§ Mr. BaldryTo ask the Secretary of State for the Environment what proposals he has for amending the law on land compensation and compulsory purchase.
§ Mr. RidleyMy Department has today issued a consultation paper inviting comments by 21 April 1989 on various proposals relating to compulsory purchase and land compensation. I have placed a copy in the Library.
§ Mr. BaldryTo ask the Secretary of State for the Environment whether the Government have concluded their review of the compensation provisions applying to compulsory purchases for commercial purposes.
§ Mr. RidleyThe Government have given careful thought to the representations about the land compensation code made during the debates on the Channel Tunnel Bill and in a memorandum submitted by the National Farmers Union and the Country Landowners Association.
Under the existing provisions, compensation is based on the market value of the land, taking account of any planning permission or hope value which attaches to it, but disregarding the effects of the scheme for which the land is being taken, except in so far as the actual or prospective development might have taken place apart from the scheme. It is generally accepted that in most cases this basis of compensation achieves a fair result since it gives the land owner the value which his asset would have realised on the open market in the absence of the proposed scheme.
The main point raised during the parliamentary debates on the subject, and repeated in the joint memorandum, was that the code operates unfairly where the end use of the land is essentially commercial, since a commercial undertaking acquiring land without the benefit of compulsory purchase powers might be expected to pay the landowner a premium in order to secure the land for itself. Particular concern was expressed about the compulsory powers which remain with nationalised industries after they have been privatised.
Land may be acquired compulsorily only where authorised by or under statute. The compulsory powers remaining with nationalised industries after privatisation relate only to the statutory functions of those industries and cannot be used to acquire land which is not needed for those functions. Each acquisition must be justified on its merits having regard to the statutory powers concerned. In these respects, compulsory acquisitions of land by or on behalf of private sector bodies do not differ from other compulsory acquisitions. The Government's view is that the market value of the land as assessed under the existing compensation provisions remains a fair measure of the loss to be compensated where any land is acquired compulsorily. It will be for Parliament to consider the scope and extent of any compulsory acquisition powers proposed in future legislation including private legislation to authorise particular developments for which land may need to be compulsorily acquired. However, it is the Government's view that compulsory powers should not be available to acquire land for incidental commercial development.