Apologies to our last set of witnesses, who unfortunately have had to leave, but if they are required to give us any more information they can write to the Clerk. Welcome to our three new witnesses this afternoon. Thanks for coming along. May I begin by asking you to introduce yourselves and the organisations that you represent?
Harry Cotterell: From our point of view, we are concerned that as yet there has been no implication of mitigation measures for business. There has been plenty on environment, but very little on business, so we will have to wait and see. The sooner that Government engage with business and sort out mitigation, the easier it will be to get the job done, and the better it will be for businesses, who will have some certainty going forward. They are already blighted and it is already a really significant issue. Mitigation needs to happen sooner rather than later.
Ralph Smyth: It is difficult to know at this stage, because the draft environmental statement currently out for consultation is more of an outline ES. It is 5,000 pages, compared with an expected 55,000 pages in December. There are definitely positive examples, where there are plans to plant local types of tree along the route, but we do not have that level of detail yet. We very much hope that there will be an adequate consultation period when the formal environmental statement is presented to Parliament.
Andrew Shirley: To build on that, the outline environmental statement, or the draft environmental statement, that is out at the moment does show a certain amount of land take, both for the construction and for environmental mitigation. I do not think there is any doubt in my mind that the final plan will be for a greater amount of land take and a greater amount of environmental mitigation, and that will impact on rural businesses significantly to a greater extent.
At the same time, there does not seem to be the engagement on HS2’s part to look at the impact on those businesses and try to mitigate some of the impact, not only of the construction but also the long-term impact.
Ralph Smyth: There are opportunities as well as threats. Because of the amount of mitigation that is planned, there are opportunities. Smaller rural businesses obviously cannot construct viaducts, but maybe they can source trees. Rather than just thinking about infrastructure pipelines, we can think about tree pipelines or other measures that will give certainty for rural businesses to invest, and then they can help bid for, and hopefully win, some contracts for this or other environmental mitigation.
Can I ask some general questions around compensation? The Country Land and Business Association said in written evidence that there were still grievances over the compensation process for HS1, and I wondered whether you could set out the nature of those and to what extent you think HS2 Ltd has taken them on board. May I perhaps also pick up your thoughts about the potential for a property bond scheme, what that might mean, and what discussions you are having around that?
Andrew Shirley: I will start by saying that in compulsory purchase, the single duty that the acquirer has is to pay not a penny more than the proved loss of the property owner. It does not have to provide any mitigation. It does not have to provide any accommodation works. It just has to deliver the scheme and, as I said, the problem is that it is a duty to pay not a penny more, so you can see some over-zealous agents acting for the acquirers trying to achieve the bottom line of compensation. In addition, although it is possible to get some of your compensation in advance, quite often that is not delivered, or it is delivered late. And when the final compensation is negotiated, you can get interest on that outstanding amount, but only at the statutory rate, which is currently 0%, whilst those that have suffered the loss would have to borrow it at several per cent. more than that. So that is a real issue.
On a property bond scheme, what we have put together in the papers that we submitted to you is a property bond scheme that compensates you. If you are residents, it compensates you for loss in value of your property when you come to sell it. And it is a transferable bond, so you can sell it on with the property if you want, and that provides the purchasers with some security that the future value will be underwritten. You can obviously only claim for the bond once, when you redeem it.
But more importantly for rural business—or all business—we have set out the way it would work for businesses. If you speak to any business, what they want to know is how much land they will lose and when they will get compensation. You can say, “Well, you will get some compensation but it will be a long time ahead. I don’t know how much land you will lose, because we haven’t got the environmental statement out.” So there is an awful lot of uncertainty. The idea of the bond is to bring that right up to the front, so you can say with certainty, as soon as is possible, how much land will be lost and how much compensation you will be paid, and that puts the business owner in a much better position to deliver his economic management of his business into the future. The way it is at the moment, you do not know what you are getting, so you cannot make any management decisions, so your business stands still for 20, 30 years. That is a generation.
Andrew Shirley: HS2 has not given us its thoughts. It has had our proposal, but it has not given us its thoughts. HS2 is not that good at communicating either with us or our individual members—it is probably worse with them.
The Secretary of State has said that he would consider the property bond scheme as part of the consultation that will be running later on this year. The problem is that we have got members who are already losing and have lost value and have suffered business stagnation for two and a half years already. How long do we have to wait?
Ralph, could you briefly outline your areas of most concern on both phase 1 and phase 2? As part of that response, what are the most important changes you would like to see in the final environmental statement for phase 1?
Ralph Smyth: I have three points. First, it is not our area of expertise but we are worried, particularly for phase 2, that some areas might become dilapidated and scruffy because of the blight of people not investing. That was a concern with, for example, the M6 toll road as that happened there. We would like to see something happen to prevent that from taking place.
There is also a need for community-level compensation if—or once—the HS2 hybrid Bill is passed. There is a good example from HS1 in Kent where the Rail Link Countryside Initiative helped invest in the local area; for example, at Cobham park, £750,000 was used as seed funding for a £10 million package that restored one of Kent’s finest country houses and that led to greater public access. There is a good opportunity there and we hope that there can be an announcement about a similar endowment fund for HS2.
A final point is the need for better data. Obviously, in some areas it is clear that there will be particular blight, but in others people are unclear of what this will mean in practice. We have got a lot of data from HS2 recently and we will be producing an interactive map that will hopefully show people much better what they can expect if or when HS2 opens.
In terms of your other question on what we would like changed, that is difficult without going through a long list, but I would highlight our concerns about the out-of-town stations: outside Birmingham and, in particular, the airport station outside Manchester. That station and its access package would cost £400 million according to the Manchester local authorities, but HS2’s figures say that that will provide 400 jobs. That is not a difficult mathematical question: that means £1 million per job. We think that that money could be much better spent on other measures, for example, improving the link to Liverpool to reduce the travel time between Liverpool and Manchester, rather than giving two stations to Manchester; one of which may be a white elephant.
I would like to ask some questions on blight and compensation. Surely one of the difficulties for farmers will be that their land will have an agricultural value, but, as in my constituency where farmland will be used to build the interchange station, the reality is that that land is worth far more than the price of growing wheat or whatever on it. How do you think that the Bill could help secure fairness in the system? Is there an appeal mechanism for a fair assessment of the land value for compensation?
Harry Cotterell: One of our suggestions—this is a longer term policy that we have been pushing for a while—is that there should be a duty of care for the acquirer. The relationship between the acquirer and the owner of the land on the ground is probably the most uneven trading relationship that has ever been invented; it makes the relationship between farmers and supermarkets look like a level playing field, quite frankly. Despite the fact that you are dealing with virtually the biggest organisation in the world, you have also got the fact that they have the law of the land behind them and they have already outlined the terms on which they are negotiating, so it is terribly difficult.
We would like a duty of care, and that would be effectively managed by an independent person who would be appointed to handle negotiations between the acquirer and the landowner or property owner. They would ensure that fairness came through. I think that is probably the only way—it is one way that would bring up the inequity. Do you have anything to add to that?
Andrew Shirley: Only that the independent person would have to have the resources to ensure that there is fair play. They would have to be in post as early on in the scheme as possible, because we envisage that the independent person will deal not only with the financial aspects, but the practicalities of the scheme. They will have the authority to call the acquiring authority to task and ask them why they have not done something, why the compensation is inadequate, why they have not looked at the mitigation works, and why they have not paid the compensation.
May I ask the CPRE a question? The reform of planning brought in the concept of biodiversity offsetting, so a development of this scale would require a very significant biodiversity offset. Is the CPRE aware of the work undertaken by Birmingham university looking at significant rectification, certainly along the length of the line approaching and passing Birmingham? Might that in part answer your point about how the damage that inevitably will be done along the line of the route will be made good?
Ralph Smyth: There are two main points. I must admit that I am not aware of that particular work. If some of my colleagues are, I can refer to them if need be. The natural environment White Paper introduced the idea of a net benefit. Of course, I am speaking to the converted here. We would like to see a net benefit, rather than simply a “no worse off” position.
In terms of mitigation and compensation, first should come avoidance—trying to avoid the impact—then mitigation, then compensation. That hierarchy is recognised by HS2 Ltd. The Law Commission has been consulting on the idea of conservation covenants, which is a way of making sure this is a long-term thing. One can plant something to compensate for damage, but the question is whether that can be maintained in perpetuity. I think we need to have some legal changes before that can happen. We also need to see how the pilots develop and whether their results give enough confidence that the benefits can be secured in the long term.
Andrew Shirley: To follow on from that, one should not get too carried away that the right way to deal with the biodiversity offsetting is to compulsorily purchase and give it to someone else to produce the habitat. Many landowners and businesses are very good at managing habitats, have the expertise to do so and are on site already.
Do you share my view that the scale and complexity of the HS2 project is matched by the scale and complexity of the compensation and mitigation issue, and it would be a good idea if the Government and HS2 got together with the various stakeholders to try to thrash out a special, purpose-built compensation and mitigation law, because the current law is not adequate? I will give two examples from my constituency. The tunnel goes underneath the houses of some people who live in Primrose Hill. They have been assured by the engineers that it will cause no problems, but they will not be able to demonstrate that it has caused no problems until two or three years after the line starts operating. In the meantime, a potential purchaser will not believe anything they are told.
In Drummond street, there are a lot of small cafés and shops that are utterly dependent on the passing trade to and from Euston station. They are going to have a wall built across their street for 10 years of a scale that matches the Berlin wall. I do not think HS2 will have soldiers on the other side with sub-machine-guns. However, there will be no chance of passing trade, and those small business will get no compensation at all.
Harry Cotterell: The short answer to that, Mr Dobson, is absolutely yes. We would be 100% in favour, and we would be delighted if that was to happen. I think there has been a general understanding in the property world at large for a long time that the compulsory purchase system is unfit for purpose. There has not been an appetite to fix it because of the cost and the fact that, generally speaking, apart from when you have a major project such as this, it is not a particularly interesting subject for politicians or the media at large, due to the huge technological impact.
Ralph Smyth: I think that there is certainly a case for considering whether hybrid Bills are fit for the 21st century. They are devices that date from the Victorian era, or indeed before. Is this the best way? Is this the mechanism that is needed for 21st-century infrastructure? Parliament might have an appetite for changing the way when it comes to phase 2. We can learn lots from the French, who try to have national public debate commissions that involve people at an early stage and try to get the issues resolved then, rather than what is happening in the UK, where everything will be brought to Parliament and there will be what will probably be the biggest Bill in parliamentary history for some Members to sit on a Committee about.
Ralph Smyth: We commissioned that report jointly with the Royal Society for the Protection of Birds and the Campaign for Better Transport, which will be appearing before the Committee on Thursday. There were a couple of examples there, where it was very difficult to quantify the carbon benefit. For example, we picked up that there was potentially a very big saving from having services going from the continent up to places such as Birmingham and Manchester. Of course, there could be an EU referendum between now and then and we do not know what will happen to border control, so it is very difficult to predict now whether such services would be viable in 10 or 15 years’ time. Certainly, however, that is a good example.
Another issue is that we are expecting a roads Green Paper this week, and there is a very real risk that potential passengers for HS2 will be taken away if there is a major road building programme. Similarly, if there is a major airport expansion programme following the recommendations of the Airports Commission, the economic and the environmental case for HS2 will be taken away. We definitely agree that there needs to be synergy and a bigger transport strategy, and we hope the Department will deliver that by the end of the year.
May I ask you about HS2 Ltd’s exceptional hardship scheme and how it has operated up to now, and also about the community forums? Have the forums been well run, and if they have not been particularly well run is it a geographical issue, with them being good in some areas and not so good in others?
Andrew Shirley: On the community forums, I think it depends on the area, on who comes and who does not come, and on whom they represent. There has been hesitance on the part of HS2 to release information—as far as the information that we want out of it is concerned—until such a time as it can roll it out to the community forums. What it has not got a grip of is that people who are trying to run businesses across the route of the railway and are having their land taken are somewhat different from those who live a couple of miles away and suffer a different load of impacts. CLA members and landowners have gone to community forums, a map has been produced and they have been told, “We are putting this wonderful bund up and it will stop all the noise,” and the farmer has sat there and said, “Yes, but that’s across my land and no one has discussed it with me.” That is the issue with the community forums.
The exceptional hardship scheme is exactly what it says. It is for exceptional hardship and, in fact, it is so exceptional that only a third of applicants get through the process. The other two thirds are left having to foot the loss, either by selling their property for a lot less or having to stay put when they want to move. Some of the judgments seem to be slightly subjective, with people in neighbouring properties marketing them the same way and one being successful and the other not. There is a real issue there. The scheme does not address enough of the impact, and the advantage of a property bond scheme is that it should be wider than that.
There may be some notes on this that I cannot find. Obviously there will be environmental damage while we dig a large line through the country, but once it is stabilised, you have a protected area. Has there been any work looking at that corridor? Farmers will not work on it, and it is protected as such. The M6 has a huge adder population that has suddenly appeared because of the protected environment, and there is an opportunity to develop and grow such sites of special scientific interest because we are engineering this unusual environment.
Ralph Smyth: There have been various claims on the Transport Committee. Some parties said that HS2 would be a Berlin wall for wildlife, and others called it a dual carriageway for nature. It is certainly worth remembering that the iron curtain was a wildlife reserve, because any humans would be shot if they tried to cross it. It was great for adders, or whatever else flourished there.
There are a number of SSSIs along existing railway lines. Although it would be a linear feature, the latest ecological policy shows that what you need is interconnectedness. HS2 should not be seen as a green corridor; it should be trying to bridge the gaps. Things such as green bridges, where you might have a green strip on either side of an access for farmers or a right-of-way bridge, can help make a more permeable landscape. There are definitely opportunities. The problem is a lack of evidence and understanding of the impacts of such large linear features, and how best not just to mitigate them but to try to have a net gain for wildlife in the longer term.
My question was not an anti-farming comment. Managed land can obviously create some amazing environmental positives, but it is quite unusual to have such a long piece of wild, fenced-in, protected land. Having lived on a farm with a rabbit population, I do understand what you mean.
Ralph Smyth: They have announced some tree planting, which is a step forward, but there are still many areas of concern. Again, a lot more detail is needed. The environmental statement is not really at a draft stage yet, which is why it is going to be really important that we have not only a decent consultation period once the hybrid Bill is produced, but that hopefully some information comes out beforehand.
That goes back to the community forums. There is a real tension between HS2 Ltd not wanting to put out information until they are sure it is finalised, particularly as it might have blight implications—if communities feel that they are being given information late and it is drip, drip, drip, there is a real tension. If HS2 Ltd had an open data strategy to look at how much data they can release, and if they engaged the public on that, it would perhaps be a bit less difficult than it is at the moment, where people feel either that the information is not there or that it is wrong.
As a supplementary to that, here is an interesting thought. The scale of the biodiversity offsetting is going to be enormous because of the scale of the project. Given that the ancient woodlands are now suffering multiple attacks, from Chalara in the case of the ash to sudden oak death syndrome—oak and ash are certainly significantly affected—might there be an opportunity here from the perspective of the CPRE to do some subsequent planting in some of our woodlands, so that they are not as badly decimated by disease, which we can predict will take perhaps a third of the species population?
Ralph Smyth: There is a real tension here, because the convention is that only the land needed for the engineering of the railway should be compulsory purchased, but modern ecological best practice—the White Paper on the natural environment—highlights the need for interventions across a wider area. So, I think there have been quite a few discussions at the HS2 environmental NGO forum about off-site planting—trying to improve the connectivity between bits of ancient woodland. However, of course, you then have the issue of some landowners not being so keen for that. Perhaps that plan might intrude on the middle of a big field, which might make that field less economic to farm. So there are many tensions and it is difficult. What we need to do is to try to deal with them early on, rather than leaving them to the last minute. But how the hybrid Bill looks at the management of land off the direct route will be a big issue.
Andrew Shirley: The operation of the scheme is based on the fact that the majority of people do not actually want to move. Therefore, it is a scheme that is encouraging people to stay put. So, the costs should not be horrendous. You are not flinging money at people just to keep them happy. You are actually saying, “If you can prove a loss, then we’ll look after you, because that loss is directly as a result of the scheme.” That is the basis we will go on.
I think that most people will stay put. They will want to stay put in their house. They will only leave if the impact is so bad that they need to leave, and then they will be looked after. It is compensating people properly for loss. That will be done on what I have described as an amalgamated map. So, HS2 will produce a map that shows all the contours: it will be the visual impact; it will be the noise; it will be the transport routes; it will be the quarrying routes; it will be the whole lot. So you have an integrated map that will define the extent of the impacts. There will be a scientific assessment, rather than just deciding at an arbitrary 60 metres. So, you would have a properly quantifiable impact on a map.
Mr Cotterell and Mr Shirley, you said in your written evidence that the Bill should be amended to provide for a duty to pay fair compensation. Is there anything you would like to add in relation to what you mean by “fair” in that context?
Andrew Shirley: Ultimately, as I outlined earlier, the duty is not to pay a penny more than the loss. What that enables authorities to do is to find the lowest value of land that has been sold and to try to beat the claimant down in their claim. So, not only do you take the lowest value of the land but you also say, “Yes, but you know, you say you spent 30 hours chasing your sheep; we think you only spent five hours, and we’ll reduce your time from £20 an hour to £10 an hour.” So, you end up being, as an individual, cut back all the time.
If there was a way, and I think this is where the independent expert comes in, of trying to quantify that and ensuring that it is fair going ahead, and not simply what the acquirer can get away with—in the last two weeks, we have had letters from our members with road schemes. What the acquiring authority does is just stop talking to you. If they do not like what you are asking, they just stop talking to you and at some point your only choice is to take the acquirer to tribunal, and that is the equivalent of taking the acquirer to the High Court. Usually the courts work very well for those who are very wealthy or very poor; the majority of people actually fall in the middle and suffer loss. However, as I say, the acquiring authority has got no interest in pursuing a solution quickly—it just has to sit back and wait.
May I ask you to beware of what might happen? Crossrail—a project I have always supported—ended up paying people compensation for the loss of their business virtually a year after they had lost their business. So, you need to be looking carefully at that aspect.
Okay gentlemen, thanks very much for coming along. Again, if there is any information that you think would be helpful for the Committee, please send it to the Clerk.
Adjourned till Thursday 11 July at half-past Eleven o’clock.
Written evidence reported to the House
HSR 01 Camden London Borough Council
HSR 02 Dr Paul Hoad
HSR 03 Dr Chris Eaglen LLB
HSR 04 Andrew Bodman
HSR 05 Wendover HS2 action group (WHS2)
HSR 06 HS2 Action Alliance
HSR 07 Greengauge 21
HSR 08 Charlie Sarell
HSR 09 Country Land and Business Association