My Lords, this has been a very good and occasionally somewhat detailed debate; I will certainly be doing a follow-up letter when we have finished.
I want to say at the outset that while I agree that HS2 must always strive to improve, I do not recognise the claims by the noble Earl, Lord Lytton, of coercion in dealing with members of the public. If someone has evidence of coercion then we would very much like to hear about it so that we can deal with it properly, but we cannot do anything with unsubstantiated accusations and anecdotes.
I turn first to compensation for tenants, a subject covered previously at Second Reading. As I said then, most types of tenants are already provided for under the existing compensation law where they are impacted by the scheme. Where they are not provided for, the Government are able to use flexible, non-statutory arrangements to provide support. The Government have also committed to taking forward appropriate measures where the law is silent in discussions with stakeholders and residents if it is necessary to do so.
Matters of tenant compensation are complex because they depend on a person’s individual tenancy arrangements, and any compensation must balance the rights of the tenant with fairness to the taxpayer. It should, of course, be executed in a sensitive manner; I think all noble Lords would agree with that.
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I will endeavour to summarise the current support available. In so doing, I will outline the legal position, the comprehensive non-statutory schemes that have been developed by the Government, and the work being taken forward by the Government following parliamentary scrutiny of high-speed rail hybrid Bills. The elements of compensation payable are set by the Ministry of Housing, Communities and Local Government in the compensation code and they apply to all government-led infrastructure projects: not just road or rail, but all of them. This scheme, therefore,
applies to HS2, these arrangements have been debated, agreed and set by Parliament, and together with those arrangements there is a vast body of case law on this subject.
Compensation is based on the principle of financial equivalence: that is, that the person affected should be compensated financially by no less, but no more, than what they have lost. Compensation due to tenants is therefore commensurate with their interest in the land they occupy. For example, if a private, tenanted property is subject to compulsory purchase, then the tenant could be eligible for various heads of claim, which could include a home-loss payment for the loss of their home. The minimum home-loss payment is set out in regulations, but is reviewed on an annual basis and uprated if necessary to reflect inflation. Tenants could also be entitled to the market value of their leasehold interest in the land. However, a tenant who is on a short tenancy, such as an assured shorthold tenancy or a periodic tenancy, is unlikely to own an asset that has any substantial value in the open market, and might therefore not receive this element of compensation. Finally, the tenant could also be entitled to reasonable moving costs. This covers any reasonable cost associated with moving, such as the cost of hiring a removals firm, or the redirection of post. HS2 has published an information note, C15, as noted by the noble Earl, Lord Lytton, and my office will happily share that with any noble Lords who request it.
In recognition of the unique aspects of the HS2 project, the Government have supplemented statutory compensation with a comprehensive package of non-statutory measures. This gives the flexibility of approach in the project which is needed when supporting vulnerable people. A key part of the non-statutory arrangements is the consideration of atypical properties and special circumstances. These are established, funded arrangements which apply to tenants as well as property owners. In addition, following the recommendations made by a Select Committee of your Lordships’ House during the passage of the phase 1 Act that compensation should be available for households that are subject to severe and prolonged construction disturbance, a prolonged disturbance compensation scheme is available. As disruption will affect residents in similar ways, regardless of their housing tenure, the scheme includes arrangements for tenants as well as owner-occupiers of residential dwellings. I trust that noble Lords will agree that all the non-statutory arrangements, which are as broad and as inclusive as they can possibly be, are an appropriate and flexible tool to support all types of resident affected by the HS2 scheme.
On the amendment of the noble Earl, Lord Lytton, in this group, it should first be acknowledged that claims for compensation for temporary possession and claims for compensation for permanent compulsory acquisition are two distinct and separate claims under different parts of the Bill. This amendment concerns compensation due for losses arising from periods of temporary possession. The Neighbourhood Planning Act 2017 provides that, when there is compulsory temporary possession of land, owners of interests in, or with a right to occupy, the land are entitled to request an advance payment of 90% of the compensation
due to them. This provision renders the proposed amendment redundant as its purpose is already achieved by the 2017 Act.
If the Bill were to restrict taking the temporary possession of land needed to build a railway only to where compensation has already been agreed prior to occupation, the construction of the railway would be put at significant risk of delay. The people of this country have been owning property and land in funny-shaped patterns for centuries: a beautiful patchwork, one might say. However, building a railway, which requires land in a straight line, inevitably involves acquiring, or obtaining access to, a multitude of holdings within that historic patchwork.
The works to build the railway are done in a logical order according to the needs of the environment and engineering. Some works are seasonal, some need to be done when the weather is clement, and some need to be done before other works; for example, building the footings and foundations before putting a railway system on top of them. Putting all the works on hold until agreements have been made with all, through to the slowest occupier to agree, would make the process unworkable, especially where the slowest occupier’s agreement was the land needed first.
The amendment would also put the railway at significant risk of extra expense. Putting the works on hold to meet the terms of the amendment could tempt some occupiers to request ransom sums as the price for their agreement. Where one occupier has demanded and received such a ransom sum, others would inevitably follow. I am sure the noble Earl, Lord Lytton, had no intention of putting phase 2a or the public purse in such peril.
Nevertheless, there are already safeguards in place in the compensation code, which applies to all government-backed infrastructure. The code applies for owners of land that is needed temporarily. Owners can claim compensation for their losses arising from temporary occupation where they provide evidence of those losses. The HS2 project will pay the reasonable costs of professional fees incurred so owners will not lose out.
I will write with more details on this important matter and supply figures for the number of outstanding cases on phase 2a. I would be very happy to receive any examples from noble Lords where people are not being treated appropriately; for example, the special cases referred to by the noble Baroness, Lady Randerson. I trust that this information has been helpful and I hope the noble Earl feels able to withdraw his amendment.