Thou shalt not covet thy neighbour’s house, part 1

This was originally published on HS2 and the Environment, and is the first of a four part series.

It didn’t take long for someone to mention Clause 47 during the proceedings of the HS2 Phase 1 Hybrid Bill Select Committee. The Committee didn’t even manage to get through its first day of hearing petitions without this proposed feature of the HS2 Phase 1 hybrid Bill cropping up; it was first mentioned less than two minutes into the evening session on the first day of the recommencement of public sessions following the summer recess.

The specific part of Clause 47 that proved to be in contention is subsection (1), which states:

1. If the Secretary of State considers that the construction or operation of Phase One of High Speed 2 gives rise to the opportunity for regeneration or development of any land, the Secretary of State may acquire the land compulsorily.

The Secretary of State referred to in Clause 47 is, of course, the Transport Secretary, not a minister who, in the normal course of events is responsible for regeneration, or planning matters in general. So, even before the implications of this proposed legislative provision are examined, Clause 47 stands out as something of an anomaly.

The Select Committee’s attention was drawn to this proposed feature of the hybrid Bill by a petition (0485) deposited by the Gooch Estate. This petition advises that the Gooch Estate is a grouping of companies and trusts for the benefit of Lady Gooch that “is the freehold owner of land in 15 separate blocks totalling 7.41 hectares (18.39 acres) in the Digbeth area of Birmingham City Centre” some of which has been identified for compulsory purchase for HS2. The petition advises that the Gooch Estate intends to “bring these sites forward for development and regeneration over the next 15 years either in isolation, with development partners and/or with other neighbouring landowners” and that the HS2 proposals will “undermine” these plans.

The petition, which points out that the proposed compulsory purchase powers are “without geographical limits”, describes the provisions as “excessive” and “unprecedented”. It further complains that the “power in Clause 47 is unqualified, meaning there is nothing in the Bill that would ensure it is only used as a matter of last resort or, for example, only with the local planning authority’s agreement”.

The Gooch Estate would appear to have some expert support for these views. An article first posted on the Planning Resource website in November 2013, which I have not linked as it is behind a paywall, quotes Robbie Owen, a partner at Pinsent Masons and a Roll A Parliamentary Agent, describing Clause 47 as “a new and unprecedented general power” and one that has “no spatial limit”. Mr Owen does not however go as far as to describe the powers as excessive; his view is that they are “understandable” as he feels that they will serve “to shore up the economic case”. Notwithstanding, he does express the view that Parliament may “baulk” at the “scope and breadth” of Clause 47. I hope that he is right to anticipate that our legislators will be reluctant to grant these powers to the Transport Secretary. Even if the Commons lets it pass, I have every expectation that Lords will at least raise a noble eyebrow or two.

The Planning Resource article also quotes the views of a partner of another legal firm with an involvement in the HS2 project. Nicholas Evans, from Bircham Dyson Bell, feels that “local authorities will probably want reassurance about how the Secretary of State plans to use [the Clause 47] power”. He argues that, since local authorities are already empowered to employ compulsory purchase powers for redevelopment purposes, they could view Clause 47 as “unnecessary and a little threatening”.

It is common ground between the Gooch Estate and the experts quoted by Planning Resource that the most likely locations where the Secretary of State would exercise the power are in the vicinity of stations, and this is why the Gooch Estate, with development land in Digbeth just a stone’s throw from the site of the proposed Curzon Street Birmingham terminal for HS2, has raised the issue in its petition. Another legal expert quoted by Planning Resource, Simon Ricketts, who is a partner at King & Wood Mallesons S J Berwin, points to the potential for Clause 47 to be employed in connection with a large housing or retail development close to a station. He comments that “there needs to be a clear understanding of what the basis of that power is and how the Secretary of State would use it”.

You may find it hard to lavish any sympathy on an organisation that plans to profit from property development, but it is the contention of the Gooch Estate that this uncertainty regarding how the powers that would be granted by Clause 47 “will result in significant adverse impacts on its interests”. It claims that its property interests in Digbeth are “specifically at risk because of the lack of development in Digbeth, which has been hampered by previous infrastructure and connectivity issues, and the high numbers of properties there which would benefit from regeneration”. It sees the “risk of unlimited and unknown compulsory purchase at a later date” as condemning its property to be regarded as “a risky and potentially unattractive prospect for investors, who are an essential component for regeneration”. The Estate’s petition concludes that “Clause 47 could therefore have the opposite effect to that which was originally intended, by undermining growth and regeneration which is already planned”.

The petition by the Gooch Estate provided the Government with the opportunity to clarify for the benefit of the Estate, the HS2 Select Committee and the concerned legal experts, such as the three that I have named in this blog, just why it thinks it needs Clause 47 and how the Secretary of State proposes to use the powers with which the clause will arm him.

In the next part of this blog I will look at what clarification has been forthcoming.

(To be continued …)

PS: Since I posted this blog I have located a full version of the Planning Resource article here.