Planning and Compensation Bill [H.L.] (Hansard, 4 February 1991)

HL Deb 04 February 1991 vol 525 cc973-1060 973

§ House again in Committee.

§ Baroness Blatch moved Amendment No. 287:

§ After Schedule 7, insert the following new schedule:

§ ("Compensation where permission for additional development granted after acquisition

§ 1. After section 22 of the Land Compensation Act 1961 there is inserted—

§ "Part IV

COMPENSATION WHERE PERMISSION FOR ADDITIONAL DEVELOPMENT GRANTED AFTER ACQUISITION

Compensation where planning decision made after acquisition.

§ 23.—(1) Where—

(a) any interest in land is compulsorily acquired or is sold to an authority possessing compulsory purchase powers and, before the end of the period of ten years beginning with the date of completion, a planning decision is made granting permission for the carrying out of additional development of any of the land; and
(b) the principal amount of the compensation which was payable in respect of the compulsory acquisition or, in the case of a sale by agreement, the amount of the purchase price, was less than the amount specified in subsection (2) of this section,

then, subject to the following provisions of this section, the person to whom the compensation or purchase price was payable shall be entitled, on a claim duly made by him, to compensation from the acquiring authority of an amount equal to the difference.

§ (2) The amount referred to in subsection (1)(b) of this section is the principal amount of the compensation which would have been payable in respect of a compulsory acquisition of the interest by the acquiring authority, in pursuance of a notice to treat served on the relevant date if—

(a) the planning decision mentioned in subsection (1)(a) of this section had been made before that date; and
(b) the permission granted by it had been in force on that date.

§ (3) No compensation shall be payable by virtue of this section in respect of a planning decision in so far as it relates to land acquired by the acquiring authority, whether compulsorily or by agreement—

(a) under section 142 or 143 of the Local Government, Planning and Land Act 1980 (acquisitions by urban development corporations and by highway authorities in connection with urban development areas);
(b) under the New Towns Act 1981 (acquisitions by development corporations and by high-ways authorities in connection with new town areas); or
(c) where the compulsory purchase order included a direction under section 50 of the Planning (Listed Buildings and Conservation Areas) Act 1990 (minimum compensation where building deliberately allowed to fall into disrepair).

§ (4) If—

(a) in accordance with the preceding provisions of this section the person referred to in subsection (1) of this section would be entitled to compensation under this section; but
(b) before the planning decision in question that person has died, or any other act or event has occurred whereby the right to compensation 974 under this section, if vested in him immediately before that act or event, would thereupon have vested in some other person,

the right to compensation under this section shall be treated as having devolved as if that right had been vested in him immediately before his death or immediately before that act or event, as the case may be, and the compensation shall be payable to the persons claiming under him accordingly.

§ (5) Compensation under this section shall carry interest at the rate prescribed under section 40 of this Act from the date of the planning decision in question until payment.

§ (6) The provisions of Part I of this Act (so far as applicable) shall apply (subject to the following provisions) in relation to the assessment of compensation under this section as they apply in relation to the assessment of compensation in respect of the compulsory acquisition of an interest in land.

§ Provisions as to claims under section 23.

§ 24.—(1) For the purpose of facilitating the making of claims for compensation under section 23 of this Act—

(a) the person entitled to receive the compensation or purchase price in respect of such an acquisition or sale as is mentioned in section 23(1)(a) of this Act; or
(b) any person claiming under him as being a person who, if compensation under that section became payable, would be entitled to it by virtue of subsection (4) of that section,

may give to the acquiring authority an address for service under this section.

§ (2) Where, at any time—

(a) after a person has given an acquiring authority an address for service under this section; and
(b) before the end of the period mentioned in paragraph (a) of section 23(1) of this Act,

such a planning decision is made as is mentioned in that paragraph, the acquiring authority shall, subject to subsection (3) of this section, give notice of the decision in the prescribed form to that person at that address.

§ (3) If—

(a) an address for service has been given by such a person as is mentioned in subsection (1)(b) of this section; and
(b) the acquiring authority have reasonable grounds for believing that the person mentioned in subsection (1)(a) of this section is dead or that any other act or event has occurred as mentioned in section 23(4)(b) of this Act,

the acquiring authority need not give a notice to the person mentioned in subsection (1)(a).

§ (4) A claim for compensation under section 23 of this Act in respect of a planning decision shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person who has not given the acquiring authority an address for service under this section, the date of the decision;
(b) if the claim is made by a person who has given the acquiring authority such an address, the date on which notice of the decision is given to him in accordance with subsection (2) of this section;

but, where there is an appeal against the planning decision, the reference in paragraph (a) of this 975 subsection to the date of the planning decision shall be read as a reference to the date of the decision on the appeal.

§ (5) The references in subsection (4) of this section to an appeal against a planning decision include an appeal made by virtue of section 78(2) of the Town and Country Planning (Scotland) Act 1990.

§ (6) Where—

(a) a person has given to an acquiring authority an address for service under this section; and
(b) that authority, before the end of the period mentioned in section 23(1)(a) of this Act, cease to be entitled to an interest in the whole or part of the land comprised in the acquisition or sale, without remaining or becoming entitled to a freehold interest in, or a tenancy of, that land or that part of it, as the case may be,

they shall notify the planning authority; and after that it shall be the duty of the planning authority to give notice to the acquiring authority of any planning decision of which the acquiring authority are required to give notice under subsection (2) of this section.

§ (7) Notice under subsection (6) of this section of a planning decision—

(a) in the case of a decision made by the planning authority, shall be given within seven days after the making of the decision; and
(b) in any other case, shall be given within seven days after the making of the decision has been notified to the planning authority.

§ Extension to planning permission where no

planning decision made.

§ 25.—(1) The provisions of sections 31 and 32(1) of this Act shall have effect in relation to any planning permission falling within column 1 of the following table for any development as if a planning decision granting that permission had been made on the date shown in column 2.

Planning permission	Date of decision
Permission granted by a development order	When development is initiated
Permission granted by the adoption or approval of a simplified planning zone scheme	When the scheme is approved or adopted
Permission granted by an order designating an enterprise zone	When the designation takes effect
Permission deemed to be granted by a direction under section 90 of the Town and Country Planning Act 1990	When the direction is given
Permission deemed to be granted by a local planning authority	The occurrence of the event in consequence of which the permission is deemed to be granted

§ (2) Where the provisions of section 23 of this Act have effect as applied by subsection (1) of this section in relation to any planning permission falling within column 1 of that table for any development, then if—

(a) before the date shown in column 2, a person who (under section 24(1) of this Act as so applied) is entitled to give an address for service under that section has given such an address to the acquiring authority; and
(b) the development is proposed to be carried out by the acquiring authority or, if it is proposed to be carried out by a person other than the 976 acquiring authority, notice of that proposal is given to the acquiring authority by the person proposing to carry out the development,

it shall, subject to subsection (3) of this section, be the duty of the acquiring authority to give notice of that proposal in the prescribed form to the person mentioned in paragraph (a) of this subsection at the address given by him to the authority.

§ (3) An acquiring authority shall not be required by virtue of subsection (2) of this section to give notice of proposed development to the person mentioned in section 24(1)(a) of this Act if—

(a) an address for service has been given to them by such a person as is mentioned in section 24(1)(b) of this Act; and
(b) they have reasonable grounds for believing that the former person is dead or that any other act or event has occurred as mentioned in section 23(4)(b) of this Act.

§ (4) A claim for compensation under section 23 of this Act in respect of a planning permission falling within column 1 of that table shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person to whom notice has been given under subsection (2) of this section, the date on which the notice was given;
(b) in any other case, the date shown in column 2.

§ Extension to Crown development.

§ 26.—(1) Where—

(a) any interest in land is compulsorily acquired or is sold to an authority possessing compulsory purchase powers, and before the end of the period of ten years beginning with the date of completion there is initiated any additional development of any of the land which was comprised in the acquisition or sale; and
(b) by reason of any such circumstances as are mentioned in subsection (2) of this section the development in question is development for which planning permission is not required,

the provisions of sections 23 and 24(1) of this Act shall apply as if a planning decision granting permission for that development had been made at the time when the additional development is so initiated.

§ (2) The circumstances referred to in subsection (1) of this section are either or both of the following—

(a) that the development is initiated by or on behalf of the Crown;
(b) that there is a Crown or Duchy interest in the land and the development is initiated in right of that interest.

§ (3) Where—

(a) the provisions of section 23 of this Act have effect as applied by subsection (1) of this section in relation to the initiation of any development; and
(b) before the development is initiated a person who (under section 24(1) of this Act as so applied) is entitled to give an address for service under that section has given such an address to the acquiring authority,

it shall, subject to subsections (4) and (5) of this section, be the duty of the acquiring authority to give notice in the prescribed form of the initiation of the development to the person mentioned in paragraph (b) of this subsection at the address given by him to the authority.

§ (4) Where— 977

(a) by virtue of subsection (3) of this section, it is the duty of a government department to give notice of development initiated by or on behalf of that department; and
(b) the Minister in charge of the department certifies that for reasons of national security it is necessary that the nature of the development should not be disclosed, except to the extent specified in the certificate,

the department shall give notice of development, but shall not be required to give any particulars of the nature of the development except to the extent specified in the certificate.

§ (5) An acquiring authority shall not be required by virtue of subsection (3) of this section to give notice of proposed development to the person mentioned in section 24(1)(a) of this Act if—

(a) an address for service has been given to them by such a person as is mentioned in section 24(1)(b) of this Act; and
(b) they have reasonable grounds for believing that the former person is dead or that any other act or event has occurred as mentioned in section 23(4)(b) of this Act.

§ (6) A claim for compensation under section 23 of this Act in respect of the initiation of any development shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person to whom notice has been given under subsection (3) of this section, the date on which the notice was given;
(b) in any other case, the time the development is initiated.

§ (7) in this section "Crown or Duchy interest" means an interest belonging to Her Majesty in right of the Crown or the Duchy of Lancaster, or belonging to the Duchy of Cornwall, or belonging to a government department or held in trust for Her Majesty for the purposes of a government department.

§ Application of Part IV to certain cases.

§ 27. The preceding provisions of this Part of this Act shall have effect subject to the provisions of the Third Schedule to this Act.

§ Regulations for purposes of Part IV

§ 28.—(1) The Secretary of State may by statutory instrument make regulations for prescribing the form of any notice required by this Part of this Act to be given in the prescribed form.

§ (2) Any statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

§ Interpretation of Part IV.

§ "additional development", in relation to an acquisition or sale of an interest in land, means any development of the land other than the following, that is to say—

(a) where the acquiring authority are a local authority, and acquired the interest for the purposes of any of their functions, development for the purposes of the functions for which they acquired it;
(b) where the acquiring authority are not a local authority, development for the purposes of the project in connection with which they acquired the interest;
(c) development for which planning permission was in force on the relevant date;
(d) in the case of compulsory acquisition, development for which it was assumed (in accordance with the provisions of sections 14 to 16 of this Act) for the purpose of assessing compensation that planning permission would be granted; and
(e) in the case of a sale by agreement, development for which, if the interest (instead of being sold by agreement) had been compulsorily acquired by the acquiring authority in pursuance of a notice to treat served on the relevant date, it would have been so assumed;

§ "date of completion", in relation to an acquisition or sale of an interest in land, means the date on which the acquisition or sale is completed by the vesting of that interest in the acquiring authority;

§ "local authority" means—

(a) a charging authority, a precepting authority, a combined police authority or a combined fire authority, as defined in section 144 of the Local Government Finance Act 1988;
(b) a levying board within the meaning of section 74 of that Act;
(c) a body as regards which section 75 of that Act applies;
(d) any joint board or joint committee if all the constituent authorities are such authorities as are described in paragraphs (a) to (c); and
(e) the Honourable Society of the Inner Temple or the Honourable Society of the Middle Temple;

and includes any internal drainage board under section 6 of the Land Drainage Act 1976;

§ "prescribed" means prescribed by regulations under this Part of this Act;

§ "the relevant date", in relation to a compulsory acquisition of an interest in land, means the date of service of the notice to treat and, in relation to a sale of such an interest by agreement, means the date of the making of the contract in pursuance of which the sale was affected.

§ (2) In this part of this Act any reference to the granting of permission for the carrying out of development of any land is a reference to the granting of permission (including where applicable outline permission) for that development—

(a) either unconditionally or subject to conditions; and
(b) either in respect of that land taken by itself or in respect of an area including that land."

§ 2. After Schedule 2 to that Act there is inserted—

§ "THIRD SCHEDULE

APPLICATION OF PART IV TO CERTAIN CASES

Disturbance, severance and injurious affection

§ 1. Subject to paragraph 2 of this Schedule, any reference in section 23 of this Act to the principal amount of any compensation shall be construed as including any sum attributable to disturbance, severance or injurious affection.

§ 2. If the person entitled to the compensation under section 23 of this Act—

(a) as, at the time of the compulsory acquisition or sale mentioned in subsection (1) of that section, entitled to an interest in other land contiguous or adjacent to the land acquired or purchased; but
(b) is, at the time of the planning decision in question, no longer entitled to that interest, either in respect of the whole or in respect of part of that land;

979 any reference in section 23 of this Act to the principal amount of any compensation or the amount of the purchase price shall be construed as excluding so much of the compensation or purchase price as was or would have been attributable to severance or injurious affection of that land or, as the case may be, of that part.

§ Increase in value of contiguous or adjacent land

§ 3. In determining for the purposes of section 23 of this Act the difference between the principal amount of the compensation specified in subsection (2) of that section and the principal amount of the compensation or the amount of the purchase price mentioned in subsection (1) of that section, in a case where—

(a) the compensation or the purchase price was or would have been reduced (whether by virtue of section 7 of this Act or otherwise) by reason of an increase in the value of an interest in contiguous or adjacent land; but
(b) at the time of the planning decision the person entitled to the compensation under section 23 of this Act is not entitled to the interest or is entitled to it only as respects part of the contiguous or adjacent land,

the amount specified in section 23(2) and the principal amount or purchase price mentioned in section 23(1) shall be calculated as if the circumstances by reason of which it was or would have been so reduced had not existed or, as the case may be, as if the interest in the contiguous or adjacent land had subsisted only in that part of the land.

§ Mortgaged land

§ 4. Subject to the provisions of this Schedule relating to settled land, where, in a case falling within section 23(1) of this Act, the interest in land which was acquired or sold was subject to a mortgage, any reference (however expressed) in section 23 or section 24 of this Act to the person entitled to the compensation or purchase price shall be construed as a reference to the person who, subject to the mortgage, was entitled to that interest, and not as a reference to the mortgagee.

§ 5. For the purposes of the application of section 23 of this Act, and of the provisions of this Schedule other than this paragraph, to a case falling within the preceding paragraph, any reference to the principal amount of the compensation which was or would have been payable in respect of any compulsory acquisition shall be construed as a reference to the principal amount of the compensation which would have been payable if the interest in question had not been subject to a mortgage.

§ 6. No compensation shall be payable by virtue of section 23 of this Act in respect of a compulsory acquisition or sale by agreement where the interest acquired or sold was the interest of a mortgagee (as distinct from an interest subject to a mortgage).

§ Settled land

§ 7.—(1) Where, in a case falling within section 23(1) of this Act, the interest in land which was acquired or sold was subject to a settlement, and accordingly the compensation or purchase price was payable to the trustees of that settlement, any reference (however expressed) in section 23 or section 24 of this Act to the person entitled to the compensation or purchase price shall be construed as a reference to the trustees for the time being of the settlement.

§ (2) Where sub-paragraph (1) of this paragraph applies, section 23(4) of this Act shall not apply.

§ (3) Any compensation paid to the trustees of the settlement by virtue of section 23 of this Act in respect of a compulsory acquisition or sale by agreement shall be applicable by the trustees as if it were proceeds of the sale of the interest acquired or sold.

980

§ (4) In this paragraph "settlement" means a settlement within the meaning of the Settled Land Act, 1925, or a trust for sale within the meaning of the Law of Property Act, 1925.

§ Interpretation

§ 8. References in this Schedule to sections 23 and 24 of this Act include references to those sections as applied by section 25 or 26 of this Act, and references to the time of any planning decision shall be construed accordingly."").

§ The noble Baroness said: I shall speak also to Amendments Nos. 288, 288A, 293, 298, 354A, 362, 366 and 367. Government Amendments Nos. 287 and 298 consist of a new schedule and clause which together have the effect of reviving, in respect of England and Wales, Part IV of the Land Compensation Act 1961. This provided for additional compensation to be paid to owners of compulsorily acquired land, or those who sold under the threat of compulsory purchase, in the event of an increase in the value of the land resulting from a planning permission granted within a period of five years after the acquisition.

§ These provisions were first enacted in the Town and Country Planning Act 1959 and remained in force until repealed by the Land Commission Act 1967. It seems to us, however, that there is a powerful case for restoring them to the statute book. The argument for doing so runs as follows.

§ As Members of the Committee will be well aware, compensation for the compulsory acquisition of land is based on the current open market value of the land taking into account any existing planning permission and hope value but discounting the effects on value of the particular scheme for which the land is required. This is the central principle of the land compensation code and it is, in our view, an inherently fair one. Cases can, however, occasionally arise where land is required for a particular form of development but, in the light of a change of circumstances, it is subsequently decided that it can more appropriately be devoted to an alternative form of development.

§ Planning permission for that development is accordingly granted, but the effect of the new permission may well be to increase the value of the land above that on which the original award of compensation was based. A good example would be where an authority acquires land compulsorily for housing but because of changed circumstances decides that the land would be better developed for office or industrial use. Where an increase in value occurs in this way it seems wholly unfair that the original owner of the land should be unable to derive any benefit.

§ The purpose of the renewed Part IV provisions is to deal with this situation by giving the former owner a right to claim additional compensation in the event of the value of the land increasing as the result of a planning permission obtained after acquisition. The provisions are reinserted in the 1961 Act in a form broadly similar to that of the original ones. There is, however, one major difference; the original five-year period within which planning permissions were taken into account for the purpose of assessing additional compensation is now to be extended to a full 10 years.

981

§ There is no simple basis for deciding over what length of time the entitlement to claim additional compensation should operate. On the one hand, we obviously want to ensure that the procedure provides an effective safeguard for those whose land is acquired. On the other hand, I do not believe that it would be right for the question of additional compensation to become too detached in time from the actual acquisition to which it relates. From this latter point of view it does seem to me that the 21-year period suggested in Amendment No. 288 proposed by the noble Lords, Lord Cornwallis and Lord Stanley, is altogether excessive. I accept that any figure must involve some degree of arbitrariness. But it seems to us that 10 years—which is, as I have said, double the time originally allowed—strikes the right balance overall.

§ Amendment No. 366 adds the new provision for England and Wales to those compensation provisions listed in Schedule 10 to the Bill on which interest is payable.

§ The remaining government amendments in this group (Nos. 293 and 354A, and part of Amendments Nos. 362 and 367) make similar provision in respect of the Land Compensation (Scotland) Act 1963.

§ I turn now to Amendment No. 288A tabled by my noble friend Lord Stanley. The effect of this is to provide that, in considering the amount of compensation originally paid to the claimant for the purpose of assessing entitlement to additional compensation under the revived Part IV, any element within the total which related to disturbance should be left out of account.

§ I must say that this proposal appears to reflect a misunderstanding of the current compensation code and the way in which Part IV will operate. The effect of case law is that an owner cannot claim payment for disturbance in circumstances where the compensation that he is receiving for the land reflects a development value which exceeds the existing use value plus the cost of disturbance. For example, where farmland is acquired the owner cannot claim for disturbance if the land has a value for housing which exceeds its agricultural value together with any disturbance cost.

§ That being so, where the value of land is enhanced by a planning permission granted after acquisition and the former owner claims compensation under Part IV, it is entirely proper that in determining how much compensation is due, if any, account should be taken of the fact that the original compensation award included a payment for disturbance—given that, as I have said, the disturbance payment was only made on the assumption that the land had no value above existing use. To leave the disturbance payment out of account would in effect involve an element of double-counting.

§ The approach that we are adopting here is identical to that followed in the original 1961 Act provisions. I hope that my noble friend will accept that it is the only fair one. I also hope that the Committee will agree that our proposals constitute a significant improvement in the overall fairness of the compensation system. On that basis, I warmly commend the government 982 amendments to the Committee and express the hope that the noble Lords, Lord Cornwallis and Lord Stanley, will not press their amendment.

§ Lord Cornwallis moved, as an amendment to Amendment No. 287, Amendment No. 288. Line 13, leave out ("ten") and insert ("twenty-one").

§ The noble Lord said: A long explanation of the amendment is unnecessary and, therefore, I shall not take up the time of the Committee. The government amendment allows 10 years from the date of completion of the sale as the period during which further development on the acquired land may trigger compensation. Often there are more than 10 years between the date of the acquisition of the land for development and the completion of the project. In many cases the timescale extends to 11 or 12 years. It would appear to be reasonable that the period during which additional payment could be triggered should extend beyond completion of the project.

§ Extending the period to 21 years would achieve two further objectives. First, it would bring the Bill into line with the usual practice in the private sector. Where an interest is reserved against future development the period is usually 21 years. Secondly, it would correspond to the maximum period of 21 years allowed under the Land Compensation Act. I hope that the Minister will reconsider her remarks. I beg to move.

§ Lord Stanley of Alderley
I think that it will be for the convenience of the Committee if I speak to my amendment now. I do not believe that I have failed to understand the present compensation arrangements, as suggested by my noble friend Lady Blatch. I believe that I understand them only too well; I believe them to be unfair. I suggest that my amendment takes a different approach and indeed is fairer, not least because if disturbance is included, that could prejudice the smaller man, particularly if he has developed his land or has the capability of so doing.
I shall try to explain the matter to my noble friend. The circumstances of the award of disturbance are related to the particulars of the claimant's agricultural, business or personal use of the land acquired at the time of the event, and not to the amount of development value attached to the interest to which these clauses relate. The amount of monetary compensation awarded for the disruption of the individual claimant's business 10 or 15 years before has nothing to do with the estimate of the development value attached to the land to which this measure is meant to relate.
That was recognised by Lord Justice Goddard in his dissenting judgment in the case of Horn v. Sunderland in 1941. That is now highlighted in the circumstances of these clauses, and against the history of land development over the 50 years since the majority Court of Appeal decision and 30 years since the passing of the Land Compensation Act 1961. It may also be said that that view has been expressed by other authoritative persons in the field. As I have said before, there is an inherent defect in the proposition that disturbance be linked to development value.
983 I fully understand that I am putting forward an approach which is different from that of my noble friend. However, I hope that she may consider my amendment to be a fair approach to the matter.

§ Lord McIntosh of Haringey
Before the Minister responds to those amendments to her amendment, I should explain why we have grave reservations about the approach in this series of amendments and about the whole approach taken in a large number of amendments with which we shall deal in the consideration of Part IV.
Those reservations can be very simply expressed. It seems to us that Members of the Committee are putting forward amendments which protect land and property owners from almost every possible adverse eventuality arising from planning laws or land compensation. In effect they are saying that if anything goes wrong because of the intervention of the public sector in land ownership or access to land, they must be compensated from now virtually until kingdom come, if one takes the amendment of the noble Lord, Lord Cornwallis. And yet, they are the same people who took off the statute book the development land tax and all taxation which would have taken away some of the windfalls which fall to land and property owners as a result of public sector activity.
One cannot have it both ways. One cannot say, on the one hand, that land and property owners will reap all the benefits of changes in use and development and all activities of the public or private sector while on the other hand compensating them for anything which may go wrong. If that is some people's idea of the market place, it is not mine.
Until justice is restored in this matter and there is some recognition that benefits can be gained for land owners from public investment activity which should be shared with the public, we shall not support amendments which seek to protect land and property owners when the market goes down.

§ Baroness Blatch
I do not believe that it would be appropriate for me to enter into the differences of opinion between the noble Lord, Lord McIntosh, and other Members of the Committee.
My noble friend and I must agree to differ about his amendment. I emphasise to the noble Lord, Lord Cornwallis, that we are doubling the length of time over which this measure would apply. It relates to other development being proposed on the land and is not comparable with that which arises in the private sector. I must rest my case and hope that the Committee will support it.

§ 8.15 p.m.

§ Lord Cornwallis
I am very disappointed to hear those remarks, particularly those of the noble Lord, Lord McIntosh of Haringey. We are not talking about land which is bought for the development of a particular project. We are talking about additional land which is often acquired unnecessarily at the outset and which is not, as a rule, returned to the land owner but is developed by an outside body at its considerable profit.
984 There is an example of that in the development which took place at the Channel Tunnel terminal. Surely it is not equitable that land should be taken at existing use value and, having built the motorway, railway or whatever it may be, an outsider should then benefit from, for example, building a petrol station on that surplus land which was taken in excess of what was originally required.
Much land is sold by willing treaty for public sector companies at figures which are in excess of compulsory purchase figures and into which these agreements are happily written. It seems to me a pity that the basic principle that the length of time for which the original owner should be covered should not extend beyond the period over which the development takes place. As I say, in many cases a development from the date of purchase is longer than the 10 years proposed by the Government. I shall not press the point this evening but I may well return to it at a later stage.
Amendment to Amendment No. 287, by leave, withdrawn.
[Amendment No. 288A not moved.]
On Question, Amendment No. 287 agreed to. Clause 44 agreed to.

§ Lord Fraser of Carmyllie moved Amendment No.289:

§ After Clause 44, insert the following new clause:

§ Advance payments of compensation and interest

§ (".—(1) In section 52 of the Land Compensation Act 1973 (right to advance payment of compensation) for subsection (5) there is substituted—

§ "(4A) Where, at any time after an advance payment has been made on the basis of the acquiring authority's estimate of the compensation, it appears to the acquiring authority that their estimate was too low, they shall, if a request in that behalf is made in accordance with subsection (2) above, pay to the claimant the balance of the amount of the advance payment calculated as at that time.

§ (5) Where the amount, or aggregate amount, of any payment under this section made on the basis of the acquiring authority's estimate of the compensation exceeds the compensation as finally determined or agreed, the excess shall be repaid; and if after any payment under this section has been made to any person it is discovered that he was not entitled to it, the amount of the payment shall be recoverable by the acquiring authority".

§ (2) After that section there is inserted—

§ "Right to interest where advance payment made.

§ 52A.—(1) This section applies where the compensation to be paid by the acquiring authority for the compulsory acquisition of any interest in land would (apart from this section) carry interest under section 11(1) of the Compulsory Purchase Act 1965 or any bond under Schedule 3 to that Act or section 85 of the Lands Clauses Consolidation Act 1845.

§ (2) If the authority make a payment under section 52(1) above to any person on account of the compensation—

(a) they shall at the same time make a payment to that person of accrued interest, for the period beginning with the date of entry, on the amount by reference to which the payment under section 52(1) above was calculated; and
(b) the difference between the amount of the payment under section 52(1) above and the 985 amount by reference to which it was calculated is an unpaid balance for the purposes of this section.

§ (3) If the authority make a payment under section 52(4A) above to any person on account of the compensation, they shall at the same time make a payment to him of accrued interest, for the period beginning with the date of entry, on—

(a) the amount by reference to which the payment under section 52(4A) above was calculated; less
(b) the amount by reference to which the preceding payment under section 52(1) or (4A) above was calculated.

§ (4) Where the authority make a payment under section 52(4A) above on account of the compensation, the difference between—

(a) the amount of the payment; and
(b) the amount by reference to which it was calculated less the amount by reference to which the preceding payment under section 52(1) or (4A) above was calculated,

is an unpaid balance for the purposes of this section.

§ (5) If, on an anniversary of the date on which the authority made a payment to any person under section 52(1) above on account of the compensation—

(a) the amount of accrued interest on the unpaid balance under subsection (2) above or, as the case may be,
(b) the aggregate amount of the accrued interest on any unpaid balances,

exceeds £1,000, the authority shall make a payment to the claimant of the amount or aggregate amount.

§ (6) The acquiring authority shall, on paying the outstanding compensation, pay the amount of the accrued interest on the unpaid balance under subsection (2) above or, as the case may be, the aggregate amount of the accrued interest on any unpaid balances.

§ (7) For the purposes of subsections (5) and (6) above, interest accrues on any unpaid balance for the period beginning with—

(a) the making of the payment under section 52(1) or, as the case may be, 52(4A) above; or
(b) if any payment has already been made in respect of that balance under subsection (5) above, the date of the preceding payment under that subsection.

§ (8) For the purposes of this section—

(a) interest accrues at the rate prescribed under section 32 of the Land Compensation Act 1961 or, in the case of a bond under section 85 of the Lands Clauses Consolidation Act 1845, at the rate specified in section 85; and
(b) the amount by reference to which a payment under section 52(1) or (4A) was calculated is the amount referred to in section 52(3) (a) or (b) for the purposes of that calculation.

§ (9) Where any payment has been made under section 52(1) above on account of any compensation, the acquiring authority is not required to pay interest under section 11(1) of the Compulsory Purchase Act 1965 or any bond under Schedule 3 to that Act or under section 85 of the Lands Clauses Consolidation Act 1845.

§ (10) Where the amount, or aggregate amount, of any payment under section 52 above made on the basis of the acquiring authority's estimate of the compensation is greater than the compensation as finally determined or agreed and, accordingly, the interest paid under this section is excessive, the excess shall be repaid.

986

§ (11) If after any interest has been paid to any person under this section on any amount it is discovered that he was not entitled to the amount, the interest shall be recoverable by the acquiring authority.

§ (12) The Secretary of State may from time to time by order substitute another sum for the sum specified in subsection (5) above; and the power to make orders under this subsection shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament." ").

§ The noble and learned Lord said: In moving this amendment I shall speak also to Amendments Nos. 289A, 289B, 331, 345, 358, 362, 363, 364, 364A, 365 and 382. These amendments deal with the procedure whereby compensation can be paid to claimants at regular intervals.

§ As the Committee will be aware, besides adding substantially to the list of provisions under which compensation attracts interest, we are proposing to establish an entirely new entitlement under which claimants can be paid the interest which is due to them in annual instalments.

§ Provisions for the payment of interest in instalments are already included in Clause 53 of the Bill. This is, however, a complex matter and we have concluded that the provisions as they stand will not achieve what we want. It is therefore necessary to come forward with new provisions which will produce the desired result.

§ The substance of the new provisions in respect of England and Wales is contained in Amendment No. 289. This links the entitlement to interest to be paid in instalments to the existing provision in Section 52 of the Land Compensation Act 1973, under which claimants in compulsory purchase cases can receive an advance payment of compensation for their land pending the final settlement. The effect is to provide that, where a claimant receives an advance payment of compensation under these circumstances, he will also be entitled to be paid at the same time any interest which has become due to him up to that point. Thereafter the claimant will be entitled to be paid, at 12-monthly intervals, any further interest that has accrued, provided that the amount of interest owing exceeds £1,000 or such other sum as the Secretary of State may prescribe by order. The entitlement to annual payments of interest will continue until the compensation claim is finally settled.

§ I turn now to the various proposals put forward in Amendments Nos. 289A, 364 and 364A regarding the frequency of instalment payments and the specified minimum amount of interest which triggers the instalment entitlement. These would provide for payments to be made every six months rather than annually and would reduce the minimum amount from the £1,000 we propose to either £500 or £10.

§ It is clearly necessary that the interest instalment provisions should be framed in such a way as to ensure that the system does not become unduly burdensome in administrative terms for the responsible authorities. A requirement to make payments of small sums at relatively frequent intervals could well impose a serious administrative cost on authorities.

§ I accept that there is room for argument as to where the limits should be set. But the six-monthly interval 987 and the alternative minimum amounts proposed by the noble Lords would not in our judgment be reasonable from the point of view of authorities. The £10 minimum amount suggested by the noble Lord, Lord Ross, would be particularly open to objection on that count. The 12-month interval and £1,000 minimum amount which we propose were both specifically referred to in the department's consultation paper and there was no widespread dissent from respondents.

§ I turn finally to my noble friend's Amendment No. 289B, which would provide for interest on compensation to be calculated on a compound rather than a simple basis. I fear that this is a proposal we could not entertain. A change to compound interest would mean placing an altogether unreasonable burden on the public purse. Simple interest is the principle firmly established not only in the statutory compensation code but also in other legislation which involves the payment of interest. It is also the basis on which interest is awarded by the courts. There is absolutely no ca se for adopting a different approach for the purposes of this Bill. Accordingly, I commend the government amendments to the Committee.

§ Lord Stanley of Alderley moved, as an amendment to Amendment No. 289, Amendment No. 289A: Leave out lines 68 and 69 and insert ("exceeds £500, the authority shall make payment to the claimant of the amount, or aggregate amount and similarly at six monthly intervals thereafter.").

§ The noble Lord said: In moving Amendment No. 289A, I shall speak also to Amendment No. 289B. Both amendments refer to the situation which arises when notice to treat has been given and 90 per cent. of the compensation has been agreed and paid. Therefore we are speaking of the 10 per cent. balance. I should say that that 10 per cent. balance can in certain cases be substantial.

§ The payment of interest on any outstanding balance of compensation is in no way a privilege conferred upon the claimant. The aim of compulsory purchase legislation is to ensure that the owner or occupier of land being acquired is no better and no worse off as a result of the development proposed by the acquiring authority. On this occasion I hope that I can carry with me the noble Lord, Lord McIntosh. I believe that this is what he would agree is fair compensation. He may help me on this amendment as opposed to the last time.

§ The amendments refer to a situation where an authority, following notice to treat, has entered into possession and has given an advance of up to 90 per cent. of the estimate of total compensation. That leaves outstanding the balance of 10 per cent. The process of negotiation, through no fault of the claimant and by its very nature, is often protracted. During that period the estimate is often revised resulting in further outstanding sums. Those sums can be quite substantial.

§ The range of opportunities for investment has changed greatly over the past decade—I address my remarks to my noble and learned friend—as well as becoming more mobile and extensive. If the claimant is to be placed in the position in which he would have 988 been had he had a fair crack at the whip—if I may put it that way—and part of his capital had not been sterilised while negotiations were proceeding, the availability of compound interest to match such an outside investment would be essential.

§ I do not understand my noble and learned friend saying that it would be unfair to give compound interest. It is unfair on the person whose land is being acquired to do otherwise. The Government are getting a very good deal. I would not mind obtaining loans at fixed interest, particularly the fixed interest that one receives from Her Majesty's Government, which is remarkably low on most occasions.

§ I am sorry to be going backwards rather than forwards. In Amendment No. 289A, as my noble and learned friend said, we are suggesting that the payment, instead of being £1,000 every 12 months, should be £500 every six months. It may not be much money for the richer Members of the Committee, but for others £500 is a large sum of money. I do not see why its payment should be delayed for 12 months. If the sum is much larger than £1,000 it should be paid after six months. I beg to move.

§ Lord Ross of Newport
Linked with these amendments is Amendment No. 364A, to which the noble and learned Lord the Lord Advocate referred briefly. As he said, Clause 53(2) obliges a person liable to pay compensation of any kind as described in Parts I or II of Schedule 10 to the Bill, if requested, to pay interest by yearly instalments provided that the interest due, exceeds £1,000 or such other sum as the Secretary of State may for the time being by regulations prescribe". The Royal Institution of Chartered Surveyors, for which I speak—I do not see why others should not agree—desires that instalments should be paid at six-monthly intervals, and that there should be no minimum limit on the instalment. That is the reason the £10 is there; it is really saying that there should not be a minimum. Amendment No. 364 provides for six-monthly instalments rather than yearly payments and substitutes the sum of £10 for £1,000 as a minimum payment, omitting any power for the Secretary of State to vary it. Why cannot we get it right today?
The Government appear to be going back on their original intention that in principle all kinds of compensation should be payable by instalments if requested. There is a strong case for payment at half-yearly intervals with no or a very small minimum. I suggest that, as at long last the Government have started paying interest on tax repayments due to us, and that if I were to put the money in a bank or building society I would be paid interest at once, the same should apply to HMG.

§ Lord Cornwallis
I wish to speak to Amendment No. 364. I shall not be moving the amendment. I support the noble Lord, Lord Stanley of Alderley, in his Amendment No. 289A.
I cannot follow the argument that it is burdensome to pay interest at six-monthly intervals. In the days of modern technology and computers, etc., the payment of sums of money on a regular basis is something that 989 could be accomplished with comparative simplicity. A much fairer system would be for these sums to be paid on a regular six-monthly basis.
As an aside, we are still waiting for some of the payouts on the M.25.

§ Lord Fraser of Carmyllie
I cannot elaborate on what I have said in speaking to the Government's amendments and responding in advance to others. Clearly there can always be an argument whether six months or one year is appropriate, or whether £1,000 or £750 is appropriate. However, the Government have moved a considerable way forward on this matter and what is put forward is a reasonable amount. Similarly, the interval for payment is also reasonable.

§ Lord Stanley of Alderley
I beg leave to withdraw Amendment No. 289A.
Amendment to Amendment No. 289, by leave, withdrawn.
[Amendment No. 289B not moved.]
On Question, Amendment No. 289 agreed to.
[Amendment No. 290 not moved.]

§ 8.30 p.m.

§ The Earl of Lytton moved Amendment No. 291:

§ After Clause 44, insert the following new clause:

§ ("Purchase notice: serious injury from works

§ .—After section 64 of the Land Compensation Act 1973 (extension of grounds for challenging validity of compulsory purchase order) there is inserted

§ "Purchase notice: serious injury from works.

§ 64A.—(1) Where the owner of an interest in land claims that the land is seriously affected land of a description falling under subsection (2) or subsection (2A) of section 26 of this Act (responsible authority may acquire land by agreement where enjoyment of land affected by public works) or subsection (2) or subsection (2A) of section 246 of the Highways Act 1980 (acquisition of land by agreement where enjoyment of land affected by works) the owner may serve on the responsible authority or the highway authority as the case may be a notice (in this section referred to as a purchase notice) specifying the land and the nature of his interest in it and the affection by reason of which it falls within one of those sub-sections, requiring that authority to purchase his interest in the land in accordance with this section.

§ (2) The authority shall before the end of the period of three months beginning with the date of service of the purchase notice serve on the owner by whom the purchase notice was served a counter-notice stating either—

(a) that they are willing to comply with the notice, or
(b) that for reasons specified in the counter-notice they object to complying with the purchase notice on the ground—
1. (i) that the owner is not the owner of an interest in the land, or
2. (ii) that the land does not fall within any of the descriptions specified in subsection (1).

§ (3) Where a counter-notice has been served under subsection (2) the owner may require the objection to be referred to the Lands Tribunal.

§ (4) An objection on either of the grounds specified in subsection (2) shall not be upheld by the Lands Tribunal unless it is shown to the satisfaction of the Tribunal that the objection is well-founded.

990

§ (5) If the Lands Tribunal determine not to uphold the objection in respect of the whole or any part of the land the Tribunal shall declare that the purchase notice is a valid notice for the land or that part.

§ (6) Where no counter-notice has been served in time under subsection (2) or such a counter-notice has been served but has been withdrawn or the purchase notice declared to be valid by the Lands Tribunal the responsible authority or the highway authority as the case may be shall be deemed—

(a) to be authorised to acquire compulsorily under the appropriate enactment the interest of the owner in the land or in that part comprised in the declaration of the Lands Tribunal, and
(b) to have served notice to treat in respect of the land or that part on the date on which the period for service of a counter-notice expired or the date of withdrawal of the counter-notice or the date of the declaration of the Lands Tribunal as the case may be.

§ (7) A notice to treat deemed to be served by virtue of subsection (6) shall not be capable of withdrawal.

§ (8) A person who has served a purchase notice under subsection (1) may withdraw it at any time before it has been declared valid under subsection (5).

§ (9) For the purposes of this section 'responsible authority' has the same meaning as in section 1(4) of this Act (right to compensation) and 'highway authority' has the same meaning as it has for the purpose of section 246 of the Highway Act 1980; and 'relevant date' has the same meaning as in section 1(9) of this Act.

§ (10) A purchase notice under this section shall not be served before the expiration of one year from the relevant date and no subsequent purchase notice after the first shall be served until three years after the service of the last previous notice.

§ (11) Once a purchase notice has taken effect under subsection (6) of this section no further purchase notice shall be served under this section in respect of the land for which the purchase notice has taken effect provided that notice of the taking effect of the purchase notice has been registered as a local land charge in the local land charges register of the appropriate local authority.

§ (12) Where compensation has been claimed under section 10 of the Compulsory Purchase Act 1965 (further provision as to compensation for injurious affection) or under Part I of this Act (compensation for depreciation caused by the use of public works) any compensation payable consequent upon such claim shall be taken into account in assessing the compensation payable in consequence of a notice to treat deemed to be served under subsection (6)." ").

§ The noble Earl said: I shall speak briefly to this amendment, which is concerned with the provision of a purchase notice facility for those whose land suffers a material detriment in connection with public works. The concept behind this amendment is contained in the blue booklet published by the Royal Institution of Chartered Surveyors. It rests on the fact that in many respects there are those whose land is affected very adversely by public works. That is referred to as "material detriment". That can be defined as meaning that the property concerned is less useful or valuable in some significant degree. I stress that this can affect equally residential, commercial or agricultural property.

§ Under the provisions of the Land Compensation Act 1973 and the Highways Act 1980 there are already powers vested in local authorities which are responsible for public works to purchase land by agreement where they perceive the land to be seriously 991 affected by the construction or the use of public works or a highway. These powers are extended by Clause 44 of the Bill.

§ The intention is that an authority will be able to acquire land which it considers to be seriously affected in the way described. The new section which this amendment proposes to insert takes the description "seriously affected" one stage further. Where an owner claims and can successfully establish that his land is seriously affected, and the land falls within the descriptions already provided for in the Acts of 1973 and 1980, he may then serve a purchase notice on the authority requiring the purchase of his interest in the land. This is the corollary which gives the facility for the person who sees his land affected to reverse the facility that a public authority already has.

§ That does not alter the category of land or claimant as against existing legislation. I feel very strongly that those who suffer this serious and detrimental effect on their land should have some facility for redress in the way suggested by the amendment. Quite frankly, it is totally unacceptable to me as a chartered surveyor and somebody who takes a fairly dispassionate line on this issue, that there should effectively be a cross-subsidy in this respect by those who stand to be affected in favour of the public authority in pursuit of its statutory function. I noted very carefully what the noble Lord, Lord McIntosh, said earlier. It is a question of balance and having a reasonably even playing field. It is not a question of there being residential occupiers and therefore potential voters. It is a question of straightforward justice. That cuts through the political aspects of the measure, on which I am certainly not going to raise any point. I am not competent to do so.

§ Unless we have a system that operates fairly and with proper balance, then it does not make any difference whether there should be a special case for one or another. It is a point of principle which remains notable because of the fact that there is no redress given. That is the background to this amendment. It will be noted that it provides for the authority carrying out the work the opportunity to object to the notice as proposed and that any dispute can be settled by the Lands Tribunal. The matter is quite comprehensive and I commend the amendment to the Committee. I beg to move.

§ Lord Fraser of Carmyllie
As the noble Earl indicated, the Land Compensation Act or, in the case of road schemes, the Highways Act 1980 gives responsible authorities a discretionary power to acquire by agreement any land of which the enjoyment is seriously affected by the carrying out or use of public works. This discretionary power is used by authorities in appropriate cases to mitigate hardship arising from the adverse effects of works during the construction stage of the project or when the scheme has come into use. It is important to understand those two separate parts. As the Committee will be aware, we are proposing in Clause 44 of the Bill that the discretionary power should in future be available to authorities from a much earlier stage in the life of a 992 development project; that is, from the point at which the proposed location of a scheme has been announced.
The noble Earl is arguing that the power for authorities to acquire property should become an obligation in the event of an owner serving a purchase notice. It seems to us that the discretion to acquire, as extended by the Bill in Clause 44, and the entitlement to compensation for loss of value together constitute an adequate protection for those affected by public development. To convert that important discretion to acquire into an outright obligation on authorities would, in the Government's view, be unjustified. It could lead to authorities being compelled to acquire substantial stocks of land. Such a requirement would have enormous cost implications and would hardly constitute a sensible use of resources.
The concept of "serious affection" is not in any way defined in the amendment and it is therefore hard to establish how widely the right to serve a purchase notice would extend. Perhaps I may anticipate the response that I am likely to get from the noble Earl. That concept appears within the 1973 Act similarly and without any definition. But as he will appreciate, that is only in the context of a discretion being given to the authorities to acquire. An actual obligation to purchase would surely require a more specific frame of reference. The number of people claiming to be "seriously affected" by any particular development scheme could be very large. It could be difficult to establish how the line was to be drawn. The noble Earl's amendment envisages that it would be left to the Lands Tribunal to settle the matter but I do not think that would be right from the point of view of either the principle itself or the substantial case-load burden likely to be involved.
It appears to be the intention that the obligation on authorities to purchase would apply both during the construction stage of a project and after the scheme had come into use. However, as I am sure the noble Earl appreciates, the effect of work at the construction stage, though unpleasant, may often be quite short-lived. It would therefore be wholly inappropriate in such circumstances that the authority should be obliged to purchase a property whenever the owner required. We in no way underestimate the difficulties and the misery which may be caused to others from the proximity to a major public development scheme. But it does seem to us that the existing compensation provisions, as extended by this Bill, do go just about as far as is reasonable and practicable in terms of safeguarding the interests of those affected. The right approach is to allow the authorities to weigh up each case on its merits and use the discretion they already have to acquire where there is good reason to do so.
With that explanation, I hope that the noble Earl will appreciate that I am not in a position to accept his amendment.

§ The Earl of Lytton
The noble and learned Lord the Lord Advocate has put forward a very compelling response. I accept many of the things he says and I agree that the amendment suffers from a number of 993 defects in drafting. I hope that he will nonetheless accept that it is the principle behind the issue that I am trying to get at.
I would feel a little happier if circumstances were available whereby someone who was seriously affected in the way envisaged—I stress that the matter is already covered in statute law—could have access to some form of review. For instance, an authority exercising its functions in this way will, of necessity, seriously affect some people. It is not intended that that should be a free for all or that there should be major resource implications. That was not the intention behind the proposal. It seems to me that there is no review provision to allow an individual who considers that he has been particularly badly affected to go along to a higher authority to say that the local authority has declined to exercise its discretion in his favour and that it ought to exercise its discretion in that way. That is a defect in the present provision. However, I accept that what the Lord Advocate said covered many of the more serious areas.
I am particularly anxious because, as in all such matters, there are resource implications. I am especially concerned that an authority, in carrying out major works, might be influenced by the overall cost rather than necessarily by the consideration of plain justice for someone who was badly affected.
I reserve my position on this matter and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Cornwallis moved Amendment No. 292:

§ After Clause 44, insert the following new clause:

§ ("Confirmation of compulsory purchase of land

§ . The Secretary of State or the Minister shall not confirm an order for the compulsory purchase of any land or rights over land unless he is satisfied:

(a) that the acquisition of the land or rights in, on or over the land in question is essential to enable the purchaser to meet its statutory obligation;
(b) that there is no suitable alternative way in which the purchaser could meet those obligations; and
(c) that the owner in question of the land or rights in, on or over land in question is unwilling or unable to enter into an agreement to sell the land or the rights voluntarily.").

§ The noble Lord said: I am asked by the noble Lord, Lord Northbourne, to give his apologies to the Committee for not being here. He did not realise that the amendment would be called up this evening.

§ Compulsory purchase powers are obviously essential to enable undertakings to fulfil their statutory duties, particularly where they are met with intransigent resistance to that which they need to do to carry out those duties. However, those powers should not be used as the easy way either to draw their plans or to abandon careful consideration of whether what they want to do is the best way of doing it or it is even necessary to do it at all. The amendment tries to ensure that due consideration is given both to the need to carry out certain works and to the method and route by which those works are to be executed.

994

§ Paragraph (c) places an obligation on the undertaker to try to purchase the land or buildings by negotiation and private treaty and to do that in advance of seeking compulsory powers. A great many people will negotiate willingly if they do not feel they are under duress. Psychologically they are more amenable if they do not feel threatened. Any negotiation must take place before compulsory powers are invoked since negotiated payments above CPO level cannot be paid once they are invoked. Extra payments are barred under Section 5 of the Land Compensation Act 1961.

§ I am sure I shall be told that all this will bring about intolerable delays. In fact it is far more likely to speed things up. If this were not the case, why do so many undertakers who have compulsory powers negotiate rather than use them and find that extra payments are a commercially viable answer which actually save them both time and money? The Government themselves have indirectly admitted the viability of this principle by paying bonuses to firms completing roadworks and so on ahead of time. How much more could be saved for the benefit of the country and the owners by speeding up the starting time of many projects! The undertaker would quickly know whether or not the owner was going to be a willing negotiator. Under present conditions an owner can hold up a project for months or even years while haggling over the details of compulsory purchase in which he is sure he is being unfairly treated. Most people are fair minded and, approached properly, are willing to negotiate and come to agreement. Compulsory powers must be a reserve against those who are obstructionists, but it is as reserve powers that they should be used and not as the spearhead. I beg to move.

§ Lord Stanley of Alderley
I warmly support the amendment because an important point of principle is involved. If one can get people to negotiate without the stick of compulsory powers held immediately over them, they will do so more easily. It is a perfect carrot and stick situation. If the Government were prepared to look along this line I am sure, as the noble Lord has already said, that settlements would be much quicker and, in the long run, much cheaper.

§ 8.45 p.m.

§ Baroness Blatch
This amendment would require the authority confirming a compulsory purchase order to be satisfied that acquisition of the land, or rights over the land, is essential for the fulfilment of a statutory obligation; that there are no suitable alternative means of fulfilling any such obligation; and that the owner is unwilling to sell by agreement.
Powers of compulsory acquisition are spread across a large number of enactments and relate to a wide range of authorities and purposes. Broadly speaking, however, the powers of acquisition are couched in terms of land which is "required" by the authority for a particular purpose. The word "required" is a fairly strong one and it has been interpreted by the courts as implying that the acquisition in question must be one 995 which is needed to accomplish the relevant authority's purpose. It is not enough, the courts have held, for the authority to argue that acquisition is merely desirable.
The need for compulsory acquisition is of course a matter on which the Secretary of State or Minister has to satisfy himself before confirming a compulsory purchase order. The law provides for objectors to an order to be heard at a local inquiry or hearing at which arguments as to whether the acquisition is needed can be properly aired.
The noble Lord's proposal would involve confining the use of compulsory purchase powers to cases where acquisition were shown to be "essential". This would in our view constitute an unreasonably rigid test, since authorities would in practice rarely be in a position to demonstrate that the acquisition of a particular piece of land was truly essential in the strictest sense. The effect would be to make it very difficult, if not impossible, for many desirable development projects which depended on compulsory purchase to proceed at all.
The amendment would further provide that the authority must have attempted to acquire the land by agreement before proceeding with compulsory purchase. Authorities will very often seek to negotiate for a voluntary sale of land without waiting for completion of the compulsory purchase procedures. But to make it a statutory requirement that negotiations take place in all cases before a compulsory purchase order could be confirmed would not in our view be a sensible proposition. I do not see that such a requirement could make any substantive difference to the situation as between the owner of the land and the acquiring authority.
The noble Lord has indicated that the effect of his proposal would be to provide an opportunity for negotiations to take place between the parties on a proper open market basis. But the reality is surely that there can never be a genuine open market situation when both parties know that there is ultimately the prospect of a compulsory acquisition in the event of negotiations breaking down. The fact that the authority was not at that point allowed to use compulsory powers would hardly alter the position. The acquiring authority would not generally be prepared to offer more for the land than it would expect to have to pay in the event of a compulsory purchase.
In these circumstances the requirement proposed by the noble Lord would seem to offer no significant benefit to the owner of the land. All it would do would be to add an extra stage to the acquisition process, with a consequent risk of unnecessary delay to important public development projects. From that point of view I see the noble Lord's proposal as being positively harmful. Although I know that that explanation will be less than helpful both to my noble friend and to the noble Lord, Lord Cornwallis, I hope that they will not press the amendment.

§ Lord Cornwallis
I take note of the noble Baroness's response. I believe that you can have a relatively open negotiation even with the threat of compulsory 996 purchase powers in the background. If that were not so I would entirely fail to understand why those organisations which have been privatised but which still retain compulsory purchase powers almost invariably do not use such powers. In fact, they negotiate their acquisitions freely with the owners concerned and find, first, that it speeds up the process considerably and, secondly, that it proves to be cheaper than going through all the processes of necessary planning inquiries and so on. It is a fact of life that this is indeed already happening.
I am sorry about the Minister's attitude towards the amendment. However, if possible, I should like her to think very carefully about paragraph (c) of the amendment. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 293:

§ After Clause 51, insert the following new clause:

§ Compensation where permission for additional development granted after acquisition

§ .—(1) Schedule (Compensation where permission for additional development granted after acquisition) to this Act (which revives Part V of the Land Compensation (Scotland) Act 1963) shall have effect.

§ (2) This section applies to an acquisition or sale of an interest in land if the date of completion (within the meaning of that Part) falls on or after the day on which this section comes into force.").

§ On Question, amendment agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 294:

§ After Clause 51, insert the following new clause:

§ Time limit on validity of notice to treat

§ .—(1) A notice to treat under section 17 of the Lands Clauses Consolidation (Scotland) Act 1845 shall, for the purposes of any compulsory purchase to which the provisions of the first Schedule to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 apply, cease to have effect at the end of the period of three years beginning with the date on which it is served unless—

(a) the compensation has been agreed or awarded or has been paid or paid into a bank;
(b) a general vesting declaration has been executed under paragraph 1 of Schedule 24 to the Town and Country Planning (Scotland) Act 1972;
(c) the acquiring authority have entered on and taken possession of the land specified in the notice; or
(d) the question of compensation has been referred to the Lands Tribunal for Scotland.

§ (2) If the person interested in the land, or having power to sell and convey it, and the acquiring authority agree to extend the period referred to in subsection (1) of this section, the notice to treat shall cease to have effect at the end of the period as extended unless—

(a) any of the events referred to in that subsection have then taken place; or
(b) the parties have agreed to a further extension of the period (in which case this subsection shall apply again at the end of the period as further extended, and so on).

§ (3) Where a notice to treat ceases to have effect by virtue of subsection (1) or (2) of this section, the acquiring authority—

(a) shall immediately give notice of that fact to the person on whom the notice was served and any other person who, since it was served, could have made an agreement under subsection (2) of this section, and
(b) shall be liable to pay compensation to any person entitled to such a notice for any loss or expenses occasioned to him by the giving of the notice and its ceasing to have effect.

§ (4) The amount of any compensation payable under subsection (3) of this section shall, in default of agreement, be determined by the Lands Tribunal for Scotland.

§ (5) Compensation payable to any person under subsection (3) of this section shall carry interest at the rate prescribed under section 40 (rate of interest after entry on land) of the Land Compensation (Scotland) Act 1963 from the date on which he was entitled to be given notice under that subsection until payment.").

§ The noble and learned Lord said: In moving this amendment I should like to speak also to Amendment No. 368. Amendment No. 294 inserts a new clause for Scotland which makes parallel provision to Clause 46 of the Bill for England and Wales. Clause 46 limits the period during which a notice to treat has effect and, as the Committee will appreciate, its substance will be considered shortly. Amendment No. 368 makes a consequential addition to Schedule 10. I beg to move.

§ On Question, amendment agreed to.

§ Clause 45 [Planning assumptions in connection with highway schemes]:

§ Lord Fraser of Carmyllie moved Amendment No. 295:

§ Page 53, leave out lines 12 to 20 and insert:

§ ("(7) The determinations referred to in subsection (5) of this section are—

(a) a determination, for the purpose of assessing compensation in respect of any compulsory acquisition, whether planning permission might reasonably have been expected to be granted for any development if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers, and
(b) a determination under section 17 of this Act as to the development for which, in the opinion of the local planning authority, planning permission would or would not have been granted if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers.").

§ The noble and learned Lord said: In moving this amendment I should like to speak also to Amendments Nos. 296, 297, 299, 301 to 306, 350, 355 and 381. Amendments Nos. 297, 350 and 381 are government amendments which contain modifications to the provisions set out in Part III of the Land Compensation Act 1961 under which the owner of land which an authority proposes to acquire compulsorily or by agreement—or the acquiring authority itself—can apply to the local planning authority for a certificate stating what development, if any, would have been permitted on the land if it were not being acquired by the authority. The statement in the certificate—usually referred to as a Section 17 certificate—is then taken into account in valuing the land for compensation purposes.

§ As the law stands, the certification procedure is not available where the land concerned comes within an area designated in the development plan as either an area of comprehensive development or as an area allocated for residential, commercial or industrial use or a combination of such uses. In such cases the 998 planning position for valuation purposes is determined on the assumption that permission would be granted for any development that is consistent with the contents of the development plan.

§ The argument has been advanced that this restriction on the certification procedure is no longer reasonable since in practice the designation shown on a development plan may not always provide a sufficiently precise or up-to-date indication of the planning position in respect of an individual site. The Government accept the force of this argument. The main purpose of the new provisions is therefore to extend the certification procedure to include land covered by development plans. The amending provisions are structured in such a way as to ensure that, broadly, where a Section 17 certificate is issued, its contents will override any contrary planning assumptions arising from the development plan which would otherwise have to be taken account in establishing the planning potential of the land.

§ These provisions also modify the certification procedure to provide for the reimbursement of costs which have been reasonably incurred by the claimant in connection with a certificate. In general, the legal and surveyors' fees arising from a compensation claim are included. However, the Court of Appeal has held that costs incurred in connection with the certification procedure cannot be recovered. That seems to us an anomaly and we are therefore proposing that it should be rectified. These changes were foreshadowed in our 1989 consultation paper on compensation and met with general approval. Similar modifications are made to Scottish legislation by Amendments Nos. 305 and 355.

§ I turn now to the two amendments concerning the certification procedure tabled by the noble Earl, Lord Lytton, Amendments Nos. 299 and 306. These have the same basic object as the government provisions which I have described and are drafted on similar lines. There is, however, an important difference in that the noble Earl's provisions do not appear to address the possibility of a conflict between the content of a Section 17 certificate and a planning assumption derived from a development plan. It is certainly the case that the chances of such conflict should be much reduced by virtue of the new development plan procedures introduced under earlier provisions in the Bill, but the risk cannot be ruled out altogether. Hence the need to provide, as our amendments do, that where a Section 17 certificate is issued it will override any contrary planning assumptions arising from a development plan. I have to say that the noble Earl's amendments are defective in not dealing with that aspect of the certification procedure and I hope in the circumstances that he will not feel it necessary to press them.

§ I turn finally to deal with a separate series of government amendments. I refer to Amendments Nos. 295 and 301 to 304. These make necessary technical modifications to the provisions already in the Bill; namely, Clause 45 in respect of England and Wales and Clause 50 in respect of Scotland. They are 999 intended to exclude the existence of an imaginary alternative when determining the value of land to be acquired for a highway scheme. I beg to move.

§ The Earl of Lytton
The noble and learned Lord the Lord Advocate has said much more cogently than I could have done almost all that I needed to say about Amendments Nos. 299 and 306 which are tabled in my name. I thank him for doing so. However, can he clarify whether he is saying that the principle behind those amendments is defective. I do not believe that that was what he meant to say. If I understood him correctly, he was saying that apart from the fact that the two amendments are deficient in that they do not resolve the position regarding conflict with the development plan, they are, nonetheless, very much along the lines of those which he has tabled. If that is the case, it seems to me that we are at one on the principle, involved and that it is merely a question of bringing into line what in effect is a provision for England and Wales and making it equal to the one which he proposes for Scotland.

§ Lord Fraser of Carmyllie
I should point out to the noble Earl that I am also dealing with England and Wales. In using the word "defective" it is possible that he has taken it in the rather narrower sense which we tend to use in Committee; namely, to indicate that the drafting is defective. What I am indicating is that it seems to me that, by omitting the one provision that is not mirrored in the government amendments, he is leaving open a possibility of conflict which the Government consider to be an undesirable risk. It may not be a very great risk, for the reasons I have given, but the possibility is there. For this reason we would consider it very much more desirable to follow the pattern laid down in the fuller amendments that we have provided.
On Question, amendment agreed to.

§ 9 p.m.

§ Lord Fraser of Carmyllie moved Amendment No. 296: Page 53, line 22, after ("construction") insert ("alteration or improvement").

§ The noble and learned Lord said: I have spoken to this amendment. I beg to move it formally.

§ On Question, amendment agreed to.

§ Clause 45, as amended, agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 297:

§ After Clause 45, insert the following new clause:

§ Certification of appropriate alternative development

§ (" .—(l) For section 17(1) of the Land Compensation Act 1961 (certificate of appropriate alternative development may be issued only if land is not in an area defined in development plan as an area of comprehensive development or shown in the plan as allocated for residential, commercial or industrial use) there is substituted—

"(1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, either of the parties directly concerned may, subject to subsection (2) of this section, apply to the local planning authority for a certificate under this section".
(2) In subsection (4) of that section (certificate stating that permission for development would or would not be granted) for paragraphs (a) and (b) there is substituted—
1. "(a) that planning permission would have been granted for development of one or more classes specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development; or
2. (b) that planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development,
and for the purposes of this subsection development is development for which the land is to be acquired if the land is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for that development."
(3) After subsection (9) of that section there is inserted—

(9A) In assessing the compensation payable to any person in respect of any compulsory acquisition, there shall be taken into account any expenses reasonably incurred by him in connection with the issue of a certificate under this section (including expenses incurred in connection with an appeal under section 18 of this Act where any of the issues on the appeal are determined in his favour)".").

§ The noble and learned Lord said: I have already spoken to this amendment. I beg to move it formally.

§ On Question, amendment agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 298:

§ After Clause 45, insert the following new clause:

§ Compensation where permission for additional development granted after acquisition

§ (" .—(1) Schedule (Compensation where permission for additional development granted after acquisition) to this Act (which revives Part IV of the Land Compensation Act 1961) shall have effect.

§ The noble and learned Lord said: I have already spoken to this amendment. I beg to move.

§ On Question, amendment agreed to.

§ [Amendment No. 299 not moved.]

§ The Earl of Lytton moved Amendment No. 300:

§ After Clause 45, insert the following new clause:

§ ("Compensation for loss where order not made or notice to treat not served

§ . After section 3 of the Compulsory Purchase Act 1965 (acquisition by agreement in pursuance of compulsory purchase order) there is inserted—

§ "Compensation for loss where order not made or notice to treat not served.

§ 3A.—(1) Where an acquiring authority have resolved to make or have taken any statutory step initiating the procedure for making a compulsory purchase order for any land but have not thereafter made an order which has become operative within a period of four years or earlier notified the owner of any interest in the land that they do not intend to make the order the authority shall be liable to pay compensation to any such owner for any loss or expenses occasioned to him in consequence of the resolution or the statutory step between the date of the resolution or the taking of the statutory step whichever is the earlier and the expiration of the said period of four years or the date of any such notice whichever is the earlier.

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§ (2) The amount of any compensation payable under subsection (1) shall, in default of agreement, be determined by the Lands Tribunal.

§ (3) Compensation payable to any person under subsection (1) shall carry interest at the rate prescribed under section 32 of the Land Compensation Act 1961 from the date of the resolution or statutory step referred to in subsection (1) whichever is the earlier.

§ (4) Where a compulsory purchase order has become operative but no notice to treat is served within the period specified in section 4 of the Compulsory Purchase Act 1965 (time limit) or the acquiring authority have not earlier notified the owner of any interest in land comprised in the order that notice to treat will not be served the authority shall be liable to pay compensation to any such owner for loss or expenses occasioned to him between the date on which the order was resolved to be made or the first statutory step to initiate it was taken whichever is the earlier and the date of the expiration of the period specified in the said section 4 or the date on which the authority gave notice that no notice to treat would be served whichever is the earlier in consequence of the resolution, the initiation of the first statutory step and the making and coming into operation of the order.

§ (5) Subsections (2) and (3) of this section shall apply to compensation to be assessed under subsection (4) as they apply to compensation to be assessed under subsection (1).

§ (6) Subsection (4) and (5) do not apply where a blight notice is served and becomes valid under Chapter II of Part VI of the Town and Country Planning Act 1990 (interests affected by planning proposals: blight) in consequence of the land being blighted land within paragraph 22 of Schedule 13 of that Act." ").

§ The noble Earl said: The principle behind Amendment No. 300 is that it provides for compensation to be paid for a demonstrable loss where a compulsory purchase order is not in fact made or notice to treat is not in fact served. There is very little more I can add to it, other than to say that when an acquiring authority or prospective acquiring authority sets off down the road of obtaining compulsory powers it can involve claimants and potential claimants in a very significant amount of expense in terms of protecting their interests.

§ This provision is something which is already, as I understand it, implemented by a number of authorities where they decide for whatever reason to withdraw from or not to proceed with a compulsory purchase order. Although the amendment appears to be a very long one, its import is quite limited. I beg to move.

§ Baroness Blatch
At the risk of over-simplifying what I think the noble Lord intends by these amendments, I would say that, largely, they all seek to make further provision for compensating owners who are facing compulsory purchase but who are nonetheless in a period of uncertainty as to whether or when the authority will proceed with the acquisition of their property.
Amendments Nos. 338 and 339 concern the steps that owners should reasonably be required to take in order to mitigate their compensatable losses. I agree that it is desirable for the owner and the authority to work out in advance of compensation being assessed what are reasonable steps to take to mitigate losses, and when they are best taken. However, I am not convinced that these are matters which need to be 1002 enshrined in the law. The courts have already concluded that expenses incurred by owners in connection with compulsory purchase should be reasonably direct and not too remote. That seems to me to be a sufficient legal basis on which to assess such compensation. I therefore do not support the idea of amending the provisions as they stand.
Amendment No. 300 seeks to provide compensation for owners' expenses incurred from the date when the authority initiated the procedure for making a compulsory purchase order if, within four years of that date, the order has not become operative nor has the authority formally abandoned its proposal, or, alternatively, if the order has become operative but notice to treat has not been served within the statutory three-year period nor formally withdrawn by the authority. Again, I can appreciate the good intentions behind the noble Earl's amendment. However, it is our view that an adequate safeguard is already available in the form of the statutory blight provisions, under which owners can normally ask the authority to purchase their property in advance of compulsory purchase. Where this occurs it is a well-established principle that expenses incurred before notice to treat are recoverable, provided they are not unreasonable, unnecessary or too remote.
It would appear from the form of Amendment No. 300 that the liability to pay compensation would be triggered even before an authority had firmly committed itself to making a compulsory purchase order. Thus the liability would presumably arise in relation to proposals which were published simply for the purposes of public discussion. This would scarcely be conducive to openness and participation in the planning system.
I turn finally to Amendment No. 342, under which an owner who has been served with notice to treat and who therefore can no longer require the authority to purchase his property under the blight provisions would be able to require the authority to take entry on to his property. It is certainly not right that an owner who has had notice to treat served on him should then be left to face a substantial period of uncertainty as to precisely when the authority is going to take possession of his property.
It is for this reason that we have introduced a provision at Clause 46 of the Bill under which notice to treat shall cease to have effect if the authority have failed to act on it within three years of its service. The clause further provides for compensation to be paid to affected owners where notice to treat lapses in these circumstances. In our view this provision strikes the right balance—on the one hand, not leaving owners in the dark for an excessive period and, on the other hand, allowing authorities sufficient time to take stock of their requirements for the proposed scheme and to carry out the complex processes that are necessary when land is compulsorily purchased. We hope that the three-year time limit will act as an incentive for local authorities to complete transactions as soon as possible. To do as the noble Earl suggests would be to impose an unreasonable constraint on acquiring 1003 authorities. I hope that that explanation is helpful to the noble Earl and that he will feel able to withdraw his amendment.

§ Lord Ross of Newport
I do not find that a very satisfactory response. It seems that the Government are saying that if the local authority, or whatever body it is which serves the compulsory purchase order or passes a resolution that it intends to go forward with compulsory purchase proceedings and then does not actually carry out that intention nor serve a notice to treat, the compensation to the owner who is affected might be triggered by serving a purchase notice. Why should the owner serve a purchase notice if in fact he dearly loves his property and does not wish to abandon it? It seems to me that there is a gap. Perhaps I have not completely taken in everything the noble Baroness has said but, as I understood her explanation, if the authority passes a resolution that it intends to make a compulsory purchase and then does not serve a notice to treat, messes about and finally abandons the project, the owner of the property, unless he serves a purchase notice, actually gets no compensation whatsoever. That surely cannot be right. He should have some recognition that he has suffered through this. There has been a blight on their property, and there is no way that they can sell it. Suddenly, the whole thing is off. The procedure may take three or four years and they receive nothing. That is wrong.

§ The Earl of Lytton
I listened with care to what the Minister said. Perhaps I may apologise to her for not having spoken to all the amendments to which, obviously, I should have spoken. I thank her for her courteous reply to all the amendments to which I did not speak and to the one to which I did speak. I apologise to the Committee for that.
There is an unresolved problem here, as has rightly been pointed out by the noble Lord, Lord Ross of Newport. It brings into sharp focus the type of problem that I have encountered when dealing with claimants in respect of small road-widening schemes and such matters. Bearing in mind that in the South East of England there is a high turnover of residential properties—people do not tend to remain on average for more than three or four years—the chances are that, within a scheme involving several hundred properties, several people may wish to move on whose homes are blighted by the provision whereby a resolution has been made but nothing further has happened.
Such people are left in an invidious position. They can cut their losses and run or, if the acquiring authority is trying to acquire by agreement, they can settle for whatever they are offered in order to get rid of the problem that is hanging over them. It is an imposition in the sense that draconian powers are being exercised which in many respects clearly prejudice the interests of individuals. I am especially interested in residential occupiers who may stand to lose a piece of front garden or something like that.
While I do not wish to press the amendment, I feel that there remains a case that the Minister has not yet answered. I ask her further to consider the matter 1004 carefully to see whether something can be done to improve the operation of the blight provisions so that they can catch up with even a few of the hard cases.

§ Baroness Blatch
Perhaps I may apologise for the second time today for being presumptuous; but there was an agreement that we would discuss Amendments Nos. 338, 339 and 342 at the same time. I thank the noble Earl for dealing with those amendments. I shall of course read everything that has been said during the course of the debate, without commitment and without prejudice to the outcome of any deliberations, between now and Report stage. I say to the noble Lord, Lord Ross, and repeat what I said when speaking to the amendments, that it is our view that an adequate safeguard is available in the form of statutory blight provisions where an owner can require the authority to purchase the property in advance of compulsory purchase.

§ The Earl of Lytton
I assure the Minister that the mistake over the groupings of the amendments was entirely mine. I did not read what was on the list. She stands completely exonerated on that score, and on that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 50 [Planning assumptions in connection with acquisition of land by roads authorities]:

§ Lord Fraser of Carmyllie moved Amendments Nos. 301 to 304: Page 60, line 14, leave out ("for the purpose of providing") and insert ("for the purpose of, or in connection with, providing, altering"). Page 60, line 16, after ("purpose") insert ("or in that connection"). Page 60, line 25, after ("purpose") insert ("or in the connection"). Page 60, line 26, leave out subsection (7) and insert: ("(7) The determinations referred to in subsection (5) of this section are—

(a) a determination, for the purpose of assessing compensation in respect of any compulsory acquisition, whether planning permission might reasonably have been expected to be granted for any development if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers, and
(b) a determination under section 25 of this Act as to the development for which, in the opinion of the planning authority, planning permission would or would not have been granted if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers.").

§ On Question, amendments agreed to.

§ Clause 50, as amended, agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 305:

§ After Clause 50, insert the following new clause:

§ Certification of appropriate alternative development

§ .—(1) For section 25(1) of the Land Compensation (Scotland) Act 1963 (certificate of appropriate alternative development may be issued only if land is not in an area defined in development plan as an area of comprehensive development or shown in the plan as allocated for residential, commercial or industrial use) there is substituted—

§ "(1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, either of the parties directly concerned 1005 may, subject to subsection (2) of this section, apply to the planning authority for a certificate under this section".

§ (2) In subsection (4) of that section (certificate stating that permission for development would or would not be granted) for paragraphs (a) and (b) there is substituted—

"(a) that planning permission would have been granted for development of one or more classes specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development; or
(b) that planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development,

and for the purposes of this subsection development is development for which the land is to be acquired if the land is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for that development."

§ (3) After subsection (9) of that section there is inserted— (9A) In assessing the compensation payable to any person in respect of any compulsory acquisition, there shall be taken into account any expenses reasonably incurred by him in connection with the issue of a certificate under this section (including expenses incurred in connection with an appeal under section 26 of this Act where any of the issues on the appeal are determined in his favour)".").

§ On Question, amendment agreed to.

§ [Amendment No. 306 not moved.]

§ Clause 46 [Time limit on validity of notice to treat]:

§ Baroness Hollis of Heigham moved Amendment No. 307:

§ Page 54, line 12, at end insert: ("(2DD) The Secretary of State shall satisfy itself in respect of any financial year in which this section has effect that the resources available to local authorities are adequate to enable them to fulfil the requirements of subsection (2C) (b) above without detriment to other services provided by any such authority").

§ The noble Baroness said: I should like to speak also to Amendment No. 322. We support the intent of Clauses 46 and 47, but the amendments seek to ensure that local authorities have sufficient resources to implement them. Clause 46, as the Committee will be aware, limits the validity of a CPO notice for three years, which is probably sensible. Should the implementation of the CPO notice be delayed, not necessarily through the fault of the local authority—for example, as a consequence of a substantially reduced capital allocation, a fate befalling many of them at the moment—the CPO notice may expire, and the whole procedure may have to be repeated later at considerable additional cost, because local authorities will have had to reorganise their capital and financial programmes.

§ Amendment No. 322 amends Clause 47 which we support. Clause 47 increases tenant compensation from £1,200 to £1,500. It will make occupants eligible for that compensation after one year rather than five and will ensure that they will be paid more quickly. We support all of that, but as it means that more 1006 people will claim compensation—more compensation and faster compensation—there will obviously be costs for the local authority.

§ Therefore, both amendments require the Secretary of State to ensure that local authorities have the resources available to do what we should all wish. Otherwise, we fear that this will simply be one more item in a long list of dogs, litter, community care and environmental protection in which duties —highly desirable duties but ones which have associated costs—are imposed on local authorities without additional resources, putting them at risk of charge-capping.

§ I am sure there is general agreement that resources should be commensurate with responsibilities. That is what these amendments seek to ensure. I beg to move Amendment No. 307.

§ 9.15 p.m.

§ Baroness Blatch
The amendment as drafted begs some important questions. Exactly how is the Secretary of State to satisfy himself of the facts? If he is not satisfied, what is he to do about it? What exactly is meant by "detriment", and how is it to be judged?
Nonetheless, the underlying thought is clear enough: it is that when central government impose new burdens on local government, they should also ensure that local government has the resources it needs in order to put those burdens into effect. I agree with that view. But this amendment is not remotely helpful in enabling it to be carried out.
Every year there is a financial settlement in which the Government determine how much they think local authorities need to spend and how much they will give them in support of that expenditure. Before the settlement is made, the Government review all the circumstances including, among other things, the new burdens which they have placed on authorities for the coming year. They also go through an extensive consultation with local authorities and their representatives.
In other words, it is already the case that new burdens are included in the settlement to the extent that the Secretary of State thinks appropriate. There is no need for us to legislate to spell this out. Indeed, it would be odd to spell it out with regard to these particular burdens, which are certainly important matters but are not in the overall scheme of things major items of local authority spending. From this point of view, the amendments are at best unnecessary and are out of proportion with the other factors which the Secretary of State is bound to take into account.
There is another hidden implication in the amendments which I wish to draw out. It is that each year's settlement includes specific provision for each item of spending by local authorities. That is simply not the case. The settlement is determined as an overall figure, taking account of a wide range of factors—new burdens, certainly, but also the level of inflation, the scope for improved efficiency, the cutting out of wasteful expenditure and, more generally, what the country as a whole can afford.
These amendments speak of avoiding detriment to other services. To satisfy himself on this score the 1007 Secretary of State would have to assess in some detail exactly what it would cost local authorities to provide a "non-detrimented" service—I apologise for that word but it is the only one that will do—for each of these functions. He would in effect have to second-guess local authorities' own decisions about their local priorities. I am sure that if we on this side had come up with such a proposal it would have been fiercely opposed by Members opposite on the grounds that it undermined local discretion and democracy. We do not intend to fall into that trap.
I hope the noble Baroness will not be surprised at my reply and will not press the amendment.

§ Baroness Hollis of Heigham
I appreciate some of the points made by the noble Baroness, but I have to say that she shares with me a concern that local government more generally is having additional burdens imposed upon it. This may not be the best way of addressing that problem. As she does, I fear increasing centralisation by central government over local government. I am delighted to see that the noble Baroness is a convert to our side in trying to hold at bay central government, and of course we should welcome her spirited support for that position.
Nevertheless, I was slightly concerned at the Minister's comment that the new burdens were included in the settlement to the degree that the Secretary of State thought appropriate; and then the Minister indicated that what was appropriate was inflation, savings and what the country can afford. That leaves out the additional responsibilities imposed on local authorities by the Minister.
I hope that what the Minister may take from this fairly brief exchange is that central government must think hard before asking local authorities to take on additional responsibilities, desirable though they may be, if their annual allocations, their capital allocations, their PES forecasts, their standard spending assessments for local authorities and the like neither keep pace with inflation on the one hand nor are commensurate with increased responsibilities on the other.
Over the past three years every local authority association has complained to the joint consultative council that the financial settlement by central government to local government has not fully compensated for the additional burdens that central government have imposed on it. If as a result of this exchange the Minister would accept that issue and bring it to the attention of her colleagues in another place, I think we should be well served. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
[Amendments Nos. 308 to 311 not moved.]

§ The Earl of Lytton moved Amendment No. 312:

§ After Clause 46, insert the following new clause:

§ ("Payment of additional sum

§ .—(1) After section 5 of the Land Compensation Act 1961 there is inserted—

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§ "Additional sum.

§ .—(1) In addition to the total compensation in respect of any compulsory acquisition assessed in accordance with the rules in section 5 of this Act there shall be paid by the authority paying such compensation to any person to whom such compensation is paid an additional sum calculated as 10 per cent. of such compensation subject to a maximum additional sum of £25,000 to assist in the re-organisation of his affairs having regard to the fact that the paying authority have or are deemed to have a compulsory power of acquisition whether exercised or not and whether or not consequent on the service of a purchase notice or a blight notice under Part VI of the Town and Country Planning Act 1990 (Rights of owners etc. to require purchase of interests).

§ (2) Where a person is entitled to an additional sum under this section and a home loss payment under section 29 of the Land Compensation Act 1973 (Right to home loss payment where person displaced from dwelling) only the higher of the two amounts shall be payable and not both."

§ (2) At the end of section 10 of the Compulsory Purchase Act 1965 (Further provisions as to compensation for injurious affection) there is inserted—

§ "(4) Section—of the Land Compensation Act 1961 (Additional sum) shall apply to the total compensation payable under this section as it applies to the total compensation on a compulsory acquisition of land assessed under section 5 of that Act (Rules for assessing compensation) but having regard to the fact that the injurious affection is compulsorily imposed on the claimant's land."

§ (3) At the end of section 20 of the Compulsory Purchase Act 1965 (Tenants at will etc.) there is inserted—

§ "(7) Section—of the Land Compensation Act 1961 (Additional sum) shall apply to the total compensation payable under this section as it applies to the total compensation on a compulsory acquisition of land assessed under section 5 of that Act (Rules for assessing compensation) but having regard to the fact that the claimant is compulsorily required to give up possession of the land."

§ (4) At the end of section 4 of the Land Compensation Act 1973 (Assessment of compensation: general provisions) there is inserted—

§ "(6) Section—of the Land Compensation Act 1961 (Additional sum) shall apply to the total compensation payable under this section as it applies to the total compensation on a compulsory acquisition of land assessed under section 5 of that Act (Rules for assessing compensation) but having regard to the fact that the depreciation is compulsorily imposed on the claimant's land." ").

§ The noble Earl said: In moving this amendment I must say that I was greatly heartened by the comment just made by the noble Baroness, Lady Hollis, that she considered local authorities should be fully compensated for the shortfall that she believed existed. Amendment No. 312 seeks to achieve exactly the same objective. The amendment attempts to rectify what is certainly perceived by the Royal Institution of Chartered Surveyors and many other bodies to be a deficiency in the fundamentals of the compensation system.

§ The principles that are at stake here are as follows. First, under a compulsory purchase order or a threat of compulsion the vendor is likely to act unwillingly. However, it must be said that no regard is to be paid to compulsion in assessing compensation. Secondly, the vendor is refunded only his cash costs and the price 1009 of his land and buildings at valuation. That fails to address the principle that there is more to the business of land and property ownership and the occupation and ownership of a dwelling house than a crude assembly of all the various bits and pieces. That omits the concept of the personal trauma or inconvenience that is suffered by a claimant and the temporary blight—on the admission of the Minister the latter is not taken into account—and unquantifiable losses which may occur and which are not necessarily reflected in the value of the land. One also has to take into account loss of view and such considerations as historic ownership. No amount of compensation can ever reinstate those considerations.

§ The measure obliges a claimant to sell at a time and at a value which are not necessarily of his choosing. He is totally under the control of the acquiring authority regarding the date and timing of the particular acquisition which then fixes the valuation date. The amendment seeks to remedy an imbalance between the public and private interests in so far as it is not already taken into account. I believe there is a compelling argument for saying that the existing measure is deficient in a material respect.

§ I did not move Amendment No. 308. This amendment differs from Amendment No. 308 only in that it applies a flat rate increase to the totality of compensation. The aim of this amendment is the same as that of Amendment No. 308, but I feel that, administratively, it is a lot easier to handle. The percentage uplift is there to reflect the compulsory nature and the unquantifiable factors of the compulsory acquisition process.

§ The amendment safeguards against paying double compensation; for instance, in the event of home loss payments. The noble Lord, Lord McIntosh, may wish to leap to his feet and tell me that residential property is a special case and should be treated as such. I do not wish to pre-empt what he may say. I believe there are provisions in the world of compulsory purchase and compensation that make every claimant something of a special case. However, I agree that the householder may require specific fall-back provisions which are not applicable elsewhere. I do not accept that the concept of a payment to reflect the compulsory nature of the acquisition is such a fall-back provision.

§ My amendment provides for a ceiling to be placed on this additional amount. The ceiling is specified as £25,000. The purpose behind setting such a ceiling was quite deliberate in the sense that one of the obvious criticisms that could be made of the amendment would concern its resource implications. The cut-off point is intended to address that criticism. I know that there are others who do not agree with that and I shall not comment further on what they may have to say in that respect.

§ There is a compelling reason for an additional sum being payable. It has resource implications and I do not want to make light of the provision. It is not my place to make the process more expensive than it need be.

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§ I should like to pick up a point made earlier by the noble Lord, Lord Cornwallis. Unless claimants can rest assured that the system will treat them in a self-evidently fair manner in respect of compensation payable there will be continued resistance to compulsory acquisition at every stage—at the making of the compulsory purchase order and on disagreements over value—with the consequential factors of public inquiries and references to the Lands Tribunal.

§ We cannot continue down that road. It requires an act of faith to break that vicious circle of on the one hand authorities wielding extensive powers and on the other hand the claimant who is in a relatively vulnerable position. There are reasons to believe that savings which may not be immediately quantifiable will be produced by an amendment such as this and they should be taken into account.

§ Amendment No. 334 is consequential on this amendment. I do not believe that I need to say more about it. I beg to move.

§ Lord Cornwallis moved, as an amendment to Amendment No. 312, Amendment No. 313: Line 9, leave out from ("compensation") to ("having") in line 11.

§ The noble Lord said: I support the principle behind the previous amendment but with reservations. I see no reason for there to be a cut-off point in compensation payments. Surely injurious effect upon one's business or home is bound to be in proportion to the size of the asset taken. In the case of land the financial damage to the viability of the remainder of the area and the quality of the land must also be taken into consideration.

§ The view may be taken, and has been taken by the noble Earl, that the proposal will help people at the bottom end of the market. So it will. However, does that mean that the remainder should not be placed on an equal footing? As already mentioned by the noble Lord, Lord Stanley of Alderley, in 1941 the Court of Appeal in Horne v Sunderland held that the vendor must be in no worse state than he was prior to the acquisition. That ruling must surely hold across the board.

§ Equally, it seems that no one must be worse off but some must be more equally worse off than others if the amendment of the noble Earl, Lord Lytton, is agreed as it stands. I am thoroughly in favour of helping those at the bottom end of the scale, but we seem to have an obsession that the rest must be penalised in order to do so. It is that very principle which has placed the CAP in such a mess and is bedevilling current negotiations. We should look at the wealth creators—and I do not mean money—just as much as the others. The wealth creators tend to be the larger enterprises.

§ I have reservations about the sentence which refers to, the re-organisation of his affairs". However, I understand that that has sympathetic Inland Revenue connotations and I would hate to upset anything that had sympathetic Inland Revenue connotations. I beg to move.

1011

§ Lord Ross of Newport
I should like to speak briefly in support of Amendment No. 312 as I added my name to it, and also to Amendment No. 326ZA in the unavoidable absence of my noble friend Lord Meston.
Amendment No. 312 is intended to write into legislation what often but not always happens in practice, and quite sensibly so. I do not have experience of the acquisitions made in connection with the Channel Tunnel and its access roads, but I suspect that the compensation paid there was often up to twice the current market value. I may say it is very difficult for valuers to try to assess values at 87/88 or at 73/74, because values seem to be increasing almost overnight. That is another reason why there should be some extra money written in, because if in 1987 somebody had accepted a market price, had completion and then went off trying to find somewhere else to live, he would have had a shock, because every time he put an offer in he would probably have been gazumped.
Another reason for this amendment is that it smooths the path. Time costs money. If you have a reluctant vendor and a rather tough-minded purchaser—somebody who is going to be pretty mean—the chances are that it will be long held out and the matter in the end will probably have to go to arbitration. Surely, it is only right that in addition to the market price there should be some incentive. This goes back into the last century. It has been authorised on many occasions. We are trying to write into the Bill only what happens very often in practice, and should certainly happen here. As the noble Earl, Lord Lytton, pointed out, we are not trying to add a further £25,000 to the maximum of £15,000. That will be taken into account, and it will not necessarily be any extra amount over and above that.
On Amendment No.326ZA, this will try to help small businessmen. Goodness knows, they are in enough trouble as it is. If any of them are left after this recession I shall be very surprised. I may be asked what is the definition of a small business. I am desperately trying to think of the report on small businesses of 15 or so years ago. I am informed by the Labour Front Bench that it was the Bolton Report. In that report one finds a definition of small businesses; it is a term applying to businesses having 200 or less employees.

§ Lord Mottistone
For the distributive trades, the figure was six employees.

§ Lord Ross of Newport
In any event, there is a definition of small businesses which would apply in this case. It could at least be taken by the Government as a guide. We all feel particularly sorry for small businesses at this particular time; they are facing all sorts of problems, not the least of which are the huge increases in rate demands. I hope that they might also be taken into account. My noble friend Lord Meston was certainly wishing to speak on their behalf.

§ 9.30 p.m.

§ Lord Stanley of Alderley
I support the amendment in the name of the noble Earl, in particular on the principle, which I do not think we have quite grasped, 1012 that if you are compulsorily purchased you are not a willing seller, and therefore it alters the books quite a lot.
The other amendment which I support is the one to which I have added my name: the amendment of the noble Lord, Lord Cornwallis. At the risk of infuriating the noble Lord, Lord McIntosh (he did the same to me two or three nights ago on farm buildings, so I do not see why I should not do it to him now) and making him rise to his feet, I see no harm in offering slightly over the odds to encourage settlement. Certainly, it works extremely well in France. I believe that Amiens tried to get the fast railway track through the town in order to get compensation. For all I know, the noble Lord, Lord McIntosh of Haringey, will have the railway through Haringey.

§ Lord McIntosh of Haringey
If the noble Lord, Lord Stanley, thinks that I rise infuriated, he has another think coming.
I think that this exchange is marvellous. It encapsulates everything that I expected it to do and all that I anticipated when I spoke on an earlier amendment. What we have is a little difference of opinion between those who—purely altruistically as regards themselves—represent the very greedy and those who represent the very very greedy.
One can go a lot further. Why are there no amendments to suggest that the proper price to be paid should not be the price at the time of the compulsory acquisition but, let us say, the best price that could have been obtained in any of the past 10 years? That would truly be a shift for the benefit of land owners and property holders. If one continues for long enough one might stop any sort of public investment for infrastructure development which involved land at all. No doubt that would be very comfortable for some noble Lords.
As for the reference to Amiens, if the noble Lord examines the history of the case he will find that, like the city of Lille and Arras, the city of Amiens wanted the TGV because of the economic development opportunities rather than the compulsory purchase price that they would receive for the land.

§ Lord Fraser of Carmyllie
First of all, I congratulate my noble friend for managing to get the noble Lord opposite to rise to his feet. I must say to the noble Lord, Lord Cornwallis, that much as I share his views on the proposals for the reform of the CAP, it is not a parallel that I feel able to continue to draw with him as we deal with compensation provisions in this Bill.
In bringing forward his amendments the noble Earl, Lord Lytton, argued that compensation payable in all compulsory purchase cases—because that is what it comes to—should include an additional payment over and above the market value of the property itself, in recognition of the fact that the claimant, though I am not sure that the claimant is necessarily an individual, or it may be some other person, is being displaced under compulsion or the threat of it. That brings us up against an important issue to which I am sure we must give careful consideration.
1013 We have considered at some length in the course of this evening's deliberations the essential principle that a claimant should be left neither better nor worse off than he would have been if the compulsory purchase were not taking place.
Market value compensation and reimbursement of out-of-pocket expenses are available to all claimants. However, there is an important addition.
Those who are displaced from their homes are also entitled to further compensation in the form of a home loss payment. This additional entitlement rests on the premise that a special payment over and above the value of the property itself is justified in order to provide some recompense for the personal distress that normally arises when someone is forced to leave his or her own home in these circumstances. The Government remain firmly committed to the principle of the home loss payment, and indeed one of the main purposes of this Bill is to increase the level of such payments and the number of claimants entitled to receive them. We do not retreat from that at all. The law also provides for farm loss and other special payments to help in particular cases and the Bill improves those provisions in a number of ways.
It does not however seem to us that there is the same justification for extending the principle of the supplement above market value to include all cases of public acquisition, regardless of the circumstances. Home loss payments are not made only because the acquisition is taking place under compulsion or the threat of it. Rather, they are intended to reflect, as I indicated, the view that the compensation system needs to give specific recognition to the particular problems faced by those who are deprived of their own homes. It does not seem to us that these problems arise in the same way where non-residential displacements are concerned. It is true that the enforced loss of any type of property will almost always prove to be a painful experience. But I would expect most people to agree that displacement from one's home will generally give rise to an altogether exceptional degree of inconvenience and distress. Hence the distinction which the compensation system makes between the residential and non-residential situations. It is not of course a distinction newly created by this Bill. It has been applied since the home loss payment scheme was first introduced nearly 20 years ago and has been upheld by successive governments since that time. The changes that we propose in the Bill do not involve any departure from the basic concept of the home loss payment.
Amendment No. 312 provides a basis for assessing additional payment. There is a great deal that I could say about the potential cost implications of the proposals. However, I am unable to entertain the basic principles underlying the amendments. We are strongly of the view that the concept of a supplementary payment above the market value cannot, in all conscience, be justified in the case of non-residential acquisitions.
I turn to Amendment No. 326ZA, tabled by the noble Lord, Lord Ross. It provides for a special payment which is broadly comparable to the home 1014 loss payment in the case of a compulsory acquisition of a small business. I understand the sympathy felt by the noble Lord and other Members of the Committee for small businesses but I see no way of accepting the proposal advanced. I have indicated the basis on which home loss payments are made but the small business is in a different situation. I cannot see that the loss of property in such a case is comparable to the loss of a home.
Businesses can claim for some losses—for instance, staff time spent on the relocation and the loss of goodwill—which are not available to home owners. Even if we were to adopt the principle of a special payment for small businesses we should immediately come up against the problem of definition. How could we frame a provision targeted at the genuine small business which was not open to circumvention and abuse?
It would appear that the amendment attempts to link eligibility for the proposed payment to entitlement for small businesses to the home loss payment. The intention appears to be that the proposed payment will apply only to those living in the business premises. If that is the intention I see no reason in logic or equity why someone who happens to have a small business which is attached to part of his home should receive a payment while another person who has a business in no way attached to his home but which is to be lost should be well treated.
I do not like to dismiss the problems of the small business. However, the home loss payment is an exceptional situation. It is improved upon in the Bill but it should not be extended.

§ Lord Cornwallis
I beg to withdraw Amendment No. 313.
Amendment to the amendment, by leave, withdrawn.

§ The Earl of Lytton
I listened with great care to the noble and learned Lord the Lord Advocate and I shall give his comments serious consideration. There appears to be a credibility gap into which the compensation code currently falls. I shall withdraw Amendment No. 312 with the proviso that I may return to it at a later stage.
Amendment, by leave, withdrawn.

§ 9.45 p.m.

§ Lord McIntosh of Haringey moved Amendment No. 313A: After Clause 46, insert the following new clause:

§ ("Compensation for land sales

§ .—(1) This section shall apply in any case where a local authority, public corporation or other public body may be required pursuant to a statutory provision to dispose of land where the body certifies that it would not, but for the operation of the provision, seek to dispose of the land at the intended date concerned or to the person to whom, or the price at which, it is proposed that it be disposed.

§ (2) In any case in which subsection (1) above applies, the Secretary of State shall issue a notice stating that—

(a) he is satisfied that the proposed disposal is at a price or on terms which are fully commensurate with the value of the land, calculated on the basis of any existing or proposed use of the land (whichever is the higher) of which the authority notifies him; and
(b) he is satisfied that no alternative use of the land which the authority or other body has proposed to him is more desirable or conducive to the needs of the area in enabling the body to maintain or improve its services, or on planning or environmental grounds.

§ (3) No disposal falling within subsection (1) above shall be completed before the issuing of a notice under subsection (2).").

§ The noble Lord said: There is an issue upon which I hope to have the support of the noble Earl, Lord Lytton, if I have not totally alienated him as a result of my previous remarks. Amendment No. 313A relates to the possibility of a local authority being forced to sell land at a time which may be unsuitable in terms of the market place or alternative uses for the land.

§ This is a probing amendment. It does not relate to any provision in the Bill but arises from a consultation paper encouraging the use of vacant public land. It was issued by the department last summer and has received a spirited response from those who were consulted. We have not yet received a formal indication of the response nor of the Government's reaction. However, rumours are circulating that somebody somewhere in Marsham Street, whether on the 17th floor or elsewhere, would like to bring into this the provisions proposed in the consultation paper. Those provisions would mean that local authorities which had vacant land could be required to dispose of it to a named buyer or, for example, they could be forced to dispose of all vacant land within a given geographical boundary.

§ The original thinking behind that is the fact that there is too much vacant public land. There is also too much vacant private land, but the Government do not think of those two facts in the same way. Indeed, there is a lot of vacant land, much of which has been vacant for far too many years. Experience of the docklands and many other parts of London, to take only the places which I know best, is that vacant land continues unused for far too long.

§ The thinking behind the Government's consultation paper appears to be that somehow that is a failure of property portfolio management rather than what I suspect is much more the case and has been the case for many years—namely, not that there is unwillingness to use the vacant land but that there are either genuine disputes about what the land should be used for or, more often, a serious lack of positive and well financed proposals for the use of the land. In other words, what is wrong is the economies of our inner city areas rather than the property management powers of the public sector.

§ Indeed, if it were only the property management powers of the public sector which were at fault, why is there so much vacant privately-owned land? It has always been held to be a virtue by house builders, for example, that they should hold a land bank and should have enough vacant land available to them to have a building programme for a number of years ahead. That was in the days when there were house builders and building programmes. Those days may return but probably not under this Government. I suspect that that belief is a fallacy and the reasons for 1016 private and public vacant land are very much the same: the state of the economy and conflicts as regards the potential uses for land rather than failures of management.

§ This amendment seeks to protect the community charge payers and those who are behind local authorities. The intention is to make sure that the public assets which they own are not disposed of at the whim of the Secretary of State at anything under the best possible value. Also, they should not be disposed of when suitable alternative uses exist on service, planning or environmental grounds. Therefore, the amendment provides that if the Secretary of State is to make statutory provision to dispose of that land, he shall require the public body to certify that it would not, but for the operation of the provision, seek to dispose of the land at the intended date to the person to whom or at the price at which it is proposed that it be disposed of; and, if it applies, he shall issue a notice saying that he is satisfied that that is the right price and that there is no alternative public use of the land which is more desirable or conducive to the needs of the area. I summarise wildly in order not to impose on the Committee.

§ The responsibility for proper estate management is quite properly held as being a very important responsibility of local authorities and public bodies. They are quite properly called to task if they fail to dispose of land at the best prices or fail to take account of proper alternative uses. If there is any truth in the rumour that the Secretary of State is to take over those responsibilities, the very least we can ask is that he should take on the responsibility also of determining, for the protection of the public body concerned, that the price is right, or that the alternatives have been properly considered, or both. I beg to move.

Baroness Blotch
I fear that there has been some serious pre-emption of the consultation paper in the amendment. I assume that the noble Lord's amendment—which seems to me to be clearly outside the scope of the Bill—is aimed at the Secretary of State's power under Section 98 of the Local Government, Planning and Land Act 1980 to direct the disposal of unused or underused land owned by a relevant public sector body and entered on his register. I am certainly not aware of any other powers to which it might apply.
As such, the amendment is misconceived. Before making a direction the Secretary of State is required to give the owner formal notice of its proposed contents and at least 42 days to make representations about any aspect of it. In taking his decision the main point the Secretary of State normally considers is whether the owner has firm and practical proposals either to bring the land into use or to dispose of it within a reasonable period. The desirability or otherwise from a planning, environmental or other point of view of the particular use the owner has in mind is not relevant to his decision in this context. In practice the representations made have been taken so seriously that only one direction has been made for every three notices issued; and where a direction has been made it has sometimes 1017 incorporated changes in the proposed method or terms or timing of disposal to meet points made by the owner.
Directions normally leave the owner free initially to decide the method of sale and only specify a particular method as a last resort; for example, auction or advertised tender. For cases where there is only one likely purchaser—for example, an adjoining owner—the price is normally required to be no less than the district valuer's valuation.
A direction that specifies the method of disposal carries with it implied consent to waive the best-price requirement of Section 123 of the Local Government Act 1972, as the courts held in the 1987 Manchester case; but we would certainly not normally expect any conflict with that requirement. We are as concerned as anyone that an owner should get a proper price for his land; indeed for that reason we would be hesitant about directing disposal when the general level of the market was depressed in the short term or when problems affecting the price of a particular site—for example, the planning position—were likely to be resolved within a reasonable period. But where an owner uses arguments about best price merely as an excuse for unreasonably hanging on to land, the Secretary of State should remain free to exercise his own judgment in the light of all material considerations without being fettered as to which considerations he must take into account.
The noble Lord may well have in mind some of the proposals in our recent consultation paper Encouraging the Use of Vacant Public Sector Land and the possible effect they might have on the price obtained by owners or on the use of a particular site. Some people seem to have the impression that our proposals were aimed at developing sites which were or could sensibly be used as, for instance, public open space, which was certainly not our intention. I do not think that in the context of this Bill we should embark on a general debate about how to deal with vacant public sector land. On this I would only stress that it is a poor use of public resources that so much public land is still being held without being used. We therefore need to consider further measures to bring such land into use. The consultation paper was part of this consideration.
The Government are looking at a wide range of options for encouraging the use of vacant land. In doing so we shall certainly take full account of the responses received to the consultation paper. I do not think I shall be betraying any great secret if I admit that there have been fairly strong adverse reactions in some quarters to our proposals for named-person directions and for franchises in particular. However, any decision to proceed with these proposals would involve legislation at some future date and your Lordships would have full opportunity to debate them then.
In the circumstances I hope the noble Lord will not press the amendment.

§ The Earl of Lytton
Before the noble Lord, Lord McIntosh, is goaded into deciding which way he will reply, perhaps I may stress that I do not rise in any 1018 sense out of anger stemming from what was said earlier in the debate. Far from it. I draw to his attention that I was the one who had the cut-off point when the noble Lords, Lord Stanley and Lord Cornwallis, were suggesting that I was not going far enough.
I say straight away that the principle behind getting these matters on a level playing field, which I suspect is what the noble Lord, Lord McIntosh, was saying, is something with which I agree. However, that is as far down the road as I would go with him. He is espousing the interests of the most powerful of the organisations involved with compensation; namely, the acquiring authorities. I do not think that that should be forgotten. The fact that they are responsible to committees does not make them any less powerful or capable of using those powers in their own interests.
In particular the noble Lord, Lord McIntosh, is trying to achieve a situation which has been a common thread throughout the debates on this Bill. I refer to the expansion of the non-recourse powers available to local authorities whether for planning or compensation. I stress the term "non-recourse" because I stand fairly and squarely against that concept unless there is a compelling reason why that should be the case.
In my understanding of the situation the noble Lord, Lord McIntosh, wants everything to be accorded to local authorities. He has been at pains to deny the private claimant. By that I mean the residential and the large claimant supposedly represented by the noble Lord, Lord Stanley of Alderley and my noble friend Lord Cornwallis. The noble Lord, Lord McIntosh, is trying to heap a pile of earth in front of the other side's goal while removing the pile in front of his own. I am not sure that that is a fair way of doing things. I had to make that point clear.

§ Lord McIntosh of Haringey
I get lost in football metaphors. Even I, who have never played football voluntarily and not at all since the age of 13, know that if I wanted to win a game I would not heap a pile of earth in front of the opposing goal and clear the way to my own. I would do the reverse.

§ The Earl of Lytton
The simile is a poor one. Noble Lords can tell that I am not an expert on football, but I believe that the noble Lord has the gist of what I was saying.

§ Lord McIntosh of Haringey
I have the gist of what the noble Earl is saying. Whenever I hear noble Lords talking about issues of principle I know that considerable sums of money must be involved. I do not mean that personally. The Minister's reply was quite fascinating. It made me very pleased that I had persisted with this amendment. I was pleased with her response that this Bill is not the appropriate place for the amendment. I was also pleased to hear her admit that the response to last year's consultation paper contained a good deal of antagonism and that if anything were to be done it would require future legislation. Can the Minister now be absolutely precise and confirm that future legislation does not mean at a future stage in the proceedings on this Bill?

1019

§ Baroness Blatch
I can give the noble Lord an absolute assurance.

§ Lord McIntosh of Haringey
I am pleased to hear that and that there is no prospect in this Bill of what has been threatened, which is in effect the privatisation of vacant public land. When and if such legislation comes—if the Government are still here to propose it we shall oppose it vigorously. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10 p.m.
Clause 47 [Home loss payments]:

§ Lord McIntosh of Haringey moved Amendment No. 314:

§ Page 54, line 18, at beginning insert:

§ ("(1) In section 29(1) of the Land Compensation Act 1973 (right to a home loss payment where person displaced from dwelling) there shall be added after paragraph (e) the following paragraph— (f) the making by a magistrates court of a nuisance order prohibiting use of the dwelling for human habitation pursuant to section 82(3) of the Environmental Protection Act 1990. and in sub-paragraph (v) after the words "paragraph (e)" there shall be added the words "or (f)".").

§ The noble Lord said: In moving this amendment, I wish to speak also to Amendments Nos. 315, 316, 317, 326 and 332. In the admirable reply given by the noble and learned Lord the Lord Advocate to a preceding series of amendments, we have clearly distinguished between the very special case of home loss payments and other forms of compensation. We have now reached, the stage of the Bill where we deal with home loss compensation. From these Benches I welcome the increased provision which has been made for home loss payments. Let us not be at all grudging about that.

§ Baroness Blatch
Is the noble Lord speaking also to Amendments Nos. 321A and 322A in this grouping?

§ Lord McIntosh of Haringey
No, I did not understand that I was. Amendment No. 321A is in a group with Amendment No. 317. I do not have Amendment No. 322A anywhere.
In welcoming the improved provisions for home loss, we are pointing out through these amendments where the home loss provisions are too heavily weighted towards owner occupiers and not heavily weighted enough towards tenants, particularly certain classes of tenants. After, all we are talking about home loss; we are not talking here about loss of property. The loss of property is dealt with in the compensation on the value of a property.
Home loss payments are the payments for the loss of a home and they are in addition to any payments for the property. So far as we can see there is no good reason why there should be improved payments in home loss terms for people who have been owner occupiers for a shorter period of time, which is what is proposed in the Bill, as compared with those who may have been tenants for a considerable period of time. We take the welcome concessions on home loss 1020 payments and extend them to a number of groups which in our view are at least as deserving of home loss payments.
Amendment No. 314 deals with those tenants who are shifted permanently from their homes because those homes have become unfit for human habitation. Amendment No. 315 refers to those who are removed permanently from their homes because of repairs and improvement work. The change towards movement for improvement reasons is valid, but repairs, if they are serious enough, can equally require permanent removal. Amendment No. 316 reflects the new forms of tenancy of the 1989 and 1990 Acts and provides that home loss payments should be available to assured tenants as well as to secure tenants.
Amendment No. 317 reflects changes which have taken place in legislation and also changes which have taken place in the practice of the private rented market. It extends home loss payments to contractual licensees as well as to secure tenants. On reflection, we should have added to Amendment No. 317 spouses with rights of occupation under the Matrimonial Homes Act. I regret that we did not think of including such a provision. If we come back to the matter at another stage we shall certainly wish to do so.
Amendment No. 326 in the same group is an attempt to provide a better definition of the phrase, "date of displacement", which is used in the legislation without being defined. I said "a better definition"; I should have said "a definition", because there is not a proper definition. I shall be interested to hear what the Minister thinks "date of displacement" means. We think and hope that our amendment gives a reasonable and workable definition.
Finally, Amendment No. 332 deals with the issue of disturbance payments which are the payments not for home loss but for compensatable interest. It is interesting to see that those Members of the Committee interested in property are no longer in the Chamber. The amendment deals with tenants who do not have what is called—it is an unpleasant word—compensatable interest. It seeks to deal with their actual expenses in removal and forced removal.
The people covered by these amendments are very much more deserving than some of those who have been the subject of previous amendments designed to help landowners and property holders. I suggest to the Committee that the amendments are very much in line with the welcome steps that the Government have taken to improve the home loss amendments. I hope the Government will feel that the extensions which have already been made would in terms of pure social justice be properly extended to the categories of tenants covered in my amendments. I beg to move.

§ Baroness Blatch
The fundamental purpose of the home loss payment scheme is to provide a monetary solace for the distress and upheaval which people suffer when compelled to leave their home at a time not of their choosing. We are concerned here with situations which involve the permanent loss of a home. Indeed, it is from the permanence of the loss that the personal distress mainly arises. There would 1021 thus seem to us no case for accepting the principle of Amendment No. 314, which would extend the entitlement to cases where a person is only displaced temporarily from his home by a court order under the Environmental Protection Act 1990 while action is taken to abate a statutory nuisance which is affecting the dwelling.
Similarly, we could not accept Amendment No. 315, which brings in cases where the occupant is displaced in certain circumstances to allow repairs to be made to his home. The legislation already provides for some home loss payments to be made where there is a permanent displacement because of an authority's need to carry out improvements. But one would expect that where repairs—as distinct from improvements—are concerned, there is a strong possibility that the occupant will return to his home once the work has been carried out. The amendment might have the effect of discouraging authorities from carrying out essential repairs because of the potential liability to pay home loss payments.
Amendment No. 316 would establish an entitlement to a home loss payment in circumstances where a housing association tenant with an assured tenancy under the Housing Act 1988 was displaced under the terms of the redevelopment ground in that Act. I have every sympathy with the noble Lord's objective. I am not convinced, however, that it would be best achieved by extending the scope of the home loss payment scheme in the way he suggests. It is of course true that home loss payments continue to be available to those housing association tenants who have secure tenancies under the Housing Act 1985. But we would not be happy about legislating to apply the same principle to those with assured tenancies under the 1988 Act. The assured tenancy regime has been the basis for most new housing association lettings since January 1989. It is the same statutory regime as applies to most new private landlord lettings and our general policy has been to avoid introducing specific statutory provisions for assured tenancies let by housing associations that are not part of the assured tenancy regime as a whole.
It seems to us that the right way forward in this matter is by way of the tenants' guarantee. That is the general framework of guidance which is formulated by the Housing Corporation, with statutory backing, and with which all registered housing associations are expected to comply in managing their properties. The guarantee already makes some provision for compensation and disturbance payments where associations carry out improvement work. But we propose to ask the corporation to look at the issue more broadly with a view to providing, via the guarantee, the safeguard which the noble Lord is seeking.
Amendment No. 317 seeks to introduce three further categories of person who would be entitled to claim home loss payments. The first covers, a statutory tenant within the meaning of the Rent Act 1977". That is unnecessary because, although the Land Compensation Act 1973 refers to tenants under the Rent Act 1968, the Interpretation Act permits us to 1022 apply the home loss payments provisions to re-enactments of the 1968 Act such as the 1977 Act. The second category includes those occupying a dwelling under a contractual licence. Home loss payments are aimed at people who are forced to leave a home to which they have developed a real attachment. There is really no case for making them available to people who merely occupied a dwelling on a short-term basis, as this amendment would require. Such people cannot normally be regarded as having any commitment to their home and might move on at any moment. The existing provisions implicitly but purposely exclude licensees such as lodgers, because of the possibility that such persons could deliberately move from place to place, where they had knowledge that an authority was soon to acquire the property compulsorily, and could claim a home loss payment on each occasion.
The third category of additional claimant would be spouses with rights of occupation under the Matrimonial Homes Act 1983. We are of course concerned here with those who have been deserted by their marriage partner. I certainly do not want to give the impression that the Government are insensitive to the problems faced by such people. However, it is a basic principle of the home loss payment scheme that eligibility for payment depends on having a legal interest in the property.
Under the Matrimonial Homes Act a deserted spouse may retain the right to occupy the marital home but he or she does not acquire a legal interest in the property. A deserted spouse can seek to make arrangements by agreement or through the courts to have a legal interest in the property transferred to him or her as part of a divorce or judicial separation settlement. The fact that such arrangements may not have been made in a particular case would not seem to justify a departure from the principle that eligibility for a home loss payment is dependent upon having a legal interest in the property.
I move now to Amendment No. 326. Under the existing home loss payment provisions, the entitlement to receive a payment occurs on the date on which the claimant is displaced from his home in consequence of any of the circumstances laid down in Section 29(1) of the 1973 Act. The date of displacement is thus the date on which he ceases to occupy his home and, by implication, the date on which the authority takes possession of the property. That seems to be an eminently sensible and uncomplicated arrangement which appears to work perfectly well. There thus seems no reason to make the change proposed by the noble Lord.
I turn finally to Amendment No. 332. This would extend the circumstances under which a disturbance payment can be made under Section 37 of the Land Compensation Act 1973. Section 37 applies to people without a compensatable interest in land (including homes but excluding agricultural land) from which they are displaced by the action of a public authority. The circumstances of displacement are very similar to those which give rise to home loss payments. Disturbance payments therefore particularly apply to 1023 those who occupy land or houses under a tenancy but, as with home loss payments, do not apply to those merely occupying property on an informal basis. The noble Lord's amendment seeks to widen or redefine the circumstances in which disturbance payments are payable, in much the same way as his other amendments sought to extend eligibility for home loss payments. For similar reasons to those which I have already stated, I am not persuaded that there is any case for extending the existing provisions in the ways the noble Lord proposes.
I am not sure whether the noble Lord is happy with that explanation, but I hope that he will not press his amendments.

§ Lord McIntosh of Haringey
I think that the Minister and I really have the same objective in mind. We are looking for home loss payments to be made where there is a substantial attachment to the home, mainly because somebody has been there for a very long time. In the Government's own amendments and in the changes they have made to the home loss payment scheme for owner-occupiers they have reduced the period of occupation very substantially so that it is now down to one year at the minimum. Therefore so far as owner-occupiers are concerned—I understand it is on a sliding scale—the Government have departed from the principle that the noble Baroness expressed and with which I expressed agreement.
If the noble Baroness looks at the real world she will find that the great majority of cases which fall under my amendments are not exclusively concerned with people who have been in occupation for a long time, but they do include substantial numbers of tenants who have been in occupation for a long time. Whenever one looks at compulsory purchase orders and remembers that they are in a minority, one finds that they tend to be—because it is more convenient to design road schemes and similar schemes where there are on y tenants rather than owner-occupiers—older properties, tenanted properties and properties where people have been in occupation for a considerable time.
I was not convinced that the noble Baroness had an adequate answer to my case for those who are removed permanently from their home because it is unfit for human habitation or else requires very substantial repair rather than improvement. The effect on the tenant, after all, is the same whether it is a case of repair, improvement or redevelopment. I was not convinced that the noble Baroness had dealt with the cases which undoubtedly exist of very long-standing tenants in those categories.
I was not convinced either that she had answered the case which was put for the new classification of assured tenant as well as that of secure tenant. I shall have to read carefully what the Minister said, and think about the Housing Corporation rules before I decide what to do about the amendments. On Amendment No. 326, I am satisfied with the definition given t y the Minister, and I do not wish to pursue that amendment. On disturbance payments, I do not 1024 believe that the Minister has addressed the issue of the expenses of those who do not otherwise have a compensatable interest.
I have an apology to make to those few Members of the Committee who may have been listening in detail. Because of the layout of Amendment No. 317, I did not realise that I had adequately provided for spouses under the Matrimonial Homes Act. I thought that it would have been a separate sub-paragraph. With those remarks and the thought that there are some aspects of the amendments to which I may wish to return, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 315 to 317 not moved.]

§ 10.15 p.m.

§ Lord Mottistone moved Amendment No. 317A: Page 54, line 41, leave out ("10") and insert ("25").

§ The noble Lord said: I shall speak also to Amendment No. 318 to which my noble friend Lord Coleraine and the noble Lord, Lord Meston, have their names, and Amendments Nos. 326A and 326B which are the Scottish equivalents to the first two amendments. Grouped with them are Amendments Nos. 317B, 318A, 319A, 320, 321A, 321B and 322A. I am advised, as I am sure the Committee will be aware, by the CBI. I am told that the amendments are also supported by the British Road Federation.

§ As the CBI has shown in its report Trade Routes to the Future, a good road and rail network is vital to this country's economic well being. Without it we shall not be able to manufacture goods on time and deliver them to customers when they need them. Our business people will be sitting in traffic jams while our competitors conclude contracts. The CBI estimates that road congestion alone costs the country £15 billion each year and is becoming worse.

§ This is not the time to have a full-scale debate on infrastructure and the extent to which the Government might subsidise it; it is, however, an opportunity to see whether the planning system can be used to encourage rather than delay the provision of vital infrastructure. There is no doubt that the planning approval system works too slowly and frustrates developments crucial to the general business community. It is democratic. That is something we all wish to preserve. So the dilemma is how to reduce the automatic tendency of those affected by development to object to it. In a nutshell, it is bureaucracy versus democracy.

§ Business believes that in broad outline the Government have the right solution. They compensate those affected with more than the market value of their property and offer them a just reward for the loss that they suffer, so that there is a real incentive to settle terms without undermining the whole development project.

§ The amendments do not in any way negate the principle which the Bill introduces of offering reasonable levels of compensation to create an incentive for home owners not to object to nearby development. However, the Government have not allowed a sufficient premium over market value to 1025 discourage people from formally opposing development proposals. Nor have the Government appreciated that many properties, especially in rural areas and in the South-East where the Channel Tunnel rail link will be needed, have values in excess of £150,000 and that by stipulating a £15,000 interest in the dwelling as a maximum, the incentive element is substantially eroded.

§ I do not believe that it is fair, justifiable or necessary to state a maximum. Accordingly, in Amendments Nos. 318 and 326B I ask the Committee to remove it from the Bill.

§ In France where, as we have heard earlier, the system provides 20 per cent. compensation above the market rate, restrictions are built in so that those being compensated waive their rights to object. I accept that that is not a model which the Government would wish to follow. However, if people are voluntarily to refrain from objecting, the level of compensation should probably be higher than that which is offered in the Bill. In the Bill in my Amendments Nos. 317A and 326A I suggest that the very reasonable and conservative figure of 25 per cent. should replace the 10 per cent.

§ In conclusion, I should like to congratulate the Government on the innovative provision that allows home loss compensation above current market value. I realise that the rate suggested may have been derived from a study within the Department of the Environment, but I believe that the CBI, with its greater understanding of the real marketplace, would have a better idea of the right figure.

§ I hope that the Government will accept my argument for 25 per cent. If, for some reason, my noble friend does not see the merit of the argument, I hope that she will have a very good explanation. I beg to move.

§ Lord Ross of Newport
Before the Minister replies, perhaps I should speak briefly to the amendments in the name of my noble friend Lord Meston. Unfortunately, he cannot be here, and he apologises for his absence.
The noble Lord, Lord Mottistone, has covered the area very comprehensively. His amendment contains the figure of 25 per cent. and that of my noble friend Lord Meston proposes a figure of 20 per cent., but they are both in agreement that there should not be a maximum.
I assume that the noble Lord, Lord McIntosh, will speak to his own amendment, to which I have added my name, covering the problems of tenants. I am sure that he will do so much better than I. It seems to be totally wrong that we should restrict the maximum compensation to tenants to £1,500. I admit that initially I put in a figure of double that amount —£3,000—but I have withdrawn that because the figure could be substantially higher. The amendment which the noble Lord will shortly be moving sets out the reasons why we think tenants should be entitled to greater compensation when they have carried out substantial improvements to their properties. In many cases this could well be to a value in excess of £3,000. They are going to come off extremely badly, judging 1026 by the example which has been quoted to us by a body which is acting for clients whose properties are subject to acquisition. Long leaseholders who have bought their properties are likely to get £100,000, whereas secure tenants are restricted to £1,500. That does not seem to be fair and equitable.
I entirely agree with the remarks of the noble Lord, Lord Mottistone, that the Government have moved on the issue and are writing into the Bill the provision of home loss payments—which certainly has not always been adhered to in the past—by authorities and others who are acquiring. That is very much a move in the right direction. However, I hope that the Government will be a little more generous.

§ Lord McIntosh of Haringey
The amendments in my name in this group are Nos. 320, 321A and 321B, and I should like to confine myself basically to those three amendments. Amendment No. 321A has already been spoken to by the noble Lord, Lord Ross. Amendment No. 320 takes up the point on which I thought that the Minister and I were in agreement, that the criterion for home loss payments ought to be the length of time which an owner-occupier or a tenant has been in the property and therefore the degree of attachment which might be thought to apply to it. We have applied the same principle to these payments, and we have suggested that rather than having it based on the value—which is a sordid commercial consideration—it should reflect the number of years in occupation. In sheer logic I do not think the Minister, having said what she has, has any way of resisting this extremely modest proposal.
As the noble Lord, Lord Ross, has said, Amendment No. 321A was tabled on behalf of a group of tenants in West London who would suffer considerably if the new home loss payments scheme were to pass unaltered into legislation. Walterton and Elgin Community Homes Limited is a tenants' association in London W9. That association has two tower blocks on its books that contain a few secure tenants and leaseholders who are all members of the same group. The leaseholders have exercised their right to buy, but the secure tenants clearly have not done so.
The local authority has served notices on the secure tenants to seek possession under Ground 10 of Schedule 2 to the Housing Act 1985. That is the provision that deals with works. It is negotiating with the leaseholders to buy back their flats. Some of the leaseholders may be able to buy property outside the local authority's stock, and some of them may be able to obtain replacement property from the local authority's stock. However, some tenants have moved voluntarily as a result of the local authority's action, and have been offered home loss payments of £1,500. That is the present maximum. Those tenants will not benefit at all from the provisions of this Bill. However, the leaseholders who would receive £1,500 under the existing legislation could now obtain as much as £10,000. The group of people whom I am discussing believes fair treatment should be extended to tenants and leaseholders. There is no difference between them as regards the degree of attachment to their dwellings. 1027 They have all spent the same amount of time in them, but only some of them have had the opportunity to exercise the right to buy.
Amendment No. 321B seeks to ensure that payments are regularly increased in line with house prices. I could expand on that point substantially but I shall spare the Committee a detailed explanation. Those amendments are a modest contribution to this block of amendments but I hope that they will find favour with the Government.

§ 10.30 p.m.

§ Lord Coleraine
I wish to extend the welcome that other Members of the Committee have given to the Government for introducing Clause 47, which is a real improvement to the home loss provisions. My Amendment, No. 318, has already been discussed by my noble friend Lord Mottistone. I do not wish to add anything further to his comments except to say that the principle of a cut-off at £15,000 would, I believe, be a difficult one to impose at the present time when so many houses, especially in the South East, are selling for very much more than £150,000. That is the price that would produce the compensation.
The Committee should also consider what happened to the property market in the first half of 1988 when in many parts of the country house prices increased by 30 per cent. Therefore someone whose compensation was fixed on the value of his property at the beginning of that year found that, by the time he came to buy somewhere else to live, property prices had risen by much more than the 10 per cent. which the home loss supplement is to provide under the terms of this Bill.
I do not necessarily think that one should talk in terms of the 25 per cent. supplement for which the CBI has asked. However, I think that there must be some case for suggesting that the Secretary of State should retain the power not only to alter the maximum and minimum payments, but also to alter the percentages, as there may be times when a 10 per cent. supplement would be inadequate.
A number of points have been made on this matter and I associate myself with the spirit of most of them. I hope that my noble friend will consider that there are aspects of the clause which need to be fairly radically reconsidered.
Whereas the 1973 Act was even-handed as between freeholder and tenant the Bill distinguishes between freeholder and tenant. The cut-off is to be a definition of "owner" contained in the Acquisition of Land Act 1981, which has nothing to do with compensation. In my view that cut-off produces unfairness and anomalies as between freeholders or owners and tenants.
It seems to me to be quixotic to treat a lease with three years and a day to run and no security at the end of the term on more favourable terms than a Rent Act statutory tenancy which may run for many years and which will be of great value to the tenant and would be of great monetary value if the tenant were allowed to sell, which the tenant is not allowed to do. There is also the position of the long residential lessee under 1028 Part I of the Landlord and Tenant Act 1954 with less than three years unexpired and a very advantageous ground rent, plus the right at the end of the term of hold-over as a statutory tenant. That tenant has much of value and it is arguable that he or she should not be left with a maximum of no more than £1,500 compensation.
Quite apart from the anomalies there is the question of balance between the owner and the tenant. The noble Lord, Lord McIntosh, has suggested that the clause unduly favours the owner. The Committee may know of my feelings on the matter because I have put down a Motion for a balloted short debate to draw attention to the fiscal and other distortions which favour owner-occupation and the affect of those distortions on every aspect of life, including economic and investment decisions. I am inclined to look at the matter from the point of view of the tenant. I agree with the noble Lord, Lord McIntosh, and other noble Lords who have spoken that a maximum of £1,500 is inadequate. It is, after all, the sum which a number of tenants would have received had their properties been compulsorily acquired in 1973.
It may be that the Bill should provide for a flat payment to all persons who are dispossessed and entitled to compensation. That flat payment would be more than £1,500. Other figures have been mentioned. It is inappropriate for me to suggest a figure because resources are involved, but a flat payment of £1,500 is quite inadequate. It should be more, possibly with a right without limit to percentage compensation. That percentage might be less than 10 per cent.
There is another aspect of this matter: the compulsory acquisition of tenanted properties by local authorities and other authorities such as British Rail, which is in our minds tonight in view of the Channel Tunnel proposals. I believe that where a compulsory acquisition is made where there is a tenant occupier in most cases there is an obligation on the acquirer, if it is a local authority, to rehouse the tenant in council housing. As I understand it, there is an obligation on British Rail to see that the occupier is rehoused, which may mean that they have to go to the local authority and persuade them to make council housing available to the person being displaced by British Rail.
If there was some way of getting that person out of council housing and into the private housing market as a tenant, for example under the new provisions introduced by the 1988 Housing Act, that would seem to me to be very advantageous. But it follows from this that if we are talking about several grades of compensation, it might be right to suggest lower compensation for a tenant who is being rehoused by the local authority and higher compensation to persuade other tenants to move into the private sector and find their own rented accommodation, or perhaps in more favourable times to get a mortgage and buy their own houses. I have said enough. I support everything that is in the clause, but I think it has not yet got it right.

§ Baroness Blatch
The amendments involve changes to our proposed new basis for determining the level of 1029 home loss payments for those displaced from their homes as a result of compulsory purchase or other statutory action.
As I have indicated to the Committee during earlier debates, the basic purpose of the home loss payment is to provide some compensation for the personal distress and inconvenience people normally suffer when required to move house at a time not of their own choosing. The payment is made on top of market value compensation for the property itself and the reimbursement of incidental expenses which apply in all compulsory purchase cases. The changes we are proposing provide for home loss payments to be made to owner-occupiers on considerably more generous terms than the current flat rate of £1,500. Tenants remain on the flat rate but they in particular should gain from the substantial reduction in the qualifying residence period from five years to one year. They will also benefit from the new provision which enables periods of residence prior to a previous qualifying displacement to be taken into account in determining whether the residence qualification is satisfied.
I hope all noble Lords will accept that, taken together, our proposals represent a significant advance on the existing position in respect of home loss payments. The question is: Have we gone as far as we could have done in these matters? The noble Lords moving these amendments are all suggesting in their different ways that we have not.
I would be the first to admit that the issues we are dealing with here are sensitive and difficult ones. Clearly, there is no simple way of putting a monetary value on personal distress. Whatever approach we adopt can be only a matter of judgment, and in exercising that judgment we have to have regard to what is fair not only to the claimant but also to the taxpayer, or charge payer, who has to underwrite whatever level of payment we fix.
So far as concerns the percentage payment for owner-occupiers, I cannot say that our proposed 10 per cent. is the right figure and that the alternatives suggested are wrong. I can say only that, having thought long and hard about the matter, we concluded that it was reasonable to plump for 10 per cent. The same goes for the specified minimum and maximum amounts. These seem to us to provide appropriate parameters, bearing in mind they are to apply across the country as a whole. To those who feel that the maximum amount is unduly low, I would say that, on the evidence we have concerning the value of properties affected by compulsory purchase, there will be very few cases in which the upper limit actually bites.
A number of the amendments reflect concern that our proposals do not involve sufficiently generous treatment of tenants as compared with owner-occupiers. While it is undoubtedly true that nearly everyone is distressed when they have to move home against their will it does seems to us that the distress will normally be greater for those who have substantially invested in their homes. Therefore, we believe it right that the level of payment for owner-occupiers should in general be higher than for 1030 tenants. But, as I have already said, tenants do stand to gain significantly from the other changes we are proposing.
I turn now to the amendment of the noble Lord, Lord McIntosh, Amendment No. 321B, which would require the Secretary of State to review the minimum and maximum amounts annually in relation to movements in house prices and, if they had not held their value, propose increases to Parliament. As I said, we are generally satisfied that the amounts specified in the Bill are the right ones to choose at the present time. However, the Secretary of State will continue to have power to prescribe different amounts by regulation. This is a point that I know will interest my noble friend Lord Coleraine: that is to say, primary legislation is not required for any change to the minimum or maximum.

§ Lord Coleraine
I thank my noble friend. Does that apply only to the maximum and minimum or does it apply to the percentage?

§ Baroness Blatch
I believe that it does not apply to percentages but it applies to the maximum and minimum.

§ Lord Coleraine
The percentage was what I was asking for in my speech. I asked that the Government should consider a power to change the percentage.

§ Baroness Blatch
Then I fear that I have not pleased my noble friend.
In conclusion, it may be helpful to remind the Committee once again of the main features of the Government's home loss payment proposals. Owner-occupiers, who previously received a flat rate payment of £1,500, will now receive 10 per cent. of the value of their property, subject to a minimum of £1,500 and a maximum of £15,000. The payment for non-owner-occupiers remains at the £1,500 flat rate. But the residence qualification for all claimants is cut from five years to one year. We are also broadening entitlement in various other ways—in particular by removing the bar on a home loss payment in the case of blight notice acquisitions. These new arrangements apply to anyone displaced in qualifying circumstances as from 16th November 1990.
I turn to Amendments Nos. 321A and 322A. These would broadly require the landlord of a secure or assured tenant who is entitled to a home loss payment to reimburse the tenant on his displacement with the value of any improvements which the tenant has made to his home. Such a requirement would fall right outside the concept of the home loss payment and has nothing to do with the value of material objects which may have been added to the home at some stage. There is no obligation on tenants to make improvements to their homes but, where they do, they may be eligible for a grant towards the cost.
I hope that the Committee will accept that what we are concerned with here are essentially issues not of simple fact but of judgment and balance. Overall, we are confident that we have the balance right and that, taken together, our proposals add up to a much better 1031 deal for all claimants. I hope that Members of the Committee will be prepared to accept this and not see a need to press their amendments.

§ Lord Mottistone
I heard what my noble friend had to say. She talks quite rightly about the need for home compensation to compensate for personal distress on the part of owners of houses. The burden of my remarks from the point of view of industry is that the compensation also acts as a discouragement to such people formally to oppose the development proposals. That is a rather different argument.
The reason I wanted more money for them was that when people have been in a house for a long time they may feel that they do not want to leave the house and receiving an extra 10 per cent. will not be enough to make them feel that they are sufficiently compensated. They therefore say, "We shall jolly well enter the battle to try to get a public inquiry and slow down the whole thing". So the roads and railways are never built and industry suffers.
My noble friend did not address that argument at all. I shall ask her to think about it in the meantime. I do not at this stage of the game wish to press this amendment but I may well come back at Report stage to repeat that argument, especially so that my noble friend may give me an answer which shows that she understands that point. At this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Ross of Newport had given notice of his intention to move Amendment No. 317B: Page 54, line 41, leave out ("10") and insert ("20").

§ The noble Lord said: I should like to say in relation to this, amendment that the compensation to tenants is totally out of line. It ought to be reconsidered. I feel that the rest of these measures are probably quite generous but, so far as tenants are concerned, it seems that they are losing out all down the line. We must reconsider that. I shall not move the amendment.

§ [Amendment No. 317B not moved.]

§ [Amendments Nos. 318 to 320 not moved.]>

§ 10.45 p.m.

§ Baroness Blatch moved Amendment No. 321:

§ Page 55, leave out lines 1 to 11 and insert: ("(3) For the purposes of this section and section 32 below the market value of an interest in a dwelling—

(a) in a case where the interest is compulsorily acquired, is the amount assessed for the purposes of the acquisition as the value of the interest; and
(b) in any other case, is the amount which, if the interest were being compulsorily acquired in pursuance of a notice to treat served on the date of displacement, would be assessed for the purposes of the acquisition as the value of the interest,

amount referred to in paragraph (b) above shall be determined by the Lands Tribunal.

§ (3A) In determining for the purposes of this section and section 32 below the market value of an interest in a dwelling, the dwelling shall be taken to include any garden, yard, outhouses and appurtenances belonging to or usually enjoyed with a at dwelling.").

§ The noble Baroness said: I shall speak also to Amendments Nos. 321, 323, 324, 325, 327, 328, 329 and 330. Amendments Nos. 321 and 323 to 325 make 1032 what are essentially technical changes to the new provisions on home loss payments contained in Clause 47 which apply to England and Wales.

§ As Members of the Committee will be aware, we are proposing that the home loss payment for an owner-occupier should be 10 per cent. of the market value of the property, subject to a specified minimum and maximum. Clause 47 as drafted defines "market value" for this purpose but only in relation to cases where property is being compulsorily purchased. However, the entitlement to a home loss payment also applies in certain cases which do not actually involve compulsory acquisition. These include, for instance, displacements arising from clearance orders under housing legislation. It is necessary to provide a basis for determining market value in such cases and our proposal under Amendment No. 321 is that the calculation should be done as if there were a compulsory acquisition in pursuance of a notice to treat served on the date of the displacement concerned.

§ The remaining amendments in the group deal with the implications of this new provision in relation to the date by which the home loss payment must be made and the right of the claimant to receive an advance payment. Amendments Nos. 327 to 330 make similar changes to Clause 49, which applies to Scotland. I beg to move.

§ On Question, amendment agreed to.

§ [Amendments Nos. 321A to 322A not moved.]

§ Baroness Blatch moved Amendments Nos. 323 and 324:

§ Page 55, leave out lines 30 to 45 and insert:

§ ("(2) Where a person is entitled to a home loss payment, the payment shall be made on or before the latest of the following dates—

(a) the date of displacement;
(b) the last day of the period of three months beginning with the making of the claim; and
(c) where the amount of the payment is to be determined in accordance with section 30(1) above, the day on which the market value of the interest in question is agreed or finally determined.

§ (2A) Where the amount of the payment is to be determined in accordance with section 30(1) above—

(a) the acquiring authority may at any time make a payment in advance; and
(b) if, on the later of the dates referred to in subsection (2) (a) and (b) above, the market value of the interest in question has not been agreed or finally determined, the acquiring authority shall make a payment in advance (where they have not already done so).").

§ Page 56, line 1, leave out from ("agreed") to ("estimate") in line 4 and insert ("to be the market value of the interest in question or, if there is no such agreement, 10 per cent. of the acquiring authority's").

§ On Question, amendments agreed to.

§ Baroness Blatch moved Amendment No. 325: Page 56, line 8, leave out ("on the completion of the acquisition") and insert ("when the market value of the interest in question is agreed or finally determined.").

§ On Question, amendment agreed to.

§ [Amendment No. 326 not moved.]

§ Clause 47, as amended, agreed to.

1033

§ [Amendment No. 326ZA not moved.]

§ Clause 49 [Home loss payments]:

§ [Amendments Nos. 326A and 326B not moved.]

§ Baroness Blatch moved Amendments Nos. 327 to 330: Page 58, line 1, leave out subsection (3) and insert: ("(3) For the purposes of this section and section 29 below the market value of an interest in a dwelling—

(a) in a case where the interest is compulsorily acquired, is the amount assessed for the purposes of the acquisition as the value of the interest; and
(b) in any other case, is the amount which, if the interest were being compulsorily acquired in pursuance of a notice to treat served on the date of displacement, would be assessed for the purposes of the acquisition as the value of the interest,

and any dispute as to the amount referred to in paragraph (b) above shall be determined by the Lands Tribunal. (3A) In determining for the purposes of this section and section 29 below the market value of an interest in a dwelling, the dwelling shall be taken to include any garden, yard, outhouses and appurtenances belonging to or usually enjoyed with that dwelling."). Page 58, leave out lines 31 to 46 and insert: ("(2) Where a person is entitled to a home loss payment, the payment shall be made on or before the latest of the following dates—

(a) the date of displacement;
(b) the last day of the period of three months beginning with the making of the claim; and
(c) where the amount of the payment is to be determined in accordance with section 28(1) above, the day on which the market value of the interest in question is agreed or finally determined.

(2A) Where the amount of the payment is to be determined in accordance with section 28(1) above—

(a) the acquiring authority may at any time make a payment in advance; and
(b) if, on the later of the dates referred to in subsection (2) (a) and (b) above, the market value of the interest in question has not been agreed or finally determined, the acquiring authority shall make a payment in advance (where they have not already done so).").

Page 59, line 1, leave out from ("agreed") to ("estimate") in line 4 and insert ("to be the market value of the interest in question or, if there is no such agreement, 10 per cent. of the acquiring authority's"). Page 59, line 8, leave out ("on the completion of the acquisition") and insert ("when the market value of the interest in question is agreed or finally determined").

§ On Question, amendments agreed to.

§ Clause 49, as amended, agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 331:

§ After Clause 49, insert the following new clause:

§ Advance payments of compensation and interest

§ .—(1) In section 48 of the Land Compensation (Scotland) Act 1973 (right to advance payment of compensation) for subsection (5) there is substituted—

1034

§ (2) After that section there is inserted—

§ "Right to interest where advance payment made.

§ 48A.—(1) This section applies where the compensation to be paid by the acquiring authority for the compulsory acquisition of any interest in land would (apart from this section) carry interest under paragraph 3(1) of the second Schedule to the Acquisition of Land (Authorisation Procedures) (Scotland) Act 1947 or any bond under section 84 (promoters to be allowed to enter on lands before purchase on giving bond etc.) of the Lands Clauses Consolidation (Scotland) Act 1845.

§ (2) If the authority make a payment under section 48(1) above to any person on account of the compensation—

(a) they shall at the same time make a payment to that person of accrued interest, for the period beginning with the date of entry, on the amount by reference to which the payment under section 48(1) above was calculated; and
(b) the difference between the amount of the payment under section 48(1) above and the amount by reference to which it was calculated is an unpaid balance for the purposes of this section.

§ (3) If the authority make a payment under section 48(4A) above to any person on account of the compensation, they shall at the same time make a payment to him of accrued interest, for the period beginning with the date of entry, on—

(a) the amount by reference to which the payment under section 48(4A) above was calculated; less
(b) the amount by reference to which the preceding payment under section 48(1) or (4A) above was calculated.

§ (4) Where the authority make a payment under section 48(4A) above on account of the compensation, the difference between—

(a) the amount of the payment; and
(b) the amount by reference to which it was calculated less the amount by reference to which the preceding payment under section 48(1) or (4A) above was calculated,

is an unpaid balance for the purposes of this section.

§ (5) If, on an anniversary of the date on which the authority made a payment to any person under section 48(1) above on account of the compensation—

(a) the amount of accrued interest on the unpaid balance under subsection (2) above or, as the case may be,
(b) the aggregate amount of the accrued interest on any unpaid balances,

exceeds £1,000, the authority shall make a payment to the claimant of the amount or aggregate amount.

§ (6) The acquiring authority shall, on paying the compensation, pay the amount of the accrued interest on the unpaid balance under subsection (2) above or, as the case may be, the aggregate amount of the accrued interest on any unpaid balances.

§ (7) For the purposes of subsections (5) and (6) above, interest accrues on any unpaid balance for the period beginning with—

(a) the making of the payment under section 48(1) or, as the case may he. 48(4A) above; or
(b) if any payment has already been made in respect of that balance under subsection (5) above, the date of the preceding payment under that subsection.

§ (8) For the purposes of this section—

(a) interest accrues at the rate prescribed under section 40 of the Land Compensation (Scotland) Act 1963 or, in the case of a bond under section 84 of the Lands Clauses Consolidation (Scotland) Act 1845, at the rate specified in that section; and
(b) the amount by reference to which a payment under section 48(1) or (4A) was calculated is the amount referred to in section 48(3) (a) or (b) for the purposes of that calculation.

§ (9) Where any payment has been made under section 48(1) above on account of any compensation, the acquiring authority is not required to pay interest under paragraph 3(1) of the second Schedule to the Acquisition of Land (Authorisation Procedures) (Scotland) Act 1947 or any bond under section 84 (promoters to be allowed to enter on lands before purchase on giving bond etc.) of the Lands Clauses Consolidation (Scotland) Act 1845.

§ (10) Where the amount, or aggregate amount, of any payment under section 48 above made on the basis of the acquiring authority's estimate of the compensation is greater than the compensation as finally determined or agreed and, accordingly, the interest paid under this section is excessive, the excess shall be repaid.

§ (12) The Secretary of State may by order increase the sum specified in subsection (5) above; and the power to make orders under this subsection shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

§ On Question, amendment agreed to.

§ [Amendment No. 332 not moved.]

§ [Amendment No. 333 had been withdrawn from the Marshalled List.]

§ Clause 48 agreed to.

§ Schedule 8 [Amendments relating to land compensation]:

§ [Amendment No. 334 not moved.]

§ The Earl of Lytton moved Amendment No. 335: Page 104, line 23, at end insert: (". In section 5 of the Land Compensation Act 1961 (rules for assessing compensation), at the end of rule (4) (disregard of increase in value of land by use contrary to law) there are inserted the words "provided that for the purpose of this rule development which constitutes a breach of planning control as defined in section 171A(1) of the Town and Country Planning Act 1990 (expressions used in connection with enforcement) shall be deemed not to be contrary to law but, in assessing the compensation, regard shall be had to any likelihood of any enforcement action as defined in subsection (2) of that section being taken and of its success or of any injunction being granted under section 187B of that Act (injunctions restraining breaches of planning control) or of any planning permission being granted or condition discharged in the course of such enforcement action or pursuant to an application under section 63 of that Act (applications in connection with existing buildings and uses) or of any certificate being granted under section 191 of that Act (certificate of lawful use or development).".").

1036

§ The noble Earl said: This amendment relates to the valuation basis and in particular the assumptions to be made in valuing property to be acquired by compulsion.

§ The present rules refer to the exclusion of any increase in value due to an activity or use which is contrary to law. That has produced a certain amount of uncertainty and litigation. The amendment is not intended to add value to a property due to some pernicious activity. However, it is intended to cater for the very limited instance in which the use is, in theory, contrary to town and country planning legislation but where the opportunity for enforcement proceedings is long past.

§ The fundamental concept behind this amendment is that it is reasonable to allow the additional value of a use of the premises which is actually going on and cannot be caused to cease by the powers in town and country planning legislation.

§ The wording of the amendment may be defective and I am always willing to consider any other views which there may be on this matter. However, I believe that the principle has already been accepted. A Department of the Environment consultation document in 1979 referred to that and indicated that legislation should be forthcoming. I am sorry that I cannot give the Committee the reference for that document.

§ However, the aim here is to value the property to be acquired on the principle which is well known in rating law known as rebus sic stantibus, which basically means you value the thing as you find it. Therefore, on that basis I commend the amendment to the Committee. I beg to move.

§ Lord McIntosh of Haringey
I congratulate the noble Earl on producing an amendment of 16 lines which contains no punctuation other than one comma.

§ Lord Fraser of Carmyllie
I understand that this amendment is grouped with Amendments Nos. 336 and 343. It is not clear to me whether or not the noble Earl intends to move those amendments.

§ The Earl of Lytton
I can confirm to the noble and learned Lord that I do not intend to move those amendments or Amendment No. 337.

§ Lord Fraser of Carmyllie
I am grateful to the noble Earl for that indication. As regards Amendment No. 335, I immediately accept that the noble Earl is touching on an issue about which the Government have been anxious. As he rightly says, a consultation paper acknowledged that the value of unlawful development against which enforcement action cannot be taken should properly be considered as part of the market value of the land. It was proposed in that consultation paper that rule (4) in the 1961 Act should be amended accordingly.
The question arises as to why a suitable amending provision has not been included in the Bill. After further consideration we have concluded that such a provision is not after all necessary, given what we are proposing elsewhere in the Bill. As the noble Earl will 1037 appreciate, Clause 10 establishes a new procedure under which a local planning authority can issue a certificate to the effect that a specified use of land is lawful, notwithstanding that planning permission has not been granted. The clause provides, among other things, that a use is lawful if no enforcement action can be taken against it. This new certification procedure should provide a satisfactory framework within which the lawfulness or otherwise of a particular piece of land can be established. It therefore seems to us that, against this background, rule (4) can be left to operate on its current basis without giving rise to the risk of unfairness. In acknowledging the point raised by the noble Earl, and with that explanation, I hope that he will withdraw the amendment.

§ The Earl of Lytton
I have listened carefully to what the noble and learned Lord the Lord Advocate has said. As it appears that the amendment is unnecessary, I am sure that the noble Lord, Lord McIntosh, will be happy that I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 336 to 343 not moved.]

§ Viscount Astor moved Amendment No. 344: Page 105, line 24, leave out ("Subsections (3) to") and insert ("The power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. (4) Subsections (3), (7) and").

§ The noble Viscount said: In moving Amendment No. 344 I shall speak also to Amendments Nos. 348, 349, 351 to 357, 359 to 362 and 382.

§ These are all amendments to Schedule 8 and Schedule 9 designed to ensure the effectiveness of the compensations provisions of the Bill. I shall gladly answer questions about them but will mention one in greater detail.

§ Amendment No. 349 adds a new category of land in respect of which a blight notice may be served. It is already possible under paragraph 16 of Schedule 13 to the 1990 Act to serve such a notice in respect of land on which the Secretary of State proposes a new trunk or special road. Amendment No. 349 extends this entitlement to owners of land which may be required for the improvement or alteration of such a road. This will in particular help people affected by the motorway widening programme. Amendments Nos. 356 and 359 make similar modifications in respect of Scotland.

§ On Question, amendment agreed to.

§ Lord Stanley of Alderley moved Amendment No. 344A: Page 105, leave out line 50 and insert: ("(6) Subsections (1) (b), 3(c), (4), (5) and (6) are omitted. 6A.—In sections 35 of the Land Compensation Act 1973, subsections (2), (3), and (6) are omitted. 6B.—In sections 36 of the Land Compensation Act 1973, subsections (1) and (2) are omitted.").

§ The noble Lord said: I thank the Government for altering Section 34 of the 1973 Act. However, I do not understand it because it leaves doubt, and I shall explain why.

1038

§ The Bill sees the farm loss payment appearing in a new form, which I welcome, and becoming applicable to freeholders, owner occupiers and indeed tenants. However, there are some technical problems. The new qualifying area of half a hectare needs complete realignment of expectation for this allowance.

§ I assume that the payment is to be considered as an amount calculated to provide recompense for the farmer, whether freeholder or tenant, displaced from any area of land whether part of a holding or above half a hectare. I also assume from paragraph 6 of Schedule 8 to the Bill that the requirement of moving to a new holding and the rigorous process of qualification outlined apply. But, for example, if three-quarters of a hectare were required from a holding of 10 hectares, it cannot be that in order to qualify for the payment the farmer would have to seek another farm.

§ I am assuming an awful lot, and I ask my noble friend whether she will allow her advisers to consult with mine to ensure that paragraph 6 of Schedule 8 achieves what the Government want and what I welcome. At the moment I and my advisers do not believe it does. That is my question in regard to Amendment No. 344A.

§ Regarding Amendment No. 344B, the new conditions under which farm loss payments become payable need a review on the basis of calculation, not least because the Government have moved the goal posts. The acquisition of small parts of the farm makes the detailed and complicated formula contained in Sections 34, 35 and 36 of the Land Compensation Act 1973 unnecessary. These payments could increase in future because of the moving of the goalposts. A fair award would be twice the amount of the annual profit. We are asking for twice the annual profit rather than the existing one year's annual profit because the Government have accepted in the Bill the need to help the small claimants. If the floor is £500 it will have to be up-rated to twice the annual profit otherwise very few will be able to claim because they will not reach £500. I beg to move.

§ 11 p.m.

§ Baroness Blatch
Two of my noble friend's amendments would change the basis for calculating farm loss payments which are made when farmland is acquired compulsorily. Amendment No. 344A consists of a series of repeals relating to Sections 34 to 36 of the Land Compensation Act 1973 which would affect the way in which the farm loss payment scheme operates. It would seem that these changes are being proposed in order to improve the position of tenant farmers who are displaced from their land because of compulsory purchase. However, I understand that the real problem affecting tenant farmers appears to be the acute shortage of replacement land which is available on suitable terms for them to rent.
We are not aware of a particular problem in respect of the amount of farm loss payments which are made to them. The repeals appear to conflict with the fundamental principle that compensation should leave the claimant in no worse but no better financial position than if he had not been affected by 1039 compulsory purchase at all. I say to my noble friend that the problem is best addressed by measures to revitalise the rented sector. To this end my right honourable friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Wales have indicated their intention to issue a consultation paper.
Amendment No. 344B would provide for farm loss payments of twice the annual average profits of the land subject to a minimum of £500. It does not specify how the average would be worked out but provides for the Secretary of State to prescribe a different minim um payment. The Land Compensation Act 1973 provides that the farm loss payment shall be equal to one year's net profit from the land concerned. That amount is normally an average of the profit for the three years preceding the farmer's displacement with a deduction for the actual or notional rent that would have been paid on the land. These payments are currently only available to landlords, farmers and tenants with a compensatable interest in the land. In the Bill we are making such payments available to farmers who are tenants for a year or from year to year, where only part of the agricultural unit is taken and where the farmer successfully serves a blight notice or where he chooses to leave his land before required to do so by the acquiring authority.
The purpose of the farm loss payment is to enable farmers who have had to leave their land because of compulsory purchase to take up farming again on replacement land whose farming characteristics may be unfamiliar, and to protect them against a shortfall in profits in the first year of farming the new land. The payment is in addition to market value compensation for the land taken and compensation for disturbance. While it is admittedly an arbitrary calculation, the size of the payment will depend very much on the success that the farmer has made of his business over the period of account.
It will therefore to a great extent reflect the effort he is likely to make in restarting his operations elsewhere. That seems to be a perfectly fair basis on which to calculate the farm loss payment. To double it and to provide a minimum payment as my noble friend suggests, would in our view cushion affected farmers unnecessarily against loss at the taxpayers' expense and would go well beyond the farm loss payment which it is intended to represent.
We have not received any representations about the amount of the payment and therefore see no need to change it. Should my noble friend not be happy with the reply that I have given, I shall arrange for his advisers to speak with my officials in the department. In the meantime, I hope that my noble friend will not press these amendments.

§ Lord Stanley of Alderley
I think we are at cross purposes here. I am not complaining about the Government's new plans in the Bill. In fact I welcome them very much because, for a change, they help tenants. However, my advisers tell me that what is in the Bill does not make the sense which my noble friend 1040 thinks it does. I very much welcome her offer to see my advisers so that we can iron out this technical difficulty. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 344B not moved.]

§ Baroness Blatch moved Amendment No. 345: Page 106, line 2, leave out paragraph 7.

§ On Question, amendment agreed to.

§ The Earl of Lytton moved Amendment No. 346:

§ Page 106, line 18, at end insert:

§ ("Application to Crown: government aerodromes

§ . For subsection (1) of section 84 of the Land Compensation Act 1973 (Part I of the Act does not apply to any aerodrome in the occupation of a government department) there is substituted— (1) References in Parts I and II of this Act to public works and responsible authorities include references to any works or authority which, apart from any Crown exemption, would be public works or a responsible authority." ").

§ The noble Earl said: I can deal with this amendment very briefly. It relates to Part I of the Land Compensation Act 1973, which refers to compensation arising from the use of public works. Section 84(1) of the Act makes it clear that Part I does not apply to any aerodrome which is in the occupation of a government department. It is obvious that airfields, particularly those in military use, can cause as much depreciation to values of property through their use as any other type of aviation establishment. This is a probing amendment in order to ascertain what justification the Government can give for the continuation of that exception. I beg to move.

Viscount Astor
It is not difficult to understand the historical reason for the MoD's exemption. It acquires land under a code set out in the Defence Acts of 1842 to 1935 rather than under the normal arrangements for compulsory purchase. Defence works such as airfields are provided and used under prerogative rather than under statutory powers as the provisions of Part I require. To bring MoD airfields under Part I would entail a complex and substantial revision of the way in which these powers operate, which is not a practical proposition at this time. However, I understand that in practice the MoD has for many years complied administratively with the Part I provisions and has met claims in appropriate circumstances. Indeed in some cases it has been prepared to depart from a strict interpretation of Part I to provide a measure of compensation that would otherwise have been denied. In those circumstances, I urge the noble Earl not to press the amendment.

§ The Earl of Lytton
The Minister has told the Committee something which I certainly did not know before; namely, what is the custom of the Ministry of Defence. I shall certainly consider this with a view to seeing whether the system is working satisfactorily. In the meantime, I think it would be entirely churlish of me to do anything other than withdraw the amendment.
Amendment, by leave, withdrawn.

§ The Earl of Lytton moved Amendment No. 347:

1041

§ Page 106, line 18, at end insert:

§ ("General vesting declaration: valuation date

§ . After subsection (3) of section 7 of the Compulsory Purchase (Vesting Declarations) Act 1981 (constructive notice to treat) there is inserted— (4) Notwithstanding any other provision in this Act the valuation date for assessing any compensation payable following the date on which a general vesting declaration was executed in respect of any land specified in that declaration shall be the date of assessment of the compensation or the date on which the acquiring authority in fact took possession of the land whichever is the earlier." ").

§ The noble Earl said: This amendment addresses a single issue. It deals with the valuation date under general vesting declarations. Under the general rules of compensation the amount is assessed either at the date of taking possession or at the date of actual assessment, whichever is the earlier. In the case of a vesting declaration that does not apply. If the authority does not take possession until some time much later than the vesting date and compensation has not by then been determined, the value of the property may well have increased but the claimant will not be entitled to that increase. It is also true to say that the value could decrease, so the claimant will obviously take a chance on that.

§ The amendment seeks to insert a new provision in the 1981 Act to apply the ordinary compulsory purchase rule as laid down in Birmingham City Corporation v. West Midlands Baptist (Trust) Association (Inc.) 1970. In cases where general vesting declarations are involved, it seems to me that there is no good reason to alter the general rule of how the date for compensation is assessed. I invite the Minister to comment on why this provision should be retained.

§ Lord Ross of Newport
I support the amendment in a different context. The Committee is looking at someone who actually owned a farm and sold it off under bank pressure for £26,000. After five years it was worth at least £80,000. It finally changed hands a year or two later for £150,000. I felt pretty miffed. I imagine that anyone who sold some land at the vesting date for £14,000, as in the example given to us, only to find that four years later it was worth over £40,000 would feel aggrieved.
I accept that in normal trading circumstances one would say, "Jolly good luck to you. You were stupid enough to do it in the first place". But in such a case the local authority is acquiring the land in a rapid process and may then decide not to take occupation. In fact, it is dodging the normal compulsory purchase procedures and short-cutting the process. There is something to be said for the fact that such authorities should pay the compensation which is due, which may have decreased. I wanted to ask the noble Lord, Lord Stanley, whether he thought that there were any farmers making a profit these days, but I thought that I had better desist from so doing.

§ Lord Fraser of Carmyllie
The law as it stands requires that, where this procedure is used, compensation must be assessed on the basis of the 1042 value of the land as at the date on which it becomes vested in the authority. The noble Earl has argued that this is an unsatisfactory requirement.
It must be appreciated that the essential feature of the general vesting procedure is that the owner loses his legal right to occupy his property in return for a right to compensation on the date of vesting. Accordingly, the vesting date has to be the only logical date at which the property can be valued for compensation purposes. Any alternative approach would simply not make sense in legal terms. To suggest that the valuation date can be defined on the same basis as applies under normal compulsory purchase procedures is to misunderstand the fundamental difference between the two systems.
With the normal compulsory purchase procedure, the claimant retains his legal right to occupy the property until the authority gives him formal notice that it wishes to enter on his land, which may be some considerable time after the compulsory purchase order came into force. Under the vesting procedure he loses his right, as I have said, on the date on which the vesting takes place. Any period of grace after that date during which the claimant continues to occupy the land is strictly a private matter to be arranged between him and the authority, whether by a contract or informal agreement. However, it is quite irrelevant for the purposes of assessing compensation. As the noble Earl will appreciate, if we were to continue on that way a further complication would arise because it does not necessarily follow that the value of the land will always increase. In view of what I have said, I hope that the noble Earl will feel able to withdraw the amendment.

§ The Earl of Lytton
Although I have some reservations about what the noble and learned Lord has said, I understand that there are difficulties. I hope that I did not misunderstand the procedure, as he suggested, even though it may appear from the amendment that this may be the case. There is an anomaly here, but with regard to the lateness of the hour I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

§ Lord Stanley of Alderley moved Amendment No. 347ZA:

§ Page 106, line 18, at end insert:

§ ("8A.—(1) For subsection (1) (b) of section 59 of the Land Compensation Act 1973 there is substituted—

§ "(b) either—

(i) subsection (1) of section 26 of the Agricultural Holdings Act 1986 does not apply to the notice by virtue of subsection (2) of that section and case B of Schedule 3 to the said Act; or
(ii) the Agricultural Land Tribunal have consented to the operation of the notice and stated in the reasons for their decision that they are satisfied as to the matter mentioned in section 27(3) (f) of the Agricultural Holdings Act 1986 (land required for non-agricultural use not falling within Case B of Schedule 3)."

§ (2) After subsection (7) of section 59 of the Land Compensation Act 1973 there is inserted:— (7A) (a) Where a tenant is served a notice to quit in pursuance of Case B of Schedule 3 to the Agricultural Holdings Act 1986 by a landlord who is not in possession of compulsory purchase powers and who is 1043 not in receipt of a notice to treat having been served by an authority with such powers the tenant shall be entitled to elect that subsection (2) of this section applies as if a notice to treat had been served; and (b) for the purposes of this subsection the landlord shall be deemed to be a person with compulsory purchase powers.".").

§ The noble Lord said: I believe that I should declare an interest at this stage in so far as I have been a tenant farmer since 1954. I have also been an owner-occupier and a landlord. As the Committee will know, my heart lies with the tenant. The amendment addresses the very unfair position of the tenant farmer who is being evicted by his landlord because the latter has obtained planning consent.

§ A tenant who is dispossessed of his holding by a landlord without compulsory purchase powers—the landlord himself not having been compulsorily purchased, as in the case I am citing, whereby he has managed to obtain planning permission —is placed in a much more disadvantageous position than the tenant dispossessed under compulsory purchase powers. The maximum compensation available here is five to six years' rent. This is wholly inadequate and will rarely be enough in order for a tenant farmer to purchase another holding. Much more importantly, most holdings are let with a dwellinghouse and the tenant farmer is faced with the additional problem of finding a home for himself and his family. It should not be to the detriment of the tenant that the status of the landlord determines the amount of compensation payable to his tenant. As I say, in this case a landlord has been fortunate enough to get planning permission.

§ The hardship caused to the tenant dispossessed under the agricultural holdings legislation is exactly the same as the hardship caused to the tenant dispossessed under compulsory purchase legislation. Both should be compensated equally. I will give your Lordships a perfect example. Take the case of two neighbouring tenants: one is compulsorily acquired and is being evicted, and the other is being evicted because his landlord has managed to get planning permission on his farm. They are not equally entitled to the same compensation, and I believe that in fairness they should be. I beg to move.

§ 11.15 p.m.

§ Lord McIntosh of Haringey
Having opposed the whole slew of amendments about compensation, I think t he case put by the noble Lord, Lord Stanley, is very sound. I cannot see why it is that two tenants -one evicted because of compulsory purchase and the other because of planning permission - should in the one case get a valuation of tenancy compensation and in the other get only compensation equal to a multiple of the rent, which could not be as much. I hope that the Government will feel that there is a case which ought to be put right here without affecting the public purse.

§ Baroness Blatch
To extend the scope of the land compensation system in this way would be quite inappropriate. I recognise that there is anxiety about the level of compensation provided for in the 1986 Act, but clearly no formula will satisfy everyone. I 1044 understand that the main problem for those losing land is the difficulty of finding new land to rent. Anything which would discourage landowners from letting will exacerbate the problem. The first priority must be to find ways of encouraging landlords to let their land and to this end my right honourable friend the Minister of Agriculture, Fisheries and Food has indicated his intention to issue a consultation paper. I know this answer will be disappointing to my noble friend, but I hope he will not press this amendment.

§ Lord Stanley of Alderley
The noble Lord, Lord McIntosh, always amazes me, particularly —if I may flatter him—on his knowledge of agricultural compensation: he filled in the part that I did not detail, and I am most grateful for his support. I do not think my noble friend answered the argument correctly. In this case somebody is being dispossessed of his home. I am not particularly worried about his finding another farm: that is his bad luck. There should be equal compensation for the loss of the home; but that is not the case. It is quite clear, as the noble Lord says.
It is almost 11.30 p.m. At any other time I would be strongly tempted to press this amendment. I shall not do so tonight, even though it would only lengthen proceedings for a short time. I beg leave to withdraw the amendment but I may well come back to it at a later stage.
Amendment, by leave, withdrawn.

§ Baroness Nicol moved Amendment No. 347A: Page 107, line 2, after ("management") insert ("and that neither the purchase nor the proposed measure of preservation or improved management would prejudice any existing freedom of access to the land enjoyed by the public").

§ The noble Baroness said: This amendment, with Amendment No. 347B, is a perfectly straightforward amendment. Their purpose is to protect existing public access on common land which is acquired under Schedule 8, paragraph 13. In our debate on common land, somewhat earlier—a long time ago, in fact—we drew attention to the loss of access rights on land which was in public ownership and is now privatised—gas, water, electricity, etc. Therefore access to common land becomes even more precious. Although the amendment refers to common land which is purchased for nature conservation purposes, despite the arguments to the contrary, nature conservation and access are not necessarily incompatible.

§ The amendments simply seek to ensure that where an access right existed—not an extension of it—that right is continued unless there are good reasons for not doing so. When I began to study the background to this matter, I became rather worried about the provisions of paragraph 13 of Schedule 8 when set in context with the original Act, the Acquisition of Land Act 1981. Land acquired under the new provision, if found to be unsuitable for the purpose for which the local authority acquired it—presumably it then ceases to be common land—could be sold on for development or whatever. I should like to be reassured by the Minister that that is not possible.

§ We should remember that land bought under the new provision is not replaced. That is an important point. Until now, common land taken for any reason 1045 has to be replaced by equivalent land somewhere else. We are now dispensing with that provision. There could therefore be a net loss of common land. I beg to move.

§ Lord Fraser of Carmyllie
The amendments relate to paragraph 13 of Schedule 8, which modifies the current legal position regarding the need for special parliamentary procedure in cases where there is a proposed compulsory acquisition of—or a proposed new right over land forming part of—an open space or common. As the noble Baroness said, the relevant statute here is the Acquisition of Land Act 1981. That Act already provides that special parliamentary procedure is not necessary where the Secretary of State certifies that he is satisfied as to certain specified criteria. The purpose of paragraph 13 is to extend those criteria so as to exclude the need for special parliamentary procedure where the Secretary of State certifies that he is satisfied that the purpose of the compulsory acquisition of the land, or new right, is to secure preservation of the land, or improve its management, as—and I emphasise this—open space or common land.
The effect of the amendments would be to provide that, in exercising that new power, the Secretary of State must also satisfy himself that the proposals concerned would not prejudice any existing freedom of public access to the land. While it may not have been intended, such a requirement would seem to us unduly restrictive.
"Open space" under the 1981 Act means any land laid out as a public garden or used for public recreation. "Common" includes any town or village green. In both cases there is an automatic entitlement—whether by statute or custom—for the public to use the land. Since the purpose of compulsory acquisition would be to secure preservation or improved management of the land as open space or common land, basic rights of access would be unaffected. It is true that a preservation or management scheme might involve some changes as to how the right of access to open space or common land might be exercised. Where that was likely to occur it could be a material consideration in the Secretary of State's decision as to whether or not compulsory acquisition should be authorised. We should not, however, consider it necessary or desirable that that aspect should be a material factor in determining whether or not the Secretary of State can issue a certificate obviating the need for special parliamentary procedure.
As the noble Baroness will appreciate, compulsory purchase powers can, in principle, be applied to any land, including common land, but all compulsory purchase orders must be confirmed by the appropriate Minister. The requirement for open space land to go for special parliamentary procedure arises in addition to the normal confirmation procedure where there is no equally convenient land to replace the open space lost. The Bill's provisions remove only the additional requirement, but in the limited circumstances that I have described. 1046 If the noble Baroness reads that elaborate explanation she will see that her fears, although I appreciate them, are ill-founded.

§ Baroness Nicol
I am grateful for that very full reply. I need to clear up one or two small issues that are relevant to it, and I should like to consider what the noble and learned Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No.347B not moved.]

§ Viscount Astor moved Amendments Nos. 348 to 354. Page 107, line 13, leave out ("Town and Country Planning Act 1990") and insert ("principal Act"). Page 107, line 17, at end insert: ("14A. In Schedule 13 to that Act (blighted land) after paragraph 16 there is inserted— 16A. Land to be included in a trunk road or special road as proposed to be improved or altered by the Secretary of State if he has given written notice of his proposal, together with maps or plans sufficient to identify the land in question, to the local planning authority"."). Page 107, line 19, at end insert:

§ ("Land Compensation Act 1961 (c. 33.)

§ 14B.—(1) In section 14(1) of the Land Compensation Act 1961 after "shall" there is inserted "(subject to subsection (3A) of this section)".

§ (2) In section 14(3) of that Act, for the words from "but" to the end there is substituted— (3A) In determining—

(a) for the purpose referred to in subsection (1) of this section whether planning permission for any development could in any particular circumstances reasonably have been expected to be granted in respect of any land; or
(b) whether any of the assumptions mentioned in section 16 of this Act (but not section 15) are applicable to the relevant land or any part thereof,

regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III of this Act."

§ 14C. In section 17 of that Act—

(a) for the words from the beginning of subsection (2) to "acquire it" there is substituted "If the authority proposing to acquire the interest", and
(b) subsection (8) is omitted.

§ 14D. In section 19(1) of that Act for "in the circumstances mentioned in subsection (1) of section 17 of this Act" there is substituted "by an authority possessing compulsory purchase powers".

§ 14E. Section 22(3) of that Act is omitted.").

§ Page 107, line 26, leave out ("for the diocese in which the land is situated") and insert ("in which the land is vested").

§ Page 107, line 29, leave out sub-paragraph (2).

§ Page 107, line 33, leave out paragraphs 16 and 17 and insert—

§ ("16. In section 13 of the Land Compensation Act 1973—

§ (a) in subsection (1) for "to the Church Commissioners to" there is substituted—

"(a) in the case of land which is not diocesan glebe land, to the Church Commissioners; and
(b) in the case of diocesan glebe land, to the Diocesan Board of Finance in which the land is vested,

and (in either case) shall", and

1047

§ (b) at the end of subsection (2) there is added "or being diocesan glebe land; and "Diocesan Board of Finance" and "diocesan glebe land" have the same meaning as in the Endowments and Glebe Measure 1976".

§ 16A. In section 26 of that Act—

(a) in subsection (2) for "of the kind mentioned in section 22(2) above" there is substituted "a qualifying interest", and
(b) in subsection (5) for "and (2)" there is substituted "(2) and (2A)".

§ 17. In section 52 of that Act—

(a) in subsection (9) after "the amount of the advance payment" there is inserted "together with any amount paid under section 52A", and
(b) in subsection (10) the words following "unpaid" are omitted.

§ Local Government, Planning and Land Act 1980 (c. 65.)

§ 17A. After section 141(5) of the Local Government, Planning and Land Act 1980 there is inserted— (5A) No compensation is payable, by virtue of an order under this section, under Part IV of the Land Compensation Act 1961".").

§ Page 107, line 42, leave out paragraphs 19 to 21 and insert: ("19. At the end of section 12(3) of, and paragraph 3(3) of Schedule I to, the Acquisition of Land Act 1981 there is added "or being diocesan glebe land within the meaning of the Endowments and Glebe Measure 1976".

§ 20. Section 20 of, and paragraph 7 of Schedule 3 to, that Act are repealed.

§ The principal Act

§ 21. I a section 151(4) (d) of the principal Act for "or 16" there is substituted "16 or 16A".

§ 22. In section 231 of that Act the words from "for a purpose" to "is situated" are omitted.

§ 23.—(1) In section 318 of that Act, in subsection (3) for the words from "be" (in paragraph (a)) to "shall" (in paragraph (b)) there is substituted— in the case of land which is not diocesan glebe land, be paid to the Church Commissioners; and (b) shall, in the case of diocesan glebe land, be paid to the Diocesan Board of Finance in which the land is vested, and shall (in either case)."

§ (2) In subsection (4) (b) of that section for "(3) (b)" there is substituted "(3)".

§ (3) At the end of section 318(6) of that Act there is added "or being diocesan glebe land; and "Diocesan Board of Finance" and "diocesan glebe land" have the same meaning as in the Endowments and Glebe Measure 1976".

§ 24. In Schedule I to that Act, in paragraph 20(4) for "paragraph 16" there is substituted "paragraphs 16 and 16A".

§ Planning (Listed Buildings and Conservation Areas) Act 1990 (c. 9.)

§ 25.—(1) In section 86(3) of the Planning (Listed Buildings and Conservation Areas) Act 1990 for the words from "be" (in paragraph (a)) to "shall" (in paragraph (b)) there is substituted— in the case of land which is not diocesan glebe land, be paid to the Church Commissioners; and (b) shall, in the case of diocesan glebe land, be paid to the Diocesan Board of Finance in which the land is vested, and shall (in either case)."

§ (2) At the end of section 86(4) of that Act there is added "or being diocesan glebe land; and "Diocesan Board of Finance" and "diocesan glebe land" have the same meaning as in the Endowments and Glebe Measure 1976".

§ Planning (Hazardous Substances) Act 1990 (c. 10.)

1048

§ 26.—(1) In section 34(3) of the Planning (Hazardous Substances) Act 1990 for the words from "be" (in paragraph (a)) to "shall" (in paragraph (b)) there is substituted— in the case of land which is not diocesan glebe land, be paid to the Church Commissioners; and (b) shall, in the case of diocesan glebe land, be paid to the Diocesan Board of Finance in which the land is vested, and shall (in either case)."

§ (2) At the end of section 34(4) of that Act there is added "or being diocesan glebe land; and "Diocesan Board of Finance" and "diocesan glebe land" have the same meaning as in the Endowments and Glebe Measure 1976".").

§ On Question, amendments agreed to.

§ Schedule 8, as amended, agreed to.

§ Lord Fraser of Carmyllie moved Amendment No. 354A:

§ After Schedule 8, insert the following new schedule:

§ ("Compensation where permission for additional development granted after acquisition—Scotland

§ 1. After section 30 of the Land Compensation (Scotland) Act 1963 there is inserted—

§ "PART V

COMPENSATION WHERE PERMISSION FOR ADDITIONAL DEVELOPMENT GRANTED AFTER ACQUISITION

Compensation where planning decision made after acquisition.

§ 31.—(1) Where—

(a) any interest in land is compulsorily acquired or is sold to an authority possessing compulsory purchase powers and, before the end of the period of ten years beginning with the date of completion, a planning decision is made granting permission for the carrying out of additional development of any of the land; and
(b) the principal amount of the compensation which was payable in respect of the compulsory acquisition or, in the case of a sale by agreement, the amount of the purchase price, was less than the amount specified in subsection (2) of this section,

§ (2) The amount referred to in subsection (1) (b) of this section is the principal amount of the compensation which would have been payable in respect of a compulsory acquisition of the interest by the acquiring authority, in pursuance of a notice to treat served on the relevant date if—

(a) the planning decision mentioned in subsection (1) (a) of this section had been made before that date; and
(b) the permission granted by it had been in force on that date.

(a) under section 142 or 143 of the Local Government, Planning and Land Act 1980 (acquisitions by urban development corporations and by roads authorities in connection with urban development areas);
(b) under the New Towns (Scotland) Act 1968 (acquisitions by development corporations and by roads authorities in connection with new town areas); or
(c) where the compulsory purchase order included a direction under section 107 of the Town and 1049 Country Planning (Scotland) Act 1972 (minimum compensation in case of listed building deliberately left derelict).

§ (4) If—

(a) in accordance with the preceding provisions of this section the person referred to in subsection (1) of this section would be entitled to compensation under this section; but
(b) before the planning decision in question that person has died, or any other act or event has occurred whereby the right to compensation under this section, if vested in him immediately before that act or event, would thereupon have vested in some other person,

§ (5) Compensation under this section shall carry interest at the rate prescribed under section 40 of this Act from the date of the planning decision in question until payment.

§ (6) The provisions of Part II of this Act (so far as applicable) shall apply (subject to the following provisions) in relation to the assessment of compensation under this section as they apply in relation to the assessment of compensation in respect of the compulsory acquisition of an interest in land.

§ Provisions as to claims under section 31.

§ 32.—(1) For the purpose of facilitating the making of claims for compensation under section 31 of this Act—

(a) the person entitled to receive the compensationor purchase price in respect of such an acquisition or sale as is mentioned in section 31(1) (a) of this Act; or
(b) any person claiming under him as being a person who, if compensation under that section became payable, would be entitled to it by virtue of subsection (4) of that section,

may give to the acquiring authority an address for service under this section.

§ (2) Where, at any time—

(a) after a person has given an acquiring authority an address for service under this section; and
(b) before the end of the period mentioned in paragraph (a) of section 31(1) of this Act,

§ (3) If—

(a) an address for service has been given by such a person as is mentioned in subsection (1) (b) of this section; and
(b) the acquiring authority have reasonable grounds for believing that the person mentioned in subsection (1) (a) of this section is dead or that any other act or event has occurred as mentioned in section 31(4) (b) of this Act,

the acquiring authority need not give a notice to the person mentioned in subsection (1) (a).

§ (4) A claim for compensation under section 31 of this Act in respect of a planning decision shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person who has not given the acquiring authority an address for service under this section, the date of the decision;
(b) if the claim is made by a person who has given the acquiring authority such an address, the date on which notice of the decision is given to him in accordance with subsection (2) of this section;

but, where there is an appeal against the planning decision, the reference in paragraph (a) of this subsection to the date of the planning decision shall be read as a reference to the date of the decision on the appeal.

§ (5) The references in subsection (4) of this section to an appeal against a planning decision include an appeal made by virtue of section 34 of the Town and Country Planning (Scotland) Act 1972.

§ (6) Where—

(a) a person has given to an acquiring authority an address for service under this section; and
(b) that authority, before the end of the period mentioned in section 31(1) (a) of this Act, cease to be entitled to an interest in the whole or part of the land comprised in the acquisition or sale, without remaining or becoming entitled to the dominium utile, or a tenancy, of that land or that part of it, as the case may be,

§ (7) Notice under subsection (6) of this section of a planning decision—

(a) in the case of a decision made by the planning authority, shall be given within seven days after the making of the decision; and
(b) in any other case, shall be given within seven days after the making of the decision has been notified to the planning authority.

§ Extension to planning permission where no planning decision

made.

§ 33.—(1) The provisions of sections 31 and 32(1) of this Act shall have effect in relation to any planning permission falling within column 1 of the following table for any development as if a planning decision granting that permission had been made on the date shown in column 2.

§ When development is initiated

§ Permission granted by the adoption or approval of a simplified planning zone scheme

§ When the scheme is approved or adopted

§ Permission granted by an order designating an enterprise zone

§ When the designation takes effect

§ Permission deemed to be granted by a direction under section 37 of the Town and Country Planning (Scotland) Act 1972

§ When the direction is given

§ Permission deemed to be granted by a planning authority

§ The occurrence of the event in consequence of which the permission is deemed to be granted

§ (2) Where the provisions of section 31 of this Act have effect as applied by subsection (1) of this section in relation to any planning permission falling within column 1 of that table for any development, then if—

(a) before the date shown in column 2, a person who (under section 32(1) of this Act as so applied) is entitled to give an address for service under that section has given such an address to the acquiring authority; and
(b) the development is proposed to be carried out by the acquiring authority or, if it is proposed to be carried out by a person other than the acquiring authority, notice of that proposal is given to the acquiring authority by the person proposing to carry out the development,

1051

§ (3) An acquiring authority shall not be required by virtue of subsection (2) of this section to give notice of proposed development to the person mentioned in section 32(1) (a) of this Act if—

(a) an address for service has been given to them by such a person as is mentioned in section 32(1) (b) of this Act; and
(b) they have reasonable grounds for believing that the former person is dead or that any other act or event has occurred as mentioned in section 31(4) (b) of this Act.

§ (4) A claim for compensation under section 31 of this Act in respect of a planning permission falling within column 1 of that table shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person to whom notice has been given under subsection (2) of this section, the date on which the notice was given;
(b) in any other case, the date shown in column 2.

§ Extension to Crown development.

§ 34.—(1) Where—

(a) any interest in land is compulsorily acquired or is sold to an authority possessing compulsory purchase powers, and before the end of the period of ten years beginning with the date of completion there is initiated any additional development of any of the land which was comprised in the acquisition or sale; and
(b) by reason of any such circumstances as are mentioned in subsection (2) of this section the development in question is development for which planning permission is not required,

the provisions of sections 31 and 32(1) of this Act shall apply as if a planning decision granting permission for that development had been made at the time when the additional development is so initiated.

§ (2) The circumstances referred to in subsection (1) of this section are either or both of the following—

(a) that the development is initiated by or on behalf of the Crown;
(b) that there is a Crown interest in the land and the development is initiated in right of that interest.

§ (3) Where—

(a) the provisions of section 31 of this Act have effect as applied by subsection (1) of this section in relation to the initiation of any development; and
(b) before the development is initiated a person who (under section 32(1) of this Act as so applied) is entitled to give an address for service under that section has given such an address to the acquiring authority,

§ (4) Where—

(a) by virtue of subsection (3) of this section, it is the duty of a government department to give notice of development initiated by or on behalf of that department; and
(b) the Minister in charge of the department certifies that for reasons of national security it is necessary that the nature of the development should not be disclosed, except to the extent specified in the certificate,

the department shall give notice of development, but shall not be required to give any particulars of the nature of the development except to the extent specified in the certificate.

1052

§ (5) An acquiring authority shall not be required by virtue of subsection (3) of this section to give notice of proposed development to the person mentioned in section 32(1) (a) of this Act if—

(a) an address for service has been given to them by such a person as is mentioned in section 32(1) (b) of this Act; and
(b) they have reasonable grounds for believing that the former person is dead or that any other act or event has occurred as mentioned in section 31(4) (b) of this Act.

§ (6) A claim for compensation under section 31 of this Act in respect of the initiation of any development shall not have effect if made more than six months after the following date, that is to say—

(a) if the claim is made by a person to whom notice has been given under subsection (3) of this section, the date on which the notice was given;
(b) in any other case, the time the development is initiated.

§ (7) In this section "Crown interest" means an interest belonging to Her Majesty in right of the Crown, or belonging to a government department or held in trust for Her Majesty for the purposes of a government department.

§ Application of Part V to certain cases.

§ 35. The preceding provisions of this Part of this Act shall have effect subject to the provisions of the Third Schedule to this Act.

§ Regulations for purposes of Part V.

§ 36.—(1) The Secretary of State may by statutory instrument make regulations for prescribing the form of any notice required by this Part of this Act to be given in the prescribed form.

§ (2) Any statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

§ Interpretation of Part IV.

§ 37.—(1) In this Part of this Act—

§ "additional development", in relation to an acquisition or sale of an interest in land, means any development of the land other than the following, that is to say—

(a) where the acquiring authority are a local authority, and acquired the interest for the purposes of any of their functions, development for the purposes of the functions for which they acquired it;
(b) where the acquiring authority are not a local authority, development for the purposes of the project in connection with which they acquired the interest;
(c) development for which planning permission was in force on the relevant date;
(d) in the case of compulsory acquisition, development for which it was assumed (in accordance with the provisions of sections 22 to 24 of this Act) for the purpose of assessing compensation that planning permission would be granted; and
(e) in the case of a sale by agreement, development for which, if the interest (instead of being sold by agreement) had been compulsorily acquired by the acquiring authority in pursuance of a notice to treat served on the relevant date, it would have been so assumed;

§ "local authority" means a regional, islands or district council;

1053

§ "prescribed" means prescribed by regulations under this Part of this Act;

§ (2) In this Part of this Act any reference to the granting of permission for the carrying out of development of any land is a reference to the granting of permission (including where applicable outline permission) for that development—

(a) either unconditionally or subject to conditions; and
(b) either in respect of that land taken by itself or in respect of an area including that land."

§ 2. After Schedule 2 to that Act there is inserted—

§ "THIRD SCHEDULE APPLICATION OF PART V TO CERTAIN CASES

Disturbance, severance and injurious affection

§ 1. Subject to paragraph 2 of this Schedule, any reference in section 31 of this Act to the principal amount of any compensation shall be construed as including any sum attributable to disturbance, severance or injurious affection.

§ 2. If the person entitled to the compensation under section 31 of this Act—

(a) was, at the time of the compulsory acquisition or sale mentioned in subsection (1) of that section, entitled to an interest in other land contiguous or adjacent to the land acquired or purchased; but
(b) is, at the time of the planning decision in question, no longer entitled to that interest, either in respect of the whole or in respect of part of that land;

any reference in section 31 of this Act to the principal amount of any compensation or the amount of the purchase price shall be construed as excluding so much of the compensation or purchase price as was or would have been attributable to severance or injurious affection of that land or, as the case may be, of that part.

§ Increase in value of contiguous or adjacent land

§ 3. In determining for the purposes of section 31 of this Act the difference between the principal amount of the compensation specified in subsection (2) of that section and the principal amount of the compensation or the amount of the purchase price mentioned in subsection (1) of that section, in a case where—

(a) the compensation or the purchase price was or would have been reduced (whether by virtue of section 14 of this Act or otherwise) by reason of an increase in the value of an interest in contiguous or adjacent land; but
(b) at the time of the planning decision the person entitled to the compensation under section 23 of this Act is not entitled to the interest or is entitled to it only as respects part of the contiguous or adjacent land,

the amount specified in section 31(2) and the principal amount or purchase price mentioned in section 31(1) shall be calculated as if the circumstances by reason of which it was or would have been so reduced had not existed or, as the case may be, as if the interest in the contiguous or adjacent land had subsisted only in that part of the land.

§ Land held subject to heritable security

§ 4. Subject to the provisions of this Schedule relating to settled land, where, in a case falling within section 31(1) of this Act, the interest in land which was acquired or sold was subject to a heritable security, any reference 1054 (however expressed) in section 31 or section 32 of this Act to the person entitled to the compensation or purchase price shall be construed as a reference to the person who, subject to the heritable security, was entitled to that interest, and not as a reference to the heritable creditor.

§ 5. For the purposes of the application of section 31 of this Act, and of the provisions of this Schedule other than this paragraph, to a case falling within the preceding paragraph, any reference to the principal amount of the compensation which was or would have been payable in respect of any compulsory acquisition shall be construed as a reference to the principal amount of the compensation which would have been payable if the interest in question had not been subject to a heritable security.

§ 6. No compensation shall be payable by virtue of section 31 of this Act in respect of a compulsory acquisition or sale by agreement where the interest acquired or sold was the interest of a heritable creditor (as distinct from an interest subject to a heritable security).

§ Land held in trust

§ 7.—(1) Where, in a case falling within section 31(1) of this Act, the interest in land which was acquired or sold was subject to a trust, and accordingly the compensation or purchase price was payable to the trustees of that trust, any reference (however expressed) in section 31 or section 32 of this Act to the person entitled to the compensation or purchase price shall be construed as a reference to the trustees for the time being of the trust.

§ (2) Where sub-paragraph (1) of this paragraph applies, section 31(4) of this Act shall not apply.

§ (3) Any compensation paid to the trustees of the trust by virtue of section 31 of this Act in respect of a compulsory acquisition or sale by agreement shall be applicable by the trustees as if it were proceeds of the sale of the interest acquired or sold.

§ (4) In this paragraph "trust" has the same meaning as in the Trusts (Scotland) Act 1921.

§ Interpretation

§ 8. References in this Schedule to sections 31 and 32 of this Act include references to those sections as applied by section 33 or 34 of this Act, and references to the time of any planning decision shall be construed accordingly." ").

§ On Question, amendment agreed to.

§ Clause 52 agreed to.

§ Schedule 9 [Amendments relating to Land Compensation in Scotland]:

§ Lord Fraser of Carmyllie moved Amendment No.355:

§ Page 109, line 7, at end insert:

§ ("5A.—(1) In section 22(1) of the Land Compensation (Scotland) Act 1963 after "shall" there is inserted "(subject to subsection (3A) of this section)".

§ (2) In section 22(3) of that Act, for the words from "but" to the end there is substituted—

§ "(3A) In determining—

(a) for the purpose referred to in subsection (1) of this section whether planning permission for any development could in any particular circumstances reasonably have been expected to be granted in respect of any land; or
(b) whether any of the assumptions mentioned in section 24 of this Act (but not section 23) are applicable to the relevant land or any part thereof,

regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part IV of this Act."

1055

§ 5B. In section 25 of that Act—

(a) for the words from the beginning of subsection (2) to "acquire it" there is substituted "If the authority proposing to acquire the interest", and
(b) subsection (8) is omitted.

§ 5C. In section 27(1) of that Act for "in the circumstances mentioned in section 25(1) of this Act" there is substituted "by an authority possessing compulsory purchase powers".

§ 5D. Section 30(3) of that Act is omitted."). On Question, amendment agreed to.

§ Viscount Astor moved Amendments Nos. 356, 357, 358, 359, 360, 361 and 362:

§ Page 109, line 8, at end insert:

§ ("5E. In section 181 of the 1972 Act (scope of blight provisions), after paragraph (h) of subsection (1) there is inserted— (hh) land to be included in a trunk road or special road as proposed to be improved or altered by the Secretary of State if he has given written notice of his proposal, together with maps or plans sufficient to identify the land in question, to the planning authority;".").

§ Page 110, line 1, leave out ("Subsections (3) to") and insert ("The power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

§ (4) Subsections (3), (6) and").

§ Page 110, line 31, leave out paragraph 10.

§ Page 111, line 2, at end insert:

§ ("The 1972 Act

§ 11A. In subsection (2) (d) of section 183 (objection to blight notice) of the 1972 Act, for "or (h)" there is substituted "(h) or (hh)"").

§ Page 111, line 4, leave out ("(2)").

§ Page 111, line 5, after ("1973") insert ("(a) in subsection (2)").

§ Page 111, line 6, at end insert ("and

§ (b) in subsection (5), for "and (2)" there is substituted "(2) and (2A)".

§ 13. In section 48 (right to advance payment of compensation) of that Act—

(a) in subsection (8), after "the amount of the advance payment" there is inserted "together with any amount paid under section 48A", and
(b) in subsection (9) (b), the words following "unpaid" are omitted.

§ Local Government, Planning and Land Act 1980 (c. 65.)

§ 14. After section 141(5) of the Local Government, Planning and Land Act 1980 there is inserted— (5B) No compensation is payable, by virtue of an order under this section, under Part V of the Land Compensation (Scotland) Act 1963".").

§ On Question, amendments agreed to.

§ Schedule 9, as amended, agreed to.

§ Clause 53 [Interest on compensation]:

§ Baroness Blatch moved Amendment No.363:

§ Page 61, line 35, leave out subsection (2) and insert:

§ ("(2) If it appears to any person that he may become liable to pay to another—

(a) compensation under any provision mentioned in Schedule 10 to this Act, or
(b) interest under subsection (1) above, under any provision mentioned in Part II of Schedule 10 to this Act or under any bond under section 85 of the Lands Clauses Consolidation Act 1845 or Schedule 3 to the Compulsory Purchase Act 1965,

1056 he may, if the other person requests him in writing to do so, make one or more payments on account of such compensation or interest.

§ (2A) If after a payment has been made by any person under subsection (2) above—

(a) it is agreed or determined that he is not liable to pay the compensation or interest, or
(b) by reason of any agreement or determination, any payment under that subsection is shown to have been excessive,

the payment or, as the case may be, excess shall be recoverable by that person.").

§ On Question, amendment agreed to.

§ [Amendments Nos. 364 and 364A not moved.]

§ Baroness Blatch moved Amendment No. 365:

§ Page 62, line 3, leave out ("Regulations or").

§ Clause 53, as amended, agreed to.

§ Schedule 10 [Compensation Provisions referred to in section 53]:

§ Baroness Blatch moved Amendments Nos. 366 to 368:

§ Page 115, line 25, at end insert:

§ ("Section 23 of the Land Compensation Act 1961 (permission for additional development granted after acquisition).").

§ Page 116, line 2, at end insert:

§ Section 31 (compensation where planning decision made after acquisition) of the Land Compensation (Scotland) Act 1963.").

§ Page 116, line 9, at end insert ("Section (time limit on validity of notice to treat) of this Act").

§ On Question, amendments agreed to.

§ Schedule 10, as amended, agreed to.

§ Clause 54 agreed to.

§ Clause 55 [Short title, commencement, etc.]:

§ [Amendment No. 368A not moved.]

§ Clause 55 agreed to.

§ Schedule 11 [Repeals]:

§ Viscount Astor moved Amendments Nos. 369 and 370:

§ Page 116, leave out lines 15 and 16.

§ Page 116, leave out line 30.

§ On Question, amendments agreed to.

§ Viscount Astor moved Amendment No. 371:

Page 117, line 8, column 3, at end insert:
	("In section 74(2) "section 71 of this Act and".").

§ The noble Viscount said: I beg to move Amendment No. 371, and also to speak to Amendments Nos. 372, 373, 375 to 378, and 384 to 394. These amendments are all consequential on the provisions of the Bill as it is amended in Committee.

§ On Question, amendment agreed to.

§ Baroness Blatch moved Amendments Nos. 372 to 394:

§ Page 117, leave out line 15.

Page 117, line 40, column 3, at end insert:
	("Section 286(1) (b).").

§ Page 118, line 3, leave out ("2").

§ Page 118, leave out lines 10 and 11 and insert: 1057

		("2, in sub-paragraph (1) (c) "and subsection (5) of section 196" and in sub-paragraph (8) "or 290".").
Page 118, line 25, at end insert:
("1990 c. 9.	Planning (Listed Buildings and Conservation Areas) Act 1990	In section 9(5) "on indictment". Section 55(6). In section 88(6) "or the presence of minerals in it".
		In section 90(6) (b) "and 42(6)".
		In section 92(2) (b) "and 42(6)".").
Page 118, line 26, leave out ("25(2) (c)") and insert ("25(1) (c)").
Page 118, line 27, at end insert:
("1990 c. 11.	Planning (Consequential Provisions) Act 1990.	In Schedule 3, paragraph 10.").
Page 118, line 32, at end insert:
("1965 c. 36.	Gas Act 1965.	In Schedule 3, paragraph 3.").
Page 119, line 23, leave out ("47") and insert ("49").
Page 119, line 35, at beginning insert:
("1961 c. 33.	Land Compensation Act 1961.	Section 17(8). Section 22(3).").
Page 119, line 36, column 3, at end insert:
		("In section 52(10), the words following "unpaid".").
Page 120, line 6, column 3, at end insert:
		("Section 23(4) (a) and (b).
		Section 25(8).
		Section 30(3).
1965 c.36.	The Gas Act 1965.	In Schedule 3, paragraph 3.").
Page 120, line 7, column 3, at beginning insert:
		("Section 5(3) (a) and (b).").
Page 120, line 8, column 3, at end insert:
		("Section 48(9).").
Page 120, line 9, column 3, at beginning insert:
		("Section 19(5).
		In section 28(1), the words "Subject to the provisions of section 26(2) to (5) of this Act,".
		Section 35.
		Section 36.
		In section 41A(6) and (7), the words "consisting of the winning and working of minerals".").
Page 120, line 9, column 3, at end insert:
		("In section 58(2) (a), "35, 36,".").
Page 120, column 3, leave out lines 11 to 14 and insert:
		("Section 84(11).
		In section 85, in subsection (5), the words "or for varying the terms of the notice in favour of the appellant; and subsection (11).").
Page 120, line 18, column 3, at end insert:

1058

		("In section 88(2), the words "(as defined in section 84(2) of this Act)".
		Section 91(3) and (5).
		In section 93, subsection (1) (k) and, in subsection (5), the words "or for varying the terms of the notice in favour of the appellant".").
Page 120, line 21, column 3, at end insert:
		("Section 98(3).").
Page 120, line 25, at end insert:
		("In section 106, the words from "other than" to the end.").
Page 120, line 26, at end insert:
		("(except section 145).
		In section 155(5), the words from "and subsection (5)" to the end.
		In section 155(6), the words "and in section 156 of this Act".
		Section 156.
		Section 157(1).
		In section 157(3), the words from "(a)" to "(b)" and, in the proviso, the words "paragraph (a) or".
		Section 157(4).").
Page 120, line 28, at end insert:
		("In section 167A(11), the words "or bodies of persons".
		Section 169(3).
		In section 201(5), the definition of "lawful access".
		Section 231(3) (c).
		Section 234.
		1048312029543
Page 120, line 29, at end insert:
		("In Part I of Schedule 19, "section 158 except subsection (5)".
1982 c. 16.	Civil Aviation Act 1982.	In section 53(1) (a), the word "158".
1986 c. 31.	Airports Act 1986.	In section 61(1) (a), the word "158".").

§ On Question, amendments agreed to.

§ Lord McIntosh of Haringey
I wish to express my thanks to my noble friends Lady Nicol, Lady Hollis and Lady David who have suffered three late nights on this Bill. I express my thanks to the Minister, to the noble and learned Lord the Lord Advocate and to all on the Government Front Bench for their courtesy. I thank those few but doughty Members of the Back Benches who have put up with what has sometimes been a dialogue des sourds as the sound has not reached too far back into the Chamber. This is a totally different Bill to that which came to the Chamber and I protested about that at the beginning. We shall have to consider it afresh on Report in two weeks' time.

Baroness Blateh
It is only the lateness of the hour that prevents me from reciprocating at length. I thank 1059 the noble Lord for his comments and thank all who have been concerned in our proceedings, including the staff.
[Amendment No.395 not moved.]
1060 Schedule 11, as amended, agreed to.
House resumed: Bill reported with amendments.
House adjourned at twenty-seven minutes before midnight.