Compensation for injurious affection

I beg to move amendment No. 65, in clause 53, page 32, line 27, leave out ‘nominated undertaker’ and insert ‘Secretary of State’.

The clause is probably the shortest in the Bill, but it is significant. I return to the issue of compensation, which we have discussed more than once in Committee. The clause provides that section 10(1) of the Compulsory Purchase Act 1965 will apply in respect of land used for or in connection with the construction of Crossrail. That section deals with those claiming

“compensation in respect of any land, or any interest in land, which has been taken for or injuriously affected by the execution of the works, and for which the acquiring authority have not made satisfaction”.

There is, however, a small but significant alteration to the wording of the 1965 Act—the substitution of “nominated undertaker” for “the acquiring authority”. If we do not do that, the Bill will effectively muddy what is already the grey area of the respective duties and responsibilities of the Secretary of State and the nominated undertaker.

The Committee might recall that when we dealt with clause 6 on compulsory purchase, I tabled an amendment that would have given the nominated undertaker, as opposed to the Secretary of State, the powers to purchase compulsorily. The Minister said that he was tempted by my amendment, but not quite enough, and it was therefore withdrawn. It is clear in the clause that the Secretary of State alone is responsible for the compulsory purchase of land. However, on the question of compensation, it appears that, although the Secretary of State will have compulsorily purchased the land and will be the acquiring authority, the responsibility for compensation now passes to the nominated undertaker.

To make the clause work, therefore, we need to insert the words “Secretary of State” rather than “nominated undertaker”, as outlined in the amendment. Otherwise, we will have an odd perversity, which is that the Secretary of State will have compulsorily acquired the land, yet the nominated undertaker—who may or may not be the Secretary of State, as we discovered previously—will pay out the compensation. That is very strange.

If a landowner’s land were seized or compulsorily purchased by one person, it would seem strange if he had to seek compensation from another. If, as is the case in clause 6, we make the Secretary of State the person who compulsorily acquires the land, it seems perfectly consistent that that Secretary of State must also take on the duties and responsibilities associated with the purchase. Therefore, my amendment would make the clause consistent with other clauses by taking out the words “nominated undertaker” and replacing them with “Secretary of State”.

On this occasion, I am not even tempted to support the amendment, and I can explain why. Clause 53 is a technical provision that arises from the fact that, although under the Bill the power to acquire land compulsorily for Crossrail is conferred on the Secretary of State, as the hon. Gentleman rightly says,  the power to carry out works on that land is conferred on the nominated undertaker. Section 10 of the 1965 Act gives a right to compensation in certain cases where, although landowners do not have particular land that they own compulsorily acquired from them, they none the less have rights associated with their land adversely affected by things done by the undertaker in constructing works on neighbouring land that has been acquired from someone else.

The purpose of clause 53 is to reflect the division of responsibilities made in the Bill so that, in such cases, it is made absolutely clear that the nominated undertaker pays the compensation under section 10 of the 1965 Act, rather than the Secretary of State, simply because of the practical reason that the actions of the nominated undertaker, in carrying out work on neighbouring land, have given rise to the right of compensation.

In this case, it is not the purchase of the land that has given rise to the right of compensation, but the “injurious affection”, as it is described in the clause. The clause does not change the cases where compensation arises, or the amount of compensation payable. It is concerned only with who will pay, as a consequence of the particular division of responsibilities in the Bill.

The amendment would negatively affect the clause by providing for the Secretary of State to pay the compensation. For that reason alone, I cannot support the amendment. I hope that the hon. Gentleman understands my point and withdraws the amendment.

I certainly understand the Minister’s point. Effectively, he is saying that the actions that occur on the land after it has been compulsorily acquired attract compensation, not the physical act of compulsory purchase itself. However, I am not quite sure that I follow his point that the amendment would negatively affect the Secretary of State. Can he clarify that?

To clarify, the clause refers to section 10(1) of the 1965 Act. I am not accusing the Secretary of State of carrying out any injurious affection on anyone. My point is that the nominated undertaker will carry out the work. Therefore, there is a clear division of responsibility. The Secretary of State purchases the land, and there are compensation arrangements in place for that purchase, separate from the clause. The nominated undertaker, however, will be responsible for carrying out any work that may be injurious to the private landowner, so it does not make sense for the Secretary of State to pay compensation for the purchase and the work that is carried out.

I thank the Minister for that very full explanation, and the matter is now perfectly clear. With your permission, Lady Winterton, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

In many senses, the clause represents a huge lost opportunity. When it was proposed that Crossrail might come down into my neck of the woods, properties along the route under discussion immediately lost about 25 per cent. of  their value. The proposal was not particularly serious and it disappeared in a matter of months, but I did have extensive conversations with Crossrail’s management about a property protection scheme to ensure that proper compensation was paid to people whose property was affected. In cases of direct compulsory purchase, it was well understood that the needs of the property owner would be satisfied, but the clause talks about others whose property is impacted by the scheme.

Crossrail’s management was very positive about the property protection scheme that we discussed. It had been piloted by the central railway project, which never happened, although I should declare that I had an interest in it. Much of Crossrail’s management was familiar with the scheme, which would have given anyone who believed that their property had been affected the option of requiring it to be compulsorily purchased at the point of construction at what would have been the full market value without the affliction.

In effect, the scheme was structured like an insurance scheme, in that it would have remained attached to the project and been exercised only at the point of construction. The money would not have been drawn down, and the option would have attached to the sale of the property so that people could have sold freely, knowing that they were selling on protection to whoever purchased their property from them. The matter would finally have resolved itself during the construction phase.

We have a serious problem with major projects such as Crossrail, which have an impact on people who must sell their property because they need the money as part of their retirement plan or for some other purpose. The existing legislation is not adequate to cover such circumstances, and I hope that the Minister will use the opportunity afforded by the Bill to set out how such people can be protected appropriately.

I understand the hon. Lady’s concern about property owners affected by major projects such as Crossrail, but I remind the Committee yet again that it is for that reason that Parliament has the hybrid Bill procedure, which is intended to protect private interests during the promotion of such public Bills. We go through the process of specially establishing a Select Committee so that we can look at exactly the concerns she expressed.

Does the hon. Gentleman accept that, even with the hybrid Bill process, there is often a long delay and that people selling property in the interim are inevitably injured? Does he also accept that one advantage of a property protection scheme is that the market identifies who has suffered because the price that they are offered for their property is different from that offered for a comparable property that is not afflicted? Many issues of contention regarding which property is or is not affected therefore disappear because the market establishes the facts.

Again, I entirely understand the hon. Lady’s point, but the hybrid Bill process allows for precisely the concerns that she has expressed. It enables those who fear that their land or property might be  adversely affected by the Bill and the scheme that it enables to petition against the Bill in the Commons—the stage that we have gone through—and the Lords. I assure her that that the hybrid Bill Committee heard many petitions on matters related to compensation. Many people expressed both their particular and general concern about the likely effects of the Bill on their neighbourhood on behalf of those who lived around them. We took careful note of the concerns that were expressed and, in some cases, made recommendations to the promoters and the Government on ways in which those interests could be given special protection. We are grateful to the promoters for the attention that they paid to those concerns and the amendments that they made to deal with specific situations and more generally as a result of those representations.

I certainly think that the other members of the Select Committee all felt at the end of the process that those who had had concerns similar to those expressed today by the hon. Member for Richmond Park were heard appropriately and had the opportunity for their concerns to be taken into account. In the overwhelming number of cases, those people felt that their concerns had been adequately satisfied and their interests appropriately protected. I feel that her concern about what she described as a missed opportunity in the clause is misplaced. Those concerns have already been taken into account and those with lingering concerns will have the opportunity to petition again when the Bill goes through the Lords and to ensure that their concerns are taken into account if they have not yet been so.

As the other member of the Committee who was also a member of the hybrid Bill Committee, I support what has just been said. The hybrid Bill Committee concerned itself at great length with the whole issue of compensation, because it seemed to us that the promoters were shoving through a project, rightly so from many people’s perspectives, but that was not the fault of the people who would be affected. Therefore, we fought long and hard on their behalf and gained some considerable advantages for them as a result.

My fear is that the amendment would be immensely misplaced in relation to the work that we did. I think that the rights are already protected in the Bill and I am well satisfied that the compensation code would be properly applied. Additional rights were given as a result of the work of the hybrid Bill Committee and it therefore seems that, not only is the amendment pretty pointless, it could also be harmful.

I thank hon. Members for their contributions on the stand part debate. The hon. Member for Richmond Park made some important points, and I know that she is concerned about the general problem of blight as it affects many private property owners. Of course, that problem has impeded any number of civil engineering and construction projects throughout the country and it continues to trouble many private property owners along the routes of roads and other potential civil engineering projects.

I disagree that the clause is a missed opportunity. If I understand the comments of the hon. Member for Richmond Park correctly, she is looking for a new, general purpose procedure that would apply not only to Crossrail, but to other civil engineering projects. Of course, that is not part of the purpose of the Bill and the clause is somewhat narrower than the scope of her points, but they were well made and I am sure she will want to continue that campaign elsewhere.

I echo the words of my hon. Friend the Member for Leicester, South and those of the hon. Member for Northampton, South. It is invaluable to have two previous members of the Select Committee, as they bring a certain perspective that none of the rest of us have or would have wanted, given the length of time that they served on that Committee. Their remarks have always contributed to positive debate and I am grateful to them both.

I agree with the points that my hon. Friend the Member for Leicester, South made about the opportunity for petitioners to speak to the Committee, raise the issues with which they had concerns and have them addressed. A discretionary hardship policy exists that allows qualifying landowners to require the purchase of their property. Of course, it is discretionary and will not meet all the demands of the hon. Member for Richmond Park. However, now that we have explored the breadth of this modest and short clause, I commend it to the Committee.

Question put and agreed to.

Clause 53 ordered to stand part of the Bill.