Growth and Infrastructure Bill

Lord Ahmad of Wimbledon Excerpts

Wednesday 30th January 2013 Lords Chamber

[The Earl of Lytton]

My Lords, I tabled these amendments as a probing gesture and, I hope, a reasonably friendly one. I wish to speak to Amendments 58 and 59 together.

I have a professional interest and involvement in the world of compulsory purchase since my early days in—

[Lord Ahmad of Wimbledon]

My Lords, as a courtesy to the noble Earl, if noble Lords wish to leave the Chamber, may I suggest that they do so quietly? Thank you.

[The Earl of Lytton]

My Lords, as I was saying, I have a professional interest and involvement in the world of compulsory purchase going back some 30 or more years and have a professional interest to declare. I also wish to record the assistance that I have had from a small group of specialist practitioners in the Compulsory Purchase Association who have been instrumental in helping me draft these amendments. There was to have been a meeting between a representative of the Compulsory Purchase Association and the department but I think that has not yet happened for various reasons. I hope that it will happen because there are probably things that could usefully be discussed, but I know that the reasons for it not happening were beyond anybody’s control.

For more than 20 years, legal experts, surveyors, claimants, acquiring authorities and others have campaigned to have the compulsory purchase system modernised. I have previously campaigned to remove some of the blocks and impediments to growth and infrastructure.

In passing, I should mention Fair Play, a publication produced last year by the Country Land and Business Association on dealing with blocks in the compulsory purchase system. I know that compulsory purchase is a slightly peripheral aspect of this Bill but I am reinforced in my endeavours in this respect by the Bill’s Long Title, which addresses the principle of unblocking systems.

Compulsory purchase is vital to growth and particularly to the creation and laying out of infrastructure. We need a compulsory purchase system that is properly modernised and is understood, with the majority of participants signed up to its principles. Participants need to believe that it is working. At the moment, I feel that there is widespread disdain and that we are dealing with a system that has fallen into a certain amount of disrepute. Participants need to support the process, even if they do not support the specific outcomes; otherwise, we will have delay and sclerosis. We have had many problems in the planning system and other systems, and the compulsory purchase system is another of those systems of administration that need to operate slickly and effectively. One gets the impression that, given the length of time for which this matter has been under discussion by experts of all sorts, it has fallen into the Whitehall “just too difficult to deal with” category. I hope that that is more perception than reality but there are many voices who suggest that the system is long overdue for reform and overhaul.

The Minister kindly wrote to me on 21 January, and I thank her for that. In particular, she endeavoured to answer a point that I had raised on compulsory purchase. She explained that the Bill is intended to deal with specific and small-scale issues and points of concern. I understand that but one needs to look at the system holistically. If we are dealing with growth and infrastructure, and getting things cranked up again for our economy to prosper, it is important that we do not deal with this matter at the periphery— at the edges. We need to deal with the central issues.

I should like to quote from the noble Baroness’s letter. She said:

“I do not think that it is appropriate at this stage in the Bill proceedings to take forward substantive changes to the compulsory purchase system without wider engagement and prior discussions on the details”.

That is all very well, but I was not sure if she was referring to amendments to this harlequin Bill in general or to compulsory purchase in particular. Perhaps she could clarify in her reply the degree to which compulsory purchase should be a component of the Bill. If she was referring specifically to compulsory purchase, I should point out that this matter has been under discussion for a long time. The issues have been well trailed.

In December 2003, the Law Commission published its paper, Towards a Better Compulsory Purchase Code: (1) Compensation. For nine years, that has been gathering dust in the noble Baroness’s department—not, I appreciate, under her jurisdiction as such. However, for far longer, experts have been campaigning for change. Blight, a degree of sharp practice in the advance payments procedures, out-of-date planning assumptions and so on are rife. All these are blocks and impediments to a streamlined system. No wonder the Country Land and Business Association, of which I am a member, has had a lot to say about this issue. It is worthy of consideration. We need to bear in mind that if we are going to roll out schemes such as High Speed 2, the way in which compulsory purchase operates is intrinsic to that process if it is to be carried out in any sort of sensible timescale and at sensible cost.

My amendments are an attempt to test the Government’s resolve and are a litmus test of their real intentions as regards growth and infrastructure. I turn to the detail. Amendment 58 is about advance payments. I should explain that when a compulsory purchase order is made and land is taken, a claimant is entitled to an advance payment of 90% of the estimated compensation due to them, while the final amount is being worked out. It should be borne in mind that at that stage, the relevant land has been taken and the acquiring body is in possession. The problem is that there is a lack of standardisation in the approach to claiming and receiving this payment.

If there is a disagreement regarding the completeness or otherwise of the information required or the basis of the payout, there is no satisfactory quick or necessarily fair solution for dealing with the matter. In those circumstances, it is wide open to abuse, and the abuse can occur on either side—both in the employing authority and, indeed, through claimants trying to manipulate the system to suit their own purposes. This simply causes delay. Advance payments are essential to a claimant’s ability to arrange their affairs. This can, and often is, mission-critical. Statutory interest—currently effectively zero—is no compensation when cash flow is king.

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[Lord McKenzie of Luton]

My Lords, we should thank the noble Earl, Lord Lytton, for his amendments because he raises an issue which is clearly of importance. I particularly commend his practice of giving us an explanatory note with his amendments. Perhaps I may commend that to other noble Lords and I shall take it on board myself.

As my noble friend said, we are dealing here with a complex compulsory purchase system in which specialist practitioners are involved. To some extent, it may be seen as just too difficult to deal with. However, my noble friend makes an important point: if it is one of the components that are holding up growth, it should be addressed. I checked with one of my colleagues, whose knowledge of this is greater than mine, his reaction to the amendment and certainly to advance payments and loss payments. The response was that the amendment does not seem unreasonable. I think that is quite a way from our saying that we are in a position to support these amendments but I look forward to the Minister's reply, particularly on the question of, if not now, when will we be able to look at the system holistically and unravel some of the complexities and inefficiencies that my noble friend has identified.

[Lord Ahmad of Wimbledon]

First, I join the noble Lord, Lord McKenzie, in thanking the noble Earl, Lord Lytton, for explaining the two areas of compensation code for compulsory purchase that are of concern to practitioners and to claimants and indeed for proposing some remedy. I think his explanations were very clear.

First, as regards Amendment 58, the Government are very grateful to the noble Earl for raising this matter. I, too, am concerned to hear about the poor practice in making advance payments of compensation. However, it is not clear how the new Section 52B of the Land Compensation Act 1973 would provide the necessary teeth, for want of a better term, to force the acquiring authority to make the payment when it is due.

The provision to allow an advance payment to be made before possession is taken is new but, again, the same issue arises about how to ensure that the payment actually happens. In both cases, the provisions may not be effective without the additional use of judicial review to obtain an order requiring a tardy acquiring authority to pay the necessary amount.

On Amendment 59, the Government note the view that the percentages for loss payments should be reversed, so that occupiers get the lion’s share. This would be a popular change for occupiers and perhaps less so for owners. The noble Earl, Lord Lytton, suggests that this change would be cost neutral and I have no doubt that cases can be found where this is so. Some have been set out in the Compulsory Purchase Association’s evidence to the Committee in the other place. There may equally be cases where the amount of compensation would rise. Currently, both the evidence and the views of the acquiring authorities are lacking.

For both of these amendments, the issues raised would require further investigation before they could be taken forward. As I said earlier, it is not clear where the teeth could be found to ensure that advance payments are made in time. This might be a subject for good practice guidance, as we have mentioned in respect of other areas of the Bill. That guidance should come from the sector. I am sure that some authorities do things properly, and if others were told how this was done, the situation may improve. The noble Earl was quite clear that sometimes it is not apparent how this process can be done more effectively and the information is not readily available.

The noble Earl also mentioned the letter on loss payments sent by the Minister. He raised the issue about meetings, to which I shall turn in a moment but, first, I shall speak about loss payments. It is clear that the noble Earl’s proposals will be popular with occupiers but not with investment owners. We have not yet heard the view of acquiring authorities. I am sure that the noble Earl will appreciate and understand that, at this time, I cannot commit the Government to taking either of these amendments forward. Even if I could, the argument may quite understandably be made that we need to look at these in more detail, have the necessary investigations and, of course, conduct all consultations, which may not be possible during the passage of the Bill.

The noble Earl suggested, and my noble friend acknowledged the fact, that it would be useful to meet on these amendments and on the particular proposal specifically. Therefore, it would be helpful if we asked our officials to arrange a meeting to discuss the two matters raised and invite the noble Earl and his associates to discuss these matters further. We would welcome such a detailed discussion. Based on those assurances and the offer of a meeting, I hope that the noble Earl will be minded to withdraw his amendment.

[The Earl of Lytton]

My Lords, I thank the noble Lord very much for his reply. As I said, my amendments are probing—I wanted to elicit a response. At this stage of the Bill, I am very pleased with the response and with the offer to meet. The Minister identified one or two things that I will comment on. Certainly the intention with regard to advance payments, and how that system would work, was intended to tap into the Land Compensation Act regulatory power provisions. There is a much longer document behind that, which sets out a series of recommendations that I know have been submitted to the department by the Compulsory Purchase Association. I hope that they will form the basis of a discussion on that point. It will require the Secretary of State’s regulation-making functions to bring that in. That is the only place where the teeth are going to bite.

I note the point about the views of acquiring authorities; it is perfectly valid. However, acquiring authorities very often use one of the same specialist practitioners with whom I have been conversing through the Compulsory Purchase Association. The relevant distillation of views is there, but it is perfectly right to raise the point and ask for better and fuller particulars to be provided. What the noble Lord said was perfectly valid. I look forward to a meeting and thank him very much for his invitation. I may return to the issue at a later stage in the Bill, but for now I beg leave to withdraw the amendment.

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[Lord Beecham]

I agree with that. What would be a concern would be the individual smallish councils in an area each seeking a separate agreement. It is the point about co-operation, which I thought the noble Lord was advancing, that I seek to emphasise and I assume the Government would accept.

Again, will the Minister indicate in replying whether the Government will look at the connection between the city deal programme and community budgeting or Total Place, and whether these things need to be linked? If that needs to be discussed further during the course of the Bill—I do not expect an immediate response—perhaps we can have some discussions about that before we get to Report stage.

[Lord Ahmad of Wimbledon]

My Lords, I first thank all noble Lords who have participated in this debate. I noted that my noble friend Lord Jenkin’s final words in moving the amendment were, “I hope my noble friends on the Front Bench smile” at his proposal. I assure him that whenever he makes a contribution I often smile, because I often agree with what he says. In what he said, there is nothing specific with which I can disagree. I think it would be generally accepted by the Committee that all contributions across the Chamber were supportive of the initiatives that are being taken.

I was particularly delighted to hear the noble Lord, Lord McKenzie, agreeing with my honourable friend in the other place, Greg Clark. What can I say? Détente has broken out. I am glad that we agree on these issues. When we have these debates, it is important that things which are working across the board are acknowledged as doing so. I do not think for a moment that we are where we want to be with the city deals. This is an evolving issue. We are clearly seeing the trialling of city deals, as has been acknowledged by many noble Lords.

Look at the first wave of the cities listed outside London: Liverpool, Manchester, Bristol, Birmingham, Nottingham, Newcastle, Leeds and Sheffield; I feel a bit like a train announcer here.

[Lord Beecham]

A high-speed train?

[Lord Ahmad of Wimbledon]

Dare I say it? HS2 may well also assist.

[Lord Greaves]

It did not reach Newcastle.

[Lord Ahmad of Wimbledon]

I am glad that the city deal has. I was concerned by the suggestion of the noble Lord, Lord Greaves, about the expansion of areas and Manchester connecting with Newcastle. As a Liverpool fan, for football reasons alone, that is something that we would want to park.

Coming to noble Lords’ points, I first reassure your Lordships on where we are on city deals. As the noble Lord, Lord Greaves, said, it is not a one-size-fits-all proposal. City deals are about bespoke solutions unlocking local growth and trialling different and innovative approaches. Perhaps it would not be appropriate for every single trial to be rolled out wholesale to every single council across the country. That said, the Government have a strong record of commitment to the localist agenda and are working directly with local authorities to provide the powers and support that they need. Where local models and city models make sense, I say to my noble friend Lord Jenkin that we will seek to make them more widely available.

On what we have already done with local authorities, we have given them greater control over their own budgets. First, an estimated 70% of income will be raised locally, compared to 50% to 60% under the current formula grant system. Secondly, from next April, councils will retain nearly £11 billion of business rates. Thirdly, the Government intend to devolve a greater proportion of future growth-related spending, based on the recommendations to which many noble Lords have alluded, as detailed in my noble friend Lord Heseltine’s recent, excellent review. My noble friend Lord Jenkin quoted my noble friend Lord Heseltine. We agree with him that local leaders and businesses are best placed to set the strategic direction of the area. He made a powerful case for increased devolution, and the Government agree with that.

Local people and businesses are better placed to take greater economic powers from central government, particularly in terms of funding and responsibilities, as the LEPs have. They can act as a stronger voice for local people, incorporating the local private sector. As several noble Lords have acknowledged, we have allocated funding. The Chancellor announced an additional £250,000 of capacity on top of the £625,000 core funding announced in September. So steps have already been taken, and I am pleased that noble Lords have acknowledged that.

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[Lord Ahmad of Wimbledon]

My Lords, I absolutely agree with my noble friend that it is very important that parish councils are notified of the making of any legal orders affecting rights of way and other highways serving or crossing a parish and indeed of any town and village green applications relating to land within the parish. It may be helpful to the Committee if I set out how the process works to ensure that this is the case.

First, as regards rights of way creation, diversion and extinguishment orders, paragraph 1(2)(b)(ii) of Schedule 14 to the Town and Country Planning Act 1990 and paragraph 1(3)(b)(ii) of Schedule 6 to the Highways Act 1980 require the order-making authority to serve notice on,

“every council, the council of every parish or community and the parish meeting of every parish not having a separate parish council, being a council, parish or community whose area includes”,

any land affected by a rights of way order.

As regards orders for stopping up or diverting highways for the purposes of development—that is, Section 247/248 orders—Section 252 of the Town and Country Planning Act 1990 requires that, before making an order, notice be served on the local authority in the area of the proposed stopping up or diversion of a highway. Therefore, the notice of a stopping up or diversion is served on the parish council in whose area the development lies.

For town and village green applications, existing regulations require notification of Section 15 applications to parish councils. Specifically, the Commons Registration (England) Regulations 2008, which apply to registration authority areas in England in respect of which the registration provisions in Part 1 of the 2006 Act have been commenced—known as “pioneer areas”—and the Commons (Registration of Town or Village Greens) (Interim Arrangements) (England) Regulations 2007, which apply to other authority areas in England, require notification of such applications to parish councils.

Schedule 14 to the Town and Country Planning Act 1990 and Schedule 6 to the Highways Act 1980 require that, before a rights of way creation, diversion or extinguishment order is confirmed by either the Secretary of State or the order-making authority, notice shall be given in the prescribed form: first,

“stating the general effect of the order and that it has been made and is about to be submitted for confirmation or to be confirmed as an unopposed order”;

secondly,

“naming a place in the area in which the land to which the order relates is situated where a copy of the order and of the map referred to therein may be inspected free of charge … at all reasonable hours”;

and, thirdly,

“specifying the time (which shall not be less than 28 days from the date of the first publication of the notice) within which, and the manner in which, representations or objections with respect to the order may be made”.

The notices shall be given, among others, to,

“every council, the council of every parish or community and the parish meeting of every parish not having a separate parish council, being a council, parish or community whose area includes”,

any of the land to which the order relates.

The Commons Registration (England) Regulations 2008, which apply in the pioneer authority areas that I mentioned earlier, require, in Regulation 22(1)(a), an applicant to serve a notice of any application to a registration authority under Part 1 of the Act,

“on each of the persons specified in Schedule 6”.

Schedule 6, as it applies to Section 15 applications, requires the notice to be served on any local authority other than the registration authority in whose area the land in question lies. “Local authority”, as defined in Regulation 2 of the 2008 regulations, includes a parish council and the chairman of a parish meeting.

Finally, the Commons (Registration of Town or Village Greens) (Interim Arrangements) (England) Regulations 2007, which apply to the non-pioneer authority areas, require, in Regulation 5, a registration authority to send notice of an application in the prescribed form to every “concerned authority”. In this case, “concerned authority” is defined in Regulation 2(2) as,

“a local authority … in whose area any part of the land affected by the application lies”.

“Local authority”, as defined in Regulation 2, includes a parish council.

I believe that what I have illustrated answers my noble friend’s questions. With those assurances and the details that I have provided, I hope that he will be happy to withdraw his amendment.

[The Earl of Lytton]

My Lords, I declare interests as the president of the National Association of Local Councils and as chairman of the Rights of Way Review Committee. If there is a failure to give the relevant notification to a parish council, will any sanction or redress be available to the parish council? I realise that the Minister may not be in a position to answer that question straight away.

[Lord Ahmad of Wimbledon]

My Lords, I am sure that there are instances where that is the case. For completeness, it may be appropriate if I write to the noble Earl on that specific point. However, I assume that appeals procedures are available to parish councils to take forward where orders are not adhered to.

[Lord Greaves]

My Lords, I thank the Minister for his reply and should be grateful to receive a copy of his letter to the noble Earl. It may be that what is now required is for the NALC to circulate to its member councils the fact that there is a need and a requirement for them to start to demand their rights from higher authorities. However, I am very grateful for the Minister’s care in setting out the details and, on that basis, I beg leave to withdraw the amendment.