Channel Tunnel Rail Link

HC Deb 06 March 1995 vol 256 cc118-24

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]

10.13 pm

Mr. Andrew Rowe (Mid-Kent)

I am not in my usual place, because I think it useful for my hon. Friend the Minister and me to be able to see each other in an uncrowded Chamber.

I am grateful to my hon. Friend for being present to answer the debate. I realise full well that he has an instinctive sympathy with many of the things that I say, whatever his departmental brief causes him to say in practice, so nothing that I say is in any way a personal criticism of himself.

In this short debate, I shall raise two closely related matters: first, the recent report of the ombudsman on the Department of Transport's handling of the blight that has been caused by the channel tunnel rail link; and secondly, the context in which that report arose.

Three Kent Members of Parliament submitted specimen cases to the ombudsman of constituents who had suffered grievous hardship as a result of the proposal to build the link. As a result, the ombudsman found that the Department of Transport had been guilty of maladministration, in that it had failed to consider the possible need to provide redress for persons suffering extreme or exceptional hardship, who were not covered by the various compensation schemes.

In rejecting the report—for only the second time in the ombudsman's history—the Department argues that the project is not exceptional, that it never fell into limbo, and that it is impossible to devise a scheme that would be able to define "exceptional" in a way in which would limit the cost to acceptable levels.

Throughout Sir Patrick Brown's evidence to the Committee, he rightly emphasised that his job was to carry out ministerial policy, and whenever it helped him to do so, he quoted Ministers. Yet, when faced with a statement from his Secretary of State that declared:

The rail link is … not just another investment project and we shall be ridiculed if we appear to treat it in that way. It has become a symbol, both at home and abroad, of our whole approach to Europe and our ability to look beyond the short-term", he lightly dismisses the remark as merely "appropriate rhetoric".

What is more, he argues that, since all the cases referred to the ombudsman were examples of what he calls "generalised blight", it would have been impossible to work out a scheme to compensate any of them without putting the Department into an untenable position. Well, he is wrong on several counts.

First, both British Rail and Union Railways have had schemes to compensate in exceptional cases. Since the former was ultimately answerable to the Government as a nationalised industry, and the latter was set up as a wholly owned subsidiary of British Rail, that seems quite a good pair of precedents.

Secondly, as my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley), who is graciously in his place tonight, pointed out to the Select Committee—in a letter that he was kind enough to copy to me—there are a number of cases which clearly are examples of specific blight, and despite the efforts of my right hon. Friend, the Department has made no attempt to help them.

Thirdly, the Department claims that the project never went into limbo, because efforts continued to find a way to advance it even when every criterion against which it was supposedly being measured had failed to be met.

What Government Departments must learn is that the public are neither stupid nor ill-informed. They had been told time and again that the Channel Tunnel Act 1987 prohibited any public subsidy to the line. They were told by the noble Lord Parkinson that the attempt to find a private sector partner had not succeeded, and they were entitled to assume that the project would not proceed.

I do not believe that any of them could have foreseen that, by setting up a nominally private company, albeit as a wholly owned subsidiary as British Rail, the Government would be able to claim that they were no longer breaching the Channel Tunnel Act if they poured subsidy into the project. Not even my sophisticated constituents could have predicted that particular sleight of hand. It was reasonable, therefore, to assume that the project would not proceed.

I believe that the ombudsman is right to describe the frantic but secret attempts of the Department to find ways of getting around the law as "limbo". I therefore believe that the Department should accept the report and offer our constituents, one of whom, in my case, has been unable to move his wife, who suffers from a progressive disease, to a more suitable house, at least a chance that they may be considered for compensation.

I turn now to the wider context. In recent months, a number of women have received considerable sums of money in compensation from the Government for having been sacked from the armed services for becoming pregnant. The sackings may subsequently have been deemed to infringe their rights, but nobody can pretend that at the time they joined up they had no idea of the possible consequences of their chosen course of action, because at the time the rules of the various services were quite clear.

The Criminal Injuries Compensation Board, which was set up in 1964, had by the end of March 1993 already paid out £909,446,123 for injuries sustained by citizens at the hands of criminals even if, according to its annual report,

sometimes they only sustain cuts, bruises or sprains. Those are two examples from a growing number in which the taxpayer is required to meet part of the cost of failures by public services to match the expectations of the citizen.

However, even as the Government accept more responsibility for helping their citizens to meet the unpredictable mischances that they encounter in their dealings with Government agencies or, in the case of the Criminal Injuries Compensation Board, their fellow citizens, there is a gross and indefensible gap in the Government's response.

At any time, the Department of Transport can decide to design a major infrastructure project and, once it has allowed its intention to become known, it plunges into ruin a large number of people who could not have known that the plan was going to be made, may even have good reasons for supposing that it would not come to pass, and can take no steps to minimise their loss.

As the permanent secretary to the Department of Transport made plain in his response to the ombudsman's report and in his evidence to the Select Committee, there is no need for the Government even to be certain that they have the funds to build a scheme on which they are working until after the necessary legislation has been passed. Last week, Sir Patrick told the Select Committee:

It is inevitable that there will be a planning phase, followed by a public inquiry or a Bill in Parliament and then a further period of detailed design and contracts before funding is committed. That is the way our system works. We know from recent experience that, even at that stage, the Government can decide either not to proceed at all or radically to alter a scheme. Oxleas wood, the project for which was recently completely changed, has been debated since 1979. The result of all that is that, for anything up to 25 years on any one project, hundreds of households can be robbed by the state with no hope of any redress.

I take as an example the village of Boxley in my constituency. There lives Mr. Gardiner in a house which was once worth more than £400,000. In a recent valuation, it was reckoned that the fall in property prices had sliced some £100,000 off that. That is fair enough: the property market has always risen and fallen. But what illustrates my point is that Mr. Gardiner had borrowed against his property to assist his business, which once had a turnover of more than £2 million and employed 12 people.

Then came the channel tunnel rail link, and the bank revalued his property. Its valuer decided that, because of the proximity of the link, the house could not be sold, valued it at nil, and the business collapsed. That is by no means an isolated example.

I shall take another village—Harrietsham, in which a young couple wanted to sell their starter home because their family was being born. They could not find a buyer except at such a grossly exploitative price that they would have been ruined and their debt to the mortgage company could never have been repaid.

Those are but two of hundreds of such tales. It is absurd to ask the owners to stay on in their homes, however unsuitable, until the project is completed.

The average householder stays some five or six years in his home before moving on. As Sir Patrick pointed out as part of his argument that there is nothing exceptional about the link, many roads projects take much longer than the projected 16 years of the link. As a result, thousands of families are expected to stay in their homes for four or five times the average length, regardless of their circumstances, or lose almost all the value of their most important, often their only, asset.

I think that the picture is an appalling one. A monopoly entrepreneur—the Government—arbitrarily decides to embark on a project that they may never even bring to fruition and thereby rob hundreds of their citizens with no intention of helping them to overcome their loss. Let them be mugged in the street and the taxpayer compensates them; let them be mugged in their own homes by the Government and they can whistle for help, for it will not come. The position is gross and unsustainable, and must be changed.

Sir Patrick told the Select Committee of his advice to Ministers on any possible change in the policy towards what he called generalised blight—which simply means specific blight for the individual, but blight that is outside the scope of the present statutory scheme. It does not mean that the misery is generalised: it is all too specific, family by family, home by home. He said that it would not represent value for money. That phrase, in the context of human misery, strikes a chill to the heart.

I know that my hon. Friend the Minister is concerned about the matter; we have discussed it. I want him to turn that concern into a public consultation on how best we can mitigate this great and widespread scandal.

Perhaps we should have a system where the valuer puts a price on a property and, if it has to be sold at a loss because of public works, part of the difference is made up. That would at least relieve the Department from being a massive property owner, which it is very reluctantly. Perhaps there should be established some sort of buyer of last resort, as I have previously suggested to the Government. Perhaps each project, as it is set up, should set up some form of mutual insurance to which any household in danger of blight might subscribe at the start of the scheme.

I do not know how to resolve this difficult problem, but what I am quite clear about is that it will not do for the Department merely to say, "Because it is too difficult, we shall do nothing." I urge my hon. Friend to make the effort. That would be value for money.

10.27 pm

The Minister for Railways and Roads (Mr. John Watts)

I thank my hon. Friend the Member for Mid-Kent (Mr. Rowe) for bringing this important subject to the attention of the House again.

The special report by the Parliamentary Commissioner for Administration on the channel tunnel rail link, which was published on 9 February, finds that there was maladministration by my Department. Exceptionally, the Department has not felt able to accept the commissioner's findings, and has therefore not offered redress. The case is a very unusual one, and the commissioner himself has recognised that by publishing the Department's response to the findings as an appendix to his report.

I should emphasise at this point that the response is a considered response by the Government, which was prepared after extensive discussion of the issues over a period of months, both with the commissioner and between Ministers. Since the report's publication, as my hon. Friend has explained, the permanent secretary to the Department of Transport, Sir Patrick Brown, has given evidence—on 1 March—to the Select Committee on the Parliamentary Commissioner for Administration. I see my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey), the Chairman of the Select Committee, in his place.

The Select Committee will make its own report to the House, and in advance of that it would be inappropriate for me to comment on the detail of the commissioner's findings or on any of the five specimen cases he considered. I can speak more generally, however, about past and present property purchase and compensation arrangements for the channel tunnel rail link project, and about the wider policy context in which they have been applied.

The commissioner's report finds maladministration from June 1990 to April 1994, when the route for the final section of the rail link was determined. The blight caused by the rail link in that period is what is described as generalised blight. To be absolutely clear about our terms, that is the blight that may arise in the early stages of a project while options are being examined and worked up, and while consultation is taking place. It can arise even earlier, when a feasibility study is being undertaken to decide whether a project should be pursued.

Generalised blight ceases at the point at which a project becomes sufficiently well defined for the likely land requirements to be identified on a plan and safeguarded from development. At that stage, statutory or equivalent blight provisions are triggered.

The period of generalised blight is undoubtedly one of uncertainty and great anxiety for property owners. Unfortunately, with controversial major proposals such as a possible new motorway or power station, that period of uncertainty can be prolonged. It is incumbent on us to try to ensure that it is not prolonged any more than is necessary, but it can be prolonged.

Nonetheless, it has been the policy of successive Governments that there should be no remedy for generalised blight. Indeed, until 1991, statutory remedies for blight were available only to people whose property was likely to be required for the scheme.

Mr. Rowe

What description would my hon. Friend give to the blight that, in his terms, is neither generalised nor statutory, but is very real? Such blight affects whole villages and communities, where it is clear that people will not buy a house because the line is close enough for them to think that it would be difficult for them to buy and sell the house on; at the same time, however, it is not susceptible to any form of compensation. How would my hon. Friend describe that kind of blight?

Mr. Watts

I am not sure that a suitable term comes readily to mind—

Mr. Rowe

Misery.

Mr. Watts

My hon. Friend has made his own suggestion. It is important that we recognise characteristics of generalised blight, and why successive Governments have not chosen to provide a remedy in respect of such blight.

Public authorities had certain additional discretionary powers to acquire land, but those were limited in scope. Before 1991, there were no general powers to buy homes that were simply blighted by proximity to proposed works.

Following a policy review, a consultation paper in 1989 proposed the introduction of new discretionary powers to allow the promoters of major public projects to deal with "blight by proximity". In the consultation paper, the proposal was made

in recognition of the length of the planning phase of many major development projects during which it may be as difficult as during later phases to sell a property which is likely to be substantially affected and devalued by the construction of the project or the prospect of its use. That proposal was taken forward, and subsequently endorsed by Parliament in the Planning and Compensation Act 1991.

Naturally, there were people who argued in response to the consultation paper and during the passage of the Bill that the provisions did not go far enough.

Sir John Stanley (Tonbridge and Mailing)

Does not my hon. Friend agree that, under the powers in section 62 of the Act to which he has referred, the Department of Transport is operating with a hardship scheme? That being the case, why is the Department so resistant to having a hardship scheme in the context of the channel tunnel rail link?

Mr. Watts

Union Railways is operating a hardship scheme. My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) has raised this matter in debate. I know that, in his view, the scheme that operates is far too limited. He also argues that it is not equivalent to the schemes that are operated on the highways side of the Department. There is a voluntary scheme being operated by Union Railways, because until the Channel Tunnel Rail Link Bill has completed its passage through the House and the other place, there is no statutory basis for compensation in relation to that scheme.

The proposal was taken forward and endorsed by Parliament in the Planning and Compensation Act 1991. My right hon. Friend the Member for Tonbridge and Mailing and a number of my hon. Friends argued that its provisions did not go far enough. Understandably, the very real problems being experienced by people whose property was blighted by the channel tunnel rail link were among the cases cited in support of this argument, although many other examples were also quoted. None the less, Parliament accepted that the improvements proposed by the Government struck the right balance, and proposals for further measures were rejected.

There are sound reasons why the Government did not consider it appropriate to go further. This is not simply a question of cost, although the Government must, of course, have regard to the fact that property and compensation costs are a charge on the project, and to the fact that a substantial increase in costs could mean that highly desirable projects would have to be deferred or could be made uneconomic.

Property purchase schemes are a mixed blessing for people in the area affected. Large-scale property purchase schemes severely distort the local property market, especially when the general property market is weak and, as experience of British Rail's early schemes showed, blight snowballs as the nature of the community changes, so more people move away. It takes many years for an area to recover from these effects.

If, for example, I accepted that the house of my hon. Friend the Member for Mid-Kent was blighted, that would almost automatically blight his neighbour's house. That is one of the fundamental objections to allowing the effect of such schemes to be too widespread.

The problems are difficult enough once a project has been defined sufficiently for safeguarding to take place. In the absence of a defined scheme, it is people's perception and fears of the effects of a possible project which give rise to generalised blight, often over a very wide area. It is only when there is a defined scheme that proper objective measurements, such as noise levels, can be applied and mitigating measures can be applied. This is the basis of our policy, and this is why there is no remedy for generalised blight.

Some hon. Members have argued, as indeed the commissioner has done in his report, that the Government could and should have introduced not a widespread remedy for generalised blight, but a more narrowly based scheme to deal with exceptional cases. However, it was the judgment of the Government at the time, and it remains the judgment of the Government now, that such a scheme would not have been appropriate.

The Government believe that, as a matter of policy, we should adopt an even-handed and consistent approach, both between individual cases and between projects.

Mr. Andrew Mackinlay (Thurrock)

I have listened carefully to the Minister. I put a straightforward question to him. If he was one of the people blighted, as Conservative Members have described, what would be his reaction, and what would he say to the Secretary of State for Transport?

Mr. Watts

I suspect that, as a property owner, I would react in much the same way as all property owners react if they find that the value of their property is being affected adversely. It is, however, not my personal judgment that I have to bring to bear in addressing this issue, but rather broader issues of public policy.

The Government believe that we should adopt an even-handed and consistent approach between individual cases and between projects. Pepper-potting of purchases is extremely dangerous, because every purchase blights all the neighbouring or equivalent properties. It is extremely difficult to define cases narrowly. I know this all too well from my own ministerial postbag, and from the variety of compassionate cases which hon. Members bring to my attention from time to time on major infrastructure projects throughout the country.

It is for those reasons that the Government concluded that the right solution was to press on as quickly as possible with the development of a robust project that could be taken forward so that blight could be ended.

Since the route was defined in 1994, Union Railways has been operating a voluntary purchase scheme, whereby qualifying owners of property to be compulsorily purchased can request Union Railways to purchase now on terms equivalent to compulsory purchase terms. Union Railways also operates a discretionary purchase scheme for properties outside the safeguarded zone, on terms broadly comparable—although I know that my right hon. Friend the Member for Tonbridge and Malling does not accept that the comparison is as close as it should be—to the scheme operated by the Highways Agency under the Planning and Compensation Act 1991.

I know that a number of my right hon. and hon. Friends, and Opposition Members, feel that those arrangements do not go wide enough. They are currently being reviewed in the light of the Court of Appeal judgment in the Owen case, and I shall announce the outcome of that review as soon as possible.

I look forward to seeing the report of the Select Committee for the Parliamentary Commissioner for Administration on the rail link case. I hope the House will find my explanation of current policy and arrangements helpful when it considers the Committee's report and will understand why it is not appropriate for me to comment further and in detail at this stage.

Question put and agreed to.

Adjourned accordingly at twenty minutes to Eleven o'clock.