions the Minister said that he would consider it. We now have it in the form of an Amendment. It means, briefly, that the levy payer should not be called upon to pay the levy until he receives the money on which the levy is assessed.
My right hon. and learned Friend the Member for Hexham (Mr. Rippon) said yesterday that the Bill was just a matter of throwing the print on the paper. I have acquired a copy of the Bill from the printers' office and I find that they missed with the throw on this very page 50. On that page, the Bill is completely blank. It is a lot better that way. At least, I can understand the blank sheet. We have been quite unable to understand the jibberish in the Bill and it seems that the printers have also failed to understand it and have produced Bills with blank sheets. This copy of mine was one of them, on page 50. For greater accuracy, therefore, I had to obtain another copy to see what our Amendment does.
The date is described in subsection (1) as a date on which the principal amount of the levy accrues due. It accrues due on the date set out in either subsection (2) or subsection (3). As subsection (2) stands, the date would be the date specified in the assessment. By turning back to Clause 45, at the foot of page 46, we find that the notice of assessment has to include
a date (not being earlier than two months from the date of service of the notice) as the date on which the levy is charged.
The levy thus becomes payable after the chargeable act or event, after the chargeable event has been notified to the Commission and after the Commission has, perhaps, asked a few questions about it and has then issued the notice of assessment and specified in it a date not earlier than two months from the date of service of the notice.
Taking into account that period, which, I imagine, might be something like six months, even with expedition, it is hardly likely that a Case A would suffer from the Clause as it stands. Case A is where the vendor has sold the property and normally will have received the sale price or the consideration for the conveyance at the time he makes the conveyance.
Case B is a very different situation. As my hon. Friend the Member for Banff (Mr. Baker) pointed out in moving the Amendment, if property is let under a lease of seven years or more, which comes under Case B, the property is assessed to discover what net development value results from that letting. The assessment is made on that net development value. The net development value may be equal, as my hon. Friend has said, to a year's rent, it might be equal to more or less, but there is no doubt that unless a premium is paid, out of which the levy might be payable, the landlord will be called upon to pay the levy before he has realised the money on which the levy is assessed—that is, the rent of the property.
We would hope by the Amendment to require the Commission to spread the payment of the levy over the rent. It might be that if the amount of money was small, the landlord would wish to discharge it at once. If it was a large amount, it should be spread over the payments.
A transaction under Case C of a development is perhaps the hardest case. Immediately the developer starts a development, such as digging a trench for the foundation of his buildings, he is assessed for levy. It may be years before he realises the proceeds of that development in actual cash. Therefore, he will have to pay out the levy and wait until he finishes his development, and, perhaps, disposes of the property, before he gets the money on which the levy has been assessed
In Case D—compensation for revocation of planning permission—the amount of levy to become payable is to be assessed when the compensation accrues due to the owner whose planning permission has been revoked. This certainly does not mean, the date on which he is able to put money in his pocket. Those of us who have had experience of compensation cases know only too well that one can agree the figure but that it takes months and months to get the cash out of the statutory undertakers or the local authority. So the levy payer will have to make payment of his levy before he receives the cash on which the levy is assessed.
The same will apply in Case E where easements may have been granted on an annual licence fee, which is a very frequent form of transaction. The assessment will be made on the value of the property in relation to that transaction and levy will have to be paid probably before the receipt of the money on which the levy is assessed.
Case F will relate amongst other things to pipe lines. One does not receive a premium for a pipe line being laid through one's property; it is always done as a matter of licence fee annually or based on other periods, and the same applies as in the case of letting.
The problem arises from the fact that the Government obstinately have refused to treat the levy as any form of tax and apply normal tax laws to it. They have
treated it as a capital demand on the levy payer to be paid by him regardless of the financial circumstances out of which he finds the money. He is assessed for a levy and, no matter what his means may be, no matter whether he has received the money from which the assessment arises, he must pay the levy. All that he can do is, later in the Clause, go on bended knee to the Commission and ask if it will let him pay by instalments. The Commission can then say that it wants security for that postponed payment.
As the Bill stands at the moment, no one can rely on the Commission ever granting that concession for payment by instalments or for postponed payment. From time to time the right hon. Gentleman has said, "Oh, yes. In proper cases, the Commission will allow such payment." At one time, I think that he added, "We might even make regulations about it."
The receipt of the money on which the levy is assessed is a matter which should be in the Bill. There should also be the Clause concerning the Commission granting a concession for payment by instalments. I do not want to wipe out that one, but I do want it to be quite definite in the Bill that the levy is payable out of the money received and that the poor unfortunate victim of the levy will not be mulcted of the money before he has received it out of the transaction which gives rise to the levy.
|Division No. 185.]||AYES||[4.53 p.m.|
|Alison, Michael (Barkston Ash)||Chichester-Clark, R.||Fletcher-Cooke, Charles|
|Allason, James (Hemel Hempstead)||Clark, Henry||Foster, Sir John|
|Astor, John||Clegg, Walter||Fraser, Rt. Hn. Hugh (St'fford & Stone)|
|Atkins, Humphrey (M't'n & M'd'n)||Cooke, Robert||Gilmour, Ian (Norfolk, C.)|
|Awdry, Daniel||Cooper-Key, Sir Neill||Glover, Sir Douglas|
|Baker, W. H. K.||Costain, A. P.||Goodhew, Victor|
|Batsford, Brian||Craddock, Sir Beresford (Spelthorne)||Gresham Cooke, R.|
|Bennett, Sir Frederic (Torquay)||Crawley, Aidan||Grieve, Percy|
|Bennett, Dr. Reginald (Gos. & Fhm)||Crosthwaite-Eyre, Sir Oliver||Griffiths, Eldon (Bury St. Edmunds)|
|Bessell, Peter||Crouch, David||Grimond, Rt. Hn. J.|
|Biffen, John||Cunningham, Sir Knox||Hall, John (Wycombe)|
|Black, Sir Cyril||Dalkeith, Earl of||Harris, Frederic (Croydon, N. W.)|
|Blaker, Peter||Dance, James||Harris, Reader (Heston)|
|Body, Richard||Davidson, James (Aberdeenshire, W.)||Harrison, Brian (Maldon)|
|Bottom, Sir Clive||Dean, Paul (Somerset, N.)||Harvey, Sir Arthur Vere|
|Boyd-Carpenter, Rt. Hn. John||Dodds-Parker, Douglas||Harvie Anderson, Miss|
|Bromley-Davenport, Lt.-Col. Sir Walter||Drayson, G. B.||Hastings, Stephen|
|Bruce-Gardyne, J.||Eden, Sir John||Hawkins, Paul|
|Buchanan-Smith, Alick (Angus, N & M)||Errington, Sir Eric||Heald, Rt. Hn. Sir Lionel|
|Bullus, Sir Eric||Eyre, Reginald||Heath, Rt. Hn. Edward|
|Campbell, Cordon||Farr, John||Higgins, Terence L.|
|Cary, Sir Robert||Fisher, Nigel||Hill, J. E. B.|
|Hirst, Geoffrey||Monro, Hector||Shaw, Michael (Sc'b'gh & Whitby)|
|Hobson, Rt. Hn. Sir John||More, Jasper||Sinclair, Sir George|
|Holland, Philip||Morgan, Geraint (Denbigh)||Smith, John|
|Hooson, Emlyn||Morrison, Charles (Devizes)||Steel, David (Roxburgh)|
|Hordern, Peter||Mott-Radclyffe, Sir Charles||Tapsell, Peter|
|Hornby, Richard||Murton, Oscar||Taylor, Sir Charles (Eastbourne)|
|Howell, David (Guildford)||Nabarro, Sir Gerald||Taylor, Edward M. (G'gow, Cathcart)|
|Hunt, John||Nott, John||Taylor, Frank (Moss Side)|
|Hutchison, Michael Clark||Onslow, Cranley||Thatcher, Mrs. Margaret|
|Iremonger, T. L.||Orr-Ewing, Sir Ian||Thorpe, Jeremy|
|Irvine, Bryant Godman (Rye)||Osborn, John (Hallam)||Turton, Rt. Hn. R. H.|
|Jenkin, Patrick (Woodford)||Page, Graham (Crosby)||Wainwright, Richard (Colne Valley)|
|Jennings, J. C. (Burton)||Percival, Ian||Walker, Peter (Worcester)|
|Joseph, Rt. Hn. Sir Keith||Peyton, John||Walker-Smith, Rt. Hn. Sir Derek|
|Kirk, Peter||Pink, R. Bonner||Weatherill, Bernard|
|Knight, Mrs. Jill||Price, David (Eastleigh)||Webster, David|
|Lloyd, Rt. Hn. Selwyn (Wirral)||Prior, J. M. L.||Whitelaw, William|
|McAdden, Sir Stephen||Pym, Francis||Wilson, Geoffrey (Truro)|
|MacArthur, Ian||Rees-Davies, W. R.||Winstanley, Dr. M. P.|
|Mackenzie, Alasdair (Ross & Crom'ty)||Ridley, Hn. Nicholas||Wolrige-Gordon, Patrick|
|Maddan, Martin||Rippon, Rt. Hn. Geoffrey||Wood, Rt. Hn. Richard|
|Mathew, Robert||Roots, William||Woodnutt, Mark|
|Maude, Angus||Rossi, Hugh (Hornsey)||Worsley, Marcus|
|Mawby, Ray||Royle, Anthony||Younger, Hn. George|
|Maxwell-Hyslop, R. J.||Russell, Sir Ronald|
|Mills, Stratton (Belfast, N.)||Scott, Nicholas||TELLERS FOR THE AYES:|
|Mitchell, David (Basingstoke)||Sharples, Richard||Mr. R. W. Elliott and Mr. Grant.|
|Abse, Leo||Faulds, Andrew||MacPherson, Malcolm|
|Allen, Scholefield||Fitch, Alan (Wigan)||Mapp, Charles|
|Anderson, Donald||Fletcher, Raymond (Ilkeston)||Marquand, David|
|Archer, Peter||Fletcher, Ted (Darlington)||Marsh, Rt. Hn. Richard|
|Armstrong, Ernest||Foot, Michael (Ebbw Vale)||Mason, Roy|
|Ashley, Jack||Forrester, John||Mayhew, Christopher|
|Atkins, Ronald (Preston, N.)||Fowler, Gerry||Mikardo, Ian|
|Atkinson, Norman (Tottenham)||Fraser, John (Norwood)||Milne, Edward (Blyth)|
|Bacon, Rt. Hn. Alice||Garrow, Alex||Mitchell, R. C. (S'th'pton, Test)|
|Beaney, Alan||Ginsburg, David||Molloy, William|
|Bennett, James (G'gow, Bridgeton)||Gordon Walker, Rt. Hn. P. C.||Morgan, Elystan (Cardiganshire)|
|Bidwell, Sydney||Gourlay, Harry||Morris, Charles R. (Openshaw)|
|Binns, John||Gray, Dr. Hugh (Yarmouth)||Murray, Albert|
|Bishop, E. S.||Gregory, Arnold||Newens, Stan|
|Blackburn, F.||Griffiths, David (Rother Valley)||Norwood, Christopher|
|Blenkinsop, Arthur||Hamilton, James (Bothwell)||O'Malley, Brian|
|Boardman, H.||Hamilton, William (Fife, W.)||Orme, Stanley|
|Booth, Albert||Hamling, William||Owen, Dr. David (Plymouth, S'tn)|
|Boston, Terence||Hannan, William||Padley, Walter|
|Bowden, Rt. Hn. Herbert||Harper, Joseph||Palmer, Arthur|
|Bray, Dr. Jeremy||Harrison, Walter (Wakefield)||Pannell, Rt. Hn. Charles|
|Brooks, Edwin||Hazell, Bert||Park, Trevor|
|Brown, Rt. Hn. George (Belper)||Herbison, Rt. Hn. Margaret||Parker, John (Dagenham)|
|Brown, Hugh D. (G'gow, Provan)||Hilton, W. S.||Parkyn, Brian (Bedford)|
|Brown, Bob (N'c'tle-upon-Tyne, W.)||Hooley, Frank||Pavitt, Laurence|
|Buchan, Norman||Horner, John||Perry, Ernest G. (Battersea, S.)|
|Buchanan, Richard (G'gow, Sp'burn)||Houghton, Rt. Hn. Douglas||Perry, George H. (Nottingham, S.)|
|Butler, Mrs. Joyce (Wood Green)||Howarth, Harry (Wellingborough)||Prentice, Rt. Hn. R. E.|
|Cant, R. B.||Howarth, Robert (Bolton, E.)||Price, William (Rugby)|
|Carmichael, Neil||Hughes, Emrys (Ayrshire, S.)||Robertson, John (Paisley)|
|Carter-Jones, Lewis||Hughes, Hector (Aberdeen, N.)||Robinson, Rt. Hn. Kenneth (St. P'c'as)|
|Chapman, Donald||Hunter, Adam||Robinson, W. 0. J. (Walth'stow, E.)|
|Coleman, Donald||Jackson, Peter M. (High Peak)||Rodgers, William (Stockton)|
|Concannon, J. D.||Janner, Sir Barnett||Roebuck, Roy|
|Corbet, Mrs. Freda||Jeger, George (Goole)||Rogers, George (Kensington, N.)|
|Dalyell, Tam||Jenkins, Hugh (Putney)||Ross, Rt. Hn. William|
|Darling, Rt. Hn. George||Johnson, Carol (Lewisham, S.)||Ryan, John|
|Davies, Dr. Ernest (Stretford)||Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)||Shaw, Arnold (Ilford, S.)|
|Davies, Harold (Leek)||Jones, J. Idwal (Wrexham)||Shinwell, Rt. Hn. E.|
|Davies, Robert (Cambridge)||Kenyon, Clifford||Short, Mrs. Renée (W'hampton, N. E.)|
|Dewar, Donald||Lawson, George||Silkin, Rt. Hn. John (Deptford)|
|Diamond, Rt. Hn. John||Lee, John (Reading)||Silkin, Hn. S. C. (Dulwich)|
|Dickens, James||Lestor, Miss Joan||Silverman, Jullus (Aston)|
|Dobson, Ray||Lipton, Marcus||Silverman, Sydney (Nelson)|
|Doig, Peter||Loughlin, Charles||Skeffington, Arthur|
|Driberg, Tom||Luard, Evan||Slater, Joseph|
|Dunnett, Jack||Lyon, Alexander W. (York)||Small, William|
|Dunwoody, Dr. John (F'th & C'b'e)||Mabon, Dr. J. Dickson||Spriggs, Leslie|
|Eadie, Alex||McBride, Neil||Steele, Thomas (Dunbartonsthire, W.)|
|Edwards, Robert (Bilston)||McCann, John||Strauss, Rt. Hn. G. R.|
|Edwards, William (Merioneth)||MacColl, James||Summerskill, Hn. Dr. Shirly|
|Ellis, John||Mackintosh, John P.||Tomney, Frank|
|Ensor, David||Maclennan, Robert||Tuck, Raphael|
|Evans, Albert (Islington, S. W.)||McMillan, Tom (Glasgow, C.)||Varley, Eric G.|
|Wainwright, Edwin (Dearne Valley)||Whitlock, William||Yates, Victor|
|Walker, Harold (Doncaster)||Willey, Rt. Hn. Frederick||Zilliacus, K.|
|Wallace, George||Williams, Alan (Swansea, W.)|
|Watkins, David (Consett)||Williams, Alan Lee (Hornchurch)||TELLERS FOR THE NOES:|
|Wellbeloved, James||Wilson, Rt. Hn. Harold (Huyton)||Mr. R. W. Brown and|
|Whitaker, Ben||Wilson, William (Coventry, S.)||Mr. loan L. Evans.|