Housing and Planning Bill

Lord Campbell-Savours Excerpts

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.

[Viscount Younger of Leckie (Con)]

My Lords, the noble Earl, Lord Lytton, has helpfully expressed concerns about landowners losing out from any uplift in land values when the compulsory acquisition of land is sought for housing as part of an application for nationally significant infrastructure. He has also raised the important issue of how claimants are treated by acquiring authorities. I recognise that these are also issues of concern for members of the Country Land and Business Association, who met the Minister for Housing and Planning last week to discuss these matters and our proposals for further compulsory purchase reforms, which are now out to consultation, which the noble Earl alluded to. We welcome these discussions with the CLA and look forward to receiving its further thoughts in response to the current consultation.

I turn first to Amendment 119B. We had quite an interesting short debate, particularly with the intervention just now from the noble Lord, Lord Campbell-Savours. In response to the noble Earl, and taking account of the comments from the noble Duke, the Duke of Somerset, I can only reiterate the main points of the response to the amendment made in Committee. A key principle under the Land Compensation Act 1961 is that compensation is offered at the open market value of the land. The open market value will take into account the effect of any existing planning permissions, and any that might be given in future in accordance with the planning assumptions in the 1961 Act. Any increase or decrease in value that is due solely to the scheme that will acquire the land—for example, a nationally significant infrastructure project including related housing development—is disregarded. The same principles apply irrespective of the powers under which compulsory acquisition is granted.

Amendment 128YAR would introduce a statutory duty of care to be owed by acquiring authorities to claimants. I agree completely with the noble Earl, Lord Lytton, that those whose land is being taken by compulsion should be treated fairly and with respect. I also listened carefully to the comments from the noble Lord, Lord Cameron, and I know that stretch of the A303 reasonably well. I also respected the comments made by the noble Duke, the Duke of Somerset. However, I do not think that imposing a statutory duty is necessary to achieve that fairness and respect. Instead, the way forward is to set out clear expectations for acquiring authorities’ behaviour in dealing with claimants in guidance, and to ensure that the system itself is fair to claimants. We have done the former already: updated guidance was published in October 2015. The latter is being addressed through measures in the Bill; provisions on lengthening the notice before entry and earlier advance payments will make the system fairer for claimants. We are also consulting on further proposals to ensure that claimants receive fair compensation, to further encourage the prompt payment of advance payments and to ensure that claimants in areas with high rateable values are not systematically excluded from issuing blight notices.

As I am sure the noble Earl will appreciate, Amendment 119B would require a fundamental change to the provisions for assessing compensation for land compulsorily acquired in the Land Compensation Act 1961. For that reason, we will be unable to support this amendment. On Amendment 128YAR, as I have explained, the Government do not consider that a statutory duty of care is necessary. I know the noble Earl will be disappointed by this, but none the less I ask him not to move his amendment.

However, I emphasise that we will of course be happy to continue our engagement with the noble Earl and other interested parties, should they wish to discuss these matters further, particularly in relation to Amendment 128YAR, as it may be possible that more can be done through changes to guidance.

--- Later in debate ---

The intervention of the state comes in the form of various types of taxation, such as on capital gains, and to some extent on the aspects built into the grant of a planning consent which gives rise to what the noble Lord, Lord Campbell-Savours, described as a huge increase in value. I refer of course to Section 106 of the Town and Country Planning Act and its clawback provisions; increasingly, a community infrastructure levy does the same in different ways. There are ways in which society benefits from this, but I go back to a point that I made during earlier stages of the Bill. If the process of compulsory acquisition is seen as expropriatory then nothing will come of that. Everybody goes to earth, to use an old country term. There is no collaboration and the thing is seen as unfair.

[Lord Campbell-Savours]

Can the noble Earl answer the simple question that I asked? Why should a landowner whose land is worth between £15,000 and £20,000 a hectare suddenly, at the stroke of a pen designating one of these areas, find that his land can be worth anything from £1 million to £7 million per hectare? How can that possibly be justified?

[The Earl of Lytton]

My Lords, I am not sure that I know the answer to that. The point that I was trying to get at in the process of this amendment was the question of who profited from the 500 houses. The short answer is that very large gains are made by dint of the market. The noble Lord may wish to take the view that the market should be overridden—a view that I feel certain many would share on his Benches. It does not happen to be my view and we will have to agree to differ on how this is to be dealt with. I entirely respect his view and I can see the social pinch point here, but I am trying to look at this as an economic model rather than in terms of who gains out of it.

I have gone on long enough about this and it is certainly not my intention to divide the House on it. I therefore beg leave to withdraw the amendment.