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WEDNESDAY, FEBRUARY 25, 1981
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THE
HOW TO INCREASE THE SUPPLY OF LAND GOVERNMENT'S LAND PRODUCTION PROGRAMME PROVIDES FOR AN INCREASING SUPPLY OF NEW LAND.
HOW TO ALLOCATE THE EXISTING SCARCE SUPPLY IN
--LEAVING THE BEST INTERESTS OF THE ECONOMY ASIDE THE LAND USED TO MEET LETTER A/B COMMITMENTS, THE GOVERNMENT BELIEVES THAT THE MOST EFFICIENT WAY OF ALLOCATING MOST OF THE LAND IT DISPOSES OF TO THE PRIVATE SECTOR IS BY SELLING IT TO THE HIGHEST BIDDER.
THE ALTERNATIVE, HE SAID, WOULD BE ARBITRARILY TO SET A LOWER PRICE FOR THE LAND AND THEN, BECAUSE THE AMOUNT DEMANDED AT THAT PRICE WOULD EXCEED SUPPLY, IT WOULD BE NECESSARY TO MAKE SUBJECTIVE JUDGEMENTS AS TO ITS ALLOCATION,
+ALTHOUGH THIS APPROACH WOULD REDUCE THE PRICE OF NEW LAND (AND NEW LAND ONLY), IT WOULD ALMOST CERTAINLY SATISFY CRITICS OF THE GOVERNMENT'S LAND DISPOSAL POLICY IN NO OTHER RESPECT,+ SIR PHILIP POINTED OUT.
ON CONTROLLING COMMERCIAL AND INDUSTRIAL PROPERTY RENTS, HE SAID THAT WHILE LAYING DOWN PERMITTED INCREASES IN RENTS OF DOMESTIC PREMISES HAD BEEN JUSTIFIED ON SOCIAL GROUNDS, DESPITE THE RISKS INVOLVED IN TERMS OF INHIBITING SUPPLY, INTERFERENCE IN THE RELATIONSHIP BETWEEN LANDLORD AND TENANT FOR NON-DOMESTIC PREMISES COULD NOT BE JUSTIFIED.
AS ALREADY DEMONSTRATED, HE SAID THE MARKET SHOWED EVERY SIGN OF PROVIDING ITS OWN SOLUTION AS SHOWN BY THE VERY HIGH LEVELS OF NEW SUPPLY-- BOTH PAST AND PROSPECTIVE OF THE TYPES OF PROPERTY IN HEAVIEST DEMAND, NAMELY, OFFICES AND SHOPS.
HE SAID THERE WAS NO CLEAR EVIDENCE THAT COMMERCIAL AND INDUSTRIAL PREMISES WERE BEING KEPT VACANT BECAUSE OF THE SYSTEM IN WHICH HALF THE RATES PAID ON SUCH PREMISES WERE REFUNDED.
+THEORETICALLY, THE RATING SYSTEM COULD BE ADAPTED SO AS TO CHARGE A PENAL RATE TO ENCOURAGE OWNERS TO LET OR SELL VACANT PREMISES, SIR PHILIP SAID.
BUT THERE WERE A NUMBER OF PRACTICAL OBJECTIONS TO DOING THIS, NOT THE LEAST OF WHICH WAS THE EXTENT OF THE POLICING REQUIRED TO ESTABLISH THAT PREMISES WERE VACANT.
WHILE UNDER THE RATE REFUND SYSTEM OWNERS HAD A FINANCIAL INCENTIVE TO DECLARE PREMISES VACANT, UNDER A PENAL RATING SYSTEM THEY WOULD HAVE AN INCENTIVE TO CONCEAL THE FACT, HE SAID.
+FURTHERMORE, NOT ALL VACANT PREMISES ARE KEPT VACANT BECAUSE THE IR OWNERS WISH IT, SIR PHILIP ADDED.
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