High Speed 2 (Compensation)

Frank Dobson Excerpts

Tuesday 21st October 2014 Commons Chamber

[Mrs Gillan]

The hon. Gentleman has made a very valid point, and I shall say more about it shortly.

There are problems with the current compensation proposals. They will compensate only about 2% of those who live within 1 km of HS2, or within 250 metres from a tunnel. As the hon. Gentleman has just pointed out, despite widespread evidence of blight, the vast majority of people affected by HS2 will not be compensated fairly, because the Government have consistently linked the scheme to distance from the line and have ignored the wider effects. HS2 Action Alliance has calculated that only about 172,000 people will receive any kind of compensation, although more than a million live within 1 km of HS2 and many are being adversely affected.

[Frank Dobson (Holborn and St Pancras) (Lab)]

In my area, around Euston, people will be living next to the biggest construction site in Europe for 10 or 15 years. They will be living within a yard of the works. However, they will be entitled to no compensation at all. As the right hon. Lady will know, uncertainty is a major source of blight. The revised proposals for Euston were supposed to be presented next month, but that has now been postponed until after the general election.

[Mrs Gillan]

The right hon. Gentleman and I have stood shoulder to shoulder across the House on this issue. There is no party divide on it. I know that my right hon. Friend the Member for Uxbridge and South Ruislip (Sir John Randall) is similarly concerned, as are many other colleagues. The point is well made.

According to estimates in data commissioned by the Government from PricewaterhouseCoopers, the average loss to a homeowner is 20% up to 500 metres from the line, 30% up to 300 metres away, and 40% up to 120 metres away. Moreover, that blight is not temporary. PwC says that it will be at its worst until at least 2023. The Government have failed to recognise that, or the fact that the scale of suffering extends well beyond the line itself.

As things stand, there is not even sufficient compensation for those living above tunnels. HS2 Ltd believes that home owners are not unduly affected by tunnels, but my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), for example, informs me that the property market in his constituency tells a very different story. There is no compensation for those affected by construction, although it will inevitably be very extensive in impact and duration. Constituents of my right hon. Friend the Member for Aylesbury (Mr Lidington) in Wendover and Stoke Mandeville live very close to the safeguarded area and the proposed construction sites, but they do not qualify for compensation under the boundary rules. It is grossly unfair that they should be expected to endure the disturbance of construction and operation as well as putting up with a loss of value to their properties unless they can prove an exceptional need to sell. Some of my right hon. Friend’s constituents say that estate agents simply refuse to place their properties on the market and that potential purchasers have been refused any mortgage on properties because of HS2. This is emblematic of the broad injustice of the current compensation measures.

The compensation schemes announced and operating to date are also problematic. The exceptional hardship scheme and the need to sell schemes have been arduous and complicated for many of our constituents, and in my view they are often wholly unjust. The lack of consistency in the decision-making process has been incredibly frustrating for those involved, and the accuracy of valuations has been the subject of contention in many areas. There has been little transparency in this process. The latest proposals—the alternative cash offer and the home owner payment—offer poor value to the taxpayer and involve arbitrary sums that bear little relation to the actual loss suffered by the individual.

--- Later in debate ---

[Mr Goodwill]

I understand my right hon. and learned Friend’s point. Stamp duty and moving costs will be payable for those in the closest band to the railway. We will announce the outcome of the consultation to which I referred later this year.

On the long-standing campaign of my right hon. Friend the Member for Chesham and Amersham for a longer tunnel through the Chilterns, we have considered a range of options for tunnels.

[Frank Dobson]

I do not wish to delay the Minister in turning his attention to the tunnel, but can he explain why the terms for urban areas are different from those for rural areas?

[Mr Goodwill]

We take the view that the level of disruption in rural areas, particularly the effect on property prices, is absolutely different from that in urban areas, where properties can be close to the railway but there might be many houses in between, and in many cases there is already a railway established, for example near Euston station, which no doubt people were aware of when they moved there.

[Frank Dobson]

My constituents might not fancy the idea of a new station, but what they really do not want is having to live next to a construction site for a decade or more. That is what they are bothered about.

[Mr Goodwill]

Yes, and I spent time with the right hon. Gentleman in his constituency, along with the leader of his council, looking at some of the mitigation that can be put in place.

I will talk a little about the property bond. My right hon. Friend referred to the Government’s decision against a property bond as a means of providing compensation for generalised blight caused by HS2. The main aim of the property bond concept is to ensure that eligible property owners do not suffer unreasonable losses because of any reduction in the market value of their properties caused by a proposed development. The defining feature of a property bond is the idea that eligible property owners, at an early stage in a project’s development, would be given a specific and binding promise of a well-defined, individual settlement, which the property owner would be entitled to redeem in specific circumstances. Should the property transfer ownership, so too would the bond. The outcome of a property bond scheme would reflect the way the scheme influenced property buyers, vendors and professionals throughout the lifetime of the relevant infrastructure project. Without evidence of those behaviours and decisions from actual schemes, it is very hard to assess the performance of a property bond for HS2.

The Government continue to believe that the property bond concept has merit, and that it was right to put it forward as an option in the property compensation consultation in 2013. However, taking all consultation responses and further practical and analytical findings into account, we continue to be concerned that the effects of a property bond on the behaviour and decisions of property owners, professionals and especially property buyers remain unknown and hard to assess.

In conclusion—