High Speed 2 (Compensation)

Robert Goodwill Excerpts

Tuesday 21st October 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

May I congratulate my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) on securing this debate on the compensation package for phase 1 of HS2. She has been a tireless campaigner on the impact of HS2, and I recognise her continuing determination to ensure that the Government do not lose sight of those concerns. Indeed, the presence of so many right hon. and hon. Members in the Chamber underlines that point. I am aware that because of ministerial responsibilities, some colleagues are not able to speak on this, but I can assure the House that my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright) and my right hon. Friend the Member for Aylesbury (Mr Lidington) never let me forget about the concerns of their constituents too.

I am aware that my right hon. Friend the Member for Chesham and Amersham has recently asked a number of parliamentary questions in relation to HS2 and has been in regular correspondence with my Department. I must also explain why she has not had a response to her recent letter on behalf of the HS2 Action Alliance. The issue at the heart of this correspondence is the way in which we have estimated the number of properties within particular distances of HS2, including the data used in replying to a parliamentary question in November 2013. Estimating property counts in a given area is an extremely complex and technical matter, and the Department for Transport is currently preparing a detailed response.

I am pleased to be responding to this debate on a subject that is of such great importance to my right hon. Friend and her constituents. Before I respond to the points she has raised, it is perhaps worth taking the opportunity to set out the current position on the compensation package for HS2. Measures to assist property owners and occupiers affected by new infrastructure have developed over the years through a mixture of statute, case law and established practice and are referred to as the compensation code. Although the Government remain confident that reliance on the existing compensation code is appropriate for the majority of infrastructure schemes, we believe that the exceptional nature of the HS2 project justifies a different approach and the Government have long been committed to introducing measures for those directly affected by HS2 that go beyond what is required by law.

At present, we have the exceptional hardship scheme in place for phase 1 of HS2. That has always been intended as an interim measure to assist those property owners who have an urgent need to sell their home but have not been able to do so, except at a substantially reduced price, as a direct result of the announcement of the route for the railway. We have also introduced express purchase for owner-occupied properties within the safeguarded area. There are detailed maps available on the HS2 website to allow people to determine where their properties are in relation to the safeguarded area. Express purchase was introduced from 9 April 2014.

I am pleased to be able to update Members on the properties that we have purchased under the schemes that are currently open. To the end of September 2014, we have spent £110.3 million purchasing 162 properties affected by phase 1.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

The problem in my constituency is that, under this scheme, HS2 has not given the market value for these properties, and it is driving down the price of those properties. That matter was raised with HS2 back in August, and I still have not received a response.

[Mr Goodwill]

The instruction to our valuers was that they should value properties at the previous unblighted price.

The properties have been purchased under the exceptional hardship scheme, the statutory blight arrangements, and through express purchase. Compensation for disturbance costs and reasonable moving costs are not included in the expenditure figures.

[Michael Fabricant (Lichfield) (Con)]

My hon. Friend will know that my constituency is affected not only by phase 1, but by phase 2. Does he agree that, as a matter of principle, whatever compensation schemes are put in place for phase 1, and hopefully, as my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) has said, they will be generous ones, they should apply equally to those in phase 2?

[Mr Goodwill]

My hon. Friend makes a valid point. If we can reach a fair compensation package for phase 1, we will certainly need to bear that in mind as we look at phase 2. I suspect that those affected by phase 2 would expect no less.

[Mr Jim Cunningham]

There are people in Coventry who are not covered by any compensation scheme, and yet they have invested their life savings in their properties. They cannot sell their properties now. What will the Government do about that?

[Mr Goodwill]

That is precisely why we are putting these compensation schemes in place. We also have an exceptional hardship scheme in place for phase 2. To the end of September 2014, we have purchased 32 properties at a cost of £15.1 million.

Following the property compensation consultation in 2013 for the London to west midlands HS2 route, the Government decided to use five criteria to select the most appropriate long-term discretionary property compensation packages for phase 1 of HS2. Those criteria are: fairness; value for money; community cohesion; feasibility, efficiency and comprehensibility; and the functioning of the housing market. Accordingly, the Government announced on 9 April the long-term compensation schemes that would be introduced for phase 1. They included express purchase, which I have already mentioned.

[Mrs Gillan]

The Minister will correct me if I am wrong, but did I hear him cite the word “fairness”?

[Mr Goodwill]

Precisely. Fairness is at the heart of our approach—fairness to those who have to move because their properties are being demolished or are so close to the line; and fairness to those who want to stay in their communities and maintain community cohesion.

We announced a voluntary purchase offer that would be available to people up to 120 metres from the railway in rural areas. Eligible owner-occupiers between the safeguarded area and 120 metres will be able to ask the Government to buy their homes at the unblighted market value. The scheme will be opened to applicants by the end of 2014 following further consultation on supplementary cash payment schemes.

[Mr Jim Cunningham]

As I said, we have people in Coventry outside the 120-metre area who have invested their life savings in a property, but cannot sell it. How will they be compensated?

[Mr Goodwill]

I will move on to the measures for those further away, but we understand that many people’s biggest asset is their home. In fact, many people see their home as part of their retirement package.

We announced a “need to sell” scheme to help property owners who have a compelling need to sell their home, but are unable to do so because of our plans to build HS2. There will be no outer boundary to that scheme, which will also be opened to applicants by the end of 2014. It will succeed the current exceptional hardship scheme for phase 1, which will then be closed. When we implement the voluntary purchase and “need to sell” schemes later this year, we will publish detailed guidance about how they will work.

We have also announced rent back, a rule that means that if a property that the Government have purchased under any of our schemes is suitable for letting, the previous owner may, if they wish, be considered for a Crown tenancy. That scheme was introduced on 9 April.

We have consulted separately over the summer on two supplementary cash payment schemes. The first would provide that, for owner-occupiers in the voluntary purchase area, an alternative cash offer of 10% of the unblighted market value of their property, with a cap of £100,000 and a minimum payment of £30,000, would apply.

[Sir William Cash]

Does the Minister accept that this is a wholly inadequate package? We sincerely trust that the Committee considering the Bill will listen carefully to the analysis that we will put forward in our petitions, because it is petitions to this House that ought to make the difference.

[Mr Goodwill]

I pay tribute to the petitions Committee, which has set about carrying out its role in a workmanlike way. My hon. Friend the Member for Poole (Mr Syms), the Chair of that Committee, is in the Chamber to hear this debate.

That cash payment scheme might help some people to decide that they do not need to move to protect the value of their investment in their home. We have also consulted on a home owner payment scheme to provide cash payments to eligible owner-occupiers between 120 metres and 300 metres from the centre line, following Royal Assent of the phase 1 hybrid Bill, to enable affected residents to share early in the future economic benefits of the railway. We have sought views on consequential changes to the voluntary purchase offer and the “need to sell” scheme.

[Mr Grieve]

What about stamp duty? It is now a very substantial tax, and anyone who sells their house, even under the voluntary purchase scheme, will have to pay stamp duty on a fresh purchase. Those people moving to a property of substantial value, which is the sort that they are likely to move into, will face a serious penalty, and one that they would not have wished on themselves, because they had no intention of moving.

[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?

--- Later in debate ---

[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—

[Several hon. Members]

rose—

[Mr Goodwill]

I have only 50 seconds remaining, so I will not give way.

In conclusion, I again congratulate my right hon. Friend on her unflagging energy in seeking the best outcome for those affected by HS2, and I very much recognise the importance of the compensation package to her and her constituents. I note the concerns she has raised and hope that I have shown hon. Members that we have a package in place that meets the Government’s policy objectives for compensation: fairness, value for money, community cohesion, feasibility, efficiency, comprehensibility, and the functioning of the housing market. I am confident that the compensation package, once fully in place alongside the protections already available through the compensation code, will perform well against those criteria.

Question put and agreed to.