Clause 87

Part of Orders of the Day — Finance Bill – in the House of Commons at 6:30 pm on 8th May 1985.

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Photo of Mr Stuart Randall Mr Stuart Randall , Kingston upon Hull West 6:30 pm, 8th May 1985

I shall not discuss the interests of the hon. Member for Mid-Staffordshire any further, but if the cap fits he should perhaps wear it.

As my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) said, development land tax was introduced by the Labour Government in 1976. It was introduced to offset windfall profits made from the sale or the development of land. Many of us will remember what happened to land prices in the early 1970s. In the south-east of England prices went berserk. There was enormous abuse in the sale and exploitation of land. Ordinary people suffered. For that reason, I oppose the abolition of development land tax.

7 pm

As my hon. Friend the Member for Birmingham, Hodge Hill pointed out, the profit arises from the land tax at a time when a local authority grants planning permission to a developer of a piece of land or to somebody who wants to sell a piece of land for a particular purpose or use. However, I think that the development land tax legislation introduced by the Labour Government was reasonable. It created exemptions. As a result, organisations such as charities and local authorities which serve community interests were exempt, as were people who built houses for their own use on land that they owned. That to my mind seems perfectly reasonable.

In the years since the last Labour Government introduced the development land tax, the Conservatives have been chipping away at it. I would like to have been a fly on the wall listening to all the lobbying that must have taken place by property speculators and the like of the various Ministers and Departments, pleading to be given an opportunity to make the kind of profits that they had made hitherto.

In 1981, the fairly new Conservative Government extended the exemptions to which I have referred to cover commercial organisations.