Matthew Pennycook
MP for Greenwich and Woolwich · Labour · United Kingdom
“It is a pleasure to serve with you in the Chair, Dame Siobhain. I congratulate the right hon. and learned Member for Kenilworth and Southam (Sir Jeremy Wright) on securing this debate.”
“I will address the right hon. and learned Gentleman’s specific question in due course. Before I do so, I want to put on the record the policy in relation to villages. He can rest assured that I will address the point; if he is unsatisfied, he is more than welcome to intervene again. A number of hon. Members mentioned villages.”
“I will say two things in respect to that, and I will come on to detail how the approach works in relation to decision making very shortly. In general terms, developers can make whatever claims they like about any particular site across the country; it is for the local authority to assess whether, in its view, that site constitutes grey be…”
“and learned Gentleman’s point about what is likely to constitute grey-belt land. Let me directly address his other two specific points. Is this a significant policy? Absolutely, and it has been judged as much by the Office for Budget Responsibility and other external commentators. Is it deliberate? Absolutely. We want, as the right hon.”
“Where authorities may wish to restrict development in villages for other reasons, a range of tools are available, such as conservation areas or normal development management policies. On the right hon.”
“We have to put in place policies that, through the decision-making route, allow homes still to be brought forward in that interregnum, but then we have to push heavily to drive towards universal plan coverage. At that point, the protections are in place.”
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“I thank the shadow Minister for that question. I think it raises a slightly wider debate than the provisions of the clause and their purposive effect, but he raises a valuable point. Decisions to designate and grant powers to a development corporation must be made via regulations. They are subject to statutory consultation and are carefully made with consideration given to issues of oversight and governance. The particular model selected in a particular area will be chosen by the relevant parties on the basis that it is the model that best suits what they are trying to achieve.”
“I want to be very clear: our preferred approach is for the development corporation to work with the local transport authority in the first instance. The measures are therefore escalatory and will be used only as a last resort. On that basis, I commend the clause to the Committee.”
“Where the direction is not complied with, and as a last resort, the Secretary of State will have the new power to transfer specific transport functions from local transport authorities to the development corporation in question. In addition to transport planning functions, the transfer may also include specific property rights and liabilities—for example, in instances where the development corporation needs to undertake upgrades to existing highways within its red line area. Any such transfer will be made by regulations and in relation to the development corporation’s red line area. The measures are intended to increase co-operation while ensuring that development corporations can ultimately deliver necessary transport infrastructure in a timely manner.”
“Clause 82 will therefore place a duty of co-operation on local transport authorities to ensure that sites delivered by development corporations include the necessary transport infrastructure and are seamlessly integrated into the wider spatial plan for the area. Local transport authorities must have regard to the plans of development corporations and co-operate in the development and implementation of their plans. Where that duty is not fulfilled—resulting, for example, in a failure to produce key outputs in an agreed timeframe or transport provisions being blocked and impacting growth potential—the Secretary of State will have a new power to direct relevant local transport authorities.”
“Clause 82 seeks to introduce a new duty for relevant local transport authorities to co-operate with development corporations in the development and implementation of their plans, Too often developments are not co-ordinated with the transport infrastructure needed to service existing and new communities. That has detrimental impacts on quality of life, productivity and economic growth. Development corporations cannot currently take on local transport powers. As a result, there can be significant delays and barriers to delivering essential transport infrastructure, particularly where local transport authorities are unaligned with the plans of development corporations.”
“Each development corporation will respond to particular and localised delivery challenges, with differences in transport requirements for each development, so it is not possible to specify the nature of the co-operation required in all cases. In practical terms, officials in my Department will support the development corporation to have those conversations with local transport authorities, try to get a shared understanding and resolve transport challenges in particular circumstances. As a necessary minimum, we will expect local transport authorities to engage constructively with the development corporation’s plans for transport delivery and not unduly block the delivery of transport infrastructure that is necessary to unlock growth in the red line area.”
“I welcome the support for the clause that hon. Members have indicated. The integration of transport infrastructure and its timely delivery are essential to delivering large-scale urban developments, and that is what the clause will facilitate. The shadow Minister and others asked me whether the wording is sufficient to deliver the objectives of the clause. I will reflect on that, as I always do, but we are clear that introducing a duty on local transport authorities to have regard to and co-operate with development corporations—this is our preferred approach in the instance—will facilitate co-operation.”
“On that basis, I hope I have reassured hon. Members.”
“The ability to transfer transport powers, which is available under the clause, is ultimately a backstop measure, and escalation via direction is an initial measure to address insufficient co-operation. The clause clearly sets out how the escalatory process will work, although it is worth saying that decisions to either direct or transfer powers will be taken on a case-by-case basis and applied only where there is good reason to believe that co-operation on the part of the local transport authority is not forthcoming and necessary transport infrastructure is not delivered. We think that the backstop is necessary for cases where the local transport authority refuses to co-operate and is blocking necessary infrastructure that the development corporation requires for its urban regeneration and development needs.”
“I thank the hon. Gentleman for his question. We just debated a clause about standardising the list of infrastructure that all development corporations can bring forward, but clause 82 addresses a specific gap in the legislation, which is that development corporations cannot have transport powers and are reliant on local transport authorities to bring them forward. I do not dismiss his point about wider infrastructure—we have debated it elsewhere, and I have taken on board the points that hon. Members have raised—but the clause addresses a specific issue and outlines a way of dealing with it. As I say, the preferred approach is co-operation in the first instance and working with the local transport authority in question.”
“Clause 83 Electronic service etc Question proposed, That the clause stand part of the Bill.”
“To bring us back to the clause that we are debating, we are talking specifically about instances of a development corporation, either within the red line area or outside it where transport infrastructure is necessary to facilitate growth within it. We need a mechanism to ensure that co-operation occurs with the local transport authority. As I have said, judged on a case-by-case basis, in instances where the local transport authority in question is not co-operating, or where Government have good reason to believe that it will not co-operate, we need a measure to ensure that those powers are transferred or a direction is put in place. On that basis, I commend the clause to the Committee. Question put and agreed to. Clause 82 accordingly ordered to stand part of the Bill.”
“However, in some instances—I think I have recognised this in a previous debate—there is a co-ordination issue. I am interested in what more can be done and I am exploring that across Government Departments. ICBs are a good example—there have been examples in my constituency. In certain cases, it may be that the 106 agreement or other provision is not bringing forward the necessary—let us put it in very practical terms—GP centre. In other cases, as I hear from many hon. Members across the country, the 106 has facilitated the construction of the building, but there is a workforce challenge. That is a wider challenge for Government and the Department of Health and Social Care to address, which they are doing. I think that co-ordination can help us to address some of these problems.”
“I thank the shadow Minister for that question. Hansard will correct me if I am wrong, but I feel that I have already given a commitment in that area, which I am more than happy to give again, on the following basis: to the extent that essential infrastructure and amenities, particularly those delivered via the existing developer contribution system, are not forthcoming in the manner required or in a timely manner, and where section 106 agreements are not being honoured, the Government are looking to take action to strengthen the existing system. There are two aspects to this. One is ensuring that local authorities are in a position to, on a fairly equal basis, negotiate with an applicant and get a good section 106 agreement. Then, there is the other part of the process, which is ensuring that the agreements entered into are honoured.”
“The clause, which again I hope is uncontroversial, simply intends to modernise and speed up the compulsory purchase process and reduce the administrative costs, and I commend it to the Committee.”
“Clause 83 amends the legislation underpinning the compulsory purchase process and compensation rules to allow the service of statutory notices to be undertaken by electronic methods of communication. Allowing CPO notices to be served on parties by electronic communication will ensure that the CPO process is modernised and made more efficient. Notices may be served by electronic communication providing the person receiving the notice has provided an address for such a service, such as an email address. Where an address is not provided, the existing methods of service—for example, by post—will remain. The default method for service of notices on public authorities will be electronic communication, providing the authority has specified an address for communicating about the specific CPO in question.”
“I made this point on Second Reading and I want to be clear: there is nothing in the Bill that changes the core principle of compulsory purchase—that it must be used only where negotiations to acquire land by agreement have not succeeded and where there is a compelling case in the public interest. It will be for individual authorities to decide where it is most appropriate to use their CPO powers to deliver their schemes in the public interest. Taken together, the clauses will ensure that quicker decisions on CPOs can be made, the administrative costs of undertaking the process are reduced, and a better balance is struck so compensation paid to landowners is, as I have said, fair but not excessive.”
“The Government’s reforms, which were outlined in the consultation published at the end of 2024, are necessary to deliver the housing and critical infrastructure that this country needs and to make it more attractive for the public sector to use its compulsory purchase powers to deliver development in the right places. That is the intent behind the clauses that we are debating this morning. To be clear, changes introduced in the Bill are not targeted at farmers or any particular landowners, and they make a limited addition to the existing power for CPOs to be confirmed with directions removing hope value, so it may apply to parish or town council CPOs facilitating affordable housing provision.”
“Clauses 83 to 92 relate to compulsory purchase and are designed as a group to improve the compulsory purchase order process and land compensation rules to enable more effective land assembly through public sector-led schemes. As hon. Members will no doubt be aware—I am sure that they have read every word—the Government’s 2024 manifesto made a commitment to further reform compulsory purchase compensation rules to improve land assembly, speed up site delivery and deliver housing, infrastructure, amenity and transport benefits in the public interest. That manifesto promised that a Labour Government would take steps to ensure that, for specific types of development schemes, landowners are awarded fair compensation rather than inflated prices based on the prospect of planning permission.”
“Where an action is triggered by the receipt of a notice under the CPO process, the legislation is clear that if notice is served by electronic communication, the notice will be taken to have been received on the next working day—“working day” is defined in the legislation. We will, of course, provide guidance for local authorities on best practice, and ensure that routes to legal challenge on procedural grounds are maintained. The central point on which we must be clear is that where parties have agreed in writing to receive service of notice by electronic methods, the burden of responsibility for responding to an action triggered by receipt of a notice will lie solely with the recipient. If they do not feel able to administer the process on those grounds, there is an option to still receive notices in the existing manner.”
“I thank the shadow Minister for those fair and reasonable questions. I will provide a reassurance on the central mechanism by which we expect the Bill to operate. Electronic communication will become the default. Where parties do not agree to receive service of notice by electronic methods, or do not provide an electronic address for service, they will continue to receive notices by post, hand delivery or it being left at their address, so there is a clear mechanism for those who do not want to, or feel they cannot, receive such notices by electronic communication. However, authorities will need to ensure that the electronic address given by recipients for service of notice is the one used when they serve notices electronically on that person.”
“We will, as I have said, provide guidance for local authorities on best practice and ensure that routes to legal challenge on procedural grounds are minimised. However, I will take the hon. Member’s point away. I am happy to share it with ministerial colleagues in other Departments. I think it is a fair challenge that the Government should ensure that, across the board, to the extent that they possibly can, they have a uniform approach to moving to electronic communication in instances where they want to do so. Question put and agreed to . Clause 83 accordingly ordered to stand part of the Bill . Clause 84 Required content of newspaper notices Question proposed, That the clause stand part of the Bill.”
“I take the shadow Minister’s point. He tempts me to opine on digital communication strategy across Government, but it is too early in the morning to do that. Different Government Departments are taking forward reform in different ways. I recognise the point he makes. It may or may not interest the Committee that I am required to do jury service in the coming weeks, which the Whips have some issue with. I received electronic and postal notice of that jury service. Different processes are in different stages of reform. We are very clear that, for this process, we want to move to default electronic communication, which has lots of administrative benefits, but we have made provision for those who do not feel that they can move, or want to move, to that type of notice.”
“Although we are maintaining the requirement for notices on the making and confirmation of CPOs to be published in newspapers, this clause simplifies the information required in the description of land included in those newspaper notices. Instead of giving complete, detailed descriptions of land, authorities will be able to comply with the requirement by briefly identifying the land through stating its postal address or, where that is not available, briefly describing its location. This will mean that newspaper notices contain succinct and clear information regarding the description of land included in CPOs and not overly complex text, ensuring that they are easier to understand and making the CPO process more accessible. The simplification of information in this regard will deliver administrative cost savings for acquiring authorities.”
“The key point is that the information contained in the newspaper notice will still give the location of the land and other information, and, importantly, as I have said, that will be complemented by information available in site notices affixed to the land in question, notices served on individuals, and information published about the CPO on the acquiring authority’s website—for example, electronic copies of the CPO, including a map and notices. The requirement to describe the land fully in these other notices is not changing. We are just trying to make more proportionate the information contained in the newspaper notice in question.”
“I again thank the shadow Minister for that fair and reasonable challenge. I recognise—as the other shadow Minister, the hon. Member for Ruislip, Northwood and Pinner, would—that the loss of local newspapers is very keenly felt in a London context. Blogs and other things have sprung up in their place, but this is definitely an issue. That is one of the reasons why we have determined not to remove the requirement to publish CPO notices in newspapers. We think that that does have benefits, particularly for members of the public who cannot access the internet, but we do think that a modernisation of the process is necessary. This is not about reducing transparency; it is about making the administrative process more proportionate and more cost-effective.”
“I think I have said enough. There is no further information that I can provide on the clause. Question put and agreed to. Clause 84 accordingly ordered to stand part of the Bill. Clause 85 Confirmation by acquiring authority: orders with modifications Question proposed, That the clause stand part of the Bill.”
“The changes are intended to speed up the decision-making process for CPOs that have not been objected to, and to allow benefits in the public interest to be delivered more efficiently. They will be particularly helpful in situations where, as part of a wider land assembly exercise, an acquiring authority needs to exercise its compulsory purchase powers to acquire title to land in unknown ownership. Modifications that do affect a person’s interest in land are allowed, but only if the affected person gives their consent for the modification being made. For these reasons, the Government believe that the clause will enable the CPO process to better benefit the public interest.”
“Where they do, it introduces the ability for acquiring authorities to confirm their own CPOs where modifications are required, providing that the modifications do not affect a person’s interest in a controversial way. Where modifications need to be made to a CPO— for example, to remove land from the CPO, or to correct a drafting error such as the wrong colour used on the map to identify land—the confirming authority will set out in a notice what modifications are required. Acquiring authorities will not be allowed to add new land into CPOs or exclude part of a plot of land from CPOs, as such changes could provoke objections. In those circumstances, the modification and confirmation of the CPO will still be made by the confirming authority.”
“Clause 85 will speed up decisions on CPOs where no objections have been received. Currently, where a CPO is not objected to, the confirmation decision can be made by the acquiring authority, providing certain conditions have been met. One condition is that the CPO does not require modification—for example, to correct an error in the drafting of the order. That adds unnecessary delay and prevents authorities from taking earlier possession of land to deliver benefits in the public interest. Clause 85 allows an acquiring authority to confirm its own compulsory purchase order with modifications, providing that they do not affect a person’s interest in the land.”
“Clause 86 General vesting declarations: advancement of vesting by agreement Question proposed, That the clause stand part of the Bill.”
“I welcome that question from the shadow Minister. We are confident that the power will not be misused. The legislation will allow acquiring authorities to make minor modifications to CPOs in cases where they do not affect a landowner’s interests, other than with the landowner’s consent. We broadly consider that such modifications are non-controversial and will not provoke objections, but given the strength of feeling that the shadow Minister has expressed on the matter, I am more than happy to write to him to set out some further clarification of how we believe the process would operate, and why we do not think there is risk of misuse in the way that he fears. Question put and agreed to. Clause 85 accordingly ordered to stand part of the Bill.”
“These clauses introduce provision to allow more flexibility for taking possession of land subject to compulsory purchase. Currently, before an acquiring authority can take possession of land under the general vesting declaration procedure, it must give a minimum of three months’ notice to those with an interest in the land. Generally, this is to allow those who occupy or use the land time to relocate, move out or arrange alternative access. Clauses 86 and 87 introduce the ability for authorities to take earlier possession of land in certain circumstances.”
“However, I am happy to reflect on whether there is a need for further safeguards in this area and to update the shadow Minister accordingly. Question put and agreed to. Clause 86 accordingly ordered to stand part of the Bill . Clause 87 ordered to stand part of the Bill. Clause 88 Adjustment of basic and occupier’s loss payments”
“Where the land includes a dwelling, the acquiring authority is empowered only to expedite the vesting of the land if the dwelling is unfit for human habitation within the well-understood meaning set out in section 10 of the Landlord and Tenant Act 1985. However, included within the power to take early possession of land or buildings is a safeguard to prevent the vesting of land from being brought forward where there is disagreement as to whether the land is unoccupied or is in a condition that it is fit for use, or where an occupant identifies themselves to the authority. As I have said, parties can make representations to the acquiring authority that those conditions have not been met, but ultimately, the decision as to whether they have or not remains with the acquiring authority.”
“I thank the shadow Minister for those questions. As ever, I will reflect on his request for procedural fairness to be maintained, but in broad terms, I would say that abuses of the kind he suggests are highly unlikely. I am more than happy to provide him with further reassurance on that point. Given that clause 87 is about undertaking the procedure in question by agreement, I think it is less controversial. On clause 86, it will be for the acquiring authority to be confident that the conditions for the use of the power have been met, and to objectively identify where it thinks that the conditions for the use of the power have been met. In doing so, it will be for acquiring authorities to respond to and defend against any disputes or challenges made on the use of the power.”
“The purpose of loss payments, however, is to reflect the inconvenience caused by compulsory purchase, and it is occupiers, rather than investor owners, who bear the greater burden in that respect because they are the ones who will need to close or relocate their businesses. As I said, the clause rebalances loss payment compensation to allow occupiers to claim a higher amount and landowners to claim a lower amount. We believe that that rebalancing of loss payment compensation in favour of occupiers is the right approach. While the clause does some of what new clause 52 seeks to achieve, elements of the new clause are problematic for the reasons I set out. I am afraid I will not be able to accept the new clause, and I ask the shadow Minister not to move it.”
“I am more than happy to respond in due course, but will first turn briefly to non-Government new clause 52, which seeks to introduce a change to the loss payment compensation regime under the Land Compensation Act 1973. The new clause would increase the amount that occupiers of buildings or land subject to a CPO would be entitled to, and place them on an equal footing with owners. Clause 88 already achieves, in part, what the shadow Minister is looking for: it increases the loss payment compensation due to occupiers of buildings and land in the way that the new clause seeks to do.”
“The clause also simplifies the method of calculating the buildings amount for occupier’s loss payments relating to non-agricultural land by using the gross internal area method instead of gross external area, which we believe is more consistent with industry standards. The clause applies to England only, apart from the change to the method of calculating buildings amounts, since the Welsh Ministers have devolved competence to reform loss payments for CPOs in Wales. I therefore see the clause as an integral part of ensuring that the CPO process is built on a fair and balanced compensation process, relative to the level of disruption and inconvenience caused to occupiers of land by a CPO. I commend the clause to the Committee.”
“That will better reflect the level of disruption and inconvenience caused to them through compulsory purchase, compared with investor-owners. It also ensures that the compensation regime is fair. To be clear, the reforms to the CPO process and compensation rules will not encourage the use of any particular type of CPO or change the fundamental principle that there must always be a compelling case in the public interest for use of a CPO. The changes being made to the loss payments regime will benefit tenant farmers whose land interest is compulsorily acquired, as they will receive a fairer share of compensation to reflect the level of inconvenience that they experience from CPOs. The changes under the clause will not result in landowners being paid less than market value for the compulsory purchase of their interests.”
“The market value of a freehold interest is often more than the market value of a leasehold interest held by an occupying tenant, which often has little or no market value. That usually results in occupying tenants receiving less compensation than owners. As occupying tenants bear the burden of having to close or relocate their businesses, the existing allocation of loss payments is poorly targeted. It unduly favours investor owners over occupying businesses or agricultural tenants who incur greater costs. The Government believe that to be unfair. The clause therefore amends the 1973 Act to adjust the balance of loss payments in favour of occupiers. Under our changes, we are increasing the land and buildings amount payments, which will benefit occupiers as that is the payment that they usually receive.”
“I thank the shadow Minister for not pressing amendments 134 to 147. I would not have been able to accept them for reasons I could have gone into at some length. I will deal with the clause and then new clause 52, which the Opposition still wish to move. To ensure that compensation paid to those whose land is compulsorily acquired is fair, clause 88 makes changes to the Land Compensation Act 1973 and the framework for basic and occupier’s loss payments. Loss payments exist to reflect the inconvenience caused by compulsory purchase. They are valued either on the market value of a person’s interest or on an amount calculated by reference to the area of the land or buildings known as the “land amount” or “building amount”, whichever is the highest.”
“We may have a principal difference of opinion here; however, on the substantive point, although we have a two-tier system already, we think that it is right to rebalance that two-tier system and weight it slightly more in favour of occupiers of land so that they are entitled to the higher amount of 7.5%, and owners of land to the lower amount of 2.5%. We think that is right, and for that reason, we will not be able to accept new clause 52. Question put and agreed to. Clause 88 accordingly ordered to stand part of the Bill. Clause 89 Home loss payments: exclusions Question proposed, That the clause stand part of the Bill.”
“The shadow Minister pushed me to reassure him and to go away and reflect to ensure that the system has equal parity. We already have a two-tier system in place; there are differing rates for tenants and landowners. All we are seeking to do through this clause is rebalance the loss payment compensation in favour of occupiers for the reasons that I have given. Landowners and occupiers can still claim for loss payments in addition to claiming compensation for the market value of their land, disturbance costs and other reasonable costs incurred because of a CPO, such as legal and other professional fees.”
“On the more substantive point, without getting into individual cases, I note the case that my hon. Friend the Member for Basingstoke made and I appreciate why he raised it, but he will also recognise why I cannot comment on specific instances of CPO use. On the general principle of the Bill, I will say a couple of things to the shadow Minister. First, we are not removing the ability for landowners and occupiers to claim for a basic occupier’s loss payment. The Government consider it necessary to rebalance how loss payments are allocated between owners and occupiers to ensure—this is the guiding principle—that those who experience the most level of disruption and inconvenience caused by compulsory purchase are compensated fairly.”
“I thank all Members for their contributions. To the point made by my hon. Friend the Member for Basingstoke, I do not think that I can add much more to the very clear set of principles that have guided our approach in opening this particular part of the Bill. This is not particularly directed at the shadow Minister, but there has been a fair amount of scaremongering about what the compulsory purchase provisions in the Bill entail, which has not always been completely accurate—let me put it as gently as that. In response to a number of the challenges, I recognise why the shadow Minister raised his point, and I addressed the point about the Welsh Government. Welsh Ministers have devolved competence to reform loss payments for CPO in Wales, and therefore this clause applies in the way that I have set out.”
“If memory serves, we had a short debate on empty homes and what more the Government can do, and I think that making changes in this area will help with that. Introducing provision for these circumstances will lower local authorities’ costs of using their CPO powers. It will support the delivery of more housing for communities. It also further ensures that the compensation regime is fair.”
“Clause 89 amends the 1973 Act to apply this exclusion to home loss payments also. The situations where home loss payments may be excluded will include where certain improvement notices or orders have been served on a person and they fail to undertake the necessary works. Local authorities can expend significant resource and cost using CPO powers to acquire neglected properties to bring them back into use. Where property owners fail to undertake mandated improvement works to their properties, they should not be able to benefit financially through claiming a home loss payment. Non-compliance with improvement notices or orders can increase the costs to the public purse of bringing valuable housing resources back into use through use of CPOs.”
“Clause 89 amends the Land Compensation Act 1973 and introduces provision to exclude the right to a home loss payment in certain situations. A home loss payment is an additional amount of compensation paid to a person to recognise the inconvenience and disruption caused where a person is displaced from their home as a result of a CPO. We have just had a debate about a slightly different aspect of what the Government intend to effect by these provisions. Under the current provisions, where property owners have failed to comply with a statutory notice or order served on them to make improvements to their neglected land or properties, their right to basic and occupier’s loss payments may be excluded. There are, however, currently no similar exclusions for home loss payments.”
“The clause will enable the taking of temporary possession under the 2017 Act, without interfering with the process for taking temporary possession under development consent orders, infrastructure consent orders or transport and works orders. It will help ensure continued flexibility for the delivery of critical infrastructure, while paving the way for the taking of temporary possession under other regimes such as the CPO process and the New Towns Act 1981.”