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Lord Whitty: My Lords, some interesting and complex points have been raised. Perhaps I may first deal with the issue of commercial versus domestic properties. The recollection of the noble Baroness, Lady Byford, and other noble Lords is correct; we were talking largely in terms of households or houses. Nevertheless, the argument that there has been an established practice of access morally and legally must equally apply to legal commercial activity. The example raised by the noble Lord, Lord Trefgarne, was of covert extension of the premises into a business activity for which planning permission had not been obtained. However, where there is established use, logically it does not matter what the premises were previously used for. Therefore, commercial use—I shall turn to agricultural use in a moment—establishes the same dilemma as regards the compensation to be given to the landowner and the rights to be given to the property.

In the commercial case, the valuation of the premises would reflect their commercial value. If there is a change of use, the situation changes. If one is moving from a residential to a commercial activity, the previous arrangement falls and the valuation is then based on commercial use. If the commercial activity is non-legal—if there is no permission for it—the landowner has a case that the valuation should reflect the commercial activity. The noble Lord, Lord Trefgarne, raised an important point but in most circumstances—except in a change of use or an

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unlawful use—the valuation of the property would yield a higher return to the landowner if it were commercially used.

As regards the agricultural dimension, it would be unusual if the only access were at the same point as the access to the farmhouse. In any case, a valuation would relate to the total area for which access was being sought. That could be a house, a commercial property or land. The application must clearly describe the premises which are served by the access and they would be valued accordingly. If there were other access to the farmland, one would expect the application not to include it because that would raise the price. In rare circumstances where the only access was to the farmhouse and the land, the logic of the situation would be that the compensation would be based on the valuation of the totality of the premises to be covered by that access. However, that situation would be rare and special provisions may need to apply. It is probably unlikely to arise.

I repeat that if there is increased commercial activity, or if there is changed commercial activity or a change of use of any kind, the provision for the valuation based on previous commercial use or domestic use is no longer valid. In that situation, and only in that situation, will a new owner, for example, have to face up to a second sum of compensation. In normal circumstances where a valuation has been made and the compensation paid, a new owner would not be faced with further compensation. The easement would stand, as it would in common law, for the future unless there were a change of use.

The noble Baroness, Lady Sharp, asked whether 2 per cent was the maximum or the set fee; in other words, whether one could negotiate up to the maximum. Under the regulations, 2 per cent is the prescribed amount. We are talking about a situation which must be dealt with by regulation and 2 per cent is the figure. Of course, that does not preclude landowners and those who require access reaching a settlement of less than 2 per cent outside the regulations. That would apply to local authorities as much as it would apply to private landowners. Therefore, people can reach a lower figure, but not via Section 68 of the Act or via these regulations.

The noble Baroness, Lady Sharp, asked about the situation in which ownership of the common land is not known. That is difficult conceptually because the situation could not arise if the owner were not known; if the person requesting access raised the issue, no one would apply for the compensation or would require it.

The Earl of Onslow: My Lords, I speak from personal experience. With regard to small plots of common land, it can be incredibly difficult to discover who is the lord of the manor and to whom moneys should be paid. As a consequence, if the land covers an area on which a mortgage is to be raised, then the mortgagor will ask, "Have you got an easement?". I must respond by saying, "No, because I do not know whom I should pay". "Right, you cannot have a mortgage". This is an important point.

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I do not know how it is to be dealt with, but such circumstances can arise. I have been involved in exactly that kind of case at home.

Lord Whitty: My Lords, I see the problem. I suppose that there is an obligation on those seeking access to try to find out who is the owner, but if that is not possible and no owner comes forward to claim compensation, then it is conceivable that such compensation might be required at a later stage. However, at the time of any change of ownership, the situation would remain as it stands at that point; namely, that no easement would be required and no easement would be granted. Given that, it would be difficult for a mortgagor to make a stipulation.

Provided that the normal searches had been carried out and that efforts were made to trace the owner and to check whether that owner was likely to require compensation, then the position is clear.

The issue with regard to common land forms part of a significantly wider matter. During the course of our debates on the Bill I recall that my noble friend Lord Williams of Elvel, who is not in his place this evening, raised the issue at some length and has returned to it subsequently. It needs to be addressed as part of a much wider problem. There are unregistered areas of common land, in particular on town and village greens, where the provisions might otherwise make it a criminal offence to assert access. Furthermore, there are certain obscurities with regard to the legal position in those situations. Regrettably it is not always possible to offer a clear legal view since many cases go back into the mists of time.

However, the Government have indicated that they are considering the matter as part of an administrative review of legislation generally on common land. We hope shortly to announce an initiative in the area. However, I regret that I cannot give a full answer tonight.

Baroness Sharp of Guildford: My Lords, I shall be brief. There is a continuing problem with regard to non-ownership and village greens because of the issue of mortgages. I think that the Minister should bear it in mind.

8.15 p.m.

Lord Whitty: My Lords, I accept the point made by the noble Baroness. That is why the matter will form part of our consideration on a wider review of common land. Not only in this area are there potential legal problems with regard to the unclear situation of the legal owners. Regrettably it applies in a number of areas around the country, and will probably apply in areas about which we do not yet know. As I have said, the problem will be addressed as part of a consideration of the wider context.

The noble Baroness, Lady Byford, asked a series of questions. She queried why property values were to be set at current levels; namely, at the point at which someone files an application rather than freezing values at any given point, such as in 1993. It is

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reasonable that at the point at which compensation is paid, that compensation should reflect market values at the time. That is why we have stipulated the current value rather than fixing it at the point at which the law was clarified.

The noble Baroness asked about payment by instalments. Nothing in the regulations would prevent an agreement from being made which allowed the payments to be made in instalments, if that was agreeable. However, the 2 per cent is the prescribed rate.

The noble Baroness also asked about car parking. The matter was not touched on when we debated the primary legislation. It might be covered by the easement, but it would have to be proposed as a part of the application at the time. I think it would also have to be an established practice and position about which no one would argue. For that reason, I think that the number of circumstances under which this procedure would cover car parking arrangements would be relatively limited.

The noble Baroness also referred to a letter which I regret I have not seen personally, although I appreciate that it is with the department. As a result of that letter, the noble Baroness asked why there is a differential between the various ages of property. The answer is that the law changed in 1925 and 1930. Indeed, one could argue that before 1925 no criminal offence would have been involved and that any payment would not be logical. My noble friend Lord Williams of Elvel—I hope that he will not mind my referring to his words in his absence—has made the point quite forcefully. On balance, we reached the conclusion that there was a residual possibility of a human rights issue for the landowner and therefore we have prescribed the minimal 0.25 per cent rate. However, the reason for the differentiation is that the law changed during that period, in particular in 1930.

Baroness Byford: My Lords, I thank the Minister for allowing me to intervene. The whole thrust of Mr Pumfrey's letter turns on the fact that, because the law changed, it has implications. Previously they may have been acting legally, but that was no longer the case once the law changed. That is the ground on which Mr Pumfrey's argument is based.

I appreciate that the matter is technical and legalistic. However, if the Minister is happy to receive a copy of the letter, then I shall ensure that it is sent.

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