§ 10.0 p.m.
§ The Minister for Planning and Local Government (Mr. John Silkin)
I beg to moveThat the Community Land (Excepted Development) Regulations 1976, a draft of which was laid before this House on 15th January, be approved.Before dealing with the provisions of these Regulations, I should remind the House of the significance of excepted development and the bearing which it has on the powers and duties given to local authorities under the Community Land Act.
Section 3 of the Act provides that relevant development is any development other than, first, development which is "exempt" under Schedule 1 to the Act; second, development which consists exclusively of the building of a single dwelling-house; or, third, development which is excepted by Regulations made under the Section. It is those Regulations, setting out the scope of excepted development, which are before the House tonight.
The general duty of local authorities under Section 17 of the Act to have regard to the desirability of bringing development land into public ownership and of developing it or making it available for development by others applies only to land which in their opinion is needed for relevant development. Thus development which is excepted is excluded from this general duty.
In due course, as and when Orders are made under Section 18 of the Act, the authorities subject to those Orders will have a duty to acquire all land needed for relevant development covered by the Orders. It is only when all authorities are subject to such duty Orders in respect of all types of relevant development that the second appointed day can be brought in, at which stage compensation on acquisition moves from a market value to a current use value basis.
Thus the Excepted Development Regulations have a key role in defining the normal scope of the land scheme. Excepted development can never be the subject of a duty Order. The special 1100 provisions for the suspension of planning permission will not apply to it, and the modified compulsory purchase procedures provided for in the Act will not operate where authorities seek to acquire land for excepted development.
Although there can never be a duty to acquire in respect of excepted development, authorities will still have a power to acquire for such development. I should also make it clear to the House that excepted status under the Regulations attaches to development, not to land. It remains open to an authority to decide that land is needed for relevant development, even when there are proposals for excepted development to take place on it, and to seek to acquire it for that purpose. Where, however, it is proceeding by compulsory purchase, the compulsory purchase order will require confirmation by the Secretary of State.
To explain the considerations which will be taken into account by the Secretary of State, it may be helpful at this point to turn to the content of the Regulations. I do not want to take up the time of the House with a detailed explanation of their scope. This will be readily apparent from the various classes set out in the schedule to the Regulations. It may, however, be useful to distinguish two distinct categories within the Regulations.
The continuing function of the Regulations is to distinguish between those developments which are of such significance from a community point of view to require that, in due course, the acquisition duty of local authorities should apply and those which are not. The Regulations therefore provide in Classes 4 and 5 for the erection of industrial buildings of up to 1,500 square metres and other buildings of up to 1,000 square metres floor space to proceed without the need for public acquisition. Class 7 similarly excepts the rebuilding or enlargement of an existing building within the limit of a 10 per cent. increase in floor space. In this respect the provisions follow exactly the tolerances in Schedule 8 to the Town and Country Planning Act 1971 as qualified by Section 278 and Schedule 18 of the same Act.
Class 11 covers any development, including change of use, which does not 1101 involve the erection of a building and is not so closely connected with the use of a proposed building, the erection of which would constitute relevant development, that the development ought to be treated as a whole.
Taking into account that the Regulations permit aggregation of individual classes, they will cover a wide range of types of development. For example, they will cover small industrial buildings or extensions, small commercial buildings, small-scale housing development of the order of 10 to 12 houses or up to 20 flats, most recreational buildings, other small buildings such as churches or meeting halls and a wide range of extensions to buildings of all types. They will also cover cases of mixed use—for example, shops with offices or flats above them.
Although, as I have said, authorities will have the power to acquire land for such development, the Secretary of State will be prepared to entertain compulsory purchase orders only where this can be justified for reasons of positive planning. Stringent tests would be applied by the Secretary of State and the authority would need to demonstrate both substantial planning advantages and that the development would not go ahead unless there were public acquisition.
The Government have throughout recognised the need to ensure that in the early years of the scheme, when local authorities are adapting themselves to their new role and building up their resources, there should be no unnecessary delay to essential development programmes. This is given effect to by the provisions of Classes 1 to 3 of the draft Regulations which apply to development under planning permissions in force on 12th September 1974—the date of publication of the White Paper on Land—and on land owned by builders, developers or industrialists on that date.
Provided that it appears that development is likely to be achieved reasonably swiftly, the Secretary of State will not normally be prepared to entertain compulsory purchase orders in respect of such land. Conversely, where it appears that steps are not being taken to initiate development in circumstances where there is an urgent need from a community point of view, he will be prepared to entertain compulsory purchase orders where this 1102 would ensure that the development would be carried out more quickly.
§ Mr. Michael Latham (Melton)
The right hon Gentleman has just made a very important statement about the acquisition of builders' land banks in certain circumstances. Will he be giving detailed guidance to local authorities about those circumstances? This is absolutely vital?
§ Mr. Silkin
Guidance will be issued in due course.
I should like to emphasise that, in applying these policies, the Secretary of State will have full regard to the necessity for builders, until authorities are in a position to meet their land requirements, to ensure continuity of operation by holding reasonable quantities of land in excess of their immediate needs. Similarly he will take into account, where the land is owned by industrial undertakers, that they frequently need the assurance that land will be available for the purpose of expansion in the relatively long term and he will require the strongest demonstration of need before confirming a compulsory purchase order related to such land.
In recognition of the contribution to maintaining development programmes made by builders and developers who, between White Paper day and the date of Royal Assent, continued actively to seek out new land and bring it forward into development, the Secretary of State will normally treat permissions obtained and land acquired between these dates as if they were within the scope of the Excepted Development Regulations.
In general, local authorities have already been asked to frame their proposals for early acquisition under the scheme in such a way as to avoid delaying house-building and industrial development. Where good progress is being made, the Secretary of State will look to authorities to avoid acquiring land currently being sought out and obtained by builders unless there are overriding reasons and to concentrate their efforts on seeking out other land and making it available to builders who may be short of land.
I hope that these arrangements will provide builders and developers alike with the confidence that they can proceed with their plans for early development free of the risk of any delay as a result of the Act while establishing a 1103 basis of partnership with local authorities which will ensure that their land needs are efficiently and economically supplied in the future.
As hon. Members will have noted, the Regulations also deal with certain other specialised types of development for particular purposes or which is to be carried out by particular bodies. I shall not take up any further time by explaining these in detail but I shall, of course, be happy to try to deal with any points raised. I commend the draft Regulations to the House.
§ 10.10 p.m.
§ Mr. Hugh Rossi (Hornsey)
I am grateful to the Minister for Planning and Local Government for the way he has introduced the Regulations, and in particular for the way he has set them in the context of the general scheme and explained to the House the effect of excepted development. There is still considerable confusion as to the exact significance of excepted development, particularly when there are phrases like "exempt development" also in the Act.
There is a general belief that, provided a person qualifies for excepted development, he is perfectly safe. The Minister has made clear that the owner of land subject to excepted development is not completely safe. The exception takes the development of land attached to it outside the scheme, but not outside the power of a local authority to acquire it, subject to the Secretary of State being satisfied on the validity of an application for a compulsory purchase order.
It was helpful of the Minister to say that he would be regarding this matter with great stringency. I hope he reinforces that time and again because there is anxiety, particularly among builders and those in the development trade, that they may be naked under these Regulations even though the inference has been drawn that they are protected to some extent. For example, Class 2 requires developers to register their existing land banks with local authorities by 5th October this year if the banks are to be treated as land subject to excepted development. The fear has been expressed to me that this might be a way of enabling a local authority to identify development land and snap it up 1104 under the powers given in Section 15 of the Act.
I invite the Minister to reassure builders and developers that he will not allow local authorities to use registration under Class 2 as a means of identifying land within their areas as suitable for development. Although he has said that, in general, excepted developments are outside the scheme, he emphasised that an exception attaches to the development and not to the land and therefore it would be possible, once land was identified by registration, for a local authority to say that it wanted a site for some other kind of relevant development and would therefore acquire it. There is a danger that an authority will call in aid the Minister's phrase about positive planning. He said that was one of the categories for which he would confirm a compulsory purchase order.
There is still a great deal of anxiety in the building and development industry and we need considerable reassurance from the Minister. He has said that he relies upon the private sector to make the land scheme work in the initial stages. He must instil confidence in that sector by giving the assurances for which I have asked.
One other matter concerns developers and builders a great deal. The right hon. Gentleman has indicated the way in which excepted development is outside the scheme. He referred to the Section 17 duty and Section 18 Orders, the suspension of planning permissions and the compulsory purchase procedures under Schedule 4. These provisions do not apply to excepted development. What the Minister has not referred to and what is not in the Act but will be in other legislation is whether excepted development will be outside the scope of the development land tax.
We have not seen the Bill on development land tax. We have been waiting for it for some considerable time. We have noted with interest the approach of what was to be the first appointed day. Still there is no Bill. We begin to wonder how the first appointed day will become effective. If the local authorities are to start acquiring land after the first appointed day at a price net of development land tax, they will be in an impossible position if the legislation defining that tax has not by then appeared.
1105 I am concerned to obtain from the right hon. Gentleman an assurance that excepted development will be outside the scope of the tax. This is a matter of great importance particularly to the small builder. The right hon. Gentleman has been telling small builders throughout the country that the limit of 10,000 sq. ft.—or 1,000 square metres as it now appears in the Regulations—in respect of residential development is there to enable them to carry on with their business. The Minister has said that he is not out to harm the small builder, that there will be an exception under the Regulations and that the small builder will be able to carry on this kind of development without interference from the local authorities.
That is all very well, but it is not good enough if these people will have to pay 80 per cent. development land tax the moment they begin their development. The concession that this Regulation is supposed to bestow will be completely nullified if the right hon. Gentleman does not ensure that development land tax will not apply.
I hope that the Minister will deal tonight with certain questions concerning the classes set out in the schedule to the Regulations. My questions arise principally because of the differences which appear between the Regulations and the original proposals as put before hon. Members in various consultation documents and Circular 121/75 issued by the Department on 3rd December 1974. Inasmuch as the consultative documents, which were prepared during our consideration of the original legislation, coincide closely with the circular, I shall refer to the circular rather than the consultative documents for the purpose of comparison.
Paragraphs 56 and 57 of the circular provide that the Secretary of Statewould not normally be prepared to entertain compulsory purchase orders under the scheme provided that good progress was being made with such development.This will particularly apply where builders bought land, or planning permission for development was obtained, prior to Royal Assent to the Act. In relation to the period after Royal Assent it will be for the authorities to assess whether in any particular case there are overriding reasons for taking steps to acquire land.…1106 The implication of those paragraphs is that normally land with planning permission or which is part of a builder's or developer's stock in trade as at the date of Royal Assent will be outside the scheme and that there is to be a difference in relation to the period after Royal Assent, when it will be for the authorities and nobody else to assess.
Class 1 in the Regulations speaks of planning permission granted on or before 12th September 1974. Class 2 speaks of land owned by builders on 12th September 1974. Why is there not a reference in the Regulations to Royal Assent date rather than to 12th September 1974? The inference of the paragraphs in the circular which I have quoted is clear. Royal Assent date land is to be outside the scheme as a whole, but that is not what is stated in these two classes.
Presumably there was a reason for selecting the date of 5th October 1976 in Class 2. It appears to give too little time for registration. The date is absolute. The registration must take place by 5th October. There is no provision for an extension of time if by inadvertence or ignorance the land has not been registered. Although the professional bodies will keep their members advised, not every builder is a member of a professional body. One cannot be assured that every communication will be read in detail by every busy builder. Some latitude should be given to late applications.
It is regrettable that under the procedures of the House we are not permitted to suggest amendments. As the appointed day is to be delayed because of the Bill dealing with development land tax, the right hon. Gentleman has plenty of time to take away the Regulations and bring them back to the House in a week or a fortnight with amendments to meet the points I have raised. We either have to agree to the Regulations in the form in which they are presented or vote them down in their entirety. We are given no option. I hope that the right hon. Gentleman will be prepared to amend the Regulations as I have suggested.
I come to Classes 4 and 5 and the definition of "gross floor space" which is contained in Regulation 2(6). Both these classes except development where, in the 1107 case of industrial development, the aggregate of the gross floor space of the buildings does not exceed 1,500 square metres and in every other kind of building development if the gross floor space does not exceed 1,000 square metres. The gross floor space is defined as ascertained by external measurement. I am informed that it is, and always has been, the practice of the building industry, quantity surveyors and professionals associated with building and development to measure by internal and not external measurements.
It seems unnecessary for legislation to be framed and worded in such a way that it does not coincide with what is the general, traditional professional practice in these matters. Perhaps it was an oversight. Perhaps it is simply because hallowed precedent has for some other reason in a Town and Country Planning Act of many years ago used external measurements in calculating gross floor space that we find it in this piece of delegated legislation. The representation made by the industry is that this definition should be altered.
It is relevant also to Class 7, which refers to the enlargement of buildings by not more than 10 per cent., and reference again is made to gross floor space. There, one would have to apply the definition in Regulation 2(6), which would mean by external and not by internal measurements.
Another matter relates to Class 6, which tells us that theerection on any land of one or more buildings to be used for agricultureshall be an excepted development. The consultative document and Circular 121 of 1975 specified the Government's intention as including in that class not only agriculture but forestry. What brought about this change? Why is forestry no longer included with agriculture as excepted development? I do not want to rehearse again the arguments we have had before concerning the need to give special consideration to the position of forestry activities.
Another matter which troubles me relates to Schedule 1 to the Act, in which there is a definition of exempt development—that is, development which is wholly not only outside the operation of the land scheme but also outside the 1108 power of purchase. The exemption applies to landused for the purpose of agriculture or forestry, of any building or other operations required for the purposes of that use, other than operations for the erection of dwelling-houses.Therefore, land or development for the purposes of agriculture other than for the erection of dwelling-houses is already exempt development under Schedule 1 and, being exempt development under Schedule 1, presumably does not require to be carried into the exception in the Regulations save to the extent to which there is an exclusion in the exemption, and the only exclusion in the exemption which I can detect is the erection of dwelling-houses for agricultural purposes. Am I to understand, therefore, that the object of Class 6, which merely speaks of the erection of one or more buildings, to be used for agriculture, really relates to dwelling-houses because other kinds of buildings are already covered by Schedule 1(2)? If that is the intention, why is not the word "dwelling-houses" or the phrase "buildings for residential purposes" included in Class 6?
I have referred already to Class 7. Class 8 is new to the House in the sense that it was not referred to in any consultative document or in Circular 121/75. What strikes me is that presumably this land is land already in some form of public ownership. If that is the case, is not the right way to treat it by including it in the definition in Section 4 of the Act to ensure that it is not an outstanding material interest? Under Section 4 we say thatA material interest in land shall be treated as outstanding for the purposes of this Act unless … it is owned by an authority, a local or new town authority, a parish … council or, in Scotland, the council of a district …".Then it goes on to deal with charities and other authorities which may be described by the Secretary of State by Order.
Would it not be more appropriate, therefore, to include land owned by the Scottish or Welsh Development Councils as one of the bodies included in the definition in Section 4, because the effect of that would be to give them a somewhat wider protection than that which is given purely by this somewhat ephemeral protection of excepted development?
1109 Again, I ask the right hon. Gentleman to indicate to us why we now find statutory undertakers appearing in Class 9. There was no reference to statutory undertakers in Circular 121/75. Nor was there any reference to statutory undertakers in the consultative documents. The impression that was given to the Committee and to the House was that statutory undertakers were already sufficiently protected by Section 18 (4)(d) of the Act, which said that the operational land of statutory undertakers would not be covered by a full duty Order; and Section 22 (8) of the Act made it clear that suspension of planning permissions did not apply to statutory undertakers. Therefore, they already enjoy the main protection which can be afforded to any class of person by reason of those statutory provisions. The right hon. Gentleman could assist the House by explaining why at this stage he should bring this forward.
I find some difficulty in understanding the meaning of Class 11. After some thought I came to the conclusion that Class 11 was intended to coincide with para. 7 of Annex B of the circular. That para. is quite clear in its language inasmuch as it relates specifically to
material change of use in land or buildings.Then it gives an explanation:Amongst other things, this would cover the restoration of mineral workings, the deposit of refuse or waste materials, and most recreational development … leaving only major recreational facilities within relevant development.It would assist us if the right hon. Gentleman would state whether the wording of Class 11 is intended to cover the special category set out in paragraph 7 of Annex B of the circular, and, if not, in what respects it is narrower or wider than the circular proposed.
The language of Classes 12 and 13 defeats me. I do not know what is meant when we are told:Any development consisting of development in any two or more of classes 1–11 inclusive so long as it does not include any development solely in class 4 or class 5.When I first read that wording I assumed that so far the schedule had been dealing with separate classes and that, if a particular development was intended separately from another and fell within one of Classes 1 to 11, it would be excepted development. The intention 1110 of Class 12 is, in effect, "If you get two or more of those classes taken together, they will remain as excepted development." Therefore, why does it mentionsolely in class 4 or class 5"?The use of those words seems to confuse. If the development is solely in Class 4 or Class 5, it cannot be two or more classes within Classes 1 to 11. I do not know whether the Minister appreciates my difficulty in that matter. I hope that I have explained my quandary sufficiently well. A similar question arises on Class 13.
There is only one other question of detail I wish to put to the right hon. Gentleman. Paragraph 9 of Appendix B of the circular refers to "Mineral extraction". We are told thatDevelopment consisting exclusively of the winning and working of minerals … together with the erection of ancillary buildingswill be treated as excepted development.
The explanation then goes on to say:Works in connection with treatment and disposal of minerals so far as they are effectively industrial processes will fall within the treatment of other industrial development.Will the right hon. Gentleman explain why there is this apparent change of mind, why it was intended in December, when the circular was issued, to include mineral extraction in that form as an excepted development and why it does not appear as a separate class in the Regulations? I thought at first that it was felt that mineral workings were covered by paragraph 3 of Schedule 1, which declares to be exemptThe winning and working, on land held or occupied with land used for the purposes of agriculture, of any minerals ".A relationship with mineral extraction is given to agricultural land. That appears to create a limitation upon the extraction of minerals in so far as it is an exemption under the Act. The circular appeared to bring in another class—namely, mineral workings unconnected with agricultural land.
The Regulations are silent about mineral workings on land other than agricultural land. Why has there been this change of mind, having regard to the many and fierce debates that took place both in Committee and on the Floor of the House about the difficulties 1111 that this industry would face unless it received special treatment under the Bill as it then was? Have all the arguments which the right hon. Gentleman appeared to accept when we were debating the Bill gone by the Board? If so, why?
Those are the questions that I put to the right hon. Gentleman, and I hope that in due course we may have an answer to them.
§ 10.40 p.m.
§ Mr. Michael Latham (Melton)
I start, as I do every time I address the House on the subject of housebuilding, by declaring an interest, as a director of Lovell Homes Ltd.
I have one or two detailed points to make, and some brief but wider thoughts about Class 5. Regulation 2(3) does not seem to cover the case where planning applications lodged before White Paper day are made subject to the Minister's call-in powers and then granted planning permission by him. I assume that in such circumstances common sense would prevail, and exemption from compulsory acquisition would normally be achieved by the Ministers' refusing to confirm a compulsory purchase order, but in the interests of obvious fairness I would be grateful to have that assurance on the record.
Secondly—this is a particularly important point to which I am sure the answer is "Yes", but again we need it on the record—I assume that the expression "planning permission" in Class 1 means outline planning permission. It aways has in the past but it is essential to get that on the record. Perhaps the Minister will confirm accordingly.
In that connection, I am a little concerned that an unsatisfactory situation could arise over changes in details. As the Minister knows, it is by no means unusual for developers to buy land with detailed consent, which they subsequently feel it is necessary to seek to change, in some cases with the strong support of the local authority. I understand that it has been suggested that any alteration of the details means that a new consent has been granted, in which case the Class 1 exemption would be lost. Perhaps we may have an assurance that any local authorities which try to pull a fast one 1112 in that regard by accepting a proposal for new details and then bringing forward a compulsory purchase order will get pretty short shrift from the right hon. Gentleman on appeal.
I am disappointed at the proposal in Regulation 2(6) that measurement should be by reference to external walls. I understand that this is because of the provision in Part IV of the Community Land Act—which may never be used; I hope it never will be—about empty offices. If that is so, it is not a useful precedent, and it is a departure from normal practice in the building industry, where internal measurements are the usual method of calculation. If this form of definition causes difficulties for the industry, I hope that the Minister will consider an amending Order.
The fourth of my detailed points is the question of the registration of land under Class 2. I hope that we shall have an assurance from the Minister that under this registration procedure the confidentiality of the information given by developers will be respected by local authorities. Information about their land stocks is of great commercial concern, and it is important that we have an assurance, for the record.
That brings me briefly to the wider questions posed by the 1,000 square metres definition, in Class 5, for dwelling-houses. I know that its rough imperial equivalent of 10,000 square feet was what the Minister promised during the passage of the Bill, but there has been a severe deterioration in the land situation during the past few weeks. Vendors are increasingly reluctant to bring their land forward for development, and everyone in the industry has noticed a substantial deterioration in the position recently.
From my own experience I should like to echo what the President of the House-Builders Federation, Mr. Charles Mitchell, said in a letter dated 9th January to the Prime Minister. He talked of thegreat concern of our Federation that we shall find ourselves facing a disastrous shortage of land for housebuilding some two or three years from now which could bring the private housebuilding programme practically to a stop before the end of this decade.He explained that the causes are threefold. The letter went on:(a) the sharp drop which has occurred in the price of development land.1113 I do not query that. The letter continued:(b) the substantial increases in taxes payable on development gains obtained by vendors because of the existing development gains tax and the proposed development land tax; and (c) the uncertainties created by the Community Land Act. These factors have undoubtedly deterred many of those who own land which would be suitable for housing development from releasing that land for this purpose, since the combined effect of the drop in land prices and the increases in tax rates has meant that land vendors' net returns are now far lower than they were a few years ago.I am not saying that house builders have no land. Most of them have their normal two- or three-year land stock. The Minister's latest inquiry, published on 6th January, although reflecting the position last October, found that there were 278,000 plots with consent and serviced. Although that represents only about 18 months' house building output at a reasonable rate, what is worrying me and the industry is that there has been a sharp decrease in the number of firms buying white land, or entering into conditional contracts or options for it. There is fairly sharp competition for land that is ready for immediate development, but most of that land is held by receivers or companies whose principals want to retire to go out of business.
Very little land is coming forward in white land form from landowners. For example, a developer told me only today—he was not talking wholly in jest—about a site that was withdrawn nom the market in his area partly because the owner had decided to grow potatoes on it instead. I have always said that the effect of so high a rate of tax with penal powers of acquisition will mean that the Minister's land scheme will work only through massive compulsory purchase, with all that that means in terms of slowness, bureaucracy and damage to the house building programme.
Once again Mr. Mitchell put his finger on the situation when he wrote:We envisage a situation therefore in which the next two years or so will see very little fresh land becoming available for housing development while builders' existing land stocks will be gradually reduced as they are brought into use for new housing developments. By the end of this period we fear that we shall be facing a major famine of housing land which will make it impossible for us to build any houses.One step that the Minister could take would be to bring forward an immediate 1114 amending Order to raise the limit from 1,000 square metres to 2½ hectares—namely, about five acres. That is the proposal that I and my hon. Friends made in Committee and that was specifically rejected by the Minister. I believe that eventually he will be forced to accept that proposal, or something like it, by the logic of events. One thing is certain; there is enormous and growing concern in the industry about the present land position. The Minister would do well to heed it.
§ Mr. John Silkin
I hope that the House will excuse me for intervening at this stage. On the question of the confidentiality of notices in respect of builders' land holdings under the White Paper, I absolutely agree with the hon. Member for Melton (Mr. Latham). I shall see that firm guidance is given and that confidentiality is respected. I felt that I had to put that on the record.
§ 10.49 p.m.
§ Mr. Hector Monro (Dumfries)
Above Schedule 4(14), which is subsequent to the paragraphs dealing with churches and burial grounds, there appears the heading:Use and development of land for open spaces.In the interpretation section—Section 6—it is said that an open space means land that is laid out for public recreation. In such a thoroughly bad Act any exceptions are worth while, and we welcome the minimal improvement that is now offered. Will the Minister say clearly where we stand on the exception, if any, for recreation land?
There are three points that I wish to make on the Act and on development land tax. Will existing sports and recreation grounds in private hands, such as a cricket ground, a squash court or a sports hall, be covered under Class 7(a) where there is extension of an existing building?
Secondly, in cases where owners wish to sell part of a cricket or football ground for housing or industrial development, will they be able to use that money to develop existing sports facilities? This is a crucial matter for those who are concerned with cricket grounds. They want to know whether they will be included in the Regulations. The answer to that question will have a serious effect on sports 1115 grounds and recreation ground development.
Thirdly, I wish to refer to the case in which a number of small private sports clubs sell off facilities and concentrate in one area, which may be an area in desperate need of sports facilities and an area liable for Government grant. Will the clubs that amalgamate be included for exemption from development land tax?
Those are the three key points on which sports clubs are desperately keen to have assurances. They want to know whether they will he exempted from the Regulations.
I wish to associate myself with the concern expressed by my hon. Friend the Member for Hornsey (Mr. Rossi) in respect of the omission of the word "forestry" from Class 10. Those of us who have agricultural and forestry constituencies are anxious to know why forestry has been excluded. Following the imposition of capital transfer tax and other forms of penal taxation, the industry is now undergoing a difficult period, and we want to know why forestry is not to be exempted.
I hope that the Minister will make clear what is the position of sports and recreation grounds in private ownership under the new Regulations.
§ 10.53 p.m.
§ Mr. Stephen Ross (Isle of Wight)
I shall be brief, because many of my questions have already been posed.
I wish to emphasise the point made by the hon. Member for Melton (Mr. Latham) in respect of Class 1 on the question of planning permission. I trust that outline planning consent is included.
Will the Minister accept the suggestion from the Royal Institution of Chartered Surveyors that the planning permission should embrace a substitute planning permission, first, where the original permission was for residential development; secondly, where the substitution was for the same class but at a greater density; and, thirdly, where the original permission had not expired at the date of applying for a permission in substitution?
I wish to refer to the word "owned" in Class 2 of the Regulations. Will the 1116 Minister accept that contracts exchanged by 12th September will be satisfactory, or even conditional contracts if entered into by that time? May we assume that long leases are also included?
I echo the point made by the hon. Member for Hornsey (Mr. Rossi) about Class 4. I referred to the question of measurement at the Report stage of the Act's passage through Parliament. As a practising chartered surveyor I have always measured from the interior of exterior walls, but including the interior walls. I accept that taking the measurement from the exterior is neater, but the practice is the other way, and all rating is done by that method. Therefore, there will be a change for the worse if we introduce this complexity.
Does the limit of 1,000 square metres in Class 5 inclde garages, or can they be an addition? What about factory sites? I understand Class 4 to mean that 1,500 square metres is the limit in any development. That seems very restrictive when we are trying to encourage developers to build advance factories. Would it not be better if that could be the size of each factory on a small estate? This is important, as I hope to see the Chairman of the Development Commission tomorrow to try to persuade him to build a few advance factories in my constituency.
Class 8 excludes development on land owned by the Scottish Development Agency or the Welsh Development Agency. It might be an idea if we had the Development Commission in on that. I understand that it is building advance factories in at any rate some parts of England.
§ Mr. Ross
I am glad to hear that.
I support the point made by the hon. Member for Melton about the restriction in size to 1,000 square metres. I ask the Minister to consider increasing it as a matter of urgency. He said in opening that that size should provide sites for 20 flats. That idea has been very much criticised by people who believe that it is a doubtful proposition. It is a very limited exception, and we could be more generous.
§ 10.58 p.m.
§ Mr. Michael Morris (Northampton, South)
I support the views expressed by my hon. Friend the Member for Hornsey (Mr. Rossi). The interpretation Regulation 2(6) is extraordinary. Subject to the Layfield Committee getting rid of rating altogether, it will cause enormous difficulty in certain areas. I hope that the Minister will reconsider it.
The question of forestry has been raised in relation to Class 6. I do not have one field in my constituency, but I should like a clear answer from the Minister on that matter, and I should like him to confirm that "agriculture" includes horticulture.
We have come quite a long way from the position of having no exemptions and a rather miserable hardship tribunal to that of having a splendid hardship tribunal with a number of exemptions and exceptions. However, as the exceptions first saw the light of day last September we must ask whether the situation in the market has changed since then. If it has, the Regulations should reflect those changes. The right hon. Gentleman is aware of the rate of unemployment in the building industry. It was running at about 150,000, but is expected to reach about 300,000 in the coming year. That means that the Regulations ought to have gone a bit further, if for no other reason than to keep down the level of unemployment. It is a great shame that they do not.
I support my hon. Friend the Member for Melton (Mr. Latham), who raised the issue of the housebuilding industry. The land banks are adequate for the next two years, but it is the period thereafter that is causing great concern in the industry. In due course the Minister will have to extend the exemptions. On the industrial side the situation is even more worrying, in the sense that while we chastise industry and tell it to get on and invest, it is suffering from ODPs and IDCs and is finding—we have had representations from the CBI and chambers of commerce—that even this rather meagre level of exemption will cause it difficulty, not least in terms of security on loans and other development.
I urge the Minister to reconsider these Regulations. The last thing any of us wants to do is to put restrictions in the 1118 way of industrial investment. I find it difficult to believe that anyone wants those restrictions. The right hon. Gentleman might be interested to know that my county council has announced that it has set aside £500,000 as a contingency for general investment in land. It is rather worrying that it should have done this at a time of restriction on public expenditure. Multiply that by the 54 county councils in England and we have another £27 million tied up.
We have great reservations about the Act. These Regulations are, unfortunately, unchanged in substance from last September.
§ 11.3 p.m.
§ Mr. W. Benyon (Buckingham)
I enter the strongest possible protest about this procedure. Here we are, at 11 o'clock, in a House that is hardly crowded, dealing with the first of what will be a torrent of Regulations under the Act. Thus are the rights of the citizen eroded. Obviously we must welcome these exceptions as far as they go. We cannot amend them. We can only vote against them or approve them. We are in a difficult position. They emphasise the complications, absurdities and, more important, the bureaucracy involved in the Act. These exceptions will entail considerable bureaucracy.
It is only right that the Minister should come clean about the number of people involved. It is right to draw to the attention of the House the advertisement that appeared in the Daily Telegraph of 21st January for the Land Authority for Wales. It called for one deputy director of land management—at a salary of £11,000—two area land managers, one chief planning officer, one senior financial assistant and one senior draftsman. That does not include the higher posts that have already been filled or, presumably, many of the lower positions which have yet to be filled.
I notice that these posts are permanent and pensionable. That is according to precedent, but I believe that it is a bad precedent. To add insult to injury, I see that the advertisement is issued from Churchill House, Churchill Way, Cardiff. The great man must be turning in his grave.
1119 I draw the Minister's attention to the Estates Times of 30th January, which reports that he has:stepped up the campaign to recruit to the Department of the Environment leading property men from the private sector … so far there has not been one acceptance.That is very wise of those in the private sector. I say to property men and to local authorities, who I hope will be increasingly Conservative-controlled after May, that they should not be beguiled by anything the Minister says about this Act. Let him do his own dirty work. Let him use his reserve powers. There is no need for anybody to break the law. There is no need for anybody to implement the provisions of the Act. It is not incumbent upon anyone to do that, or to insist upon its implementation.
Nothing more describes the absurdity of these Regulations than Classes 2 and 3. It is said that either a developer or an industrialist who has held land since 12th Septmber 1974—it does not have to be the same developer or industrialist—is excepted, but if in that period there is one person involved who is not a developer or an industrialist the exception falls to the ground. There could be no greater indication of the absurd degree of bureaucracy that we have got ourselves into in dealing with the Act and the Regulations being made thereunder.
Finally, I support wholeheartedly what my hon. Friend the Member for Hornsey (Mr. Rossi) said about agriculture, and I hope that we shall have proper answers to the changes that appear to have been made since the operation of the Act, as exemplified by Class 6 of the Regulations.
§ 11.6 p.m.
§ Mr. Graham Page (Crosby)
I declare an interest as a director, but not a shareholder, of a property trust company.
I am sorry that the Regulations have had to come up for debate on the Floor of the House tonight, the day before the Joint Select Committee on Statutory Instruments is to hear evidence on the Regulations from the right hon. Gentleman's civil servants. We welcome civil servants at Select Committees, but it is better to deal with such matters as we have to deal with them in Select Committees before a Statutory Instrument is debated in the House.
1120 There are a number of ambiguous phrases and paragraphs in the Regulations which might well have been cleared up had that evidence come before the Select Committee before the Regulations came up for debate in the House.
A debate on a Statutory Instrument of this kind must necessarily be on Committee points. We do not get any other chance to debate it in that way. However, these Regulations go much deeper than that. They will impose serious hindrances in the way of reasonable enterprise. One major hindrance is the uncertainty inherent in the Regulations. The right hon. Gentleman made a mass of non-statutory statements about the Secretary of State's intentions about the approval or disapproval of compulsory purchase orders. It is clear from what the right hon. Gentleman said that the Secretary of State is determined to keep firm control over what the local authorities wish to do in the circumstances of the Regulations, but that leaves the ordinary developer and builder in great doubt about the way in which he should proceed or whether he will be successful in his opposition to a compulsory purchase order.
The other hindrance is, as my hon. Friend the Member for Hornsey (Mr. Rossi) said, the relationship between the Regulations and the development land tax. Are these items of excepted development to be free from development land tax? I know that this does not come within the Regulations, but we are left in a state of considerable confusion by the dates. The Regulations are to come into operation on 6th April 1976. There is another date—namely, October—in the Regulations. That makes me wonder whether the first appointed day will be in October or in April. At any rate, the Regulations will come into operation before they can take effect, unless the first appointed day is to be 6th April as well. Perhaps the right hon. Gentleman can forecast that for us. It may be that the Regulations are to come into operation but remain ineffective until the first appointed day is declared.
As the Minister explained, the effect of the Regulations is to take these prescribed classes outside Sections 17 and 18 of the Act—the duty of a local authority to acquire property—and also outside 1121 Sections 19 to 22—the suspension of planning permission and disposal notification provisions.
The Minister also said that excepted cases are outside Schedule 4, paragraphs 1 to 3—the modified compulsory purchase order procedure. As I read it, these cases will still be subject to Section 15, which brings that part of that Schedule into operation and will still be subject to the special powers of local authorities to acquire and, therefore, also subject to the special procedure set out in Schedule 4.
There should have been many more exceptions in the Regulations, but we cannot argue that now. We can, however, argue whether the Regulations are clear and understandable and why some of the classes have been restricted. The definition of a building in Regulation 2(1) differs from the definition in the Act. In the Regulations, it includes part of a building. In the Act, it includesany structure or erection, and any part of a building so defined, but does not include plant or machinery comprised in a building.This is most confusing. What sort of buildings are industrial buildings to be—the sort in the Regulations or the sort in the Act?
Under Class 2, commercial buildings can, apparently, be included as excepted development, provided they are not mainly the development itself. Under Class 2, excepted development is described as being development consisting wholly or mainly of the building of dwelling houses or industrial buildings. I should like confirmation that, if part of the development is commercial development, it will still come within Class 2.
Reference has already been made to Regulation 4, which deals with binding contracts. The Minister should explain what will happen when, as often occurs, a purchaser signs a contract contingent upon planning permission being granted within a specified time. Has the prospective purchaser a material interest in the land during that time? It is impossible to discover this from the Regulations.
Class 1 presents problems about amended applications. There will be some hard cases of permissions having been given and then having had to be amended. I hope that what the Minister said about the Secretary of State's attitude 1122 to this situation in his consideration of CPO applications will relieve this kind of hardship.
Why does Class 2 cover only freehold? With 999-year leases, particularly in my area of the North-West, ground rent has no distinction from chief rents on freeholds. That will be a stupid distinction.
I come to Class 8. Why are the Scottish Development Agency and the Welsh Development Agency included in Statutory Instrument No. 19/1976—The Community Land (Outstanding Material Interests) Order? Ten other authorities are set out in the schedule to that Order. Why are these not designated as excepted developments? If they are not excepted why should these two agencies come within that designation?
Will the right hon. Gentleman confirm that because Class 11 will include development other than building—it will take in engineering, mining or other operations, such as a car park—it will therefore include mineral workings on land other than agricultural land?
I think and hope that I understand Classes 12 and 13. They seem to allow any combination of developments falling within any two or more of the classes in the schedule, except that developments solely in Class 4 or Class 5 may not be combined with developments solely in Class 7 either by itself or in combination with any other class.
It is inherent in legislation such as that contained in the Community Land Act that it will spawn complicated Regulations of this sort. Sometimes it does not matter, because only experts or those in a particular trade have to operate or be concerned with them. These Regulations, however, affect the production of people's homes and their places of work. Their complications will delay and prevent the building of homes, factories and offices. I wish that the Government could have been more generous in relieving the public of the chains of the Community Land Act by this Order.
§ 11.18 p.m.
§ Mr. John Silkin
This has been a most interesting debate and one that I have welcomed not just for its own sake, although the quality has been unquestionably high, but because it illustrates the following point: we could have done what 1123 was urged in Committee on many occasions, namely, put into the Bill the various matters that have been discussed this evening. To change or modify them would then have meant more legislation. At various times in Committee my hon. Friends and I argued for flexibility. That was because we originally wanted to go for administrative decisions rather than Regulations. We were, however, persuaded that Regulations offered the right approach. If it were decided, however, to make changes as a result of consultation—and hon. Members tonight have made points that I undertake to consider again—they could not be made swiftly unless they were made administratively:
§ Mr. Silkin
The hon. Gentleman is on a bad point. Many of the factors have emerged only after consultation. The National House Builders Federation has been referred to. I welcome the consultations that we have had with it. It has been extremely helpful. Some of the points made by the hon. Member for Melton (Mr. Latham) would never have seen the light of day unless the consultations had taken place. They could only have taken place once the Bill was law.
Perhaps the time has come for the hon. Member for Buckingham (Mr. Benyon) to stop regarding himself as the Wat Tyler of Buckinghamshire. The rights of citizens are not being eroded by the Regulations. On the contrary, the whole point of the Regulations is to enable the rights of citizens to be protected and made absolutely clear.
The right hon. Member for Crosby (Mr. Page) spoke of the uncertainty caused by so many matters being the subject of administrative decision. The Regulations define the development to which the duty to acquire land applies; no more than that. I am increasing the certainty by going beyond that and stating the principles on which the Secretary of State will base his decisions on compulsory purchase orders. Many matters have been raised. If I omit to answer any of them in the short time at my disposal, I undertake to deal with them by correspondence.
1124 The definition of "building" differs from the definition in the Act. The right hon. Member for Crosby is quite right; the definition of "building" in Section 6(1) of the Act is not carried forward into the Regulations. Under the Regulations, "building" has its common meaning and includes part of a building. The effect of taking a narrower definition of "building" than appears in the Act is to increase the scope of Class 11, that is, to widen the exceptions.
The right hon. Gentleman and I are very old friends, but even our mutual affection does not prevent my saying that if he expects me to agree that this is the first time in history that an affirmative Order has come to the House before it has gone to Committee, he is stretching our friendship too far. It has happened very often.
§ Mr. Silkin
It is not the first time that the right hon. Gentleman has heard complaints from the Opposition directed to his Government. We all know that one.
I shall deal with one or two of the right hon. Gentleman's detailed points, some of which are common to those raised by the hon. Members for Melton and Isle of Wight (Mr. Ross). As to the call-in procedure, the Secretary of State will use his common sense, of which he has a great deal, especially when he is advised by me. The question will be dealt with on its merits, as will substitute planning proposals. This must be done on its merits. For example, it would be ludicrous to make an exception for an application put in on 11th September 1974 where a call-in direction is in force. The Secretary of State will take the commonsense view.
The line has to be drawn somewhere with the conditional contract. This is the line which I felt should be drawn. On the other hand, the builder should be given the opportunity to undertake the development even if he has not established a prior negotiating right. I hope that will help.
Three hon. Gentlemen, including the hon. Member for Isle of Wight, mentioned long leases, and the right hon. Member for Crosby slightly pole-axed me with the point about the 999-year lease. 1125 It used to be the old perpetual renewable lease, if I remember my law. I shall consider that matter. It will certainly give me something to think about. Again, I believe this is best done by administrative action.
Several hon. Gentlemen suggested that I should re-examine the figure of 1,000 square metres for non-industrial development. The hon. Member for Melton again produced his two hectares. I cannot go as far as that. The advantage of this approach is the adaptability and flexibility of the Regulations. I think that the figure of 1,000 square metres is right, but if, by dint of practice, I find that it is not, it will be relatively easy to make a change, and I have no doubt hon. Gentlemen would be very happy to see that change made. The administrative procedure enables that to be taken under review.
The hon. Member for Dumfries (Mr. Monro) referred to the question of recreation land. I suppose that the bulk of what one is talking about is in the ownership of charitable trusts. That may not be so north of the border, but it is so south and west of it. But the hon. Gentleman has a point about privately-owned recreation land, although not too strong a point. I think that Class 5 covers the examples he gave, such as squash courts, which needed to be dealt with. Again, I think that Class 11 covers recreation land—the golf course, for example—which is excepted development.
§ Mr. Michael Latham
One very important matter is whether planning permission under Class 1 deals with outline planning permission.
§ Mr. Silkin
Before turning to that matter, I want first to reply to the right hon. Member for Crosby. Schedule 4 (2) provides that modifications apply only to purchases of outstanding interest in the development land. Development land is land suitable for relevant development. The Regulations take development out of relevant development and therefore take development out of the modifications.
§ Mr. Graham Page
This is confusing. There is a deliberate exemption in Class 15 of exempted development, without mentioning excepted development.
§ Mr. Silkin
I am sorry that it is confusing to the right hon. Gentleman, but I am sure that his acute brain will make sense of it.
If I am unable to deal with all the points raised in the debate I shall write to right hon. and hon. Members, but I must now reply to the speech of the hon. Member for Hornsey (Mr. Rossi). I think, first, that I have dealt with the question of the builders and the identification of land, unless he wishes me to go into it further.
The hon. Gentleman asked me why the date of Royal Assent was not the date specified in the Regulations. We are here adhering to what was said in the consultative document. Rolling forward the Royal Assent is an administrative action that recognises the efforts of those who went on acquiring land after the White Paper date and were encouraged by the Government to do so. This administrative treatment is an advantage for builders, as it gives them the benefit of prior negotiating rights under Schedule 6.
The question of the development land tax is a matter for my right hon. Friend the Chancellor of the Exchequer, and it will be dealt with speedily, when the hon. Gentleman will have his answer.
The question of registration by 5th October is vital. If registration is not effected by 5th October, by inadvertence, it will still be possible for a local authority to serve notice that it did not intend to acquire. There is a built-in safety mechanism, which happens to be six months from the date set out in Circular 121 of 1975, dealing with the first appointed day. The right hon. Member for Crosby did not spot that.
The provision regarding floor space follows the office permit provisions in the Town and Country Planning Act 1971, but it also appears in Section 28(6) of the Community Land Act. That was by way of an Opposition amendment moved in another place and accepted by the Government. I have had three definite ways suggested to me by various interested parties—the National House Builders Federation, the RICS and British Insurance—as to how one should deal with this, and all of them were different.
§ It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
§ Question agreed to.
That the Community Land (Excepted Development) Regulations 1976, a draft of which was laid before this House on 15th January, he approved.
§ Mr. Michael Morris
On a point of order, Mr. Deputy Speaker. Earlier today we debated the procedure of the House. It ought to be recorded that the time allowed to discuss the Regulations that we have just debated was totally inadequate. I hope that the Leader of the House—