House of Commons Hansard Debates for 9 Jan 1996 (pt 31)

Mr. Jacques Arnold: My hon. Friend's reference to generalised blight is accurate. However, if the blight is caused by plans, written on maps, which involve going

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straight through people's houses, although the blight is generalised, it is specific and lethal for the people concerned.

Mr. Watts: I acknowledge the force of my hon. Friend's point. He will understand, however, that there has always been a distinction between generalised blight, which arises before a project has been defined and a route has been safeguarded, and the situation once a route has been safeguarded, which triggers the statutory provisions that the House has enacted.

Looking at the cases in a little more detail, I understand that Mr. and Mrs. Winzar purchased their property in 1990. It is very close to, but not on, the line of the proposed rail link route. However, the property has been included in the limits of deviation for the scheme and has been safeguarded because, in the opinion of Union Railways, construction of the new line would make living in the property intolerable.

In accordance with the national compensation code, Union Railways therefore offered to buy the property at the market value it would have enjoyed if the rail link proposal did not exist--that is, the unblighted value of the property. It also offered a home loss payment and disturbance costs, with payment of Mr. and Mrs. Winzar's reasonable legal and agents' fees. Unfortunately, the total offer made by Union Railways proved insufficient to cover the mortgage and loans on the property raised in relation to the business. As the price offered to Mr. and Mrs. Winzar reflects the unblighted value, any loss in value since the property was bought in 1990 reflects a general fall in house prices since that date, and not the effects of the scheme.

I understand that Union Railways has offered to go to arbitration over the valuation, and to pay the initial costs of it. It has also proposed that Mr. and Mrs. Winzar should be free to come back on a new valuation date at any time if they wish to withdraw from arbitration. In addition, the company has agreed to an extended completion period limited to 12 months as a protection against the property market falling. Completion could still be on the basis of the valuation at the time of purchase so that any rise in the property market would benefit Mr. and Mrs. Winzar.

Mr. and Mrs. Smith are in a similar but not identical position. I understand that they bought their property in 1987 and remortgaged it in 1989 to finance an expansion of their business. It is on the line of the proposed rail link and therefore became eligible for purchase under Union Railways' voluntary purchase scheme as soon as the route was safeguarded.

Again, Union Railways offered Mr. and Mrs. Smith the unblighted market value of their property and other payments in accordance with the national compensation code. It has also offered arbitration and to pay the costs of it, together with the possibility of Mr. and Mrs. Smith withdrawing from arbitration and recommencing within 12 months, in the hope that a rise in the housing market would benefit them.

Finally, Union Railways has offered to allow Mr. and Mrs. Smith to continue to occupy the property for a fixed period on payment of a rent which would effectively be deducted from the completion price. It has not been prepared, however, to allow Mr. and Mrs. Smith to continue to occupy the property rent-free.

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Subject to agreeing valuations, the offers made by Union Railways would leave my hon. Friend's constituents in no worse a position than they would have been had they sought to sell in the absence of the rail link. Indeed, they would get the benefit of additional payments under the national compensation code--home loss payments, disturbance costs and legal and agents' fees.

Mr. Arnold: Will my hon. Friend clarify one point? Were my constituents to come to a settlement over the domestic properties, would it prejudice their rights to subsequent compensation in respect of the losses to their businesses that arose directly out of the blight?

Mr. Watts: I can reassure my hon. Friend that, if his constituents agreed terms of compensation within the provisions which are available now, and if, as a result of the further work which we are undertaking and on which we will consult with the Select Committee on the Parliamentary Commissioner for Administration, we are able to agree and implement a scheme to provide compensation in circumstances of extreme hardship such as the Parliamentary Commissioner and the Select Committee described, and if Mr. and Mrs. Winzar and Mr. and Mrs. Smith were eligible to be considered under the terms of such a scheme, their right to be considered would not be prejudiced by the fact that they had agreed to the purchase on the basis which is currently being offered to them. I hope that that is a reassurance to my hon. Friend and his constituents.

To ensure that no avenue has been overlooked, I shall also ask Union Railways to look again at these two cases to see whether there is anything further that can be done within the voluntary purchase scheme and the national compensation code.

I shall now deal with the general question of the blight effects on and compensation arrangements for properties and businesses during the various phases of the channel tunnel rail link project.

In common with all major infrastructure projects, the rail link project was subject to what is described as generalised blight, which is the blight that may arise in the early stages of a project while options are being examined and worked up, and consultation is taking place. It ceases at the point at which a project becomes sufficiently well defined for the expected land requirements to be identified on a plan and safeguarded from development.

It has been the policy of successive Governments that there should be no remedy for generalised blight, and it is significant that Parliament did not take the opportunity to decide that generalised blight should give rise to compensation during the passage of the Planning and Compensation Act 1991.

The House is aware of the Parliamentary Commissioner for Administration's report on the channel tunnel rail link and blight, which relates to the generalised blight phase of the rail link project. I was grateful for the opportunity to inform the House of the current position on that report, and on the subsequent report of the Select Committee on the Parliamentary Commissioner for Administration about the channel tunnel rail link and exceptional hardship, during the debate initiated by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) on 14 December.

On this occasion, I simply reiterate that, in the response to the Select Committee given by my right hon. Friend the Secretary of State for Transport on 1 November, the

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Government concluded that they had to continue to resist the Parliamentary Commissioner's finding of maladministration in this case, and that any new principle of administration implied in the Committee's report was unacceptable, but that the Government were prepared to consider afresh whether a scheme might be formulated to implement the Committee's recommendation that redress should be granted to those affected to an extreme and exceptional degree by generalised blight from the channel tunnel rail link during the period June 1990 to April 1994, and how such a scheme might operate.

The Government agreed to look again at the possibility of a compensation scheme out of respect for the Select Committee and the office of the Parliamentary Commissioner, and without admission of fault or liability. We also made it clear that the Government would have to consider seriously the possible costs of such a scheme, which cannot yet be established, and that we could not make an open-ended commitment on an uncosted basis, in view of the Government's responsibilities to the taxpayer.

I know that hon. Members and their constituents are keen to know as quickly as possible the outcome of our consideration of whether such a scheme might be formulated. However, at this stage I have nothing substantive to report since the debate on 14 December, except to say that we will make as speedy progress as we can, taking account of the Government's undertaking to consult the Select Committee as proposals are developed and the need to consider seriously the costs of the scheme.

There are many important factors to be looked at, including an acceptable definition of extreme and exceptional hardship, the basis on which any compensation might be paid, the scope of any scheme and its practical operation, and the likely cost of administering any scheme and of compensation to be paid. Until the process of fresh consideration is completed, it is not possible to say whether or what new compensation arrangements might apply or to know whether Mr. and Mrs. Winzar and Mr. and Mrs. Smith might benefit from any such arrangements. I have already assured my hon. Friend and the House that any eligibility that they have to be considered under the terms of such a scheme would not be prejudiced by their earlier agreement of terms for the purchase of their properties under the arrangements that are currently in place.

As with all major infrastructure projects, compensation arising from the rail link is calculated in accordance with the national compensation code. In the case of the rail link, statutory powers for property purchase will not exist until enactment of the Channel Tunnel Rail Link Bill.