Compensation Consultation – Tricks of the Trade

The government are re-running the HS2 compensation consultation, after the original was found to be “so unfair as to be unlawful”. The consultation closes on 4th December 2013. Details can be found here.  

This was first published by VoxOpp.

In September the Government announced its new compensation proposals for those affected by HS2 and described them as “generous and comprehensive”. But we cut our teeth on the previous proposals which were “the most generous ever” and are not taken in by this street trader language. The ‘lucky’ few who fall within the 120m boundary will indeed be taken care of but the vast majority of households affected will be left out in the cold. How are the Government managing to do this while appearing to be so generous and understanding?  Here are a few of the tricks of the trade.

  1. Sleight of hand The stated criteria for the new proposals are: fairness for those affected, value for money for the taxpayer, community cohesion, feasibility, efficiency and comprehensibility and the functioning of the housing market. But on the other hand, the Government “does not expect the scheme it eventually adopts to necessarily be highly regarded under all criteria”. No doubt “fairness for those affected” and “the functioning of the housing market” are the criteria that will slide out of sight, much to the Government’s regret.
  2. Double-think Consider these two sentences:
    Values can be expected to recover when the scheme is operational and its full effects are known. The Government considers that it is unreasonable to expect taxpayers to compensate for temporary reductions in property values that subsequently recover”.
    The Government considers HS2 to be an exceptional project for a number of reasons. The period of time needed for design and construction is very long. The linear nature and overall length of the development is also unusual, as is its largely rural setting.”
    OK if they accept that it is unusual, why are they basing their assumptions on past history? The “largely rural setting” will mean that values will not be inclined to recover. In an urban or suburban setting, there are many reasons for choosing to live in a particular area – good schools, great leisure facilities, a high street with excellent shops, and just the right tube or bus stop. So if a new infrastructure project comes along it may put prospective house buyers off for a while but in the end the area still has things going for it and prices do recover. Conversely, in the countryside we have to drive to most amenities anyway, so if a noisy railway goes right past one village, then we’ll choose to buy a house in another village a couple of miles further away which has access to all the same amenities but also has peace and quiet which country dwellers seek. There is no reason why anyone should ever want to buy a house in the country near to a noisy railway line, unless they can get it at a substantially reduced price.
  3. Not my problem, mate The “exceptional” hardship scheme has been transmuted into the “long term” hardship scheme.  It is not clear whether it is “long term” simply because the scheme is to cover a long period, or whether the “hardship”, while no longer needing to be “exceptional”, has to have the potential for ruining a good chunk of your stay on this earth. The big problem with the Long Term Hardship Scheme is the “Hardship” qualification.  Why should you have to suffer actual hardship in order to qualify for the compensation that enables you to move and get on with your life? What’s wrong with just wanting to move? They don’t even define hardship – but a rule of thumb judging on past experience is that if your story is heart-wrenching enough to get into the Daily Mail, you may stand a chance.
  4. Two Card Trick Another astonishing feature of this scheme is the 15% clause. Under it, if you have had an offer on your house within 15% of the asking price and have rejected it, your application will fail. This is because, they say, there is “historical evidence” that 12% is the average drop that people are likely to accept when selling a house. It should be obvious to everyone, although apparently not the government, that this very high figure must be an average that includes over-optimistic asking prices. But here comes the punch line. A further  qualification for the LTHS is that your house has to be on the market at a “realistic asking price”. In other words, you start at a low price and take a further great big hit. There is no explanation, by the way, for the 3% they have added to this already high figure of 12%.
    To get an idea of the effect of this, a look at one village which will be adversely affected by HS2 shows that if people were to sell their houses at a price 15% below Zoopla’s current estimated price, then everyone who had bought their house since mid 2004 would get less than they paid for it. In over half the cases they would get less than 90% of what they paid for it. Compared with Nationwide’s calculator which indicates that house prices have risen by an average of 11.36% since 2004, this is disastrous. The government’s rules would ensure that these people would simply not be able to move. This is not “normal functioning of the property market”.
    Because of the shortcomings of the scheme, some householders may run out of options – their lives will be put on hold for over a decade, all their plans for the future dashed. The Government presumably washes its hands of this problem.
  5. Smoke and Mirrors Consider this sentence: “As of 1 October 2013, 121 applications to the EHS had been accepted. Of these, purchases had been completed in 96 cases”. Nearly 80% success rate – sounds promising doesn’t it? Except that that word “accepted” is important here.  The number of applications received is not mentioned. It is actually much higher at 503, but most applications are rejected at the first stage.  The true success rate is no more than 24% with only 19% of those received resulting in purchases being completed.
  6. Sabotage One of the reasons this consultation had to be done again is that the DfT did not give proper consideration to HS2AA’s bond proposal. Forced now to give it attention, what have the DfT done? Sabotaged it completely by rejecting all but a geographically limited version of it, so that it ends up as a slightly worse alternative to their own proposal.  Sir Humphrey Appleby would be proud of them!
  7. Quick, let’s hide behind this law The 1973 Land Compensation Act is beginning to show its age – it refers throughout to highways and “aerodromes” and, incidentally, doesn’t seem to know that railways exist at all (perhaps in those days the government regarded railways as a thing of the past). You cannot make a claim until one year after the line comes into use, if you live that long (wait a minute though – death qualifies as long term hardship, so it’s not all bad news). A claim can be made for loss in value of a property because of physical factors (noise, vibration, smell, fumes, smoke and artificial lighting).  So if you paid a premium because your house had “stunning countryside views” and now it hasn’t – tough! Also, don’t think it is going to be easy proving there is any noise – HS2’s publicity film of the train showed it making less noise than the local bus and they have an Orwellian capacity for rewriting the truth and believing it. The fact that you probably have a bus three times a day, whereas the train is going to pass 36 times an hour is irrelevant to them. Incidentally, watch out for future skulduggery regarding the number of trains per hour because, under this law, you cannot make a later claim for “intensification of an existing use”.
11 comments to “Compensation Consultation – Tricks of the Trade”
  1. E Mail from Alison Munro today asking for my response to yesterday’s consultation ,it’s a pity she only works that quickly when she wants something .I am still waiting for a reply to my letter sent one year ago

  2. Mr. Harlow, your comment “Estimates have suggested that the capital depreciation of properties within 1 kn of the track will be at least 12-15 bn.
    This is known to the Govt.
    They suggest that after the line opens 2026 ( a generation) that prices will recover within a proportion of that and therefore no compensation is deserved. The additional regional losses will also have an impact on the general economies.
    For many 13 years of ‘ a halt on life’ or having to take a 30% loss of assets will be hugely disruptive.
    It is grossly unfair.

    It is not unfair. It is simply following the examples of HS1, M40 extension and M42 modernisation. The values bounced back post construction.

    • “not unfair” – if you are a citizen of a totalitarian state like Cameron’s beloved China.

      Yours is a false argument which actually does not address human suffering other than by a frank and ruthless denial that suffering takes place.
      I have acknowledge part of what you state but your premise is based on a time factor of 15- 20+ years being insignificant for the victims ( a generation) and frankly even the Govt admitted ‘a proportion’ re-establish value on completion/commissioning of the project. It is certainly not all. Perhaps your view is the occult one of this Govt which openly promised ‘fair’ compensation.

      The use of historical examplars of exploitation does not challenge the ethical argument. That bad occurred before does not mitigate its perpetuation.

      One wonders how may were forced to sell by life events and who were the beneficiaries of the subsequent ‘bounce back’. One group may have had to sell out cheap (without a locus of control over their lives) and another benefitted (in part) from any partial recovery subsequently. It is still a redistribution with victims.

      You premise suggests that victims are to sacrifice their time/finance for 20 yrs for the Govt./common good and take a risk that things might improve thereafter. Furthermore that they should ‘suck up’ any socio-economic adversity in the meanwhile.
      McLoughlin asks us to think of our children, many of the protesters are doing exactly that. HS2 is a blight on a generation and many hundreds of thousands of lives (including children) will be disrupted.

      Its clear to see what social equality/ civil rights camp you are from: individual lives don’t count it is all about bulk population. Why not accept a general proeprty bond if what you say is so guaranteed and rosy?
      I think because the exemplars you highlight revealed some significant losers and permanent blight that challenge your argument.
      There is no comparison between HS1 and HS2. HS1 used existing motorway corridors and avoided AONB. The volume of traffic is going to be far greater and disruptive on HS2.
      (PS I lived 5 miles and 400 ft up from HS1 route it was still intrusive to the AONB)

      Today the Chilterns Board reveal 1Bn Contigent Value loss to the un-tunneled part of the Chiltern’s AONB.
      How will this “bounce back”?
      It won’t; it is permanent loss and damage.

      HS2 was a cynical political wheeze in its conception this much has been admitted.
      Too Fast, Too quick in planning, failed opportunity for connectivity,too damaging to the environment and useless/incompetent company delivering it. The two engineering firms who consulted advised against route 3. HS2 ltd advised for it (on now spurious grounds).
      If it is truly necessary it needs radical revision and proper planning.

  3. Pingback: STOP HS2 | Compensation Consultation info from HS2 and the Environment

  4. If we dont vote for them that is the only way that we can show our disgust at the situation.I just keep telling them when I see an article so
    at least the word will spread.If we all did that it would help.

  5. I am concerned that the nation has not got behind the victims of the HS2 scheme, not just for these victims but because the same process will occur with future infrastructure plans of which many are proposed across the nation.
    The population have been groomed by quite specific propaganda and this has been divisive preventing a general call for proper and adequate compensation.

    Estimates have suggested that the capital depreciation of properties within 1 kn of the track will be at least 12-15 bn.
    This is known to the Govt.
    They suggest that after the line opens 2026 ( a generation) that prices will recover within a proportion of that and therefore no compensation is deserved. The additional regional losses will also have an impact on the general economies.
    For many 13 years of ‘ a halt on life’ or having to take a 30% loss of assets will be hugely disruptive.
    It is grossly unfair.
    In addition the stress and suffering of living with uncertainty is already emerging.

    No other private projects can inflict so much harm without proper compensation.
    This represents an anachronism of civil rights and is like The Victorians and the Nation of Brunel part of antiquated
    attitudes as to property rights.
    The govt is well aware of this which is why through PR they have labelled the individuals involved ‘rich landowners etc’
    launched lawns v jobs campaigns and indeed the recent traitors to commerce campaign.
    The truth is the Govt and the Houses (in the main) are knowingly asset stripping one group of people to redistribute wealth. This process continues macroscopically in the regions that will lose out and those that will benefit.

    Is this discriminatory? The losses are known and to some extent quantifiable.
    It is not accidental or an organic process of development it is planned and deliberate.
    In some ways it is not different ethically to colonial practices of land grabs, enclosures and ethnic translocation.
    The victims of HS2 have been marginalized and gradients of envy created by PR to dehumanize their condition and to denigrate their rights in a manner that is as deliberate as it is shameful. The motive is to achieve the landgrab as cheaply as possible and to prevent there being a national reaction of support for the victims and against the landgrab.
    As the article shows the Orwellian double speak supports the ruthless state.

    HS2 is only viable if HS2 a private company are protected from having to pay due and fair compensation
    Meanwhile (once the line has parliamentary consent) certain property markets will start to rise (as developers plan and build in anticipation ( and buyers buy in).
    These matters were not part of the election pledges.
    This is redistribution of wealth by stealth or political intrigue. Track the money and beneficiaries.

    HS2 is just the start there are so many new ‘infrastructure’ and building projects planned.

  6. Your article on compenionsion some very good points but where do we all go now when the government is focused on hs2 going ahead with out paying out compenionsion they seem to be in the driving seat and have a take it or leave it attitude

    • We have to make it clear in every legal way that fair compensation equals full compensation
      Firstly everyone must respond to the consultation and if that doesn’t produce the result ,and I don’t think it will,
      we must all make it clear that we,supported by our friends and family,will not vote for any party which supports hs2 starting with next years European and Council elections

        • They will only care when the principals underlying the unfairness of HS2 and the Govt process hit their own lives. The govt have exploited this aspect and created false divisions and false divisive propaganda.
          As a nation the UK once had solidarity of sorts, however, since the 1980s self and personal comfort have been the philosophy inherent in the culture with ’causes’ to hold some projection of good and ethics. We have become a culture of individuals,tribes and moral relativism.

          Green Belt, AONBs and National Parks are all fair game in the Coalitions intended modernization and need to cope with population boom/housing need.
          HS2 (as presently proposed) is an example of things to come. It should raise concern (if only the plans are so badly done). It should have a political consequence.
          The population have become complacent largely because they have been dis-empowered.
          New proposed changes to legislation will only further reduce their collective power (lobby bill +press freedom etc)

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