to 60% than the 50% suggested by the Working Group. The consequent effect of his prediction is shown in Annex C, which may be compared with Enclosures 8 and 9 of the Working Group's report. (Members will also note that the estimates of the land required to be resumed have been updated, resulting in a very much greater resumption programme in the next three years than the Working Group expected).
The present system encourages owners to accept exchange entitlements in preference to cash, thus establishing what amounts to a system of speculative borrowing on the security of future sales. Although the costs of the present system in reduced land revenue (the Government's return on land exchange for letters B is in terms of values as at the date of the letters) are less noticeable than direct expenditure on compensation, they are nevertheless very real. Over the years the use of this system has been equivalent to the payment of a rate of interest by the Government well above market vates. With the large outstanding commitment and an exceptionally heavy resumption programme in hand these heavy loan costs could continue well into the eighties. For as long as land prices continue to increase appreciably, the cost of the present system would be higher than would the cost of the compensation rates recommended by the Working Group.
It is therefore proposed that the Working Group's recommenda- tions relating to the new package offer and to compensation generally should be adopted and that, because of the heavy current resumption programme, this should be as soon as possible. Accordingly, it is proposed that, subject to the provision of funds by the Finance Committee for the increased compensation payments, the new system should be brought into force as from 1st July 1978. The Expenditure (at 1978 prices) over the next four years, including this current financial year, is estimated to be: