Clause 75 - Occupier's loss payment
Planning and Compulsory Purchase Bill
2:45 pm
Mr Geoffrey Clifton-Brown (Cotswold, Conservative)
We do need a little clarification. Whereas, under the previous clause, we were dealing with the basic loss payment, which was 7.5 per cent. of the value or a maximum of £75,000, in this clause we are dealing with the occupier's loss payment, which is 2.5 per cent. of the value of his interest, capped at £25,000. The same arguments apply, so I would press the Minister again about updating the maximum amount. We are to debate amendments on the matter later, but it would be helpful if the Minister would tell the Committee whether she anticipates updating the figure annually or in some other way.
I slightly pre-empted the clause stand part debate on this clause by saying that whereas the basis loss payments given in clause 74 are reasonably generous, particularly to those in low-value properties, those in clause 75 are not. In layman's terms, the proposal in subsection (8) of new section 33B of the Land Compensation Act 1973 of £100 per hectare not exceeding 100 hectares amounts to £10,000 for 250 acres, or £15,000 for 750 acres. That is £40 per acre and £20 per acre respectively. Considering that the
current value of land is probably in excess of £2,000 per acre, it is minimal.
The Minister spoke earlier about compensating for the costs of removal. Some of the unreimbursed costs that I mentioned this morning, in terms of having to acquire a new farm and to build new buildings, will be far greater than £10,000 or £15,000. The payment is not very generous, and I do not think that it will encourage property owners to agree compulsory purchase arrangements quickly—nor does the National Farmers Union. However, we shall see whether the Government's judgment is correct.
The further that we move into the clauses, the less generous they become. The buildings amount given in subsection (9) of £25 per sq m or part of a sq m of the gross floor space of any buildings on the land is probably what a relatively low-cost building would achieve in rent in the city, where rents are—even in today's depressed market—currently between £20 and £60 per sq ft. That puts the capital value at between £2,400 and £7,200 per sq m. The building loss payments would amount to between 1 per cent. and 0.3 per cent. Considering that the acquisition costs of a compulsory purchase project are typically less than 25 per cent. of the total cost of the scheme, those payments are less than generous. It would be helpful of the Minister to show how she arrived at the figures and what she thinks that they will compensate for.