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New Clause—(Amendment Of S 19 Of Principal Act)

Volume 530: debated on Tuesday 13 July 1954

The text on this page has been created from Hansard archive content, it may contain typographical errors.

(1) In section nineteen of the principal Act (which imposes on a local authority an obligation to purchase land in certain circumstances) after subsection (2) there shall be inserted the following new subsection, that is to say—

"(2A) In considering, for the purposes of the last foregoing subsection, whether or not the use of land in any particular state is or would be reasonably beneficial, the Minister shall not take account of the possibility of any development, whether of that or any other land, of any class not specified in the Third Schedule to this Act."
(2) The preceding subsection shall be deemed to have come into operation on the eighteenth day of November, nineteen hundred and fifty-two:
Provided that nothing in this section shall affect the validity of anything done in consequence of a purchase notice served before the commencement of this Act.—[Mr. H. Macmillan.]

Brought up, and read the First time.

5.30 p.m.

I beg to move, "That the Clause be read a Second time."

I move the Second Reading of the Clause with some emotion because I see the hon. Member for Acton (Mr. Sparks) in his place and in my Department this Clause has long been regarded as Acton's benefit. I was sorry that he has so far looked a gift horse in the mouth as to put down an Amendment and I hope that he will not think it necessary to press it.

What we have tried to do, and what I am advised that we have succeeded in doing, is to put beyond doubt that the owner who serves a purchase notice must make his case on one ground and one ground only—the uselessness of the land in its existing state. He must be able to point to the land and, quite apart from any potential value for development, show that it has become incapable of reasonably beneficial use in its existing state.

I think this new Clause meets the fears of local authorities, expressed by the hon. Member for Acton and others, that the machinery of the Bill and our intentions under the Bill would be frustrated by an extended use of Section 19 of the existing Act. I hope that the House feels that this Clause preserves the position and makes it clear that there is no such danger.

I had hoped that the Minister would say a little more about the new Clause. I welcome it as far as it goes, but it is by no means clear whether it overcomes the problems which we discussed at some length in Committee.

It seems to me that two courses are open to any person in relation to compensation for planning refusal—either a course under the Bill or a course under the principal Act. There is this exception—that in the 1947 Act it must be a condition that planning refusal leaves the land incapable of reasonably beneficial use. It is possible in the Bill, of course, to refuse planning permission and to leave the land precisely in that condition.

If the owner seeks planning permission, if that permission is refused and the land is left incapable of reasonably beneficial use, then the owner has two choices; he can either claim compensation under the Bill—although he is not forced to do so—or he can serve a purchase notice under Section 19 of the principal Act. If the planning refusal were on account of development of a low value, then the compensation which he would receive under the Bill would be very small and the amount which he would receive if he proceeded under Section 19 would be much greater, for it would be the use value and the development value plus one-seventh.

I had hoped that the Minister would explain to us precisely what are the uses defined in the Third Schedule of the principal Act. I have read it several times and I am not at all clear as to its meaning. It seems to me from some specific instances which I have obtained that the difficulty which the right hon. Gentleman seeks to remove is not being removed.

I have several examples, but this is a case where the individual could have two choices, choosing either to take compensation or to serve a purchase notice. It is where land with a substantial Part VI claim was the subject of planning application for use as a caravan site. The planning application was refused and the county district council has been served with a purchase notice. In this case the situation and nature of the land is such that apparently the requirements of Section 19 are met. If the owner had chosen merely to take his compensation, the Government would have paid, but because the owner served the purchase notice, the county district council will have to carry the burden of compensation.

The case arises particularly in Middlesex but also in other counties concerned with London's green belt. There are green belts in other big towns and cities which will to some extent be similarly affected. I am informed that there is a high development value on practically all the green belt land, which, at the moment, is open land used for agricultural purposes. Its value for agricultural purposes—its existing use value—is low.

Supposing the owners apply for planning permission to develop it and supposing that, rightly, in the interests of good planning and of the preservation of the green belt, planning permission is refused, the owners are entitled either to serve a purchase notice upon the county council to take over that land and to pay at the rate of the existing use value and the development value, plus one-seventh, or, alternatively, they are permitted to claim the compensation which the Minister pays.

Generally, the amount which he would pay in compensation would be much less than the owner would receive if he served a purchase notice under Section 19. A situation may well arise in which the owner wants to get rid of the land. This Bill does not provide that the land shall be purchased; it provides only that compensation shall be paid, leaving the ownership of the land in its present hands. But, planning permission having been refused, the land may be of no further use to the owner. He may be interested in no other form of development. It would naturally be to his advantage to say, "I will not take the compensation for planning refusal, but will serve a purchase notice." Therefore, in cases like that the county council will become burdened with the financial responsibility, whereas if the individual had elected to take compensation under this Bill then the Treasury would take the financial responsibility.

That leads me to one further point. It seems rather inconsistent that where planning refusal is given compensation is not paid from one source and one source only. At some time the right hon. Gentleman ought to make an amendment in this respect that in all cases of planning refusal the amount to be paid shall be from Treasury sources. That does not apply at present, and we have this duality of approach. Theoretically, it would be possible for all those owners of green belt land to unload their land on to the county councils. I agree that that is an event which is not likely to take place, although just now we do not know to what extent it might take place. If it did happen it would have a serious effect on the finances of the county councils concerned.

What we want and what the right hon. Gentleman has not dealt with during his short speech, but which I hope he will do before we finish with this new Clause, or if not he then the Attorney-General—he looks more hopeful on this point—is to establish that where planning permission is refused under the terms of this Bill, the procedure of Section 19 of the principal Act shall not apply in such cases. If we can establish that principle this danger of local authorities having unloaded upon them land which they do not want and having to pay for it out of their own resources would to some extent be reduced to the absolute minimum.

That is all I want to say by way of principle, but the right hon. Gentleman was not at all clear about one point. He kept on saying that the refusal of planning permission must lead to land being incapable of reasonable use. That can operate under this Bill and that is my point. The refusal of planning permission can leave land incapable of proper use, and if that condition is serious the owner is entitled to take action under Section 19. That is what I want to avoid, so I will appeal once again to the right hon. Gentleman to look into this matter. It is one of some difficulty. If he can restrict the procedure under Section 19 purely and absolutely to those conditions in the 1947 Act which invoke that procedure, he will go a long way to solve this problem. If he cannot isolate the danger in the way I have endeavoured to put before the House then it still exists and is a very real one which may well develop in the course of time.

5.45 p.m.

I must refer for a few moments to this matter because this is an important point which was raised in Committee, when I ventured to warn my right hon. Friend that in his desire to meet the point put by hon. Members opposite he was in danger of altering the long-established procedure under the principal Act much more than he intended to do. There was a considerable discussion on 27th May on this topic, but I do not propose to go into that now.

There are two points here. First, there is the question of who should pay as between two alternative possibilities for the owner. On that I have very little to say. On the whole, I should have thought that the new Clause which we are now discussing does, in fact, guard against the difficulty mentioned by the hon. Member for Acton (Mr. Sparks). Let us take his case of the green belt owners. It will be quite impossible for an owner to argue a Clause 19 case based on the fact that it was a farm, had always been a farm, but was no longer capable of reasonable beneficial use. It has always been a farm and, therefore, I think we are excluding specifically the Third Schedule use, which is the existing use, and that meets the point of the hon. Member.

Unless I have misunderstood this Clause, it goes much further than that, because there are certain very important owners who have not that alternative choice. All Part VIII owners and a body for whom we have sympathy, the trustees of charitable lands, cannot make use of one of the alternatives, because they never were allowed to make a claim and have no unexpended balance. Therefore, if they cannot get relief under Clause 19 they can get it from nobody at all. It is vital to ensure that the Clause 19 procedure is not altered to their detriment.

When I raised this I understood the Minister to say that he did not intend to alter the existing position. As I read the new Clause, it does alter the position and for this reason. Let us take the case of a Part VIII owner who has land in a development area, which, in fact, has never been developed at all. It grows thistles and is part of a frontage which has never been developed. In the ordinary way the owner would have a substantial Part VI claim and he would be able to insist in appropriate circumstances that he comes under the provisions of this Bill. But being a Part VIII owner he cannot because he has no Part VI claim, and, therefore, cannot have an unexpended balance.

But suppose that upon that land an arterial road is laid, leaving portions of that frontage completely useless. Under the law as it has been since 1947 he could go through the procedure of Clause 19. All he has to show to the satisfaction of the Minister is that the piece of frontage left would be incapable of being reasonably beneficially developed and, in effect he would get his compensation because the local authority took it over. He cannot do anything else under this Bill because he has no unexpended balance not through any fault of his own but by the provisions of Section 85 of the principal Act.

This particular piece of land has grown thistles and has never grown anything else but thistles. It has never been, for example, land used for houses which were blitzed, and which, under the Third Schedule, could be restored to its former use with houses erected on it. Its only use has been growing thistles, and if the owner is to be dealt with under Clause 19 on the basis that this is thistle land and nothing else but thistle land, then under this new Clause the owner would lose all. Instead of getting compensation for frontage land at a frontage value which would be paid for quite properly by the acquiring authority, it seems to me, unless I have misunderstood the effect of these not very clear words, that Clause 19 will not apply. This land has simply got a thistle value and the owner cannot get anything from anybody else because he has no unexpended balance.

I hope it will be explained to us in detail that this is not an alteration of the existing law and that it will not do what I suggest, but it seems to me that is what it will do. If it does so then I say it is something that nobody would wish to carry out, and I ask the Minister to be very careful in another place in making sure that in meeting the reasonable case put forward by hon. Members opposite to prevent the Minister, as it were, shovelling off his financial responsibilities on to the local authorities, he does not leave Part VIII owners in the position that they cannot get anything on the swings or on the roundabouts.

I have one very short comment to make on the very lucid exposition of the Part VIII owners' position, as presented by my hon. Friend the Member for Oldham, East (Mr. Horobin). I do not think that the hypothetical owner he described would be quite so badly off as he suggested. When the local authority puts the arterial road across the land it would have to acquire a portion of the land for that purpose and the owner would get his compensation, including development value for the rest of the land. This would be a bit less, by reason of the severance of the other bit, but he would get it under Section 51.

I have only taken the case that my hon. Friend gave although his actual instance was capable of a different solution.

Let me come back to the point put by the hon. Member for Acton (Mr. Sparks). Section 19 of the principal Act was used to start with in the large majority of cases in regard to blitzed sites in cities on which the rebuilding of war-damaged property was not permitted development because there was a direction that it should not be. In such cases, if planning permission was refused, a remedy was open to the owner under Section 19. There have been cases of late in Middlesex, as the hon. Member said, in which it has been sought to expand the doctrine to cover Green Belt land.

This raises a simple but fundamental point under Section 19. We must have regard to land in its existing state. What would be argued in relation to the green belt, and what was, in fact, argued, is that although we look at the land in its existing state when we adjudge its reasonably beneficial use, if it is land ripe for development its reasonably beneficial use must be related to that development use. In other words, land in the green belt area could be in reasonably beneficial use as agricultural land, but not for the purposes of the Section, because it is also ripe for development, and, therefore, should be adjudged as potentially residential land.

What the hon. Member for Acton wants is to cut out that argument. The proposed new Clause does precisely that. It will be very difficult to advance that argument if the Clause is added to the Bill. Whether, in all cases, it will be fair to the owner is a little doubtful. I can envisage cases where it may operate with hardship if a person is not able to have the development value taken into account in an area ripe for development. The law will be clearer to that extent, as the result of the proposed new Clause, although I should have thought occasion might have been taken to have something more definite, some practical definition of what one has to have regard to in assessing what is reasonably beneficial use. It is a very broad phrase. In each case it will be a question of fact, and it is difficult to evolve a code for the guidance of people in authority.

I find myself in a difficulty in discovering the meaning of the proposed new Clause. If an owner desires to build a factory and applies for permission, and if it is refused, an order under Section 19 is served. He may be told that the land can be reasonably beneficially used for dwelling-houses.

Is that specified in the Third Schedule to the 1947 Act? I think the relevant paragraph in that Schedule is paragraph 6, which says:
"In the case of a building or other land which … was used for a purpose falling within any general class specified in an order made by the Minister for the purposes of this paragraph …"
To discover whether it is within such a class, one passes from the Third Schedule to an order made under it. In that "Use Classes Order," dwelling-houses, in the example which I have taken, are not mentioned. One assumes that they must be disregarded in ascertaining whether the land can be reasonably beneficially used. Such things as shops are mentioned in that order but in respect of a different part of the land. Do they come within the phrase used in the proposed new Clause:
"… any class not specified in the Third Schedule to this Act"?
It is an extraordinarily difficult matter, because one has to go from an Act to an order and back again, to ascertain what is meant by "reasonably beneficial use," or "class not specified in the Third Schedule." I make a plea for simplification of the proposed new Clause.

I can only speak again with the leave of the House, in order to reply to some of the points which have been raised. I do not think that the Amendment in the name of the hon. Member for Acton (Mr. Sparks) is necessary. The proposed new Clause seeks to make what we already have in the Act doubly sure. Like many peacemakers, I am accused on one side of the House of not going far enough and on the other side of going too far. This only confirms me in my view that I am right in taking a middle course.

Would not the right hon. Gentleman agree that one very clear solution to all his problems is to make the Treasury responsible?

That is a very clear solution to all our problems, both public and private.

Would not the right hon. Gentleman agree that that would indeed be aurea mediocritas?

We are not on the Gold Standard yet.

I will look again at the proposed new Clause with my advisers to see whether we can make a further attempt at clarity in another place. The Bill does not in any way alter the terms upon which a person may serve a purchase notice if the conditions are satisfied and he is not getting reasonably beneficial use from the land in its existing state. The Section 19 system will work in the future as it has done in the past. The proposed new Clause makes no change. Its purpose is to make doubly sure that the Bill shall make no change.

6.0 p.m.

As for the fear which he had that the need of the nation to secure the green belt might be satisfied at the expense of the local authority under Section 19, I think that was impossible without this new Clause, and doubly impossible with it. Clearly, there is no fear of that at all. I hope that, on consideration, the hon. Gentleman will see that his fears if they had any foundation, ought not now to exist because this Clause is specially designed to meet them.

The problem of whether in some ways we have gone too far in another direction has been raised by two of my hon. Friends below the Gangway. I can only say that, as I am informed, the Part VIII owners are left precisely where they were under the 1947 Act. This Bill does not make it any more difficult for a charity than it was under Section 19. After all, the hon. Gentleman talks about thistle value, but the real value of the piece of land is its prevailing use value.

Of course, a great deal of this land is of ultimate use to the local authority which purchases it, and it is a mistake to regard it as useless in that sense. It is useless in its existing state. I will certainly have the most careful consideration undertaken to see whether there is any legal flaw. I am sure that it does what the hon. Gentleman wants to do, and I want to make sure that it does not do something which we do not want it to do. I hope with that assurance that the House will feel it right to pass this Clause.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.