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Mr. Clifton-Brown: I am still not entirely clear. The nefarious, well-disguised Crown bodies that might have the extant mines somewhere within their portfolios having been found, how long will new clause 15 remain in operation? Will it continue for ever more or will there be a cut-off date by which, if the mines have not come forward, it will cease to have effect?
Keith Hill: Coal mines are already covered by the planning Acts. As to the duration of new clause 15,
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perhaps that is a matter on which I can write to the hon. Gentleman.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
New clause 16
Subordinate legislation
'(1) The Secretary of State may by order provide that relevant subordinate legislation applies to the Crown.
(2) The order may modify such subordinate legislation to the extent that the Secretary of State thinks appropriate for the purposes of its application to the Crown.
(3) Relevant subordinate legislation is an instrument which—
(a) is made under or (wholly or in part) for the purposes of any of the planning Acts,
(b) is made before the commencement of section (Crown application of planning Acts) of this Act, and
(c) is specified in the order.'.—[Keith Hill.]
Brought up, read the First and Second time, and added to the Bill.
New clause 17
Assessment of compensation: valuation date
'(1) The Land Compensation Act 1961 (c.33) is amended as follows.
(2) After section 5 there is inserted—
''5A Relevant valuation date
(1) If the value of land is to be assessed in accordance with rule (2) in section 5, the valuation must be made as at the relevant valuation date.
(2) No adjustment is to be made to the valuation in respect of anything which happens after the relevant valuation date.
(3) If the land is the subject of a notice to treat, the relevant valuation date is the earlier of—
(a) the date when the acquiring authority enters on and takes possession of the land, and
(b) the date when the assessment is made.
(4) If the land is the subject of a general vesting declaration, the relevant valuation date is the earlier of—
(a) the vesting date, and
(b) the date when the assessment is made,
and ''general vesting declaration'' and ''vesting date'' have the meanings given in section 2 of the Compulsory Purchase (Vesting Declarations) Act 1981.
(5) If the acquiring authority enters on and takes possession of part of the land—
(a) specified in a notice of entry, or
(b) in respect of which a payment into court has been made,
the authority is deemed, for the purposes of subsection (3)(a), to have entered on and taken possession of the whole of that land on that date.
(6) Subsection (5) also applies for the purposes of calculating interest under the following enactments—
(a) section 11(1) of the Compulsory Purchase Act 1965;
(b) paragraph 3 of Schedule 3 to that Act;
(c) section 85 of the Lands Clauses Consolidation Act 1845;
(d) section 52A of the Land Compensation Act 1973,
and references there to the date or time of entry are to be construed accordingly.
(7) An assessment by the Lands Tribunal is treated as being made on the date certified by the Tribunal as—
(a) the last hearing date before it makes its determination, or
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(b) in a case to be determined without an oral hearing, the last date for making written submissions before it makes its determination.
(8) Nothing in this section affects—
(a) any express provision in any other enactment which requires the valuation of land subject to compulsory acquisition to be made at a particular date;
(b) the valuation of land for purposes other than the compulsory acquisition of that land (even if the valuation is to be made in accordance with the rules in section 5).
(9) In this section—
(a) a notice of entry is a notice under section 11(1) of the Compulsory Purchase Act 1965;
(b) a payment into court is a payment into court under Schedule 3 to that Act or under section 85 of the Lands Clauses Consolidation Act 1845.''.'.—[Keith Hill.]
Brought up, and read the First time.
Keith Hill: I beg to move, That the clause be read a Second time.
With this new clause, we return to consideration of the compulsory purchase provisions of the Bill. The new clause is one of several that are intended to clarify or to amend the current compulsory purchase system in order to make it clearer and fairer. As the Committee is aware, the Bill contains various provisions on compulsory purchase in clauses 73 to 77. Clause 73 clarifies the purposes for which local planning authorities can exercise their compulsory purchase powers, while clauses 74 to 77 introduce a new element of compensation for loss. We shall, no doubt, return to those if time permits.
New clauses 17 to 21 concern the operation of the compulsory purchase processes. They form part of a wider package of reforms described in our policy statement of 18 July 2001 with a view to creating a simpler, fairer and faster compulsory purchase system.
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Turning to the substance of new clause 17, the introduction of a new section 5A to the Land Compensation Act 1961 is intended to clarify the legal position as to the point in time at which land being compulsorily acquired is to be identified and valued for compensation purposes. The uncertainty has arisen as a result of conflicting case law. By removing that uncertainty, we hope that those having their property compulsorily acquired will find the negotiation for compensation to be quicker and fairer.
Subsections (3) and (4) of new section 5A will determine the date on which land and buildings that are being compulsorily acquired are to be valued. The valuation will reflect the nature, condition and market value of the land on that date. In the case of land being acquired through the notice to treat procedure, the date on which the land is to be valued for compensation purposes will be the date on which the acquiring authority enters the land and takes possession. A notice to treat informs the recipient of the acquiring authority's intention to acquire land and requests details of the recipient's interest in the land. The notice also invites the recipient to enter into negotiations—to treat—for the purchase of the land. The authority then has three years in which to take possession of the land. Alternatively, the authority can
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obtain a right of entry by paying into court the sum claimed by the owner and by giving a bond that it will pay the full amount ultimately agreed or awarded to the claimant plus interest.
If the acquiring authority chooses to use the general vesting declaration method of taking possession of land, the relevant date for valuation purposes will be the date on which title to the land vests in the acquiring authority. This method is an alternative to the notice to treat procedure and it has the advantage to the acquiring authority of enabling it to acquire legal title to the land in the shortest possible time.
The only exceptions to the valuation date falling on the dates to which I referred are, in the case of both the notice to treat and general vesting procedures, where the compensation payable has already been assessed at an earlier date by the Lands Tribunal or where the parties have agreed a figure for compensation between them. The tribunal will normally become involved in compulsory purchase compensation cases only where the parties cannot agree the compensation to be paid. The date of its decision will then not be until some time after the authority has taken possession by either the notice to treat or the general vesting declaration route. The new provisions take account of the fact that the acquiring authority and the claimant may refer the matter to the tribunal at an earlier stage. Of course, it remains open to the parties to agree the compensation to be paid at any time during the compulsory purchase process.
I have mentioned that the date on which an acquiring authority enters and takes possession of land can be up to three years after service of a notice to treat on the owner and others with interests in the land. During that time, property prices may of course have changed considerably, as may the nature and condition of the land and buildings to be acquired. The purpose of clarifying the valuation date by legislation is therefore not only to provide certainty but to ensure that what is paid to the owner reflects property prices at the time he is being displaced and needs to find a replacement property. It will also prevent double compensation being paid—for example, if accidental damage were to occur to the property following service of the notice to treat for which he was entitled to receive insurance compensation.
Subsection (5) of proposed new section 5A also provides that the relevant valuation date for the whole of the land included in a notice of entry is to be the date on which the acquiring authority first takes possession of any part of the area. That means that compensation becomes payable to the claimant from the earlier date, so enabling him to negotiate meaningfully for a replacement site. In addition, in accordance with the provisions of subsection (6), he will be entitled to receive interest on the compensation due to him in respect of the value of the whole of the land to be acquired, pursuant to the notice of entry, from the date on which that first part of his land is taken until full payment is made.
The provisions offer a fairer way of dealing with compensation payable under the compulsory purchase procedure.
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Mr. Clifton-Brown: I was not looking forward to this part of the Bill, because it deals with a pretty difficult subject. Only those with an everyday involvement in compulsory purchase have a good working knowledge of it. I have not been involved in it for a long time.
I welcome the Minister's explanation and his clarification of the relevant valuation date. The law is at present confused on the subject, but new clause 17 appears to clear up case law. For example, in the 1991 case of Hughes v. Doncaster metropolitan borough council, in All England Law Reports No. 295, it was stated that the value of land includes both its market value and any compensation for disturbance. This is a difficult concept. People often get wind of compulsory purchases and various speculative developers buy up the land with a view to increasing its value merely because it is about to be compulsorily acquired.
A case from 1955—Lambe v. Secretary of State for War, heard in the Queen's bench division and recorded in All England Law Reports No. 386—clearly states that the increase in value due to the scheme is never to be taken into account. It seems that there is some confusion. Indeed, in some notable cases speculators have bought land and made a considerable profit as a result. Although the new clause provides some clarification, I am not sure that it entirely deals with the matter. Nor am I sure how one could do so, because of speculation about compulsory purchase orders long before they are made. I do not know how we can prevent such speculation, but I would welcome further clarification.
I am not entirely clear as to when one would go down the route of notice to treat and when to go down the route of general vesting. I presume that the notice to treat route is an earlier occurrence and therefore less likely to be subject to the speculation that I have described than the vesting route. General vesting occurs when the acquiring authority takes possession; notice to treat occurs when the acquiring authority starts discussion of that land. Again, that gives manipulative speculators the chance to make money at the state's expense, which is not desirable.
I welcome the clarification in new clause 18 on exactly whose interest in land can be taken into account.
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