Housing and Planning Bill

Debate between Duke of Somerset and Lord Campbell-Savours

Monday 25th April 2016 Lords Chamber

[The Duke of Somerset (CB)]

My Lords, I, too, support these amendments in the name of my noble friend. I thank the Minister for making some good progress with the arguments I put forward in Committee. We are going to see that in the amendments that are about to be moved. On interest rates for late payments, it would be good if the Government could commit to monitoring the success of the penal rates of interest for securing payment of compensation before entry. That would be very helpful.

These concessions still leave two topics unresolved from the group that I spoke to in Committee. First, on NSIPs, which are covered by the first amendment in this group, the Government are arguing that the landowner will get only current use value rather than development value for up to 500 homes with no functional link to the project but situated within one mile of it. This is confiscatory. I again ask the Government: who will benefit from this largesse? Is it the house purchaser or, probably more likely, the infrastructure provider? If it is the latter, this surely demonstrates the unfairness of the idea. The principle of equivalence loses coherence when applied as I have just mentioned. A farmer or landowner may have several tens of acres removed from his holding by this means, leaving his business unsustainable as a result. Existing use values would be unlikely to allow him to purchase elsewhere to rebuild his business, especially after the considerable costs he is bound to incur. In effect, the acquirer is giving himself planning permission to take land at lower value, develop it and gain a large financial uplift at the expense of the original owner. At the same time, it would ignore local plans and local neighbourhood plans.

I turn to the second amendment in this group, relating to a duty of care. In Committee, the noble Viscount, Lord Younger, on behalf of the Government, said that,

“claimants should be treated with fairness … and kept up to date”,

and that,

“competent professionals should be advising their clients to act in this way”.—[Official Report, 23/3/16; col. 2451.]

The word “should” appears again and again. This is not the same as “must” or “shall”. Similarly, to my mind the word “urges” in this context is not strong enough.

I do not really understand why the Government should wish to deny Amendment 128YAR, which would merely strengthen and make mandatory the points that the Minister advocated in Committee. Clear guidance would not give those people subject to compulsory purchase orders the comfort that a compulsory duty of care, as incorporated in this amendment, would deliver. It would also provide a benchmark by which to judge whether an acquiring authority was behaving fairly and reasonably. I ask the Government to consider carefully accepting both these useful amendments.

[Lord Campbell-Savours (Lab)]

My Lords, I totally oppose Amendment 119B. I made a long contribution in Committee —I think it was 18 or 20 minutes—on the whole question of the compulsory purchase of land.

I want to ask the mover of this amendment and his supporters a very simple question. In Committee I drew attention to the value of agricultural land, and the value of that land when it is given full planning permission. If I go by memory, I quoted figures of £880,000 in west Cumberland, where my former constituency was; £4 million per hectare in Watford; and £7 million per hectare somewhere on the southern outskirts of London, although I cannot remember the place exactly. Why should a landowner have the value of his or her land transformed from between £15,000 and £20,000 a hectare to between £4 million and £7 million a hectare simply on the stroke of a pen designating a national infrastructure scheme somewhere in the UK? What right does he or she have to that increased value on land to which they have done absolutely nothing to secure that additional value apart from own it?

When our fathers went to war in the Second World War, they did not fight for a country where people could make vast fortunes simply by holding land. The cost of that land falls upon people all over the UK who now cannot afford to buy a home, particularly in our major cities. The price that they are paying for all that is to feed the landowners who own the land, who should be readily giving up that land to help to deal with the national housing crisis at the price of its worth to them in its existing use, but of course they do not want to do that.

If people outside reading Hansard think the amendment is complicated, it is actually quite simple: it would protect landowners and their wealth, and the people who would pay for that are the people who cannot afford to do so—young people throughout the country who cannot afford to buy a home.

Housing and Planning Bill

Debate between Duke of Somerset and Lord Campbell-Savours

Wednesday 23rd March 2016 Lords Chamber

[The Duke of Somerset (CB)]

My Lords, I will also speak to the other amendments in this group. I do so on behalf of my noble friends Lord Cameron of Dillington and Lord Lytton, who are unable to be here today. We have had suggestions for some of these amendments from the CLA, of which I declare my membership.

For a long time, compulsory purchase in this country has been a messy compilation of many pieces of legislation and is well overdue for reform. As time has gone on, it has become ever more unbalanced in favour of the acquiring authorities and the agents of the state. Indeed, many privatised utility operators have gained compulsory purchase powers—and apparently, at the last count, there are 172 of them.

I turn to the amendment. I mentioned in our Second Reading debate my concern that it was unfair for an acquiring authority to be able to purchase land for housing as part of an NSIP at current use values. Last week, the Minister made a strong case in resisting an amendment from the noble Lord, Lord Campbell-Savours, who wanted an agricultural use valuation for local authority compulsory purchases. He spoke of land being valued by the “no-scheme world” and said that market value took into account the effect of planning permission already granted and thus “hope value”. I therefore feel that it must follow that once an NSIP has been granted planning permission, then the value of adjoining land for housing is substantially enhanced by the very existence of the scheme. Thus, development value is established and should be applied where the proposed land for housing within one mile of such a scheme is valued. It is the same as if the land had been purchased on the open market. Will the Minister explain to the House why an NSIP should make the principle of fairness so different? It is still confiscatory. Is it the Government’s intention that the retail purchasers of the new houses should benefit from this largesse, or is it for the benefit of the acquiring authority? I find Clause 144 rather offensive.

I turn now to Amendments 103BC and 103BD. There are normally two imperative concerns for farmers and landowners faced with compulsory purchase. The first is the effect on the smooth continuation of their businesses: perhaps the splitting of the land, for example. Their second concern is how much and when they will be paid. In the past, payment has routinely been late and after entry. This is unfair and needs to be changed. Farmers already have to cope with supermarkets’ delayed payment exploitation. Moves are afoot to improve this, so why should we not legislate properly now—and in the same spirit—to establish the principle of payment in advance of entry for compulsory purchase? In these circumstances, owners face extra costs and need promptly to replace assets lost in order to continue in business. Why should they have to delay or borrow—through no fault of their own—to continue their businesses?

The Government have proposed to improve the interest rates applicable, but I do not believe that they are realistic or raised to the commercial rates of lending. The CLA has suggested rates in line with late commercial payments, and those are similar to those set out in Amendment 103BD, which I support. I believe that the Government are consulting on this, and I await the outcome. Nevertheless, the principle must be payment in advance or no possession, with proper interest rates applicable for failure to follow that. At any rate, it should be cheaper to do this, as landowners will be disinclined to fight the order knowing that they will get a fairer price for their assets. Of course, if the primary principle is adhered to, there should be no need to invoke the 8% penalty rate that is mentioned in the amendment, as the standard 4% rate should encourage the authority to pay promptly.

Acquiring authorities are in a strong position while negotiating, so Amendment 103BF in this group is consequential. It would help to prevent bullying by introducing a new duty of care to ensure fairness between the parties by setting out guidelines on behaviour. This is in effect a good-practice clause, which is needed as acquiring authorities usually have the upper hand in negotiations against the landowner, who is thus in a weaker position.

Other amendments in this group in the name of my noble Earl, Lord Lytton, are intended to tidy up a series of procedural anomalies and have been suggested by the Compulsory Purchase Association, of which I am not a member. Amendment 103BAA is necessary to safeguard the acquiring authority’s position where—even though it exercised due diligence in seeking to identify those interested in the land and entitled to a notice to treat—after serving notice of entry it becomes aware of a previously unknown person with a relevant interest in the land to be acquired.

Under the current provisions of the 1965 Act, if new interests come to light between serving a notice to treat or notice of entry and taking entry, a new notice needs to be served, resulting in 14 days’ delay. This does not give rise to serious problems at present with only 14 days’ notice of entry but it would become a significant problem with the longer notice period of three months proposed in the Bill.

Acquiring authorities rely on information provided by claimants as to who has a relevant interest in land. I am told that it is quite common to be provided with incorrect information, such as trading names rather than company names or the names of individuals. If an acquiring authority has acted in good faith in serving the notices, such as relying on information provided under Section 5A of the Acquisition of Land Act 1981—the questionnaire requiring information on legal interests—it should still be entitled to proceed, which is what this amendment would facilitate.

Another material adverse side-effect of the Bill’s provisions as drafted is that those served with notices could effectively ransom a promoter by creating a new interest every time a new notice was served. Controversial projects could simply be prevented from ever acquiring land by opponents to the scheme using such a device. This amendment would therefore also prevent acquiring authorities potentially being ransomed by the creation of a new interest in land after service of a notice of entry.

Amendment 103BG relates to circumstances where a claimant considers that the land proposed to be compulsorily acquired cannot be taken without material detriment to the remainder. This is sometimes referred to as the “all or nothing” provision and it is already contained in the compulsory purchase rules under Section 8 of the Compulsory Purchase Act. The amendment is necessary to ensure that, subject to adequate notice, the acquiring authority is able to take possession of the land originally proposed to be acquired, even where the owner has served a counter-notice requiring additional land to be taken. This is the same as the current position and it works quite effectively without any prejudice to landowners who contend that the acquiring authority should also be obliged to acquire more land than that initially proposed to be acquired. However, paragraph 5(a) of new Schedule 2A in Schedule 17 to the Bill provides that on service of a counter-notice, all notices of entry relating to any interests in the land proposed to be acquired would cease to have any effect. As such, this would have a seriously deleterious effect on the timing and costs involved in compulsory purchase and on implementing a project. This would not arise if the Bill were amended as proposed.

Finally, Amendment 103BH is necessary to give effect to paragraph 5 as amended in the way that I have just proposed. I beg to move.

[Lord Campbell-Savours (Lab)]

My Lords, I do not want to exhaust the patience of the Committee but once again I draw attention to the fact that the problem of high housing prices in this country stems from the cost of land. These amendments, clearly promoted by the Country Land and Business Association, which represents the interests of landowners—the people who will benefit from the exorbitant and inflated prices being paid for land in the United Kingdom—should be opposed by the Committee. I oppose them, and anyone with any sense will oppose them, as will the great majority of the British people.

One day we are going to have to deal with the problem of inflated land prices in the United Kingdom, which are almost unique in the world outside of the great capital cities, and we are simply ignoring it. This situation cannot carry on as it is. We are removing the right of millions of people—whole generations—to own their own home, unless they are prepared to take on huge mortgages, simply to fill the pockets of people who own land. I object, as no doubt do the great majority of the British people.