HS2 in Hansard 21/10/2014

High Speed 2 (Compensation)
Motion made, and Question proposed, That this House
do now adjourn.—(Mel Stride.)
7.3 pm
Mrs Cheryl Gillan (Chesham and Amersham) (Con):
I am grateful for the opportunity to raise the issue of
compensation for those adversely affected by High Speed 2.
I thank colleagues for being here alongside me, as well
as those who were unable to attend but have contacted
my office. Since its announcement, and in common with
others such as my right hon. Friends the Members for
Aylesbury (Mr Lidington) and for Buckingham (John
Bercow), I have received numerous representations from
people affected by HS2. The theme, I am afraid, is a
common one: despair at the current compensation
arrangements and a feeling of powerlessness from people
who think they cannot influence the process.
Since HS2’s announcement, I have consistently pushed
for a fair and generous compensation package. Sadly,
despite six public consultations and four years of anxiety
for my constituents in Chesham and Amersham and for
other colleagues’ constituents, the current proposals for
compensation remain as inadequate as ever. However,
before the Government’s announcement of their response
to the latest consultation, I wanted to give the Minister
one more chance finally to listen to people and to put
things right.
There have been promises fromMinisters. The overriding
principle of this project ought to be that no one should
have to suffer a financial penalty or be trapped in their
home because of HS2. That view is shared by many of
us, including my hon. Friend the Member for Ruislip,
Northwood and Pinner (Mr Hurd), who is currently on
paternity leave but who would otherwise have been
present. Unfortunately, the reality shows that that is not
the case. Some properties have been on the market for
years, and people are trapped and unable to move on
with their lives.
Notwithstanding those ministerial promises, the
compensation schemes to date have beenwoefully derisory,
and people are facing substantial financial loss. The
Transport Secretary promised that compensation would
be “full and fair” for “those most directly affected”, and
the Prime Minister told me personally that compensation
schemes would be “generous and fair”. Given that other
major infrastructure projects are in the pipeline, it is
time for a rethink on compensation. I hope that the
Minister will respond positively, with the aim of introducing
fairer arrangements.
Mr Jim Cunningham (Coventry South) (Lab): I
appreciated the fact that when members of the HS2
Committee visited Coventry andKenilworth, they allowed
me to accompany them and explain the situation to
some of my constituents. As for the question of negative
equity—I know that the right hon. Lady will agree with
me about this—some people in the Coventry area who
have invested their life savings will not qualify for any
form of compensation.
Mrs Gillan: The hon. Gentleman has made a very
valid point, and I shall say more about it shortly.
There are problems with the current compensation
proposals. They will compensate only about 2% of
those who live within 1 kmof HS2, or within 250 metres
869 Business without Debate 21 OCTOBER 2014 870
from a tunnel. As the hon. Gentleman has just pointed
out, despite widespread evidence of blight, the vast
majority of people affected byHS2will not be compensated
fairly, because the Government have consistently linked
the scheme to distance from the line and have ignored
the wider effects. HS2 Action Alliance has calculated
that only about 172,000 people will receive any kind of
compensation, although more than a million live within
1 km of HS2 and many are being adversely affected.
Frank Dobson (Holborn and St Pancras) (Lab): In
my area, around Euston, people will be living next to
the biggest construction site in Europe for 10 or 15 years.
They will be living within a yard of the works. However,
they will be entitled to no compensation at all. As the
right hon. Lady will know, uncertainty is a major source
of blight. The revised proposals for Eustonwere supposed
to be presented next month, but that has now been
postponed until after the general election.
Mrs Gillan: The right hon. Gentleman and I have
stood shoulder to shoulder across the House on this
issue. There is no party divide on it. I know that my
right hon. Friend the Member for Uxbridge and South
Ruislip (Sir John Randall) is similarly concerned, as are
many other colleagues. The point is well made.
According to estimates in data commissioned by the
Government from PricewaterhouseCoopers, the average
loss to a homeowner is 20% up to 500 metres from the
line, 30% up to 300 metres away, and 40% up to 120 metres
away. Moreover, that blight is not temporary. PwC says
that it will be at its worst until at least 2023. The
Government have failed to recognise that, or the fact
that the scale of suffering extends well beyond the line
itself.
As things stand, there is not even sufficient compensation
for those living above tunnels. HS2 Ltd believes that
home owners are not unduly affected by tunnels, butmy
right hon. and learned Friend the Member forKenilworth
and Southam (JeremyWright), for example, informs me
that the property market in his constituency tells a very
different story. There is no compensation for those
affected by construction, although it will inevitably be
very extensive in impact and duration. Constituents of
my right hon. Friend the Member for Aylesbury
(Mr Lidington) inWendover and StokeMandeville live
very close to the safeguarded area and the proposed
construction sites, but they do not qualify for compensation
under the boundary rules. It is grossly unfair that they
should be expected to endure the disturbance of
construction and operation as well as putting up with a
loss of value to their properties unless they can prove an
exceptional need to sell. Some of my right hon. Friend’s
constituents say that estate agents simply refuse to place
their properties on the market and that potential purchasers
have been refused any mortgage on properties because
of HS2. This is emblematic of the broad injustice of the
current compensation measures.
The compensation schemes announced and operating
to date are also problematic. The exceptional hardship
scheme and the need to sell schemes have been arduous
and complicated for many of our constituents, and in
my view they are often wholly unjust. The lack of
consistency in the decision-making process has been
incredibly frustrating for those involved, and the accuracy
of valuations has been the subject of contention in
many areas. There has been little transparency in this
process. The latest proposals—the alternative cash offer
and the home owner payment—offer poor value to the
taxpayer and involve arbitrary sums that bear little
relation to the actual loss suffered by the individual.
Nigel Adams (Selby and Ainsty) (Con): I support the
principle of the alternative cash offer for those living
within 120 metres, but the scheme simply does not work
for those living beyond that line. Does my right hon.
Friend understand the concerns of my constituent,
Mr Watson from Church Fenton, who e-mailed me
earlier today to say that he was not at all happy to lose
£95,000 from the value of his property? He described it
as writing a cheque to the Government for £95,000 only
to receive a Government refund of £7,500. That is
neither full nor fair.
Mrs Gillan: Myhon. Friend is absolutely right. Phase 2
will affect his constituency, and the problems that we
are having with phase 1 will come back to haunt us all
on phase 2, so it is good that he is raising these matters
early on behalf of his constituents. He is absolutely
right to suggest that the alternative cash offer applies
only to a limited number of home owners. As the
payment is based on a 10% loss and is capped at a
maximum of £100,000, it is completely unreflective of
the true loss in property value. It is not a strong enough
incentive for people to stay in their homes.
Jeremy Lefroy (Stafford) (Con): May I return for a
moment to the exceptional hardship scheme?Aconstituent
of mine, having arrived at a value that was supposed to
be fair, was then asked by HS2 to reduce the figure by
£20,000 so that it could get the property into a rentable
state. That is neither fair nor reasonable.
Mrs Gillan: My hon. Friend’s example speaks for
itself.
Mr Dominic Grieve (Beaconsfield) (Con): I wholly
endorse what my right hon. Friend is saying. The fact is
that many people in my constituency have homes of
very high value, but the compensation bears absolutely
no relationship to the investment that they have made in
purchasing the home, or to the fact that in many cases
the properties are heavily mortgaged and that their
losses will be colossal—running into millions of pounds
in many cases.
Mrs Gillan: My right hon. and learned Friend makes
an important point. Those people have worked hard,
saved and invested in those properties.
Sir William Cash (Stone) (Con): My right hon. Friend
is making an excellent speech. Those of us who are
between Birmingham and Manchester are extremely
glad that we are going to have the opportunity to
petition and to have our case heard by the High Speed
Rail (London – West Midlands) Bill Select Committee,
and we are grateful to her for everything she has done.
Mrs Gillan: I thank my hon. Friend. I glad to see that
the Chairman of the Committee, my hon. Friend the
Member for Poole (Mr Syms), is in his place. I note
that there are many hon. Members here tonight, and
871 High Speed 2 (Compensation) 21 OCTOBER 2014 High Speed 2 (Compensation) 872
[Mrs Gillan]
I welcome those who have just come into the Chamber.
It is important to put these points to the Minister in as
forceful a way as possible.
The home owner payment scheme proposes to give
home owner payments to those living between 120 metres
and 300 metres from the line. This once again limits
compensation by distance from the line. It also does
little to assist the functionality of the property market
in affected areas. The payments on offer are too low
and, as the effect of inflation is not considered, they
might be inaccurate as well.
Like other colleagues, I have many farmers and
landowners inmy constituency, and none of the schemes
properly addresses the impact of HS2 on them. I deal
with a number of organisations, including the Country
Land and Business Association and theNational Farmers
Union, that are campaigning hard to ensure that affected
landowners receive fair and timely compensation, and I
hope the Minister understands the special problems
facing farmers and growers. He is a farmer himself, so
I am hoping for that special understanding.
Mrs Caroline Spelman (Meriden) (Con): I am sure
my right hon. Friend is aware that for many farmers the
difficulty is that they are compensated at agricultural
prices, but where land is taken beyond the actual
requirements for the track, there is of course speculative
value in that land, and does she agree that it is important
that land-take is kept to a minimum?
Mrs Gillan: My right hon. Friend makes a valid point
and I entirely agree.
Concern has also been expressed to me by colleagues,
and, indeed,MrSpeaker, about the fact that compensation
has only currently been offered to owner-occupiers.
Owners of second homes or those living in social housing
receive no recompense, in spite of having to endure
years of disruption and intrusion in an identical fashion
to homeowners. If HS2 goes ahead, I would like to see
four main changes on compensation and a greater
safeguard for those affected.
First, I and many others have always supported the
introduction of a property bond scheme, as proposed
by HS2 Action Alliance, where the Government act as a
purchaser of last resort, and whereby buyers have the
confidence to buy properties on the open market at
unblighted prices. I believe this scheme would provide
greater functionality of blighted property markets, and
a better deal for all constituents.
PricewaterhouseCoopers’ March 2014 report on a
potential property bond scheme concluded that it was
a fair option, assuming it has a generous boundary.
Regrettably, there has been a continual reluctance to
adopt this option by Ministers, in spite of widespread
backing. The Department for Transport has rejected
this scheme in the past because of “money risks”.
However, figures from PwC demonstrate that the figures
are not prohibitive, and given the clear benefits of this
scheme in terms of supporting normal market activity, I
would ask the Minister to reconsider this scheme carefully
once again and recognise its obvious advantages for
both the market and those affected.
Secondly, the “need to sell” scheme needs revising to
remove the financial hardship criteria to allow those
who are unable to sell their properties because of HS2
to be free to move. Thirdly, the boundaries of the
voluntary purchase scheme should be widened to a
distance greater than the 120 metres, reflecting the true
levels of blight and to match the payments actually
made under HS1.
Fourthly, the whole compensation package should
take into proper account blight in urban areas, over
tunnels, and those who will suffer extensive construction
disruption. In particular, the Treasury should reconsider
once again the possibility of introducing stamp duty
exemptions for affected properties to re-stimulate the
property market.
Finally, if this project ever reaches its construction
phase it will cause blight and disruption still to be
identified. I believe that to protect my constituents, and
all our constituents who are affected by HS2, we need
an additional safeguard. I propose that the construction
code should be added to the Bill in order to implement
a binding and comprehensive duty of care that sets
standards and time scales for the conduct of HS2, its
contractors and sub-contractors during construction.
An independent ombudsman should be appointed to
adjudicate swiftly on abuses and with powers to compensate
those adversely affected.
The current £50 billion budget for HS2 is currently
being paid by the taxpayer, but it is also being paid at
the expense of those who will suffer as a result of this
project. Government have a duty of care to ensure that
those blighted by this highly disruptive infrastructure
project are fully and appropriately compensated. A
failure to do so is not only insulting, but also sets a
worrying precedent for inadequate mitigation for future
schemes.
The Minister will have noticed tonight that I speak
not just for my own constituency, but for many others,
and I urge him to listen to our electors and do the
decent thing by people whose lives have been turned
upside downby this risky, poorlymanaged and ill-conceived
project.
To borrow, and slightly change, the words from
“Macbeth”, “If it were done when ‘tis done, then ‘twere
well it were done properly.”
7.19 pm
The Parliamentary Under-Secretary of State forTransport
(Mr Robert Goodwill): May I congratulate my right
hon. Friend the Member for Chesham and Amersham
(Mrs Gillan) on securing this debate on the compensation
package for phase 1 of HS2. She has been a tireless
campaigner on the impact of HS2, and I recognise her
continuing determination to ensure that the Government
do not lose sight of those concerns. Indeed, the presence
of so many right hon. and hon. Members in the Chamber
underlines that point. I amaware that because of ministerial
responsibilities, some colleagues are not able to speak
on this, but I can assure the House that my right hon.
and learned Friend the Member for Kenilworth and
Southam (JeremyWright) and my right hon. Friend the
Member for Aylesbury (Mr Lidington) never let me
forget about the concerns of their constituents too.
I am aware that my right hon. Friend the Member for
Chesham and Amersham has recently asked a number
of parliamentary questions in relation to HS2 and has
873 High Speed 2 (Compensation) 21 OCTOBER 2014 High Speed 2 (Compensation) 874
been in regular correspondence with my Department. I
must also explain why she has not had a response to her
recent letter on behalf of the HS2 Action Alliance. The
issue at the heart of this correspondence is the way in
which we have estimated the number of properties
within particular distances of HS2, including the data
used in replying to a parliamentary question in November
2013. Estimating property counts in a given area is an
extremely complex and technical matter, and the
Department forTransport is currently preparing a detailed
response.
I am pleased to be responding to this debate on a
subject that is of such great importance to my right
hon. Friend and her constituents. Before I respond to
the points she has raised, it is perhaps worth taking the
opportunity to set out the current position on the
compensation package for HS2. Measures to assist
property owners and occupiers affected by new
infrastructure have developed over the years through a
mixture of statute, case law and established practice and
are referred to as the compensation code. Although the
Government remain confident that reliance on the existing
compensation code is appropriate for the majority of
infrastructure schemes, we believe that the exceptional
nature of the HS2 project justifies a different approach
and the Government have long been committed to
introducing measures for those directly affected by HS2
that go beyond what is required by law.
At present, we have the exceptional hardship scheme
in place for phase 1 of HS2. That has always been
intended as an interim measure to assist those property
owners who have an urgent need to sell their home but
have not been able to do so, except at a substantially
reduced price, as a direct result of the announcement of
the route for the railway. We have also introduced
express purchase for owner-occupied properties within
the safeguarded area. There are detailed maps available
on the HS2 website to allow people to determine where
their properties are in relation to the safeguarded area.
Express purchase was introduced from 9 April 2014.
I am pleased to be able to update Members on the
properties that we have purchased under the schemes
that are currently open. To the end of September 2014,
we have spent £110.3 million purchasing 162 properties
affected by phase 1.
Alec Shelbrooke (Elmet and Rothwell) (Con): The
problem in my constituency is that, under this scheme,
HS2 has not given the market value for these properties,
and it is driving down the price of those properties.
That matter was raised with HS2 back in August, and
I still have not received a response.
Mr Goodwill: The instruction to our valuers was that
they should value properties at the previous unblighted
price.
The properties have been purchased under the exceptional
hardship scheme, the statutory blight arrangements,
and through express purchase. Compensation for
disturbance costs and reasonable moving costs are not
included in the expenditure figures.
Michael Fabricant (Lichfield) (Con): My hon. Friend
will know that my constituency is affected not only by
phase 1, but by phase 2. Does he agree that, as a matter
of principle, whatever compensation schemes are put in
place for phase 1, and hopefully, asmy right hon. Friend
the Member for Chesham and Amersham (Mrs Gillan)
has said, they will be generous ones, they should apply
equally to those in phase 2?
Mr Goodwill: My hon. Friend makes a valid point. If
we can reach a fair compensation package for phase 1,
we will certainly need to bear that in mind as we look at
phase 2. I suspect that those affected by phase 2 would
expect no less.
Mr Jim Cunningham: There are people in Coventry
who are not covered by any compensation scheme, and
yet they have invested their life savings in their properties.
They cannot sell their properties now. What will the
Government do about that?
Mr Goodwill: That is precisely why we are putting
these compensation schemes in place. We also have an
exceptional hardship scheme in place for phase 2. To the
end of September 2014, we have purchased 32 properties
at a cost of £15.1 million.
Following the property compensation consultation in
2013 for the London to west midlands HS2 route, the
Government decided to use five criteria to select the
most appropriate long-term discretionary property
compensation packages for phase 1 of HS2. Those
criteria are: fairness; value for money;community cohesion;
feasibility, efficiency and comprehensibility; and the
functioning of the housing market. Accordingly, the
Government announced on 9 April the long-term
compensation schemes that would be introduced for
phase 1. They included express purchase, which I have
already mentioned.
Mrs Gillan: The Minister will correct me if I am
wrong, but did I hear him cite the word “fairness”?
Mr Goodwill: Precisely. Fairness is at the heart of our
approach—fairness to those who have to move because
their properties are being demolished or are so close to
the line; and fairness to those who want to stay in their
communities and maintain community cohesion.
We announced a voluntary purchase offer thatwould be
available to people up to 120 metres from the railway
in rural areas. Eligible owner-occupiers between the
safeguarded area and 120 metres will be able to ask
the Government to buy their homes at the unblighted
market value. The scheme will be opened to applicants
by the end of 2014 following further consultation on
supplementary cash payment schemes.
Mr Jim Cunningham: As I said, we have people in
Coventry outside the 120-metre area who have invested
their life savings in a property, but cannot sell it. How
will they be compensated?
Mr Goodwill: I will move on to the measures for those
further away, but we understand that many people’s
biggest asset is their home. In fact, many people see
their home as part of their retirement package.
We announced a “need to sell”scheme to help property
owners who have a compelling need to sell their home,
but are unable to do so because of our plans to build
HS2. There will be no outer boundary to that scheme,
which will also be opened to applicants by the end
875 High Speed 2 (Compensation) 21 OCTOBER 2014 High Speed 2 (Compensation) 876
[Mr Goodwill]
of 2014. It will succeed the current exceptional hardship
scheme for phase 1, which will then be closed.When we
implement the voluntary purchase and “need to sell”
schemes later this year, we will publish detailed guidance
about how they will work.
We have also announced rent back, a rule that means
that if a property that the Government have purchased
under any of our schemes is suitable for letting, the
previous owner may, if they wish, be considered for a
Crown tenancy. That scheme was introduced on 9 April.
We have consulted separately over the summer on
two supplementary cash payment schemes. The first
would provide that, for owner-occupiers in the voluntary
purchase area, an alternative cash offer of 10% of the
unblighted market value of their property, with a cap of
£100,000 and a minimum payment of £30,000, would
apply.
Sir William Cash: Does the Minister accept that this
is a wholly inadequate package? We sincerely trust that
the Committee considering the Bill will listen carefully
to the analysis that we will put forward in our petitions,
because it is petitions to this House that ought to make
the difference.
Mr Goodwill: I pay tribute to the petitions Committee,
which has set about carrying out its role in aworkmanlike
way. My hon. Friend the Member for Poole (Mr Syms),
the Chair of that Committee, is in the Chamber to hear
this debate.
That cash payment scheme might help some people
to decide that they do not need to move to protect the
value of their investment in their home. We have also
consulted on a home owner payment scheme to provide
cash payments to eligible owner-occupiers between
120 metres and 300 metres from the centre line, following
Royal Assent of the phase 1 hybrid Bill, to enable
affected residents to share early in the future economic
benefits of the railway. We have sought views on
consequential changes to the voluntary purchase offer
and the “need to sell” scheme.
Mr Grieve: What about stamp duty? It is now a very
substantial tax, and anyone who sells their house, even
under the voluntary purchase scheme, will have to pay
stamp duty on a fresh purchase. Those people moving
to a property of substantial value, which is the sort that
they are likely to move into, will face a serious penalty,
and one that they would not have wished on themselves,
because they had no intention of moving.
Mr Goodwill: I understand my right hon. and learned
Friend’s point. Stamp duty and moving costs will be
payable for those in the closest band to the railway. We
will announce the outcome of the consultation to which
I referred later this year.
On the long-standing campaign of my right hon.
Friend the Member for Chesham and Amersham for a
longer tunnel through the Chilterns, we have considered
a range of options for tunnels.
Frank Dobson: I do not wish to delay the Minister in
turning his attention to the tunnel, but can he explain
why the terms for urban areas are different from those
for rural areas?
Mr Goodwill: We take the view that the level of
disruption in rural areas, particularly the effect on
property prices, is absolutely different from that in
urban areas, where properties can be close to the railway
but there might be many houses in between, and in
many cases there is already a railway established, for
example near Euston station, which no doubt people
were aware of when they moved there.
Frank Dobson: My constituents might not fancy the
idea of a new station, but what they really do not want
is having to live next to a construction site for a decade
or more. That is what they are bothered about.
Mr Goodwill: Yes, and I spent time with the right
hon. Gentleman in his constituency, along with the
leader of his council, looking at some of the mitigation
that can be put in place.
I will talk a little about the property bond. My right
hon. Friend referred to theGovernment’s decision against
a property bond as a means of providing compensation
for generalised blight caused by HS2. The main aim of
the property bond concept is to ensure that eligible
property owners do not suffer unreasonable losses because
of any reduction in the market value of their properties
caused by a proposed development. The defining feature
of a property bond is the idea that eligible property
owners, at an early stage in a project’s development,
would be given a specific and binding promise of a
well-defined, individual settlement, which the property
ownerwould be entitled to redeem in specific circumstances.
Should the property transfer ownership, so too would
the bond. The outcome of a property bond scheme
would reflect the way the scheme influenced property
buyers, vendors and professionals throughout the lifetime
of the relevant infrastructure project.Without evidence
of those behaviours and decisions from actual schemes,
it is very hard to assess the performance of a property
bond for HS2.
The Government continue to believe that the property
bond concept has merit, and that it was right to put it
forward as an option in the property compensation
consultation in 2013. However, taking all consultation
responses and further practical and analytical findings
into account, we continue to be concerned that the
effects of a property bond on the behaviour and decisions
of property owners, professionals and especially property
buyers remain unknown and hard to assess.
In conclusion—
Several hon. Members rose—
Mr Goodwill: I have only 50 seconds remaining, so
I will not give way.
In conclusion, I again congratulate my right hon.
Friend on her unflagging energy in seeking the best
outcome for those affected by HS2, and I very much
recognise the importance of the compensation package
to her and her constituents. I note the concerns she has
raised and hope that I have shown hon. Members that
we have a package in place that meets the Government’s
policy objectives for compensation: fairness, value for
money, community cohesion, feasibility, efficiency,
comprehensibility, and the functioning of the housing
market. I am confident that the compensation package,
877 High Speed 2 (Compensation) 21 OCTOBER 2014 High Speed 2 (Compensation) 878
once fully in place alongside the protections already
available through the compensation code, will perform
well against those criteria.
Question put and agreed to.
7.33 pm
House adjourned.

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