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HS2 campaigners tell of 'true' cost of £42 billion scheme

The high-speed rail link (HS2) project has caused controversy in the countryside from the word go.


Farms ripped in half, businesses decimated – they are familiar scenarios for anyone unlucky enough to be situated along the path of the new high-speed rail link (HS2).


As 2017 – the year when construction is expected to start on Phase One between London and Birmingham – draws ever closer, campaigners are ramping up calls for better compensation and mitigation.


More than 200 agricultural holdings will be blighted by the £42 billion scheme, yet many farmers know little about how their businesses will be affected in the long-term.


Dairy UK chairman John Edge, who farms north of Crewe, Cheshire, said nine of his eight-hectare (20-acre) fields will be ‘dissected’ by the line.


He said: “This is going to have a huge impact – I have no idea how we are going to access the fields.”


Mr Edge said the 291ha (720-acre) farm, which is in the Higher Levels Stewardship scheme, has invested in numerous capital projects including woodland improvement and hedge laying, which could now be ‘ridden roughshod’ over.


He said: “This will not shut us down, we will work around it, but at the moment there is no way of telling how our business will be disrupted.”


Mr Edge predicted the value of his farm would ‘no doubt be decreased’ and said he feared the scheme would be outdated by the time both phases are finished and the trains hit the tracks in 2033.


“I am not opposed to investment in infrastructure, but I question whether this is the right project,” he added.


“I think the money could be used in a better way, either on the present railway or upgrading the lines which are not in use at the moment.”


For dairy farmers Mike and Linda Wood, their business will be devastated by HS2.


They stand to lose 68ha (170 acres) of their 83ha (206 acres), which would make operating the family’s new dairy unit at Portways Farm in Buckinghamshire untenable.


Mr Wood said: “We built a brand new parlour in 2010 to complement the herd, but there is a possibility we will not be able to use it to its potential because we are losing the acreage. It could become a financial burden.”


The Wood family speak to the NFU about their concerns.


He added the decision to run the rail line through the farm would impact on the next generation of farmers and scupper his children’s chances of carrying on the family farm.


“The compensation, whatever it may be, will not make up for the work and efforts we have put into building this business up since my grandfather started it,” said Mr Wood.


“There are two more generations after me who are already very keen on farming. This will all disappear.”


John and Rosemary Barnes, who run Packington Moor Farm, Staffordshire, with their son and daughter-in-law, said the scheme will literally cut their farm ‘in half’.


Mr Barnes said: “We have a flock of 200 sheep, 450 acres of cereals, a wedding venue, a farm shop and a cafe.


“HS2 will cut our farm in half and the bulk of its infrastructure [15 out of 19 buildings] will be demolished, as well as my son’s house.”


Mr Barnes said the project meant they had been forced to shelve plans to invest in their own business.


Mrs Barnes added: “HS2 is destroying our life as we know it. We are prepared to make another life but we need certainty of the future and appropriate compensation to go with it.”


Last week saw the closing date for petitions to be lodged against the HS2 Hybrid Bill, with the NFU submitting a petition on behalf of its members.


Key points address compensation and how it is paid to affected farmers and landowners, the amount of land which will be taken out of agricultural production and certainty over planning permission to replace buildings demolished in the scheme.


Roger Benson, of Midlands-based chartered surveyors Hinson and Parry, said many of the firm’s farming clients would be anxiously awaiting the outcome of the petition, saying it was the ‘only real way’ on Phase One to influence the Bill and the maps and plans which accompany it.


“The better news is, as part of this process, HS2 has announced new and better compensation provisions which build upon those currently available under statute,” said Mr Benson.


“On Phase One, the immediate changes are any property owner, within limits, which has at least 25 per cent of its land holding within the grey safeguarded area can apply to sell to the Government straight away.


“The purchase would be ‘as if’ the property was compulsory acquired.”


Mr Benson said: “A 10 per cent home loss payment [up to £47,000] could be claimed in addition together with disturbance payments, fees, moving expenses and such-like. This is likely to be rolled out in Phase Two in due course.”


Despite a raft of criticism, including an Environmental Audit Committee report warning the project was in danger of ‘putting costs before the countryside’, Westminster remains steadfast in its commitment to HS2.


Secretary of State for Transport Patrick McLoughlin said: “HS2 is the most ambitious and important infrastructure project in the UK since we built the M25 30 years ago, and in 30 more it will be just as integral a part of the nation’s prosperity.”


However, the CLA, which has been lobbying for greater compensation for those affected, said ministers often ‘forgot’ the plight of hundreds of farmers and landowners when promoting the benefits of HS2.


CLA president Henry Robinson said: “Many landowners will be stuck managing what is left because not only is the compensation offered inadequate to cover the real impact of the loss, it is nearly always paid out too late for necessary re-investment to be made in a timely manner.”

  • To watch a video of the Wood family speaking about their concerns click here

Business factors to bear in mind

Catherine Desmond, partner at Saffery Champness, said the process throws up capital tax considerations for farmers, landowners and others faced with disposals of land and the significant sums of cash which could come their way.


She has laid out some of the areas which need close attention.


Capital Gains Tax (CGT) liability

CGT is broadly charged at 28 per cent of the difference between the payment received and the cost of purchase of the land.


However, it may be possible for relief from an immediate CGT liability provided the sums under the compulsory purchase order or compensation scheme are re-invested in other land or property.


Entrepreneurs’ Relief

Where reinvestment in land or property is not possible, some planning ahead will determine whether a disposal of land will potentially qualify for Entrepreneurs’ Relief. If it does, this would bring the CGT rate down to 10 per cent.

Inheritance Tax (IHT)

Implications for IHT should also be considered since land currently used for agriculture or another business purpose may benefit from relief so the value of the land is exempt from IHT on death.


However, cash from compensation payments will not benefit from relief unless funds are reinvested into other qualifying assets.

Key HS2 facts

  • HS2 will cover 351 miles of new track linking London to Birmingham and Birmingham to Manchester and Leeds
  • The Government expects 9 million road trips will be replaced by rail journeys
  • HS2 will be the most expensive railway in the world
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