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. It 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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The amendment would effectively alter Section 52A of the Land Compensation Act 1973 and pave the way for a proper and simple process for making advance payments through a regulatory framework. If taken forward, it would ensure that adequate information was provided by the claimant, that demands for excessive or irrelevant information were curtailed, and that payments would have to be made in a timely fashion. I accept that there is a little more detail behind it than that but those are the three principal areas where there are problems. I do not believe that it has any financial
implications beyond freeing up the system and avoiding people taking to the trenches because the existing system does not work.
Amendment 59 is about loss payments. I ask your Lordships to ignore the length of the amendment. The principle is a good deal simpler and I shall not go through the amendment line by line. Loss payments are top-up sums paid to claimants in recognition of compulsion being used. They apply variously to occupiers or tenants and to investors or landlords. Occupiers are entitled to 2.5% of the value of their interest as a loss payment up to a maximum of £25,000. Investors—for some reason that escapes me—are entitled to 7.5% of the value of their interest up to a maximum of £75,000. However, the Compulsory Purchase Association and I do not feel that this represents a fair balance between the respective claimant interests. It is the occupier in possession who is displaced and has to reorganise his affairs and who bears the brunt of the acquisition impact. Therefore, my view is that those figures should be reversed. The amendment would reverse that inequitable treatment between occupiers sustaining the front-line loss and investors sitting somewhere else.
The amendment would also change the basis of the calculation of loss payments for occupier claimants from a percentage of the land value element to a percentage of the total value of the claim. This last point would overcome issues where a tenant is nearing the end of a lease but may have rights, under other statute, to a new lease on expiry and where the real estate value as such may be small or minimal.
There are some consequential matters that this amendment also tidies up—hence its apparent complexity.
I do not believe that the amendments would have significant consequences for the public purse but they would go some way to improving confidence in a system that badly needs some general maintenance and repair.
Mindful of the Minister’s letters to me, I am prompted to ask as my parting shot: if not now in this Bill, in the context of improving growth and infrastructure, then when? This country needs to see real measures that have identifiable effects. I should have thought that the time for dealing with this matter was now, although I recognise that there are many far wider issues, such as blight, planning assumptions and all sorts of other things, that need sorting out in our compulsory purchase code. I beg to move.