I thank the Deputies who have contributed to this very important set of amendments and I would also like to thank the House for agreeing to take such a large number of amendments together. However, as far as my amendments are concerned there is really only one substantive matter involved, and that is the new set of valuation rules for determining the amount of compensation. These new rules are set out in amendment No. 60 which proposed a new version of the First Schedule to the Bill.
All of the other ministerial amendments are either consequential or otherwise dependent on this basic provision. For example, amendment No. 16 and all 13 amendments to sections 18 to 24, inclusive, are concerned solely with applying the new First Schedule to the less usual categories of compensation claims dealt with in Part IV of the Bill.
The main occasion for compensation claims envisaged under the Bill is the refusal or adverse conditioning of planning permission as dealt with in section 12. However, the possibility of compensation is provided for also, as previously, in relation to certain other actions by planning authorities under the 1963 Act: removal or alteration of a structure, discontinuance of use, removal or alteration of a hedge, tree preservation orders, creation of public rights of way, entry on land and placing or dealing with cables, wires and pipelines. Only very rarely have compensation claims arisen under any of these provisions, and in some cases, as far as we know, no claim has ever arisen.
Because of the restructuring of the valuation rules which I am now proposing in the revised First Schedule, it is necessary to make certain adaptations to these provisions of Part III of the Bill, so that the rules can be meaningfully applied in these cases. The bulk of the amendments which we are now discussing are concerned with this and provide explicitly that the First Schedule, as proposed by amendment No. 60, shall apply to assessment of compensation in these instances also.
Having disposed of these largely technical adjustments to the Bill, I would like now to deal with the key amendment No. 60 which proposes a new version of the First Schedule. This sets out an entirely revised set of rules for determining the amount of compensation in all cases arising under the Bill. The Bill, of course, severely limits the right to planning compensation, but in cases where planning compensation should still be payable, the measure of it should be the reduction in the value of a person's land which is directly attributable to the adverse planning decision.
Rightly or wrongly, the valuation rules of the 1963 Act seemed to encourage a maximalist approach to assessing compensation. In practice, compensation tended to be based on the difference between the value of land following the adverse planning decision and its notional value had the planning permission been granted, albeit subject to suitable conditions. In other words, the top line for valuation purposes tended to be set by the landower's own aspirations for development of his land in the form of his planning application.
The most important and radical provision of amendment No. 60 is to do away with this maximalist assumption. The top line which it fixes for valuation purposes is simply the realistic market value of the land immediately before the adverse planning decision, but the new rules make it absolutely clear that only reasonable prospects for developing the land are to be embraced in this assessment. In particular, regard must be had to the fact that the land might not, at the relevant time, have carried any substantial planning permission and that its prospects of obtaining such permission would have to be viewed by the market as uncertain. The new rules categorically disallow any automatic presumption of the kind of planning permission which the owner was seeking.
The valuation framework proposed in the new First Schedule is clearly structured around the difference between the antecedent and the subsequent realistic market value of the land, subject to all of the qualifications provided by the previous rules. As well as making the fundamental change which I mentioned, the new First Schedule reorganises and refines most of these previous rules. I can deal with it in greater detail in response to particular queries which Deputies have raised.
Deputy Gilmore has also put down an extensive range of amendments relating to valuation matters. These substitute concepts such as the "actual loss incurred by the applicant" or "the financial loss incurred by the developer" for the concept of reduction in value which underlies the existing valuation provisions of the Bill.
For a start, I am not clear that the notion of loss in itself differs appreciably from that of reduction in value, but if I understand Deputy Gilmore's amendments correctly, he may be concerned to relate the idea of loss very closely to the particular circumstances of the applicant. If so, his amendments are attempting to import an element of subjectivity which would not be consistent with accepted land valuation principles. Planning is about regulation of land use and planning compensation must relate to the effects of this regulation on land values, not to the personal circumstancese of the claimant.
Having said this, I am grateful for Deputy Gilmore's attempts, as expressed in his amendments, to improve and clarify the new valuation rules. I can accept his amendment No. 7 to my amendment No. 60, which involves the deletion of Rule 4 (2) of the new First Schedule.
I cannot accept his amendment No. 5 to Amendment No. 60 which would prevent account being taken of any increase in the value of the land attributable to planned public infrastructural works. If these works have or would have enhanced the value of land, then it is to be assumed that, had they granted planning permission, the planning authority would have levied an appropriate development contribution. Rule 3 (2) (c) already requires the arbitrator to have regard to this likelihood and to take account of the effect on open market value.
Deputy Quinn speaks quite knowledgeably about these matters and I appreciate his intervention in this regard. He spoke knowledgeably about the history of the development land question and the principle of setting the compensation for acquisition of land at existing use value, as recommended by the majority Kenny report. This was for the outright acquisition of land as distinct from the purposes of this Bill. Under the Bill we are attempting to fix the compensation to be paid for the reduction in value arising from planning decisions, but the ownership of the land is not changing. My approach is to fix the compensation not at purchase price or value but at the difference between the antecedent and the subsequent realistic market value of the land. The new rules categorically disallow any automatic presumption of the kind of planning permission which the owner was seeking.
Deputy Quinn's amendment No. 8 would seriously compromise the possibility of planning compensation. It provides that compensation would be disallowed where it exceeds the existing use value of the land prior to the planning application, and where a claim is based on the estimate of the increased value which the desired planning permission would have brought.
I have no difficulty in accepting the substance of the last part of this amendment. As I emphasised, paragraph 3 of the new proposed First Schedule provides for this very same point and will ensure that the top line, for the purposes of calculating reduction in value, will not be set by the aspirations of the planning application.
I have difficulty, however, regarding the relevance of existing use value to the circumstances of planning compensation. A landowner will enjoy the existing use value of land both before and after an adverse planning decision. In that sense, it is the bottom line for the purposes of calculating reduction in value, but, by definition, the due amount of planning compensation cannot be the existing use value since the landowner will not have lost this.
Planning compensation has to be based on the difference between the antecedent value of land, when it was unaffected by the adverse planning decision and its subsequent value when it has been affected by the planning decision.
That is generally the view I put to the House. While I can concede on some items, I cannot do so in respect of others.