Neighbourhood Planning Bill - Report (2nd Day)

Part of the debate – in the House of Lords at 6:30 pm on 28th February 2017.

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Photo of Lord Campbell-Savours Lord Campbell-Savours Labour 6:30 pm, 28th February 2017

My Lords, I was unfortunately unable to attend the Committee stage on the Bill because it clashed with other meetings. However, I want to use government Amendment 62 to raise an issue that, from what I have heard, was not dealt with in Committee.

I want to go back to the debate that took place on 17 March 2016, when the noble Viscount, Lord Younger of Leckie, commented on this whole question of the no-scheme world. Perhaps I may read out what he said and then ask some questions about how we should interpret it. He said that the compensation code—which, as I understand it, is dealt with under Amendment 62—

“is underpinned by the principle of equivalence. This means that the owner should be paid neither less nor more than his loss. The code provides that land shall be purchased at its open market value, disregarding the effect of the scheme underlying the compulsory purchase”.

I think that that is what the noble Lord, Lord Young, was referring to, and it is a question of rules. The noble Viscount continued:

“The land is valued in a construct called the ‘no-scheme world’, whereby any increase or decrease in value which is due to the scheme is disregarded. Land will always have its existing use value but market value also takes into account the effect of any planning permissions that have already been granted, and also the prospect of future planning permissions”.

He goes on to talk about “hope value”, and then says:

“In some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For example, the land might be in an isolated rural location where permission for development would have been unlikely to be granted”.—[Official Report, 17/3/16; col. 2040-41.]

In other words, as I understand that, there is provision within the law whereby we can acquire land at a very low price, depending on what the ultimate use of the land will be.

What I cannot quite get my head around is why, if that is the case, we cannot buy land for housing on that basis. Why cannot we buy land for housing on the same basis as we buy land for airports, motorways, bypasses, railways, reservoirs and other utility uses, and then build housing developments on that land? It could be acquired at a very low price, probably something like £8,000 or £10,000 a plot on which to build, as against often spending £50,000, £100,000 or £200,000 for a plot of land.

On this sort of housing use, Section 226 of the land compensation Act 1965, as amended by Section 99 of the Planning and Compulsory Purchase Act 2004, sets out conditions for applying for a compulsory purchase. It must aim for,

“the promotion or improvement of the economic well-being of their area”— or,

“the promotion or improvement of the social well-being of their area”.

Therefore it is defined in the law that where there is an acquisition for improvements in social well-being, a CPO can be used. So why cannot we use that procedure for acquiring land at a low price to build the hundreds of thousands, if not potentially millions, of houses that are going to be needed here in the United Kingdom?

I go back again to the argument that I have used repeatedly in the House. I do not want to bore noble Lords, so I will put it simply: there is a difference in the cost of land in United Kingdom. You can buy land around the London area—agricultural land—at £20,000 to £25,000 an acre which, at a stroke of a planner’s pen, is worth £4 million or £5 million per hectare. If that is the case, it is the community that has increased the value of that land, not the landowner. Therefore, it is the community that should see the benefit of that land. If the community is to see the benefit of that land, it potentially means that we could create cheaper housing for thousands, or perhaps even millions, of people. We somehow do not do that, because we are always protecting the land value, which is only to the benefit of the people who own the land. I cannot understand why, if we have provisions in the law like this, which allow for the acquisition of land, we do not use them. We have a judgment from Lord Denning where he says that,

“Parliament only grants it, or should only grant it, when it is necessary in the public interest”.

It is in the public interest to acquire cheap land to provide housing for people in the United Kingdom. I have used this amendment as a peg, and I ask Ministers once again: why cannot we proceed on the basis that I keep advocating in this Chamber?