6800. I am talking about the case where the two people may not even have known that they were both going to bid and are purely being excluded because of this very, very strange-looking rule. The alternative of course is not to do that, but purely to ask people to bid how much they would be prepared to pay above the open-market price and then only one gets it.

   (Mr Smith) But the way it is structured here, that is in fact what happens and it is sorted out quickly. I really do not see that there is a benefit for us in going through this process.

  6801. I am not sure there would be any benefit to you, but a benefit to the public and possibly giving the former owners, the qualifying interests, a fair crack of the whip.

   (Mr Smith) Well, with respect, I think they do have a fair crack of the whip. We have tried our best to ensure that that happens through this policy. I think there is nothing here that is trying to catch people out. There is no hidden message. This is what it says.

  6802. Is blight within your scope, Mr Smith?
  (Mr Smith) Yes.

  6803. It may be a difficult question to answer, but, where you have had experience of that process in the past for residential property, I understand that it works by two surveyors, one for the person that is being acquired and one for the acquiring authority, both suggesting a price, and then there is possibly some negotiation. I am just wondering what the difference between the two prices typically is to start with and then in what proportion of cases agreement is reached. This is purely out of interest.

   (Mr Smith) Well, it depends on the reasonableness of each surveyor where they start. Generally speaking, valuation margins generally come within 10 per cent in normal circumstances and very often are narrowed down to far less than that. Under compulsory purchase, your professional fees of engaging a surveyor for acting on your behalf will be paid by the acquiring authority and you can get that advice yourself through that route at no cost to you.

  6804. I understand that the fees are only paid at the very end of the process though which could be, say, seven months of blight and another nine for the Lands Tribunal, so 16 months and I think some professional services firms do like to be paid as they go along. Can I please ask you to define a phrase you have just used of "valuation margin"? What is that please?

   (Mr Smith) What I was referring to was a normal difference between the surveyors because valuation is not an exact science and, typically, there can be a difference of opinion on the value of that sort of margin, i.e. 10 per cent. It is not something, I am afraid, you can scientifically prove in a laboratory; it is a process where it is imperfect, so different people have different opinions.

  6805. MR PRITCHETT: Thank you very much. That is exactly what I was hoping to hear. I have no further questions on that.

  6806. CHAIRMAN: Thank you, Mr Pritchett. I think we will break for quarter of an hour and come back at five to 12.

  6807. CHAIRMAN: Mr Smith, just before Mr Mould re-examines, if he wants to, I want to make sure that there is not a misconception here. I was looking again at Mr Pritchett's petition. Paragraph 7 relates to the extra home loss payment. That does not in any way affect, does it, the actual compensation for the interest that he has in his flat?

   (Mr Smith) No, my Lord.

  6808. It is an extra?

   (Mr Smith) It is an extra, yes.

  6809. CHAIRMAN: Mr Mould, is there anything you want to ask?

  6810. MR MOULD: I suppose there is, again, to correct what may be a slight misconception, just to clarify the relationship between the Crichel Down Rules and the land disposal policy. We might just turn up page 9 of the information paper C10.[14] I just draw attention, Mr Smith, to section 2 on that page which I think sets out quite clearly the inter-relationship between the Crichel Down Rules to which you have referred and the Crossrail land disposal policy.

  (Mr Smith) Yes. It is in paragraph 2.2

  6811. "Supplementary to" and not "a replacement of"?

   (Mr Smith) Exactly.

  6812. MR MOULD: That is all. Thank you very much.

  6813. CHAIRMAN: Mr Pritchett, I will ask Mr Mould whether he has anything to say and then you have the last word.

  6814. MR MOULD: I shall be very brief indeed. I am just asking for Mr Pritchett's exhibit to be put up. There are three changes to the Bill that he proposes. The first of those relates to the home loss payment. I think the only point to make is that, as your Lordship touched on a moment ago, Mr Pritchett is entitled on compulsory acquisition of his property to the full range of land compensation which will include the open-market value of his premises assessed at the valuation date. The home loss payment is in addition to that and it has been explained that the thinking behind it is broadly that it reflects the fact that he is having his land taken from him compulsorily but, as I have explained, Parliament has participated from time to time in the revision of the maximum limit and I have explained that that was done most recently in June, I think, of last year.

  6815. The same point applies in relation to the second of his points, which is really to do with the valuation date at which open-market value is to be determined. I have pointed out that again Parliament has recently reviewed the provisions as regards the identification of the valuation date and it is now set out in section 5(a) of the Land Compensation Act, and that applies generally, not only to those whose land is acquired for the Crossrail scheme but also to all those whose land is acquired compulsorily or under the shadow of compulsory purchase for public works. It is also perhaps worth noting that, as has been touched on, as I understand it Mr Pritchett is the owner-occupier of his residential premises; it is his home, and on that basis he is entitled, and indeed would remain entitled, to serve a blight notice if he wishes to advance to a date effectively of his own choosing when Crossrail acquires the property and by that process to seek to control, at least to a degree, the date at which the valuation of his property for the purposes of assessing that compensation is carried out.

  6816. The third point, which is where you have had the evidence of Mr Smith, relates to a rather different situation. Here, of course, we have moved away from land compensation for compulsory acquisition to what is a separate topic, and that is how, as a matter of policy, land which is effectively left over for redevelopment following the construction of the railway is to be dealt with by the Secretary of State. As Mr Smith has explained, the land disposal policy, an extension of the Crichel Down Rules, is designed to balance three matters: firstly, the public interest in sites of that kind being brought forward for appropriate redevelopment consistent with planning and other policies on as speedy a timescale as can be achieved—there is a clear public interest in that on prominent sites in central London; secondly, the public interest in realising the open-market value of such land so that the public purse is not disadvantaged in that sense; and the third, that in concert with those factors former owners should have a proper and appropriate opportunity to participate in redevelopment if they can show the necessary degree of expertise and financial capability and their participation does not bring about undesirable delays in the process of securing the overall redevelopment and realisation of sites of that kind. That is what the land disposal policy is designed to achieve, to draw that balance. It is one which is fundamentally set against the background of compulsory acquisition. In other words, as your Lordship, if I may say so, quite fairly and correctly put it, it takes place in the scheme world and that is why, to pick up my Lord, Lord Brooke's point, land compensation for compulsory acquisition of a landed interest which falls within the overall block of property taken is not entitled to secure an uplift in value that is derived from the scheme and only from the scheme and not from the pre-existing development value, such that it is, that would have existed in the absence of the scheme. Mr Smith has made the point that but for Crossrail there would be no realistic prospect of a comprehensive redevelopment scheme taking place on the block of land of which Mr Pritchett's property forms a part. It is only Crossrail that has generated that opportunity, and therefore it is right that that opportunity should be kept quite separate from the compensation Mr Pritchett receives for the acquisition of his flat.

  6817. The other point I would emphasise is the opportunity point. The land disposal policy, as Mr Smith has quite rightly in my respectful submission been at pains to point out, does provide the opportunity for former owners to get together in relation to sites which were formerly in fragmented ownership and to produce a scheme for consideration by the Secretary of State—a consortium effectively—to take forward oversight development of the site. It is subject to establishing the necessary credentials, as we have made clear, but the opportunity is there. That essentially, as I understand it, is what Mr Pritchett is seeking reassurance about. That is what his third point is designed to achieve: to reassure him that if he can produce the necessary expertise and get a secure agreement he can at least come forward with a proposal of that kind, and that is what the policy in principle enables him to do. Frankly, if that is what he wishes to do there is nothing to stop him setting that process in motion with others who have land within the area to be acquired as soon as he finds it convenient. I am not saying for a minute that that bid will necessarily be successful, but the opportunity is there for him within the policy to embark on that process if that is what he would wish to do. The Secretary of State, in accordance with his policy, will then consider proposals that may be made at an appropriate time and in accordance with the terms which are set out in the policy, but there is no justification or need for the policy to be amended in the way that Mr Pritchett has suggested in order to enable that opportunity to be enjoyed by him. Finally, just in response to a comment Mr Pritchett made at the beginning of his presentation, I have just had the safeguarding provisions checked and my instructions are that the site which includes his flat has been safeguarded as an area of surface interest for Crossrail since 1991.

  6818. BARONESS FOOKES: Mr Mould, may I be absolutely clear. When it comes to point 3 of Mr Pritchett's points I take it that he is on all fours with any other person wishing to develop; he has no prior or special interest or regard as a former owner. That is it effectively, is it not?

  6819. MR MOULD: Yes. His status as former owner enables him, if you will, to seek to bring forward a proposal in conjunction with other former owners which the Secretary of State, provided that they accord with the policy that he makes that we explained to you, will consider a first offer for. I suppose it can broadly be described in policy terms as a pre-emptive right. The opportunity is there for former owners to come forward with a proposed redevelopment scheme provided that it is one that is consistent with and accords with the detailed terms of the land disposal policy that we have set out, and if the Secretary of State is satisfied that that bid is one that is acceptable in the light of all the considerations that we have explained to you then he will enter into an agreement with that consortium of former owners and will not put the site on the open market. I have had a note put in front of me to say that it is a right of first refusal, if you will.