Orders of the Day — Land Development (Compensation)

Part of the debate – in the House of Commons at 12:00 am on 23rd July 1976.

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Photo of Mr Guy Barnett Mr Guy Barnett , Greenwich 12:00 am, 23rd July 1976

I congratulate the hon. Member for Esher (Mr. Mather) on raising a very important issue —the relationship between the rights of the individual to enjoy his property undisturbed and the needs of public authorities to carry out development for the community as a whole. I particularly appreciated the sympathetic and sensitive way in which the hon. Gentleman presented his constituent's case. I should like to refer to that later, but to begin with, I want to deal with the general issues, as did the hon. Gentleman.

The issues involved were precisely set out in the White Paper "Development and Compensation—Putting People First", published in 1972. It is from this document that the hon. Gentleman has quoted, and it has incorporated the results of wide-ranging reviews of the policies adopted by authorities undertaking public works, notably highways, and the provisions of the compensation code. New powers were subsequently introduced in the Land Compensation Act 1973 to enable those authorities to do more to mitigate the disruption they cause and to improve and extend the code to secure further the private rights and interests of the individual. In what is a difficult and complex field, full of special cases, this was a major attempt to strike a better balance between individual and community needs.

I shall not weary hon. Members by reciting the list of improvements made in the 1973 Act. They were, however, substantial, and they involved the commitment of sizeable extra public funds. Many people have benefited as a result, though we can never avoid all of the hard cases.

The hon. Member has spoken about the case of a constituent. People whose homes are threatened or taken for public developments frequently object strongly to the intrusion into their way of life. They suffer a measure of disturbance and distress which is over and above any strict monetary value of their loss. The hon. Gentleman emphasised this point and made it particularly well.

Of course, this is not always the case. People are sometimes only too pleased to be moved from sub-standard housing due for redevelopment into modern homes. These are the cases we do not hear about. Nevertheless, there is the likelihood of substantial distress for people pulling up roots firmly put down, and this is recognised in the 1973 Act in so far as special home loss payments, extra to any compensation sum, are provided for. It is estimated that these payments amount to some £22 million a year. I mention this to indicate the practical application of the new powers introduced in 1973.

Before turning to deal with the detail of the points raised, I should perhaps first outline the basis of compensation and other benefits payable where people's homes and land are acquired by compulsory purchase. I do not think there can be any argument that public authorities need compulsory purchase powers if they are to be able to carry out their statutory duties in the public interest, but there are, of course, safeguards for the individual owner in that if he objects, the issues involved are aired at a public inquiry and the appropriate Secretary of State is required to take any objections into account in deciding whether compulsory purchase should be authorised. Basically, it is a question of deciding whether the needs of the acquiring authority, acting in the public interests, outweigh the interests of the owner who wishes to keep his land. But the question of compensation is, and has always been, a separate issue and does not enter into the case for or against compulsory purchase.

In the majority of cases, compensation is assessed, as the hon. Gentleman said, on market value—that is, the amount which the property might be expected to realise if sold by a willing seller on the open market. In addition, the acquiring authority is obliged to pay the proper legal costs and, usually, disturbance compensation for other reasonable expenses and losses which the person has to incur as a result of the compulsory purchase. Ths includes the cost of altering soft furnishings and movable fixtures and fittings to fit them to the new home, telephone reconnection charges, and so on. Then, as I have previously mentioned, if the person has lived in the house for five years before being displaced, there is entitlement to a home loss payment of three times rateable value with a minimum of £150 and a maximum of £1,500.

There are other obligations on authorities. Under the 1973 Act, local housing authorities are required to ensure that any person displaced by public action is satisfactorily rehoused. This might mean providing suitable alternative accommodation available on reasonable terms. Alternatively, the authority may help with the provision of a mortgage, or in the case of the older person or those with low earnings, make interest-only mortgage advances repayable on maturity. There are also provisions for advance payment of compensation.

In essence, the compensation code is intended to give people the open market value for the actual interest acquired, plus their additional necessary expenses. The only significant exception to the market value basis applies to unfit dwellings, where site only value is applicable. But even here supplementary payments to owner-occupiers will normally bring the compensation up to market value.

I have explained these arrangements at some length to demonstrate the scope of the code and the significance in real terms of the 1973 Act extensions. The right hon. Member for Crosby (Mr. Page) on Second Reading of the Land Compensation Bill described the provisions as the most extensive reforms of the law of compensation in favour of the individual that have been put before Parliament for more than a century".—[Official Report, 27th November 1972; Vol. 847, c. 152.] I would not dissent from that view, and there is no evidence to suggest that these provisions are not working as intended.

Against that background I shall try to respond as helpfully as I can to the hon. Member's comments about Miss Lechner's circumstances. I emphasise, however, that that case concerns the proposed acquisition of land by the Thames Water Authority for the River Mole flood alleviation scheme, which the hon. Gentleman supports. This is a responsibility of my right hon. Friend the Minister for Agriculture, Fisheries and Food and not my right hon. Friend the Secretary of State, who is not responsible for either the scheme or the proposed acquisition.

I understand, however, that the recent correspondence has endeavoured to set out the facts of the case, which has a long planning history. It is recorded in the council minutes that in 1954 Esher Urban District Council granted a planning permission for the retention and continued use of the Pilgrims as a dwelling, but by a condition attached to the permission it restricted its occupation to the owner, and required removal of the structure on the expiration of her occupancy. The intention at that time was to be helpful to the occupier. In 1974, the new Elm-bridge Council reaffirmed that the condition attached to planning permission in 1954 should not be varied.

From the re-establishing of these bare facts of the case within the more general issues raised in the debate, it is clear that in so far as the use of the structure on the site is limited by a personal planning permission, so will that factor be taken into account in the open market and in the compensation that should properly be paid. I stress, however, that it is not for me to interpret the law in the particular case.

Nor can I comment on the compensation offered. This is for negotiation between the vendor and her advisers and the acquiring authority. To the extent that a dispute on the sum remains, it may be referred to the Lands Tribunal for determination. The other normal entitlements to home loss and the rehousing provisions would apply, and I understand that the Thames Water Authority has this week reaffirmed offers in this respect.

I apologise for having spoken at such length, but the debate is widely framed, encompassing many detailed and complex points. I have explained the basis of the compensation code and the essential link with market value. This has for many years been the fundamental principle of the compensation code, and must continue to be so.

I do not want to underestimate the distress caused when land is taken, and I well appreciate the sympathy which the hon. Gentleman has shown in what he said about his constituent. But I believe that the provisions introduced in the 1973 Act go a long way towards achieving an equitable balance between the competing claims of the individual and the community