§ Mr. Gordon Wilson
I beg to move Amendment No. 88, in Clause 9, page 8, line 4, leave out subsection (2).
The Temporary Chairman
With it it will be convenient also to take the following amendments:
No. 89, in page 8, line 18, leave out subsection (4), and No. 90 in page 8. line 23, at end add:'(5) The imposition of a requirement under subsection (1) or subsection (3) shall be subject 415 to variation or confirmation on appeal to the Scottish Land Court'.
§ Mr. Wilson
Subsection (1) will be generally welcomed by local authorities as an addition to their powers for enforcing planning agreements or planning consents issued in connection with offshore petroleum development. I understand that the provision gives a power where none existed before. Although such a requirement was made a condition of planning consent in the case of Argyll County Council and McAlpines at Ardyne, with the company's consent and agreement, without the benefit of that subsection that condition might have been unenforceable.
Subsection (2) says thatNo requirement under subsection (1) above may be imposed except with the approval of the Secretary of State.If the Government consider that it is appropriate under subsection (1) to give a local authority certain powers the additional discretion of making the necessary arrangements should also be conferred upon that local authority without the need to consult the Government again. Subsection (2) in a sense tends to weaken some of the powers in subsection (1) and would cause the local authority continually to look over its shoulder at what the Government might care to suggest.
This is basically a probing amendment and I shall be interested to see what response it draws from the Government. In these days, when there is regionalisation of local government, and when there is an intention to devolve as much power as possible from central Government, subsection (2) might be irrelevant.
§ 12.15 a.m.
§ Mr. Teddy Taylor
I hope that the Minister will think carefully about accepting the amendment, and understand that there is another side to the case. Subsections (2) and (4) are useful in that they act as a restraint on local authorities which might make unreasonable demands. How is a firm to put money aside for restoration which might not take place for 20 or 30 years? No one would have the slightest idea what it would cost then, in view of the way inflation is going, or what it might physically involve. A great deal of money would be tied up unreasonably.
416 It has been suggested that so-called restoration bonds might be the answer. By that means firms could take out virtually an insurance, but the cost is frightening. Another suggestion is a fund to which all the companies would contribute, thus building up a large sum to carry out restoration when required. The difficulty is that a great deal of money would be tied up unnecessarily for a long period, and the levy required to finance it would be unfair because of the variation in the size and scale of developments.
The best solution, which I hope the Government will accept, is to have a fallback fund, a kind of default fund, which could be used only when firms failed to carry out their restoration obligations. That has the support of the CBI, which has written to me and other hon. Members. Firms could pay a limited levy for this kind of insurance.
I regard subsections (2) and (4) as useful safeguards, and hope that the Minister will retain them.
§ Mr. Fairbairn
I wish to probe the matter, which is a difficult one for the Minister. It is difficult to say what the cost of reinstatement might be when one has no knowledge of what development will take place. What sort of directions might the Secretary of State give under subsection (4)?
In my Amendment No. 90 I say that the imposition of a requirement under subsections (1) or (3) should be subject to variation or confirmation on appeal to the Scottish Land Court. In a situation in which a price may be unrelated to the capacity of a tenderer to pay, a body outside the Government should have a say in confirming it or denying it. Those who advise Governments are not always the wisest of people. A body outside Government might be able to take a more impartial view.
§ Mr. Millan
We are dealing with a new provision. I hope that after I have explained what we are trying to do none of the amendments will be pressed.
There are a number of different considerations. It has not been possible so far for a planning authority to have a planning condition enforceable in terms of money. There are planning conditions which can be enforced, but not conditions 417 committing the developer to provide certain sums for a particular purpose.
With reinstatement it is important that we should have not only planning conditions but some assurance that the money will be there to do the physical job at the end of the day. The purpose of Clause 9(1) is to provide for that. It is necessary to proceed with a little caution here for a number of reasons. We are dealing with new territory. It will not be easy for local authorities necessarily in the first instance to calculate what the reinstatement costs might be. I say that without criticising them.
They may wish to be on the safe side and impose too onerous obligations on developers. On the other hand, they may, equally, under-estimate what is likely to be involved and impose too generous conditions on the developer. It is best to proceed by having the approval of the Secretary of State, which is what is provided under subsection (2). The subsection also has to be read in conjunction with subsection (4) which deals with the Secretary of State's powers to give directions.
The hon. Member for Glasgow, Cath-cart (Mr. Taylor) mentioned a number of ideas for providing the procedures for building up reinstatement funds. The proposals he mentioned were described and discussed in a report which the Oil Development Council produced for the Government. The Government are certainly interested in discussing this, and we have had preliminary consultations with insurance companies to see whether we could work out a scheme which would provide for the purposes of this clause. If we are to do this there would have to be some kind of assured market for the insurance companies.
It could not be done simply on a "one-off "basis. Therefore, we want to do this in a way which will be effective from everyone's point of view, in a way which will guarantee reinstatement to the level that the local authority may wish reasonably to impose. We do not want undue obligations to be imposed on the developer, particularly in a way which would involve him in setting aside all the money for reinstatement at the start of the development when from his point of view, that may be an extremely inconvenient time, financially. We want to main- 418 tain flexibility with a certain amount of control by the Secretary of State so that when we can work out some kind of solution which would apply to more than one site we will be able to operate it.
I have not found that the local authorities have objected in any way to Clause 9. They very much welcome the new power they are getting here. They realise that this is an area in which we must move with a certain amount of caution and try to get the right solution. If we were to do it other than through the Secretary of State I am advised that the Scottish Land Court would not be the appropriate body.
I hope that with that explanation this clause will be generally acceptable. This is new territory but it is a useful provision and we are determined to make it work effectively.
§ Mr. Gordon Wilson
While I agree with much of what the Minister has said about the need for some form of central direction or guidance in connection with these new provisions, may I ask him whether he would not agree that this would be possible by using the terms of the powers contained in Clause 9 (4)? This would allow the Secretary of State to make general directions with regard to the exercise of the powers and the terms of arrangements thereunder:and such directions may either be given generally or may relate to a particular application or to applications of a class specified in the direction".Does reliance on subsection (4) not rule out the need for subsection (2)? If the Minister is prepared to give guidance to the local authorities would that not be sufficient? Would he not then be prepared to leave it to local authorities to take cognisance of the guidance he has given?
§ Mr. Millan
It may be that if we were more experienced in this matter we could do without subsection (2), but I am not sure that the two provisions overlap. I think there is something in subsection (2) that would not in any circumstances be included in subsection (4). But even if that were not so I should be reluctant to take out subsection (2) and rely on directions in an area in which there is still a good deal of work to be done, and we are not sure that we shall be able to work out something that will be effective simply by means of directions.
419 I should prefer this provision to remain in the Bill. I do not think local authorities will find this burdensome. Nor, given the general tenor of the Bill, do I think developers will find it burdensome either.
§ Amendment, by leave, withdrawn.
§ Clause 9 ordered to stand part of the Bill.