POWERS WITH RESPECT TO THE LAYING AND MAINTENANCE OF PIPES ETC. (Hansard, 4 July 1989)

§ Mr. Howard

Schedule 18 sets out the powers under which the authority and water and sewerage undertakers are able to lay and repair pipes and carry out associated works. They are generally able to exercise their pipe-laying powers after serving reasonable notice on the owner and occupier of the land.

The purpose of amendments Nos. 239 and 240 is to require the authority and undertakers generally to seek the consent of the owner and occupier of the land before exercising the powers. The power to lay pipes after serving reasonable notice would be limited to cases of emergency, cases where the undertaker is complying with a requisition to provide a main or sewer and cases where the Secretary of State determines that it would be exceptionally difficult to obtain the consent of every owner and occupier concerned.

The overall effect of those amendments would be severely to inhibit the ability of undertakers to meet effectively the requirements placed on them to provide the water and sewerage services that are essential to public health.

While there may seem to be a superficial reasonableness about the amendments, in practice they would impose extremely cumbersome arrangements on the Secretary of State and undertakers, which would to a large extent defeat the whole object of the pipe-laying powers. Far from merely limiting those powers in a sensible way, the amendments would in fact undermine them.

It is self-evident that imposing a requirement to obtain the consent of every landowner and every occupier will cause delay. Whether it is a case involving many landowners and occupiers along the route or only a few, negotiations can be protracted as each person affected attempts to persuade the undertaker to go elsewhere, to delay entry or to give greater compensation or some other advantage over everyone else. Where negotiations break down, the amendments provide for the Secretary of State to determine whether consent is being unreasonably withheld. That would be a quasi-judicial process which is bound to take some months to determine, particularly if the person withholding the consent does not co-operate with the process or if local inquiries are involved.

The amendments provide for some exceptions. They provide for the Secretary of State to be able to determine whether it would be exceptionally difficult to obtain within a reasonable time the consent of every owner and occupier concerned. But that would be a very difficult jurisdiction for the Secretary of State to exercise. There would have to be strong evidence that an attempt to use the normal consent procedure would involve exceptional difficulty beyond the normal length of those protracted processes. The Secretary of State would need to consider representations from the parties involved, perhaps to take independent advice or even to hold a local inquiry. There 180 would then of course be the possibility of further delay by dissatisfied parties seeking to challenge the Secretary of State's decision by way of judicial review.

5.15 pm

The amendments are particularly unreasonable when considered in the context of our European Community obligations. On the one hand, Opposition Members urge us to comply with those obligations, in particular the drinking water directive, to an impracticable time scale, while on the other they support moves to remove from the Bill the very powers that water and sewerage undertakers will need to meet those commitments. If the operational capabilities of water and sewerage undertakers are constrained in the way proposed by the amendments, there is certain to be a considerable deterioration in the pace at which we can expect to see the improvements that we all want in the quality of our drinking water and standards of our bathing beaches.

I know that in retaining the existing powers of water authorities to lay pipes on notice, we would be preserving the unique position of the water industry as the only public utility with such powers. The water industry can, however, properly be regarded in a different context from other utilities. Satisfactory water supply and sewerage arrangements are essential to public health. The undertakers need those powers to be able to carry out the major improvement programmes necessary to meet the European Community requirements on public water supplies and to ensure the improvement in the cleanliness of our beaches—matters which we are constantly told should be taken forward more rapidly. The water industry does not generally have the operational advantages of other utilities. The route of water and sewer pipes is often determined by the need for gravitational flows, which is a restriction that does not apply elsewhere.

I appreciate that some landowners are dissatisfied with the levels of compensation paid in those cases. The Bill provides for full and fair compensation to be paid in cases where the value of the land is depreciated or loss or damage is caused as a result of the exercise of pipe-laying powers. The grounds on which compensation is paid following the exercise of those powers are being brought into line with the compensation provisions which apply to other utilities. Landowners affected by the exercise of those powers by the water industry will therefore be able to claim compensation on the same grounds as those affected by similar operations of other utilities. The Bill also provides for disputes over the amount of compensation to be referred to the Lands Tribunal.

I am well aware of the scope that those powers offer for arbitrary behaviour on the part of undertakers. I know that there have been occasions in the past when landowners have suffered from unreasonable actions. It is for those reasons that we have taken significant steps to protect the interests of landowners.

First, the Bill provides for the powers to be subject to a statutory code of practice to be submitted by the undertakers to the Secretary of State for approval. Unlike the voluntary codes which exist in some water authorities, the codes will be mandatory and the powers will be subject to the oversight of the director general. The Department has produced a model code, on which the statutory codes will be based, in consultation with the water industry and landowning interests. The code will cover all aspects of the pipe-laying process. In particular, it will contain 181 provisions requiring undertakers to provide information to owners and occupiers about the works, to plan the works to cause the minimum inconvenience to landowners and to restore the land, once the work is complete, to its original condition. Undertakers will be required to act in a reasonable way at all times. I believe the model code strikes the right balance between the need to ensure that landowning interests are protected and the reasonable needs of undertakers.

§ Mr. Howard

In the Bill we do not propose any change to the existing arrangements relating to interest. My hon. Friend will be aware that we have separately issued a consultation document that deals with the payment of interest on compensation in compulsory purchase cases. We shall be announcing the results of that compensation exercise in due course.

The second step we have taken is to provide in clause 156 for the director general to direct an undertaker to make a payment to the complainant, up to a maximum of £1,000—which we propose should be increased to £5,000 —if he is satisfied that an undertaker has failed to consult the owner and occupier before or during pipe-laying, or by acting unreasonably has caused them to suffer loss or damage or to be inconvenienced. This provision will help to ensure that undertakers act reasonably when exercising their powers.

Finally, my noble Friend the Minister for Housing, Environment and Countryside introduced in the other place a new requirement on undertakers. Lords amendment No. 161 requires undertakers to alter or remove a pipe in response to a reasonable request from a person with an interest in the land where the pipe is installed, or on adjacent land. There will be recourse to the director general in cases where a person considers that an undertaker has refused to comply with a reasonable request to move a pipe. An undertaker will be able to recover from the person the expenses it reasonably incurs in carrying out the works. That will go a long way to ensuring that the presence of undertakers' pipes on private land does not unreasonably hinder any subsequent development of that land.

I know that, in accepting amendments Nos. 238 and 240, the other place was greatly concerned about the powers that will be available to the water industry and the scope they offer for inconsiderate behaviour. The powers are, however, essential for operational, and more importantly public health, reasons. Knowing the strength of feeling on this issue, I have given very serious consideration to the views expressed in both Houses when the issue has been debated. With the leave of the House, I propose to move the amendments on the marshalled list in lieu of Lords amendment No. 239, which will improve still further the protection of the interest of landowners provided in the Bill, while at the same time preserving those essential powers.

The amendments provide that, when exercising their powers in order to lay new pipes, undertakers will be required to give a minimum of three months' notice. A minimum of 42 days notice would be required in the case 182 of replacement or repair of existing pipes. The only exceptions to those arrangements would be cases of emergency and the exercise of the powers in response to a requisition to provide a main or sewer or a request to provide a service pipe when the undertaker is required to comply within a statutory time limit. Those notice periods are intended to ensure that the examples of the exercise of the powers following an unreasonably short period of notice that have concerned Members of both Houses are not repeated.

The amendments also contain a further measure designed to ensure reasonable behaviour by undertakers. It provides for the maximum payment which the director general can direct an undertaker to make to a complainant under clause 156 to be increased from £1,000 to £5,000.

Finally, the amendments provide for the Secretary of State to make regulations to provide for advance payment of compensation in respect of the exercise of the powers. I can give the House an undertaking that the regulations will be made in time to come into force on transfer date. They will follow the precedent of section 52 of the Land Compensation Act 1973 and provide for advance payments of 90 per cent. of the agreed amount of compensation or 90 per cent. of the compensation as estimated by the undertaker. The advance payment will be made not later than three months after such a payment is requested.

The provisions contained in these amendments, together with those in the code of practice, will fully meet the concerns of the other place. The Bill will specify the periods of notice that an undertaker must give before entering land, and the undertaker will be required by the code of practice to provide information to the owner and occupier about the purpose of the works, including the nature, route and timing of works. Those requirements, combined with the provisions in clause 156 for the director general to direct an undertaker to make a payment, now up to £5,000, in cases where the undertaker has failed to consult a complainant or has acted unreasonably in exercising the powers will, I believe, deal extremely effectively with the legitimate concerns of landowners.

The provisions brought forward in these amendments have the agreement of the movers of Lords amendments Nos. 239 and 240 in the other place. I therefore urge hon. Members to disagree with the Lords in amendments 239 and 240. They would not only impose a severe constraint on the ability of undertakers to perform their statutory duties, including those to meet EC obligations, but in putting pressure on undertakers to agree, in effect, ransom payments to landowners would be to the detriment of consumers generally. The House should also disagree with amendment No. 238 since, as a consequence of the amendments we are now moving, it is unnecessary.

I recommend to the House amendments on the marshalled list in lieu of Lords amendment No. 239, which will improve the protection afforded to landowners while preserving the powers of undertakers to meet their statutory obligations. I commend them to the House.