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Printed for the Cabinet. July 1952
SECRET
C. (52) 228
7th July, 1952
CABINET
Copy No.
78
TOWN AND COUNTRY PLANNING ACT, 1947: AMENDMENT OF
FINANCIAL PROVISIONS
MEMORANDUM BY THE MINISTER OF HOUSING AND LOCAL GOVERNMENT
We have got to decide what we are going to do about the financial provisions of the Town and Country Planning Act, 1947; and we have got to decide this very quickly. It seems clear that some amendment is necessary. Our problem is to decide what line the amendment should take.
2. The reasons why some amendment is considered necessary, the possible alternatives, and my proposals (which I call a Limited Compensation Scheme), are set out in my memorandum H.A. (52) 79, which has been considered both by the Committee on Development Charges and by the Home Affairs Committee (H.A. (52) 15th, 16th and 17th Meetings). I have now been invited by the former Committee to put forward my proposals to the Cabinet, indicating the difficulties which have been discussed.
3. My scheme very briefly is—
(i) to retain the limited compensation settlement effected by the 1947 Act
and to pay the compensation only as and when damage is inflicted; (ii) to exclude compensation altogether in some cases;
(iii) to abolish development charge;
(iv) to retain the basis of payment for land compulsorily acquired at existing use value, with the addition of the full claim for loss of development value which has already been assessed under the Act of 1947.
4. Following the discussions in the two Committees I still think that this scheme is the best we can do, and that it would indeed both save money and be generally acceptable.
The £300 million
5. The Act fixed a sum of £300 million to be paid out, before 1st July next, to all owners of development value as it existed in 1947. It is generally agreed that to pay out so vast a sum during the next twelve months would be undesirable for both political and financial reasons. Many of the claims need never be paid at all (where development will eventually be allowed, or where there is no intention of developing); many more need not be paid yet. This means that we must legislate to make compensation payable only when permission to develop is refused or the land is acquired by a public authority.
If
But on what basis is compensation to be paid when the time comes? compensation were to be paid on the basis of the full development value of the land at the time when that value matures and is, therefore, at its peak, the State would be faced with an enormous and unending liability. Planning continually shifts values if you prevent building in one place the building value moves to another. To compensate every landlord at the peak of his value, would be an unending drain on public funds and would expose us to savage and justified attack. It would become impossible to prevent building over agricultural land, the continued sprawl of towns over the countryside, and the general waste of our natural resources. We
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