Cheryl Gillan MP highlighted the urgent need for a fairer rate of interest on late payment of compulsory purchase compensation for farms and rural businesses.
The issue was discussed during Business Questions in the House of Commons yesterday (September 15) following the proposal of a new interest rate of 8 per cent above base rate for late payments.
The current rate of interest on late payments for acquiring authorities such as HS2 Ltd was 0.5 per cent below base rate.
MP for Chesham and Amersham Cheryl Gillan said the construction of HS2 would mean a ‘substantial amount’ of rural land in her constituency would be compulsory purchased which would have ‘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.
"Increasing the rates of interest paid on late payments of compensation due is a crucial part of this process,” Mrs Gillan MP said.
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 although changes may not be brought into force until spring 2017, the focus is to ensure that the ‘proposal translates more swiftly into reality’ for farms and other rural businesses that have been affected by compulsory purchase.
“The CLA has been pressing for a fairer rate of 8 per cent above base and we were pleased that Government listened to our reasoning and agreed that 8 per cent is a fairer rate.”