Clause 60 - Compulsory purchase facilitating development

Finance Bill – in a Public Bill Committee at 9:30 am on 10th June 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Mark Prisk Mark Prisk Shadow Paymaster General

The Chief Secretary will know that the Planning and Compulsory Purchase Bill is being considered today on the Floor of the House. Given that the Bill seeks radically to alter both the operation of and the valuations for compulsory purchase, which clause 60 addresses, can he tell the Committee what discussions have taken place between the Inland Revenue and the Office of the Deputy Prime Minister concerning the new compulsory purchase arrangements?

Photo of Mr Paul Boateng Mr Paul Boateng Chief Secretary, HM Treasury, The Chief Secretary to the Treasury

The double hit problem does not apply when a local authority acquires land for development by itself because the authority does not need to pass the land on to anyone else. There is no general relief for local authorities save where they are acquiring land as part of a statutory reorganisation, which is dealt with in clause 66.

One might ask why the relief is available even if the land is acquired by agreement rather than by the order being enforced. We considered that question, but took the view that it would be onerous to require an authority to go through the statutory procedures to enforce an order to get the relief when the landowner is willing to execute a voluntary transfer.

The relief works for all types of compulsory purchase under all statute. The clause relieves the charge on the local authority and therefore the double hit on the developer. Paragraph (3) extends the relief to a voluntary transfer agreed between the developer and the landowner, where the landowner voluntarily transfers the land to the local authority. That will not happen frequently in practice because in a voluntary settlement the developer usually asks the landowner to transfer the land directly to them. The relief applies only where the developer is a person other than the acquiring authority. Where the developer is also the acquiring authority, no relief is available because the double hit problem does not arise.

The clause will relieve a problem that would increase the costs of development in the early stages, and I hope that it is attractive to the Committee. We are discussing the matter with the Office of the Deputy Prime Minister, and the clause does not refer to particular legislation and will work with the new regime. Given the Committee's general sense of good will towards the clause, given its objectives, I hope that it will stand part of the Bill without further debate.

Question put and agreed to.

Clause 60 ordered to stand part of the Bill.