PROPERTY owners living on the proposed HS2 route who face a compulsory purchase of their home have been dealt a further blow from the Government, the Country Land and Business Association says.

The CLA represents landowners, farmers and rural businesses, and says the Government has reneged on a commitment to penalise companies – including HS2 Ltd – for taking land but failing to pay compensation on time.

A letter from the Minstry of Housing, Communities and Local Government to the CLA says it has commissioned a review into plans to impose a penal rate of interest on late compensation payments.

With the deadline for HS2 Ltd to start taking land fast approaching, the CLA says the failure to ensure a meaningful penalty for acquiring authorities who do not pay compensation on time goes against the commitment to make the compulsory purchase system clearer, fairer and faster.

CLA president Tim Breitmeyer said: “People affected by projects like HS2 have already suffered serious disruption to their businesses and lives.

“It is simply not right to take any person's property and fail to pay them. If they do not receive timely compensation they need to borrow in order to relocate or reinvest.

“This puts them under immediate financial pressure and makes it impossible to move on and rebuild lives and businesses.

“The Government committed to making the system fairer. This open-ended review means the reforms risk failing to deliver meaningful change in the behaviour of acquiring authorities as promised.

“Without a punitive rate of interest in place they have no incentive to change their practices, which are characterised by delays and late payments.

“Reneging on this promise significantly undermines the chance of fair payments not just for those affected by HS2 but by all large national infrastructure projects.”

The letter received by the CLA says that following further reflection ‘on the possible unintended consequences of the previously proposed rates’ the Government needs to consider ‘potential gaming risks’ before finalising its approach.

The CLA says this is a risk it does not recognise, although the Ministry states it will look to review the interest rate arrangements.

Mr Breitmeyer has written to housing minister Dominic Rabb calling on him to reconsider the review and implement the rates of interest alongside other reforming measures due to come into force on April 6, and before HS2 Ltd begins the process of acquiring land from July onwards.