Levelling-up and Regeneration Bill

Lord Carrington Excerpts

Wednesday 3rd May 2023 Lords Chamber

Moved by

[Lord Carrington]

292: After Clause 123 insert the following new Clause—
“Duty of care(1) It is the duty of any body using compulsory purchase to act fairly towards the owner of any property being acquired and any claimant of compensation.(2) The Secretary of State must issue a code of practice specifying how the duty in subsection (1) is to be discharged.”Member’s explanatory statement
This amendment will ensure that legislative provision for compulsory purchase, and the actions of the acquirer, always achieve a correct balance between the interest of the state and that of the property-owning individual.

[Lord Carrington (CB)]

My Lords, I declare my rural interests as set out in the register. My Amendment 292 would establish a statutory duty of care that makes the acquirer consider and possibly reduce the impact of a compulsory purchase proposal on the claimant, their property and their business. The intention is to safeguard property owners against the excesses of acquiring authorities, many of which are large, commercial and profitable companies or government bodies. HS2 comes to mind in this respect: stories of its excessive use of compulsory purchase powers are numerous in the part of Buckinghamshire in which I live.

Property owners are affected by compulsory purchase in many ways. Some lose their whole property. Many lose only a proportion of their property but have to suffer the impacts of construction for many years or decades, having to maintain a viable business throughout that time.

The acquirer’s responsibility is to compensate the landowner or business owner for their loss. This is nearly always paid after the land has been taken, and in some cases many years after. This delay only adds to the loss. Many property owners affected by compulsory purchase feel that their interests are ignored by acquirers keen to deliver the scheme, together with any environmental mitigation, but with little consideration for the person or business that may have occupied that area for generations. For an individual, this really is David and Goliath.

A statutory duty of care to consider and mitigate the impact on landowners and businesses affected by the scheme would rebalance the interests of delivering the scheme and reduce the impact. A duty of care would not delay or prevent schemes but it would ensure that the impacts on property owners and businesses are considered as a key part of the scheme, rather than being an afterthought considered only when compensation is due some time later.

The Secretary of State will have to justify how this duty of care is delivered, but an appeal to an independent person or ombudsman would give the proposal legal force. I look forward to the Minister’s response on this constructive amendment designed to take much of the aggravation out of compulsory purchase while enabling sensible schemes to progress with considerations of the interests and livelihoods of the owner.

Moving on in this group, I now call for the deletion, or at least complete redrafting, of Clauses 174 and 175, as well as government Amendment 412D, which proposes a new clause after Clause 175. The compulsory purchase provisions contained in these three clauses are immensely complicated to the layman, including myself, so I will contain my remarks to an overview and the principles at stake. In opening this debate, I would be interested to hear from the noble Baroness how these clauses relate to the Law Commission’s review into compulsory purchase reform, as it seems odd to be legislating before receiving the outcome.

By way of background to these clauses, the Government in June 2022 initiated a consultation process largely covering the contents of the clauses. We finally received the Government’s response to those consultations last week, some nine months after the close of the consultation. Under consultation principles the response should be within four months. Please also consider the fact that this Bill was introduced to the other place in May last year. What was the point of the consultation if the Government had already decided what to do?

Broadly speaking, the comments are highly diverse and no consensus was reached on any of the questions, and the negative and “not sure” views were the majority in most cases. The main comments highlight issues such as unfairness created by a two-tier property market, the vague definition of public interest, absence of clarity leading to additional costs and delays, human rights, mental health and stress, the European Convention, and potential wider effects on housing developments.

The clauses bring into question the long-held principle that anyone forced to sell land should expect to be put in the same position as would be the case if the land had not been taken from him. In other words, he should be paid market value. The purpose of Clause 174 is to cap the cost of acquiring land for affordable housing in a compulsory purchase situation by eliminating “hope value” in certain defined circumstances through the use of directions by the Secretary of State. I quote:

“In assessing the value of land … it is to be assumed that no planning permission would be granted for development on the relevant land”.


In other words, the value would be existing use rather than market value, which might incorporate hope value, which is the value attributed to the expectation of development in the future. This market value currently applies to any purchaser, whether compulsory purchase or a commercial sale. In the case of compulsory purchase, any hope value included in the purchase price paid would have to be justified and have sound basis, as it can be challenged at a tribunal.