Transport Secretary on HS2 compensation: Full Statement

In January the government announced that we would proceed with plans to build a high speed rail network linking London with Birmingham, Leeds and Manchester. High Speed Two (HS2) will have a transformative effect on Britain, bringing cities closer together and providing the new transport capacity we need to meet the challenges of the 21st century.

We need to drive forward with this vital national project. In doing so we need to provide support for those facing the disruption that the plans for the railway are causing, while also protecting the interests of tax-payers who will ultimately pay for compensation. We have been clear throughout that we are committed to providing appropriate compensation and assistance for those affected by the building of HS2.

The statutory system of compensation already provides fair compensation for the vast majority of infrastructure schemes. However, given the particular circumstances of HS2, in this case I believe it is right to go above and beyond what is required by law. Today I am launching a generous proposed compensation and support package for public consultation.

Under the proposals set out today all those living closest to the route of HS2, in the so-called ‘safeguarded area’, will be able to choose to sell their home to the government – whether it is required for construction or not – at any time after the HS2 route is safeguarded, which is currently expected to happen in Spring 2013. Those choosing to sell their homes will receive its full un-blighted value (that is, what the property would have been worth had there been no plans for HS2), a home loss payment of 10% of the value of the property (up to a maximum of £47,000) and be reimbursed for reasonable moving costs, including stamp duty on the purchase of a new property of equivalent value.

In rural areas we will establish a ‘voluntary purchase zone’, extending out from the boundary of the safeguarded area up to 120m either side of the line, within which homeowners will have the option to sell their homes to the government at their full unblighted value at any time after the HS2 route is safeguarded.

For those living beyond both the safeguarded area and voluntary purchase zone but who need to move house during the development of HS2 and find they are unable to sell their property, there will also be a ‘long term hardship scheme’ under which the government will buy the homes of successful applicants at their full unblighted value.

In addition, under the new ‘sale and rent’ back scheme, homeowners whose property will need to be acquired will have the option to sell their homes to the government early and stay in them as tenants until the properties are required for the railway.

We recognise that the owners of properties above tunnels may also be concerned about the potential impact of HS2 and therefore we are bringing in a series of measures designed to provide confidence in these properties.

Finally, we will work with local authorities, housing associations and affected tenants to agree a joint strategy to replace any social housing which is lost.

I must stress that we have already written directly to all those whose homes we currently expect to need to buy in order to build and operate HS2 on the London – West Midlands route. The wide-ranging proposals set out today reflect the significant nature of the concern that currently exists in the property markets near the HS2 line of route, they are not a reflection of what the government believes the long term impacts of HS2 will be. We fully expect that the impacts of HS2 will be considerably less than feared and that property prices will recover over time. However, we recognise that the current property markets near the HS2 line of route may not reflect this.

HS2 will be the backbone of a new transport system for the 21st century, offering the new railway capacity that our country will need to compete and grow. However, we fully recognise that the line will have unwelcome impacts on people living close to the route and I believe that this package of compensation demonstrates the strength of the government’s commitment to provide the right compensation and assistance to those affected.

Alongside the property consultation published today, we are also publishing a consultation on safeguarding directions for HS2. This will set out the proposed area of land considered necessary to protect the line of route from conflicting developments, that is to say planning permission being granted for developments on land that will be required for the construction or operation of HS2. This will also set the ‘safeguarded area’ within which compensation measures will apply.

Both consultations will close on 31st January 2013.

Transport Secretary, Patrick McLoughlin