Compensation scheme for tenants

High Speed Rail (West Midlands - Crewe) Bill – in a Public Bill Committee at 2:15 pm on 25th June 2019.

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‘(1) The Secretary of State must by regulations make provision for a scheme to compensate tenants adversely affected by the scheduled works.

(2) The scheme must make provision for tenant occupants of—

(a) house boats;

(b) mobile homes;

(c) static homes including caravans;

(d) farms; and

(e) other private properties.

(3) Regulations under this section may contain such supplementary, incidental, consequential or transitional provision as the Secretary of State considers necessary or expedient.

(4) Regulations under this section must be made by statutory instrument.

(5) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’—

Brought up, and read the First time.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

I beg to move, That the clause be read a Second time.

Having listened to the concerns of the public, Labour proposes new clause 4. It was evident at the petitions stage of the Bill that along sections of the route HS2 would cause great disruption for residents, but there has been deep dissatisfaction with the way that HS2 Ltd has handled compensation. There have rightly been changes in practice to ensure that landowners and freeholders receive compensation for the loss of their homes, but the issue has not been completely resolved. The Government have provided compensation for individuals, but the new clause addresses where they have fallen short. Its purpose is to ensure that compensation is paid to tenants such as tenant farmers, who often live in close proximity to their place of work, and who will now have responsibility for finding new accommodation, and are more than likely to face longer journey times to work, and residents in urban settings who will lose their home as a result of HS2.

We cannot ignore the fact that across the UK, there are many private rental properties, which many people make their home for a significant time; like social housing tenants, they often plan for it to remain their home for their whole life. There are tenants in other forms of accommodation, too, such as houseboats, which cannot necessarily move, permanent caravans and mobile home parks. Some of those who rent comprise the poorest in our society. Uprooting them and causing them to move—possibly to a property demanding higher rent—could result in greater inconvenience and expenditure. It could mean moving costs and longer travel times. Clearly, HS2 must pay an appropriate amount of compensation for the disruption that it causes these residents.

Labour is concerned that this issue has been overlooked by the Government. We therefore believe that it is necessary for the Government to produce a report on the impact that the HS2 programme has on those who rent different forms of accommodation, and to come up with a compensation scheme that provides reasonable mitigation for the costs and disruption that the programme has caused.

Photo of Nusrat Ghani Nusrat Ghani Parliamentary Under-Secretary (Department for Transport), Assistant Whip (HM Treasury) 2:30 pm, 25th June 2019

The hon. Gentleman raises a very important point, and it is vital that HS2 engages fully with residents and deals with them swiftly, clearly and with humility. As this is such a sensitive issue, and no doubt many people will focus on it, I will take a moment or two to respond.

Most types of tenants affected by the scheme are already provided for under current compensation law. Where they are not, the Government can use flexible, non-statutory arrangements to provide support. Where the law is silent, the Government have committed to taking forward appropriate measures in discussion with stakeholders and residents, should it be necessary to do so. Matters of tenant compensation are complex, because they depend on an individual’s tenancy arrangements. However, I will endeavour to summarise briefly the support that is available. I will outline the legal position, the comprehensive non-statutory schemes that the Government have developed to assist property owners who are affected by HS2, and the work that the Government are taking forward following parliamentary scrutiny of high-speed rail hybrid Bills.

The elements of compensation payable are set by the Ministry of Housing, Communities and Local Government, and apply to all Government-led infrastructure projects, including HS2. The HS2 scheme applies these arrangements, which have been debated, agreed and set by Parliament, together with the vast body of case law on the subject. Compensation is based on the principle of financial equivalence: the person affected should be financially compensated with no less and no more than what they have lost. Compensation due to tenants is therefore commensurate with their interests and the land they occupy; for example, if a private tenant property is subject to compulsory purchase, the tenant should be eligible for various heads of claim that comprise the market value of the leasehold interest in the land. They might also be eligible for a home loss payment for the loss of their home, and for reasonable moving costs.

The key part of the non-statutory arrangements is a consideration of atypical properties and special circumstances. These are established, funded arrangements that apply to tenants as well as property owners. I am pleased to say that in response to concerns raised by the phase 2a Commons Committee, the Government have committed to improving guidance on those atypical arrangements and raising awareness and accessibility, so that we can continue to provide the right support at the right time to people who need to use them. The Government have also been charged with developing a non-statutory prolonged disruption scheme in response to the phase 1 Lords Committee’s concerns on this subject. The Government intend shortly to release details of the scheme, which will assist residents who have different types of tenure, and who are affected by significant construction noise across the HS2 route.

Finally, in response to concerns raised by the phase 2a Commons Committee, the Government have committed to taking forward three strands of work on compensation for owners of houseboats and other types of moveable home. The first is to explore whether there is a case for bringing houseboats into line with caravans on statutory home loss payment entitlement. The second is to establish whether there is a case for introducing regulations to compensate houseboat residents who are affected by significant noise disturbance from rail works. The third is to explore the potential use of non-statutory compensation measures in advance of legislation being introduced, should the case for change be established. The Government are committed to taking forward appropriate measures in discussion with stakeholders and affected residents.

In conclusion, I believe the Government’s established non-statutory arrangements, which are as broad and inclusive as possible, are an appropriate and flexible tool to support all types of residents affected by the HS2 scheme. That is why I believe the proposed new clause is unnecessary, and I would urge the hon. Gentleman to withdraw it.

Photo of Matt Rodda Matt Rodda Shadow Minister (Transport) (Buses)

I thank the Minister for her response, and for mentioning the legal principles of the compensation scheme. As she said, however, the Government’s response is still a work in progress. For that reason, and because of the serious public concern about rented properties, I will press the new clause to a vote.

Question put, That the clause be read a Second time.

Division number 4 High Speed Rail (West Midlands - Crewe) Bill — Compensation scheme for tenants

Aye: 6 MPs

No: 8 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 6, Noes 8.

Question accordingly negatived.