The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith)
I beg to move, in page 22, to leave out lines 21 to 30, and to insert:and(b) such fraction of the value of any claim holding whose area includes that land as attaches to that land;and the unexpended balance of established development value of that land immediately after the commencement of this Act (hereafter in this Act referred to in relation to that land as its 'original unexpended balance of established development value') shall be taken to have been an amount equal to eight-sevenths of the amount or aggregate amount so attributed.As the Bill is drafted anomalies occur where compensation is payable by reference to unexpended balances and the 1069 supplement of one-seventh. If I were to give the Committee an example it would clear up the position. I am supposing that the land had an unexpended balance of £700. In that case, the supplement would be £100 and on compulsory acquisition the owner would be entitled to receive £800.
I should have to go back to the beginning of the Bill to do that. We have spent days on this matter. This deals with unexpended balance of the claims against the £300 million. On compulsory acquisition there would have been compensation at £800. If, instead, the land were made subject to planning restriction, which caused a depreciation of say £490, under Part II of the Bill that sum would have been paid out by way of compensation and, therefore, there would have been left an unexpended balance of £210.
If, later, the land was compulsorily acquired, the position would have been this. The owner would get £210 plus the supplement of one-seventh of £210, which is £30. If we add this up, this is what we find. The dispossessed owner would receive £490, then his £210 plus £30, which is £730, and which is £70 short of the £800 which he would have got on compulsory acquisition.
The Amendment cures that anomaly by making a supplement of one-seventh an integral part of the unexpended balance. In other words, the unexpended balance is now multiplied by eight over seven, which is the figure on which we work.
§ Mr. D. Johnston
This is a sensible Amendment, which was originally suggested in the English Bill by my right hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas). I am in favour of it.
§ Mr. Bence
It is not for me to criticise an hon. and learned Member on our Front Bench, but when I listened to the right hon. and learned Gentleman giving his explanation of this Measure it took me back to my school days. We used to do some arithmetical juggling whereby one spent a couple of shillings here and there, multiplied it, added to it, subtracted from it and found out that we 1070 were a shilling short in the end. No one knew where the shilling had gone. The arithmetical comedians at the Scottish Office, having found out that the previous owner of the land was losing £70, then devised an arithmetical process by which to give back to the private owner the £70 that was missing.
So far as I know, this is the first time that our arithmetical system has been altered to suit particular people. It is a most extraordinary thing. If this sort of thing is allowed to go on, especially when a Bill which has been before the Scottish Grand Committee is committed to the whole House, people will imagine that in Scotland we do things in this way. That is not true. The Scottish people do not do things like that. They are most mathematical and logical. It is only Scottish administrators here who have peculiar arithmetical ways of overcoming what they imagine is an injustice to certain owners of land.
I have great respect for my hon. and learned Friend on the Front Bench, who said that he was in favour of this Amendment, but if a thing is worked out by arithmetic and it does not give people the benefit which they think it ought to, that is too bad. As an engineer who worked with machinery and equipment, I know that if the arithmetical formula did not suit the way I was working, I could not change the formula. I got the sack and the thing I was producing had to be scrapped. What happens here is that when the wrong formula is used we get Cabinet changes.
My hon. Friends who have been miners know that when working in the mines it is the calculations which lead to a certain thing. Here we have our Legislature bringing in an Amendment to alter the arithmetical system decided on for many years because it has been discovered that by that process some landowners in Scotland who have had their land acquired for public purposes—which is a just thing to do according to the ex-Minister of Housing and Local Government in his speech at Scarborough—are losing by it, and it is proposed to change the arithmetical system to make sure that they shall not lose a penny. None of these people has yet taken his own life. The Government want to make sure that the unexpended balance is paid back to 1071 the full, so they change the system of arithmetic.
I hope that we shall get a far better explanation of this than we have had. Here we have £70 missing out of £800, and the right hon. Gentleman has given an arithmetical system by which to replace the £70. I am not satisfied with the explanation. Is it just that the owner of land for a certain period should get the full value set upon it every time? I do not see why he should not get £70 less. Many of us have seen our capital value decrease and our savings decrease in value since this Government came to power. Every £ which I have saved has been reduced in value by 2s., but the landowner is not to be allowed to lose anything on his land. I think that a better method should be found than changing the arithmetical system.
§ Mr. Hector Hughes
It is not without significance that the Lord Advocate, who has had the conduct of the Amendments up to the present, seems to have retired temporarily from the arena in favour of the right hon. and gallant Gentleman who has taken over the explanation of this mathematical problem. It seems to me right that there should be that transfer of explanation, because I think that I am right in saying that the right hon. and gallant Gentleman is a chartered accountant and is, therefore, perhaps more fitted to deal with this great problem of higher mathematics than, if the Lord Advocate will allow me to say so, a mere lawyer like myself.
Clause 18, which is under consideration and which it is sought to amend, was one of the Clauses considered by the Scottish Grand Committee after the Labour group had withdrawn in protest against the inadequacy of the time allowed for the consideration of this most complex Bill. The right hon. and gallant Gentleman admitted, in so many words, that this was one of the most complex Bills which he had ever come across, and he begged not to be put off the thread of his arguments because of its great complexity. The Amendment which it is sought to make in the Clause was not even hinted at in the Scottish Standing Committee. Indeed, to such a lower level had that debate fallen that we find on reading the OFFICIAL REPORT that the 1072 hon. Member for Dumfries (Mr. N. Macpherson)—who, I regret to say is not now present—protested against the undue severity with which the 68 Clauses were going through and the lack of consideration that was being given to them. With the hon. Member I cordially agree that the Bill is defective in many ways. The Amendment will not cure those defects.
As was hinted by one of my colleagues, the Amendment is a rather indecent piece of political nudism because it shows in all its ugly nakedness an attempt by the Government to benefit a particular class. As my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) pointed out when dealing with the missing shilling of his school days, there is a missing £30 in every £100 which the Amendment seeks to find and put into the hands of a particular class. That is not the kind of thing that the Committee will stand for.
The Clause specifies the manner in which any unexpended balance of development value is to be dealt with. The Clause was as clear as any Clause in this complicated Bill, but the Amendment makes it still more opaque and obscure than it was. It provided that the unexpended balance of development value should consist of the aggregate of two things: the valuethe value of any claim holding having an area consisting of …the land referred to in subsection (1), plusthe appropriate fraction of the value of any claim holding whose area includes that land.Subsection (3) defines "appropriate fraction." That, simple as it is, loses its simplicity when it suffers the attack of the Amendment.
Now, it is proposed to alter this by leaving out the word "appropriate" and its definition, which gave some flexibility to the Clause, and to insert instead a rigid proposal thatthe unexpended balance of established development value … shall be taken to have been an amount equal to eight-sevenths of the amount or aggregate amount so attributed.There is a certain amount of flexibility in the Clause at present, but the Amendment will remove it and thereby inflict hardship on the community by giving a special favour to a particular class.
Further comments could be made upon the Clause, as they could be made about 1073 the rest of the Bill, but the Bill and the Clause are not under discussion. I have said enough to make it clear that the Amendment, so far from improving the Clause, will make it much more obscure and more difficult to administer in practice and, worst of all, will give a benefit to one class at the expense of the rest of the community. I hope, therefore, that the Amendment will be defeated.
§ Mr. Lawson
The position in the first place, as I understand it, was that when the claims were established it was expected that they would be paid out fairly soon, but that since payment came later and we appreciated that there would be considerable delay in meeting the claims, there was to be a payment of interest. The one-seventh about which we have been speaking is, as it were, a capitalisation of the interest, the payment at 3½ per cent. between 1948 and 1953, so that the one-seventh added to the total of the original claim makes the total of the original claim eight-sevenths.
We are dealing only with claims that are due to be paid. The position with which I am concerned is whether the claims that are not due to be paid but will arise in the future will all be transferred from original claims on the basis of the one-seventh and become claims of eight-sevenths rather than the former seven-sevenths. In other words, is this interest payment, which arises from the delay in payment between 1948 and 1953, to be carried forward and placed on all the claims that have not yet arisen to be paid? Is it a future payment as well as a past payment?
§ Mr. Pryde
Earlier in the debate I said that the Government had treated the Committee in a cavalier fashion and that the Amendments altered the whole theme of the Bill. I now go a stage further. The conduct of the Government on this occasion is disgraceful. They are doing something of which no Government could be proud and upon which the people will judge them at the next Election.
What the Government are doing is to blackmail the people's Treasury to benefit a certain section of the community, who are certainly not supporters of this party. They are saying that any land that was valued at £700 in 1948 will now be paid for at the rate of £800. That is nothing 1074 short of sheer blackmail of the people. I ask the Government to consider the problem fairly and honestly and to withdraw the Bill, take it back again, and see that it is drafted, as it should be drafted, as a piece of constructive legislation.
§ Mr. Ross
I want only one simple question answered. There is, obviously, a difference between the original Bill and the Amendment. It is a difference in money, because the arithmetical quotation by the right hon. and gallant Gentleman ended up with somebody getting a little more money than he would have got as the Clause now stands. What will be the aggregate cost to the Treasury if we pass the Amendment?
In reply to that last question, I cannot give a definite figure but it would be no more than was intended in the first place. As the hon. Member for Motherwell (Mr. Lawson) said, the intention in the first place was that the one-seventh should be added to the unexpended balance in the name of interest between the two dates. The hon. Member for Motherwell asked me a specific question. The answer is "Yes, it will be an integral part of the amount forming the ceiling of compensation in the future." That is how we arrive at the one-seventh; we put on a limit. The money has not been paid within the period, and so the interest will attach to future claims.
I need not deal seriously with the points made by the hon. Member for Midlothian and Peebles (Mr. Pryde). It is not a question of benefiting a certain section of the community. The whole object is simple—that they should not be treated differently when their land is compulsorily acquired. We thought that the original text of the Bill meant that they were treated equally but we find, in fact, that they are not and we have therefore put down the Amendment to ensure that the original purpose is accomplished.
§ 5.30 p.m.
§ Mr. Lawson
It means, in effect, that all these future claims, from now for as long as the Act is in operation, will be increased in the total amount by one-seventh.
Yes. I think the hon. Member understands it quite clearly. The interest payment, which is represented by the supplement of one-seventh, will attach to all claims.
No, I do not admit that at all. All we are doing is correcting a mistake which we did not previously observe.
§ Mr. Emrys Hughes
May I press for a clearer answer to the question put to the Minister by my hon. Friend the Member for Kilmarnock (Mr. Ross)? My hon. Friend's question, which was quite clear, sought to discover the aggregate sum of money, but, instead of telling us that, the Minister said it would not exceed something else. Surely the Committee have a right to be given an approximate total figure for what this proposition will cost. We should press for an answer.
The hon. Member must be well aware that no one could answer that question. We do not know what claims will arise in the future. No estimate can be made. We do not know what land will be acquired compulsorily by various authorities between now and doomsday. If the hon. Member can arrive at a figure for that, I congratulate him.
§ Amendment agreed to.
§ Clause, as amended, ordered to stand part of the Bill.