Recently, Labour has decided to reform compulsory purchase orders with the Planning and Infrastructure Bill. It intends to make it easier for local councils to seize land for housing, and, crucially, this involves local councils not needing to pay the great uplift in its value upon the granting of planning permission. This bill constitutes a serious wrong to landowners who would not receive just compensation for said seizure — but, fundamentally, compulsory purchase orders themselves are the real problem. Indeed: Compulsory purchase orders are, in effect, theft. An excellent case study of the ethics of CPOs can be found in the Northfleet Harbourside Development.
Compulsory purchase orders take a person’s property without their consent
The Northfleet Harbourside Development in Kent proposes to build a new football stadium, retail space and some 3,500 homes. I’d normally be entirely in favour of this big construction project — a step towards getting Britain’s house prices down from eight times average incomes to their post war average of half that. However, the Northfleet Harbourside Development is only possible via aggressively compulsory purchase ordering the existing industrial estate — which would only be made easier by the mentioned bill. Kent County Council, in its closing statement submitted to the Northfleet Harbourside Inquiry revealed, “compulsory acquisition appears unavoidable.” This is wrong. Theft is taking a person’s property without their consent, compulsory purchase orders take a person’s property without their consent; therefore, compulsory purchase orders are theft. The landowners’ rights should stand.
The 40 businesses and 700 jobs on the industrial estate at risk from the development shouldn’t be run roughshod over via legal extortion either. Running roughshod over them presupposes the greater importance of new businesses and jobs over those already existing. No. Hospitality jobs at the new football stadium for Ebbsfleet United, who initiated the scheme under the ownership of Abdulla Al Humaidi, are no more important than the mechanic jobs currently supported by Prestige and Performance Car Services. Our individual rights, including our property rights, properly constitute the moral realisation that each person is of ultimate value not subordinate to anyone. So: What is Ebbsfleet United, the developer’s, case for the state bulldozing people’s businesses and taking their land?
Ebbsfleet’s United case to the ongoing planning inquiry is Jeremy Bentham’s utilitarianism all over as they argue the benefits of the 3,500 new homes and 3,000 jobs which will be created simply outweigh the losses of the industrial estate being bulldozed. The mere fact a theft will increase aggregate happiness is no warrant for it, however. An old woman on the sea front may own a very large house which could make an excellent hotel with lots of jobs; obviously, this is no justification in itself for forcing her out. Are we really to believe your rights over resources only extend to those objects you get the most utility out of compared to anyone else. Again, obviously not, what you acquire through voluntary exchange and original acquisition is yours.
A better defence of Ebbsfleet’s United case would be to invoke Henry George’s idea, recently championed by Rory Sutherland, that landowners are not entitled to the natural resource value of their holdings. George argues since none of us created the land we are all equally entitled to it, and, thus, pure land rent, i.e., actual rent excluding the value of all improvements made via labour, should be taken for the common benefit. Now, the land rent of a holding granted planning permission for residential use is massive, meaning, the existing industrial estate would be forced to sell were it levied. A compulsory purchase order, especially where the hope value goes to local councils, or, is passed onto house buyers, essentially does the same as a land value tax here. Is it a plausible defence of CPOs?
No for at least three reasons. One, a land tax would seriously undermine commonly accepted property rights. If you bought a cheap house in a rundown neighbourhood and then it was gentrified and the plot became very valuable, you’d be forced to sell your house to pay a massive land value tax. Similarly, if you ran a naturally occurring vineyard; then, if the grapes made from your particular soil massively went up in value due to a craze for them in China, you’d implausibly be required to give away pretty much all of your stored wines and tendered vines and have your livelihood entirely destroyed. This is because the land rent, owed to the community, on the naturally occurring grapes from the particular soil in the stored wines would still dwarf any substantial labour you’d have put into them.
Two, it implausibly requires massive redistribution from developed nations such as Britain to the undeveloped world in Africa. This is because Britons have much more than their per capita share of the global land rent than Africans; only look at land rent in real terms in Libya compared to here in England. We’re “hoarding” fertile soil while Africa is loaded with sand. George might not have seen the global implications of enacting his “common right to the land”, but his philosophical heirs such as Hillel Steiner have and they recognise this would require hugely expanding foreign aid. Gulp.
Three, taxing land has the very adverse effect of ensuring less of it is discovered. Strange? Not when you understand George wanted all natural resources, “land”, such as oil, gas and coal to be taxed, meaning, the gains from discovering reserves of them would seriously diminish, resulting in fewer discoveries, and, therefore, higher energy prices over the long term. I suspect defenders of CPOs will make a final argument along these lines. “Sure, private property should generally be respected and compulsory purchase orders for trivial purposes are wrongful theft, but where the benefits are massive compared to the minor costs, then the compulsory purchase order is not a wrongful taking”.
They might argue, as it is permissible to trespass over land to get your kid quickly to hospital after an accident, so, analogously, you can knock down a small industrial estate to provide a lot more jobs and homes. This is plausible in some cases, for example, placing artillery at strategic points on the coast to stop invasion may warrant knocking down seaside homes. The Northfleet Harbourside Development, typical of CPO projects, doesn’t pass the test of being a massive benefit at all though. Destroying businesses such as CRS Cables Limited built up over years of hard work is not permissible simply so football fans can have an 8,000 seat stadium, especially when the current stadium in the last year has only seen a maximum of a 31 per cent filling of its 4,769 seats.
Private property must stand; compulsory purchase ordering must fall
Does a developer have the right to knock down your bungalow and put a 100 storey flat in its place where locations just as good exist elsewhere supplied by willing landowners? No. Yet this is the situation concerning most CPOs. Delivering 300,000 homes every year is important in increasing housing affordability, but this needn’t come about by stealing land and destroying businesses and skilled jobs in the process. Instead, the government should look to relaxing planning regulation generally.
Labour’s bill to ensure councils can take land off its owners without just compensation under compulsory purchase orders is simply part of the broader wrong of the legal instrument itself: CPOs are theft. Both the utilitarian and Georgist arguments in favour of them fail, and, the limited case for compulsory purchase ordering being permissible on the basis of massive net benefits achieved, while strong, doesn’t apply to the vast majority of instances of their use, such as at Northfleet. In sum, private property must stand; compulsory purchase ordering must fall.
