Flexible friends, part 2

(… continued from Flexible friends, part 1, posted on 7 Mar 2015).

In part 1 I reported that two couples from the hamlet of Radstone in South Northamptonshire had been advised by the HS2 Select Committee to apply for compensation to the new Need to Sell (NTS) scheme, despite not apparently satisfying the eligibility requirements for Criterion 3 of that scheme (having made an effort to sell). Were that not a sufficient potential challenge for the NTS Panel, the second couple, the Herrings, find themselves in a situation that requires the Panel to think even further out of the box.

For reasons that I will allow you to discover for yourselves from the video or the transcript of their petition hearing (see footnote 1), the Herrings own two adjacent properties, one in which they reside and the other which they are renting to a tenant. In order to redeem the interest-only mortgage on their home, and to raise funds for retirement, the aim, before HS2 had put a spanner in the works, had been to sell the rented property when Mr Herring retired. With the putative fall in freehold value of the rented property that HS2 has caused, Mrs Herring told the Committee that she feared that she could be made homeless and bankrupt.

Any application that the Herrings might make to the NTS for the rented property would fall outside the eligibility requirements for Criterion 1 (property type), as the Promoter’s Lead Counsel, Tim Mould QC, pointed out to the Committee. He told them that the NTS is “rooted in the principle that, in order to qualify, you need to be able to show that you would qualify on the statutory qualification principles that apply to the blight notice regime”. He later explained that if the “only interest” that an applicant to the NTS had was that they were the owner of a rented property “whose freehold value is affected, then they wouldn’t qualify under the scheme” (see footnote 2).

Despite this fairly clear warning from Mr Mould, the Committee recommended to the Herrings that they should apply to the NTS. Such advice appears to be in the belief – which I consider to be naïve and mistaken – that the NTS Panel will be prepared to put aside the five criteria whenever they hear a hard-luck story from an applicant. The Committee appear to have been encouraged in this belief by Mr Mould who, whilst making no promises, has refused to close any of the doors that the Committee has suggested could be ajar to allow a way in for an applicant. Even in the case of the Herrings, where he appears to have been pretty definitive about the poor chances of an application from the owner of a rented property succeeding, he also told the Committee that “there will always be exceptional cases which are thought to be meritorious” (see footnote 3).

The foundation for the Committee’s trust in the NTS Panel doing the “right” thing was explained by Member of the Committee, Michael Thornton MP (see footnote 4):

“… we do feel that as a result of petitioners and this Committee, that the HS2 promoters are aware that they have to do this right. So, no guarantee of course, but I think their response has been to think, ‘We have to do this right, we can’t not do it right’, which I think gives us some confidence”.

Well I’m afraid that I don’t share Mr Thornton’s confidence in the NTS Panel. I can’t see why we should expect the NTS Panel to operate with any more flexibility or compassion than its predecessor EHS Panel, or at least not to anything like the extent that the Select Committee appears to expect. I remember Sandy Trickett, on the basis of her considerable experience of the EHS, describing the EHS Panel as “bureaucratic and unsympathetic” and displaying “no flexibility” (see footnote 5).

Also I recall that the Rt Hon Jeremy Wright QC MP told the Select Committee that he was “afraid that the application of this scheme has left many of the people [he represents] with the thought that every effort was being made not to pay out, and an unduly restrictive approach was taken to the criteria of the scheme” (see footnote 6).

And Mrs Herring told the Select Committee that the owners of one of the properties in Radstone had, at least before their MP became involved, been turned down by the EHS Panel – a decision that Sir Peter Bottomley described as “shocking” (see footnote 7).

So, if the Select Committee is wrong about the NTS, what will happen to the failed applicants that the Committee has directed to the scheme? Mrs Herring raised this matter and suggested that, since the members of the Select Committee were “so well-versed now in the issues”, then they “should offer themselves up as an appeal body” (see footnote 8).

Whilst none of the Members showed any great enthusiasm for this proposal, Ian Mearns MP did say to Mrs Herring (see footnote 9):

“…apply to the scheme, and then if you are [dis]satisfied with that, you can then come back here. You are right, there is no right of appeal, but we need to know if the scheme isn’t working, and therefore, we have to look at that. I would say to that, there is a possibility of you coming back here to let us know that the scheme hasn’t applied, to work for you.”

Although the Chairman’s take on things appeared to be rather more focused on assessing whether changes are needed to the rules of the NTS, rather than helping individuals (see footnote 10):

“If the scheme isn’t working as well as we hope it will be working, then we will be making representations to the Department for Transport about changing or improving or amending, tweaking the scheme. I suspect it might need at some point to be tweaked for the reasons that you say.”

I hope that, having recommended petitioners to apply to the NTS, the Committee will be prepared to intervene directly in any cases where it is clear that injustices may be occurring. It would be totally wrong for any petitioners finding themselves in such circumstances to be left hanging out to dry by the Select Committee.

Footnotes:

  1. The session was held on the morning of Tuesday 24th February 2015. The hearing of the Herrings’ petition starts at 11:12 in the video and at paragraph 372 in the transcript.
  2. Mr Mould’s comments may be found in paragraphs 409 and 424 of the transcript for the morning of Tuesday 24th February 2015.
  3. See paragraph 409 in the transcript the morning of Tuesday 24th February 2015.
  4. See paragraph 400 in the transcript the morning of Tuesday 24th February 2015.
  5. Refer to my blog The exceptionally hard to get scheme, part 3 (posted 13 Dec 2014). Ms Trickett’s comments may be found in paragraphs 367 and 368 of the transcript for the morning of Thursday 20thNovember 2014.
  6. Mr Wright’s comment may be found in paragraph 56 of the transcript for the afternoon of Wednesday 11thFebruary 2015.
  7. See paragraphs 378 to 383 in the transcript the morning of Tuesday 24thFebruary 2015.
  8. See paragraph 391 in the transcript the morning of Tuesday 24thFebruary 2015.
  9. See paragraph 392 in the transcript the morning of Tuesday 24thFebruary 2015.
  10. See paragraph 398 in the transcript the morning of Tuesday 24thFebruary 2015.

PS: In case you can’t recall, “your flexible friend” was the marketing tag for the, now defunct, Access credit card. A thin plastic card may prove, I fear, to be far more flexible than a NTS Panel member.

Important Note: The documents from which the quotes and extracts reproduced in this blog are taken include uncorrected transcripts of evidence, which are not yet an approved formal record of the proceedings of the HS2 Select Committee. Neither witnesses nor Members have had the opportunity to correct the record in such instances, and it may therefore be subject to changes being made in the light of any such corrections being requested.

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