Government urged to deliver fairer interest on compulsory purchase late payments

Construction of HS2 means a "substantial" amount of rural land is set be compulsory purchased
Construction of HS2 means a "substantial" amount of rural land is set be compulsory purchased

A Buckinghamshire MP has pressed the government to fulfill its promise to deliver a "fairer" compulsory purchase system.

During Business Questions in the House of Commons on 15 September, Cheryl Gillan MP highlighted the urgent need for a fairer rate of interest on late payment of compulsory purchase compensation.

A new penal interest rate of 8% above base rate for late payments – in line with standard government practice – was proposed earlier this year by the Department for Communities and Local Government and HM Treasury.

The current rate of interest on late payments for acquiring authorities (such as HS2 Ltd) is 0.5% below base rate.

Cheryl Gillan, MP for Chesham and Amersham
Cheryl Gillan, MP for Chesham and Amersham

Cheryl Gillan, MP for Chesham and Amersham, said the construction of HS2 means a "substantial" amount of rural land in her constituency is set be compulsory purchased, with "devastating impacts" on the farmers and rural businesses affected.

"I welcome the Government’s commitment to making the compulsory purchase system clearer, fairer and faster and I am pleased to work with the CLA to push for this commitment to be translated into practical changes and ensure fairer treatment for people affected," Miss Gillan said.

"Increasing the rates of interest paid on late payments of compensation due is a crucial part of this process."

Speaking for the government, Leader of the House of Commons David Lidington MP said the issue would be raised with the Chief Secretary to the Treasury.

CLA Chief Surveyor Andrew Shirley said rural businesses that lose land to compulsory purchase and do not receive timely compensation need to borrow in order to relocate or reinvest in their business.

"It is right and fair that these businesses should receive fair interest on the late payments that are owed to them," Mr Shirley said.

"The CLA has been pressing for a fairer rate of 8% above base and we were pleased that Government listened to our reasoning and agreed that 8% is a fairer rate.

"Reports this week have suggested that the changes may not be brought into force until spring 2017, our focus now is to ensure that the proposal translates more swiftly into reality for farms and other rural businesses affected by compulsory purchase."