It is always a particular pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). As a fellow officer of the all-party group for the advancement of West Ham United—happily, they are doing rather well at the moment—it is always a pleasure to speak after him and to recognise his very real commitment and expertise in housing, particularly in the area of leasehold.
I ought to refer to my entries in the Register of Members’ Financial Interests. One of them includes being a leaseholder in the hon. Gentleman’s constituency.
My experience of stock transfer has been rather more positive, but his serious and important points need to be addressed. For any London MP, dealing with leaseholders is particularly important, because leasehold is such a critical part of the capital’s housing stock.
I was reminded of some of the remarks made to me in the past by my good friend, who has now left the House, Jacqui Lait, the former Member for Parliament for Beckenham. As many hon. Members will recall that she was a very doughty and active advocate of leasehold reform and of improvement in that area of the law. It is time that we paid tribute to her for her work.
I will turn to new clause 47 and amendments 79, 76 and 77 on compulsory purchase, which stand in my name. My smile at the hon. Member for Poplar and Limehouse related not so much to being a leaseholder, but to his reference to high-powered barristers. It never quite seemed like that in the Bow county court—that is all I can say.
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Compulsory purchase is a complex but important area of law and one where Ministers are engaged in the need for reform. The simple truth is that our compulsory purchase law has evolved piecemeal since about 1840, when the initial legislation and case law started. It has grown up incrementally, it is not coherent and lags well behind the rest of the planning system in terms of being updated. The Law Commission has recognised that and continues to work on it. I hope that we will revisit this matter in the course of this Parliament. Frankly, we need to get a grip of compulsory purchase law and have wholesale reform. That is not possible in the context of this Bill, but I welcome the improvements that it does make on compulsory purchase and land compensation, which are good steps forward. I will suggest some other steps forward.
I am sorry that the hon. Member for Erith and Thamesmead (Teresa Pearce) thinks that these are negative proposals. I do not see them that way and will try to persuade her of that, although I suspect I will not succeed, given that she comes from Charlton territory. For all that, let me at least try.
I will set out the essence of what I am trying to do. There are three aspects of the new clause and amendments. First, they are about fairness of treatment to landowners whose land is acquired compulsorily. People assume that this somehow relates to landed estates and the aristocracy, but that is not the case at all. Many people whose land is acquired compulsorily are small businesses or smallholders in one way or another. They are small people who sometimes struggle to finance the running of their businesses. It can happen in an urban area. We can think of compulsory purchase orders that have been made in relation to infrastructure projects in London and elsewhere. Fair treatment for the landowner is as important as fair treatment for the public or other authority that acquires the land.
Secondly, we must ensure that there is prompt payment. I think all of us would agree that, whatever the circumstances, the payment of compensation should be done swiftly and at a fair rate of interest. The rate of interest is the third aspect of my amendments. We are still deficient in this. The Government have made an important step forward in the Bill in increasing the rate of interest. I welcome that, as do bodies such as the
Country Land and Business Association, which represents landowners and businesses in rural areas, but I am pressing Ministers to go further.
Let me explain why these changes are needed. First, there is the question of a duty of care. Duties of care are often written into statute in relation to a number of issues. The acquisition of land can bring fundamental change to the future of a business in an area and to families. Frequently, we are talking about family businesses that may be acquired or have part of their land acquired compulsorily. There is nothing wrong with compulsory acquisition. It is sometimes necessary for the greater good, but the fair treatment of those people is important.
New clause 47 would place a duty of care on acquiring authorities to ensure that those who lose land or property through compulsory purchase are treated fairly. It would also introduce a clear set of guidelines by which the authority would have to adhere and against which it could be judged objectively. The Minister might say that we do not need primary legislation for that. We can talk about that in due course, but the issue needs to be flagged up because there is concern among many practitioners.
I am grateful for the support not only of Mr McKee in the Table Office, who was rightly referred to earlier, but of people in the Compulsory Purchase Association—practitioners in the legal field—who highlighted the concern about consistency and suggested the possible means of having a transparent mechanism for determining a fair rate of compensation. At the moment, there is a bit of a horse-trading process. A proper set of guidelines on conduct would give people a benchmark against which to judge whether the acquiring authority was behaving in a fair and reasonable fashion.
The state gives considerable power to acquiring authorities in compulsory purchase. I do not object to that, but the corollary is that it should be exercised in a sensible, professional and genuinely fair fashion. Most of the time it is, but there are occasions when it is not, and that is what we are seeking to address. If that measure might be achieved through means other than primary legislation, I hope that we can take that forward in the constructive way that the Housing and Planning Minister spoke about when discussing the other compulsory purchase amendment that I tabled on Report. I hope the Minister will concede that we need to address this issue.
Amendments 76, 77 and 79 are tabled in my name, but it is not right to characterise them as weakening the power of compulsory purchase. Compulsory purchase requires fairness for both sides, and we are seeking first to ensure prompt payment, and secondly to ensure that payment comes at a fair rate of interest for those who will be paid. Amendment 79 deals with advance payment. Often, if land is compulsorily acquired, whether that land is a farm or a rural business—the principle is the same—people find it difficult to secure funding to take their business forward. If part of their holding is severed and part of the business is, in effect, taken away, that may interrupt and disturb their existing financial arrangements with their bank. They may have to go back to the bank because they have mortgaged or borrowed against X number of acres, and suddenly that figure is reduced and the bank will inevitably want to reconsider its arrangements. In order to give comfort to the bank,
it is important that people receive prompt compensation and at a fair rate for what has been taken. That is what we are seeking to address.
At the moment, even though it is possible to sort out the acquisition and compensation sum, there are frequently long delays after the authority has taken possession of the land. Once the acquiring authority has taken possession of land under compulsory purchase, it is no longer available for use as part of the business. The land has gone from the landowner, but they might not receive compensation for many months and they will have to make bridging arrangements with their banks in the interim.