Clause 74 - Basic loss payment
Planning and Compulsory Purchase Bill
11:00 am
Mr David Wilshire (Spelthorne, Conservative)
May I make it clear, as my hon. Friend the Member for Cotswold has, that I support the principle of the new loss payment scheme? It should perhaps have been introduced some while ago. [Hon. Members: ''Ah!''] One reason why I spent so
long on the Back Benches was that I used to say things that were critical of the previous Government, but I shall let that be. No one is perfect. My party is slightly less imperfect than this Government, but that is a different issue.
What concerns me about the principle of a loss payment scheme is that, whereas we need such a scheme, I am afraid that the Government are not going about it correctly. Under various amendments, we have heard about the introduction in a sense of the attitude that applies to rate support grant settlements, which involves the use of a formula. In this case the formula is the percentage: we consider that x per cent. is okay or that y per cent. is okay, and we will apply that across the board. When somebody qualifies for a payment, a formula is used to calculate the amount rather than use common sense and judge individual circumstances. My experience of a formula in any situation, whether for rate support grants, council tax or for the payment of compensation, is that sooner or later it will come a cropper. There is always an instance when it is blindingly obvious that more is due than the x per cent. that the formula allows.
There is no provision in the clause that the above formula is no substitute for common sense, and that is to be regretted. Somewhere along the line, the Government of the day, whatever their political colour, will find themselves embarrassed if they stick to that arrangement. I do not see what is wrong with using market value. I know that some in Parliament do not like the market, but it is possible to establish the value of losses. Many people specialise in working out a realistic figure for losses in all sorts of circumstances. One need only consider the insurance industry, which constantly deals with complicated claims. It is possible to assess the cost of rebuilding, for example, although, of course, it is very difficult to put a value on pain and suffering or on the loss of profits. However, the private sector is not subjected to a formula; it is subjected to negotiation. Therefore one arrives at a realistic figure in each case that is acceptable to the insurer and to the claimant. It should not be beyond the wit of man, and certainly not beyond the wit of the Government and the civil service, to come up with a formula of words rather than a formula of figures to deal with the issues that arise after a valuation of a property has been made.
I am against formulas in principle; the market value has something to offer. I am also concerned that the clause contains no reference to replacement values. It is all very well to ask, ''What are you losing? You are suffering some inconvenience and interruption and we realise that you would rather not go, so we will pay you something for it.'' However, there is no real understanding that because you are being forced to move on you will have to replace the value of what you have. It may appear to be like for like, but because of the circumstances it is not.
Because we are so close to finishing, Government Members may have thought that they have avoided hearing about Heathrow airport for a whole morning—[Hon. Members: ''Oh no!'']—but I am sorry to have to disillusion them. The planning of
terminal 5 provides a wonderful example of a replacement issue.
When terminal 5 was being planned, the value of some cottages beside the sewage works, where terminal 5 is being built, had to be decided. You can imagine that a group of cottages between two runways next to a sewage works had a value that was much lower than that of nice cottages with a garden not next to a sewage works between two runways at the world's busiest international airport. Bit by bit, the owners were winkled out, often against their wishes, until one family remained. It had reached the stage when compulsory purchase powers were being contemplated against the remaining family. The family merely wanted to move to a little house with the same square footage and the same amount of garden near their families. They lived at the western end of the airport and the rest of the family was living to the south of it in Ashford in my constituency. The difference in value between being bought out next to the sewage works and moving to the same thing in highly desirable Ashford was astronomic.
If a formula had been applied, even if it involved a topping up because of the inconvenience, the difference in value would have been such that it would still have been impossible for that family, whom I represented, to move into a maisonette or bedsit. Because the public sector was luckily not involved in compulsory purchase, BAA was persuaded to say to those people, ''We get the message. Go and find yourselves a like-for-like, same square footage, same-size garden house and we will buy it for you if you give us what you own at the moment.'' That is what I mean by replacement.
That situation will occur time and again with compulsory purchase. I am amazed that the Government have decided to refer to the fact that under certain circumstances the replacement costs are the costs that shall be followed when it comes to compensation.