§ House again in Committee on Clause 26.
Lord Renton moved Amendment No. 46:
Page 22, line 10, at end insert:
("(7) Where the Authority proposes to grant a licence, the Authority shall, before it does so—
(8) The period allowed under subsection (1) (b) above is the period of 28 days beginning with the day on which the proposal is received by the National Rivers Authority or River Purification Authority, or any such longer period as may be agreed in writing between the Authority and the National Rivers Authority or the river purification authority, as the case may be.").
§ The noble Lord said: On behalf of the noble Lord, Lord Moran, who is unable to be with us tonight, I beg to move Amendment No. 46. Amendments Nos. 47, 49 and 55 are grouped with it. However, I should point out that Amendments Nos. 47 and 55 are merely consequential. The substance of the case that I wish to put forward is contained in Amendments Nos. 46 and 55.
§ The broad purpose of the amendments is to ensure that the Coal Authority consults the National Rivers Authority or, in Scotland, the appropriate river purification authority in respect of proposals to grant coal mining licences. It is suggested that the consultation should also relate to some of the conditions of those licences. The reason for that, I should have thought, was very plain to all those who have some knowledge on the subject. In coal mining there are underground water supplies which have to be got rid of before coal can be mined and sometimes before galleries can be made in the pits. The normal way is to pump that water out of the coal mine. If it is not too impure it eventually finds its way to the nearest river.
§ While any minewater discharges from new operations would no doubt require a discharge consent, it is possible that an operator taking over existing workings might not be aware of the full implications of the mining activity which had gone on before, or groundwater or pumping regimes. From the point of view of improving the quality of our rivers, it is important that we should not have unexpected and unwelcome discharges. That is one of the points about which, naturally, the National Rivers Authority and the river purification authority would be worried.
§ Therefore, before a licence is granted at all there should be consultation with whichever body it may be—the NRA or the RPA in Scotland—and consultation not only as to the grant of the licence but as to the conditions attached to it with regard to the discharge and pumping of water.
I am sure that the Committee will agree that Amendment No. 55 is also of considerable importance. It refers to what might happen when a mine to which a licence relates is abandoned. The amendment says:
Conditions included in a licence under this Part shall contain provision requiring the holder of the licence to provide to the National Rivers Authority or the river purification authority not less than 90 days prior written notice of the holder's intention to abandon a mine to which the licence relates".
In case any Member of the Committee wonders why there should be that condition of 90 days' notice, the cessation of mineworking could be accompanied by pressure—and I give one example of the many which
could arise—or could give rise to pressure being maintained on pumps which continue to discharge after the working ceases and might discharge impure water, Other examples could be found.
§ I would not dream of dividing the Committee tonight on this probing amendment. It is to give the Government an opportunity of outlining their policy on the important matter of consultation in granting a licence and the conditions to be attached to it. I beg to move.
§ Lord Prys-Davies
I wish very much to support this series of amendments. I believe that there is widespread interest and support for the thrust of the amendments. There is a growing conviction that the NRA, as the rivers control agency, should have the opportunity of commenting on an application when it is made and then to recommend, where necessary, what conditions, if any, should be included in the licence. That is to ensure that the mine itself does not become a source of water pollution when the mine operations cease at some time in the future.
The NRA, on examination of an application and determination of the local plans, will have a pretty good idea of what is likely to happen if the mines are closed and the pumps are switched off. It cannot guarantee that, but it has a pretty good idea of what will happen. It seems to those of us who live in the vicinity of the rust-coloured rivers that the issue should be addressed right at the beginning when the application for a licence is under consideration and not left until closure, when it becomes extremely difficult to find a solution.
I believe that there is evidence from the courts—we had a recent case in the Crown Court in Cardiff at the end of last year—showing how difficult t is to prosecute the mine-owner under Section 85 of the Water Resources Act 1991. I believe that the noble Lord, Lord Renton, has fulfilled a service to the coal mining communities and those affected by the rivers in introducing the amendment. I hope that the Minister can give sympathetic consideration to the amendments.
§ Lord Strathclyde
I understand entirely why my noble friend moved the amendments on behalf of the noble Lord, Lord Moran, and I am grateful that he has done so. It gives me an opportunity to explain exactly what our policy is. I aim to be helpful and hope that. I shall be reassuring.
Amendment No. 46 seeks to give the water regulatory bodies a special role in the grant of licences. It would require all proposed licences to be referred to the appropriate body and they would have a fixed time in which to make representations to the authority.
This raises the same basic question as we have faced on the many amendments tabled during this Committee stage. The question is: what is the proper role of the authority in the granting of licences under this Bill and what is the role of other regulatory bodies? There is a tendency—a perfectly understandable one—to heap more and more responsibilities on any new body which the Government propose to create. In particular, there is a tendency to heap on such a body increasing responsibilities for the environment. As I said, that is 883 very understandable, but it is nevertheless potentially a recipe for duplication, at the very least, and, at worst, confusion and muddle.
Our approach is based on the premise that bodies which have been given particular responsibilities should have the right duties and powers for the role that has been conferred on them. In this case, it means that the NRA and the corresponding Scottish bodies should have the powers to discharge their roles. I think they do. My noble friend Lord Renton made the point, quite rightly, that all discharges to controlled waters must have their consent and, moreover, that they are statutory consultees on any planning proposal. They are then able to make any appropriate representations to the planning authority about the implications of any new development, including coal mines, for the water environment.
I refer back to a debate that we had earlier this evening. All the licence does is to give the mining company the licence to mine coal, but not permission to do so; because it still has to go through the other hurdles, in particular planning permission, before it is entitled to do so.
It is, of course, appropriate, that the coal licensing arrangements should fully support the statutory framework which already exists. It will therefore be made abundantly clear that it is the responsibility of the applicant to obtain and comply with all necessary consents, including NRA consents. Schedule 8 to the lease contains a covenant by the tenant, at his own expense, to execute all works and to provide and maintain all arrangements, whether affecting an owner tenant or occupier, which are directed or required by any statute in force or by any competent authority. It seems to me that these are the necessary and appropriate steps to provide proper protection of the water environment.
The amendments will add potentially more bureaucracy to the licensing powers. Moreover, it seems to me that the amendment gives the authority an additional role of an environmental regulator which could already conflict with the bodies able to do so. Environmental regulation should be the business of the bodies which have specifically been given those roles. The authority should co-operate with those bodies and I am entirely confident that it will do so.
Amendments Nos. 42, 43 and 57 are meant to ensure that there will be proper consultation with the appropriate water regulatory body before a licensed mine is abandoned by its operator. It is of course desirable and necessary that such consultation should have taken place before abandonment, and we have not overlooked the question. As I explained on Tuesday in the discussion on the first group of amendments, the approach which we envisage will then be followed.
The eighth schedule to the lease contains a covenant from the tenant that he will keep the mine in a satisfactory condition (which is defined as the condition required to ensure that no immediate or potential liabilities fall on the authority). If he wishes to close any part of the mine, he has to give the authority six months' notice and a report on the possible consequences of the closure and details of the steps which he will take to secure that the mine remains in a satisfactory condition.
884 The authority will ensure that the NRA is fully consulted in this process. Before agreeing to termination of the lease, the authority will expect the operator to institute any reasonable treatment measures identified and to make an appropriate payment for any continuing costs. Once the lease has come to an end, the authority will of course be responsible for the mine as for any other abandoned coal mine.
I think that the process I have described is the most effective way of proceeding. The leases of the mines and the responsibilities of the authority will not only secure proper consultation with the environmental regulatory bodies but, what is much more important, will secure that appropriate measures are taken to protect the environment in these circumstances.
My noble friend raised a very important issue. It is one that we have spent considerable time thinking about. That is why we have come up with the regime that I have outlined. I believe that the ends that it will achieve are exactly the same as those which would be achieved by the noble Lord's amendment; namely, to protect the water environment.
§ Lord Dormand of Easington
Perhaps I may clarify my mind on what was said; this is an important matter. I believe that the Minister said that the National Rivers Authority and the river purification authority are statutory consultees. My next point is: are they statutory consultees in these particular circumstances? I say that because we are talking about a new authority that will come into being, the Coal Authority, and it may just be that the legal situation will not provide for that. If that is the situation, then I can see the Minister's point of view that this would be a duplication or an unnecessary emphasis on what has to take place anyway. If I can be clear in my own mind about that matter, then I shall be very happy.
§ Lord Strathclyde
In my reply I explained the procedures that would take place in regard to the NRA. I hope that that satisfies the noble Lord.
To turn to the noble Lord's primary point as to the NRA's role as a statutory consultee, that is its role in statute when planning permission is required. Since planning permission is required to undertake opencast coal mining, that is when the NRA will be involved in the decision whether to give planning permission. I maintain that that is exactly where it should be present. It should not be in the decision as to whether to grant a licence. That quite properly is a role for the Coal Authority. But when it comes to granting planning permission, when there are so many other statutory consultees, when there might be the prospect of a public inquiry, and so on, that is where the NRA and the bodies in Scotland have a very important role.
§ Lord Renton
Perhaps I may supplement what my noble friend has just said. When planning permission is granted, necessarily it is granted subject to various conditions. My noble friend is suggesting that the same sort of conditions could be applied then as is proposed in these amendments. Is that the position?
§ Lord Strathclyde
That is exactly what I understand to be the case. The main point is: at what stage of the 885 process should the NRA and other bodies be involved? I maintain that it should be at the planning permission stage rather than at the licensing stage. The licensing stage is purely a moment when the Coal Authority decides who should receive the licence once it has decided on certain safeguards which are quite properly outlined in the Bill.
§ Lord Prys-Davies
Clearly we shall have to study very carefully the words of the Minister. In reference to Amendment No. 55 in particular, will the Minister help the Committee to this extent? Can the Coal Authority impose a condition in the licence that will require the licensee to provide notice to the NRA?
§ Lord Strathclyde
I think I explained in my original reply that part of the lease explains that it is the responsibility of the applicant to obtain and comply with all necessary consents, including NRA consents. That is the important point.
§ Lord Prys-Davies
In Amendment No. 55 we are dealing with the abandonment of the mine. The licensee is required to serve notice if he proposes to abandon the mine. Can the Coal Authority insert that condition in the licence?
§ Lord Strathclyde
When it comes abandonment, again the eighth schedule to the lease contains a covenant from the tenant that he will keep the mine in a satisfactory condition. When the owner gives notice that he is going to abandon the mine, the authority will at that point ensure that the NRA is consulted in the process to make sure that the mine either remains in a satisfactory condition or that suitable decisions are taken to reduce water pollution.
§ Lord Renton
I am grateful to the two noble Lords opposite who have shown an interest in this matter and for the questions that they have put. I am very grateful to my noble friend Lord Strathclyde for his very full explanation of the Government's attitude towards what I believe are very important amendments. It is satisfactory to note that we are agreed upon objectives. The Government, the National Rivers Authority and the noble Lord, Lord Moran, have the same objectives. My noble friend said in effect that those objectives do not need to be fulfilled in the way that is suggested in Amendments Nos. 46 and 55 because they will anyway be fulfilled by other means. I am not in a position to challenge that at this moment. I shall want, and others will want, to study very carefully what he said.
I was a little puzzled by his references to—did he say Schedule 8 of the Bill? I am concerned that Schedule 8—
§ Lord Strathclyde
I can help my noble friend immediately. If I said that, I confused him. I did refer to the eighth schedule; but it is the eighth schedule to the lease, not to the Bill. We have produced a draft lease in a separate document. I shall make sure that my noble friend receives a copy.
§ Lord Renton
I am very grateful for that clarification, because it did not seem to me that the eighth schedule to the Bill fulfilled the prophecies that he or I had in 886 mind. With the satisfaction that at any rate the Government intend to achieve these purposes, and that it will be for others concerned to consider whether those services are adequately fulfilled by the way that the Government suggest or whether something still needs to be written into the Bill, with that further matter to be considered, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 26 agreed to.
§ Clause 27 [Authorisation contained in licence]:
§ [Amendment No. 47 not moved.]
§ Clause 27 agreed to.
§ Clause 28 [Conditions of licence: general]:
§ [Amendments Nos. 48 to 51 not moved.]
Lord Peston moved Amendment No. 52:
Page 23, line 49, at end insert:
("( ) Conditions included in a licence under this. Part shall contain provision requiring the holder of the licence to take out and maintain a policy or policies of insurance insuring against all loss, damage and liabilities arising from the operation of that mine.").
§ The noble Lord said: Amendment No. 52 has two roles. One is in its existence as an amendment in its own right. But it also exists in order that I can say a few words on the whole context in which it is placed, namely the context of licences.
§ My general view of the Bill, which is commonly referred to as the coal privatisation Bill, is that the name is something of a misnomer. It is not a Bill about selling pits. It is a Bill about selling licences. I regard licences as the essence of the Bill. When I examined the various paragraphs of the clause—Clause 28—to which my amendment refers, and the contents of Clauses 29 and 30, I tried to think of a suitable adjective to describe them. I thought of calling them "vague"—but that is not the right word. Then I tried "broad brush"—but that: is not right either. I thought about "vacuous". These: paragraphs occupy a lot of space but they say little or nothing.
That is the nature of the problem when debating the Bill. If I am right that licences are what matter and that what will happen in the real world when the Bill is passed into law will be dependent on the licences, then in terms of the statute itself we need to know a good deal more about the detail of the licences. Butt we do not have that information in the statute. What we have—I draw the Committee's attention to Clause 30(3)—is:
the duty of the Authority to publish model provisions".
As the noble Lord, Lord Strathclyde, pointed out, there are already in existence documents of a sort that give some indication of what would be in the licences.
§ Earlier amendments, as well as my own amendment, seek to ensure that, because licences are so important, there ought to be rather more specific matters about licences in the Bill, particularly if I am right and the Bill is about licences and not about pits. I emphasise my specific amendment, which concerns insurance, because it relates to the question of liability and how there is any protection against that, which the Minister, when we, met in Committee last Tuesday, felt was not as important as I considered it.
§ I tabled the amendment in the deliberately provocative way of stating that the coal authority should 887 demand insurance against all those things. I do not think for one moment that any rational insurance company would want to sell such insurance. But if no rational insurance company would want to sell such insurance, what rational person would want to buy a licence? That seems to me to be the essence of the Bill.
§ The Minister becomes very cross with me as I tear the Bill apart. But the fact remains that, in my opinion, this piece of legislation is as badly flawed as any that one could come across. I am afraid that if anybody buys a licence, he will find that he has certain statutory responsibilities anyway, as part of company law, to deal with insurance. My point is that because of the nature of the Bill he will simply discover that it cannot be bought. That is why I want to have put on the face of the Bill the requirement that it must be bought. Otherwise, how could he possibly allow himself to incur the liabilities?
§ At 8.30 p.m. I do not happily put down such an amendment on purpose. I would much rather debate such an issue at 3.30 in the afternoon. But 8.30 is the time at which we have reached the amendment. Therefore I emphasise to the Committee and those Members who have turned up, not in great numbers, to look at the Bill that this is the kind of question that it is our duty to put before the Committee so that at least the Minister can tell us how we get out of this little problem. I beg to move.
§ 8.30 p.m.
§ Lord Strathclyde
I dare say that more of my noble friends and colleagues would come to listen to these debates if there were amendments which were rather more interesting to deal with. The noble Lord, Lord Peston, asks how we are to deal with the problem. But there is no problem. The only problem that I can see is the one quite naturally foreseen by the noble Lord when he tabled the amendment requiring insurance as a statutory duty. The insurance industry may well be more than happy to pick that up. But if it does not, and if for one reason or another it does not do so in one year, that closes down the mine and makes sure that the private sector cannot operate.
§ I come back to the point that I have made time and again when dealing with amendments tabled by the noble Lord, Lord Peston; namely, the noble Lord's desire to make sure that privatisation does not occur. This amendment is one of the noble Lord's insincere and non-serious amendments rather than one of his more helpful ones.
§ All industrial activity is capable of giving rise to "loss, damage and liabilities". Where it is economically viable to do so, the industry will not want to place itself in a position in which it is unable to meet its obligations and will buy insurance. There is something much more important in what the noble Lord, Lord Peston, said. He said that in this Bill and the privatisation process the most important thing is the licence; licences are not found in the Bill and therefore there is a huge gap. I disagree entirely with him. He said that because he knows that there cannot ever be a close and detailed examination of the licences as they are not in the Bill; and he said that therefore it is a flaw in the Bill. It is not.888
§ The role of the authority and the way in which it disposes of the duties that we have given the authority in terms of the Bill is the important matter. All that the licence does is to give to the successor company, the mining company, the ability to go ahead and do its mining. Within that operation there are a lot of obligations for the mining company, some of which I have set out and some of which are laid down during the course of the licensing. It is entirely fair to cross-examine on its intentions.
§ I am not sure what more I can say to the noble Lord, Lord Peston, since he has quashed his own amendment in a way. There are questions that need to be answered. What is to be done if insurance cannot be obtained? Would the noble Lord seek to compel the insurance industry to provide the insurance? Is that what he has in mind for the insurance industry? If that is the case, he will have to propose further amendments to establish such powers over the insurance industry. I believe that what I said at the beginning is correct.
§ The noble Lord believes that no one in his right mind would wish to operate a coal mine or become a licensee. That is his opinion. We believe that the expressions of interest already made in the coal industry justify our very positive attitude toward the industry. We hope that it will be successful.
§ Lord Prys-Davies
Before my noble friend decides what to do with the amendment, perhaps I may invite the Minister to be a little more specific. At least I can give him one question which needs to be answered. As I understand the matter, the Coal Authority is empowered to require the operator to lodge an insurance guarantee of a bond against liability for subsidence damage to the surface of the land and buildings on the land. However, I understand that the Coal Authority cannot require the licensee to lodge a restoration bond for the restoration and treatment of the surface of the land after his licence for opencast mining has been completed. It seems to many of us that there is a strange degree of contradiction between requiring an insurance bond to meet a claim for subsidence damage to the surface of the land and denying the authority to obtain a bond against the failure to restore.
§ Lord Strathclyde
The noble Lord has picked out the case of subsidence, which is an important one. There is not any contradiction. The point is that subsidence is a very good example of where one needs to secure future liabilities because the withdrawal of support and subsidence damage to private property are more or less unavoidable consequences of modern mining. It is because lawful mining will result in damage to people's homes that we have proposed the strongly worded duty in Clause 2(1) (c) which means that security will have to be provided by the operator if required by the Coal Authority. The amendment of the noble Lord, Lord Peston, says they must insure against all loss, damage and liabilities, whether or not those liabilities would occur in practice.
§ Lord Peston
I am not certain that the noble Lord understands either my amendment or anything that I 889 have been saying. As someone who has been teaching for the past 40 years, that is not an unusual experience for me.
The point I am trying to make about the Bill has nothing to do with my sincerity or insincerity; it is that the Bill is not very good in terms of what it is seeking to do. As I understand it, the Government, as part of their manifesto, pledged to return coal to private ownership. I have already pointed out that the Bill does not do that; it sells licences and not pits. At this stage that is what we are discussing.
I am saying that one of the reasons why the Bill in practice will not work—as the noble Lord says, we shall see what happens both to people who bid for licences and how long they survive subsequently—is because buying a licence means buying a series of potential risks. Normal good business practice is to buy insurance against those risks. It is in the nature of the Bill that one will not be able to buy the insurance one requires. The reason I tabled the amendment was to make that clear, rather than to help the insurance industry, which we can do on another day.
I am trying to explain to the Minister that he and his right honourable friends have not done the job in the Bill that they think they are doing. There is no point in going over the ground again, especially as we shall be coming to subsidence in a few moments, on which again a question of liability of a serious kind arises. Having said that, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 53 to 55 not moved.]
§ Clause 28 agreed to.
Baroness Turner of Camden moved Amendment No. 56:
After Clause 28, insert the following new clause:
§ ("Conditions as to employment terms
§ .—Conditions included in a licence under this Part shall include provision requiring the holder of the licence to ensure—
- (a) that the terms and conditions of employment of persons employed in the coal-mining industry in Great Britain shall be no worse than the terms and conditions in existence immediately before the restructuring date;
- (b) that any arrangements in existence immediately before the restructuring date with regard to concessionary coal or cash in lieu for existing workers shall be maintained; and
- (c) that there shall be full recognition of and consultation with trade unions if this is requested by a majority of persons employed by the licence holder in coal-mining operations.").
§ The noble Baroness said: Paragraph 7 of Schedule 2 to the Bill provides for the Transfer of Undertakings (Protection of Employment) Regulations 1981 to apply to any transfer resulting from privatisation. That means that contracts of employment will be transferred to the successor companies.
§ It is true that the TUPE regulations, which the Government have to apply anyway as they are based on the EC's acquired rights directive, offer certain safeguards to employees in the event of takeover or merger. In fact, they were deliberately devised to give such protection. Not only must the new employer take over and implement the contracts of employment for staff; it is now accepted that comparable pension provision must also be given—we discussed pension provision earlier this afternoon. Existing collective 890 agreements with the unions must be honoured and there must be consultation with representatives of the workforce prior to transfer.
§ However, in important respects the TUPE regulations do not go far enough. Companies will be able to bypass the regulations by giving notice or by relying on a number of subterfuges which are known to exist. Indeed, the guidance issued by the Minister in March 1993 sets out ways in which a dismissal could be regarded as fair even under TUPE. He cites the technical and organisational reasons which could be relied upon in such an event. Moreover, as the Minister has often told this House, it is open for an employer to terminate a recognition agreement when he thinks it appropriate. TUPE does not prevent that happening after the event. Furthermore, there is no protection in the event of insolvency.
§ It is our submission that coal is a special case. It requires a stable industrial relations framework and wages stability. If those are not provided, companies will simply compete on the basis of low wage levels and the industry will degenerate into a low wage ghetto. Furthermore, low wages and low wage systems based primarily on piecework are not conducive to safety. That was recognised in 1946 and is why the legislation introduced then provided explicitly for recognition and national conciliation schemes to govern terms and conditions of employment.
§ That principle currently extends to the private licensed mine sector. Under Clause 15 of the licence, private owners must observe every local and national agreement or settlement reached by British Coal and the relevant union. If the Government are serious about protecting miners' terms and conditions, if they mean what they say about "no worsening", then Amendment No. 56, which stipulates that successor companies must offer terms and conditions no worse than those existing just prior to privatisation, should be accepted. Successor companies should honour agreements already in existence as a condition of their being granted a licence. Arrangements in regard to concessionary coal and other conditions should be honoured. There should be full consultation with and recognition of appropriate unions if a majority of the people employed by the licence holder want that.
§ All that is important. Without protection for terms and conditions of employment in what remains of the UK mining industry, there will be competition, not on the grounds of high technology and productivity but by undercutting wage costs and working conditions. We are in danger of creating a series of sweatshops. I believe that, in an industry as important to us as the coal industry, that is profoundly unacceptable. As my noble friend Lord Peston said, the Bill is about licences and what should be in them. I hope that the Minister will agree with me and be prepared to accept the amendment. I beg to move.
§ 8.45 p.m.
§ Viscount Goschen
The Government fully recognise the concern to protect the interests of those currently working in the industry, as expressed this evening by the 891 noble Baroness, Lady Turner of Camden. But we believe that the Bill already provides suitable protection.
§ The amendment attempts to protect such interests through the Coal Authority licence. I must clarify the purpose of the coal operator's licence. The licence gives to fit and proper persons authorisation to mine and imposes on them obligations for the treatment of liabilities arising from subsidence. It does not cover health and safety, which is governed by health and safety legislation. It does not cover environmental obligations, which are governed by environmental legislation. Similarly, it would not be appropriate to use the Coal Authority licence to ensure compliance with employment law.
§ I can assure the Committee that there are safeguards in the Bill to protect the interests of British Coal's employees. As the noble Baroness said, Schedule 2 contains provisions to ensure that the Transfer of Undertakings (Protection of Employment) Regulations 1981—(TUPE)—apply to any transfer of an undertaking, or part of an undertaking, under a restructuring scheme or modification agreement. Those employees who transfer in this way with the undertaking or the part in which they are employed can, therefore, be confident that all their terms and conditions of employment will be safeguarded on restructuring. As the noble Baroness said also, special rules apply to pensions and are accordingly dealt with separately in the Bill.
§ After a transfer there will be scope for changes to terms and conditions, subject to the normal protection offered to all employees under United Kingdom employment law. That protection includes an obligation on employers to obtain the agreement of employees to any such change. I hope that the Committee will accept that it is essential that there should be scope for changes to terms and conditions—for example, to allow the introduction of new technology and working methods —if the industry is to be competitive.
§ TUPE will transfer British Coal contracts of employment to private sector successors. Thereafter, they can only be amended by agreement with relevant employees. Continuing employees' entitlements to concessionary fuel and cash in lieu are contractual entitlements which will therefore be protected by the provisions of TUPE. So any change in such entitlements will need to be agreed with the relevant employees.
§ The noble Baroness raised the point of trade union recognition. The right to belong to a trade union is a right of all employees. That will not be affected by the Bill. However, it has always been government policy that employers should be free to decide whether to recognise, or to continue to recognise, trade unions or any particular trade union. If employers wish to change their bargaining arrangements, then it is a matter for them. Equally, trade unions are free to convince employers of the merits of recognition.
§ TUPE will transfer the vast majority of contracts of employment of British Coal staff who will move to successor companies. I hope that in the light of the explanation of the TUPE provisions which I have 892 detailed, the noble Baroness will accept that her amendment is not necessary. I would urge her to withdraw it.
Can my noble friend confirm that any coal miner who has contracted some wretched disease or suffered an injury resulting from an accident during his time of employment with the Coal Board and then has troubles with the new licensee because of an accident or some condition will have his rights carried on when he is working for the new licensee? I think my noble friend has said that that is the case, but I am not quite sure.
§ Viscount Goschen
This specific issue was dealt with on the first day of Committee. It was spelt out by my noble friend Lord Strathclyde that in the event of an employee moving to the successor company and then having the medical problems that my noble friend Lord Bathurst detailed he would take up the matter with his new employer, the successor company.
§ Baroness Turner of Camden
I am not at all certain whether the successor company would have the obligation to settle with such an employee. If it were pneumoconiosis, there is a pneumoconiosis scheme which covers the rights. But if the individual concerned suffered an accident and has a common law claim, my understanding is that the situation is very different. The successor company would have to deal with such an issue under the terms, presumably, of employers' liability insurance. Will the Minister be good enough to confirm that that is the case?
§ Viscount Goschen
The noble Baroness is correct about the provisions which she detailed on pneumoconiosis—the disease that is so difficult to pronounce. That was the main thrust of the arguments that took place. I believe that she is correct on that matter.
§ Baroness Turner of Camden
I am sorry to come back on the point. Miners suffer not only from pneumoconiosis. There are injuries which come about as the result of mishaps in the mine. Such injuries can give rise to claims at common law. At the moment the Coal Board has to deal with such a common law claim within the terms of its own employers' liability insurance. The successor company, however, will presumably have to have its own employers' liability insurance for which it will have to pay probably a higher premium plus of course the taxation on premiums which are now a part of government policy. It will have to pay those costs, and that insurance will have to cover, I assume, any common law claim arising in one of the successor companies.
§ Lord Prys-Davies
To summarise, are the Government drawing a distinction between a miner who suffers an industrial disease and a miner who suffers an industrial accident? Is there a distinction between industrial disease and industrial accident?
§ Viscount Goschen
We discussed this complex issue in great detail at an earlier stage of the Committee on Tuesday. My noble friend Lord Strathclyde is writing to the noble Lord's noble friend Lord Callaghan detailing chapter and verse on the issue. What I can say to the noble Baroness is that the liabilities for the past injury, including under common law, are not covered by TUPE but are transferred by the scheme. That is the important issue.
§ Lord Dormand of Easington
The Minister said earlier that the main reason why the amendment would not be acceptable to the Government was that its three parts are taken care of in the Bill itself. I do not profess to know the Bill word for word. Can he tell us which part of the Bill deals with it?
§ Viscount Goschen
My point was that the amendment was unnecessary because of the Transfer of Undertakings (Protection of Employment) Regulations which are contained in Schedule 2. That is why we believe that the amendment is unnecessary. We already have adequate provision in the Bill.
§ Baroness Turner of Camden
The noble Viscount will not be surprised to learn that I am not entirely satisfied with his response to my amendment. We must be grateful for the existence of TUPE; otherwise, individuals, faced with the consequences of privatisation, might find themselves in a very much worse position than they do now. However, the whole thrust of my argument was that TUPE is not sufficient. It is certainly not sufficient to guarantee a continuation of the right to recognition and to consultation with the appropriate unions, which is part of the amendment. Of course, the agreements will be carried over in the beginning, but there is no reason why they should be maintained, as the Minister made clear. It is very unlikely that they will be maintained in some instances if there is not an insistence in the licence that there should be the basic minimum safeguards for employees proposed in the amendment.
It is not my intention this evening to press the amendment —the Chamber is thinly attended—but I shall look with interest at what has been said by the Minister both in regard to the particular amendment and also to the points made about industrial injury. I should be most grateful if a copy of the letter which is being sent to my noble friend Lord Callaghan could also be sent to me. The position is by no means entirely clear to me, although I think I understand it. I think I understand it, and I am not happy about it. But that is a different matter. In the meantime, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 29 [Conditions for the provision of security]:
Lord Morris of Castle Morris moved Amendment No. 56A:
Page 24, line 13, leave out ("may") and insert ("shall").
§ The noble Lord said: As I eat my cornflakes at breakfast time, it is my custom, unless there is some Bach or Vivaldi, or Couperin or Handel on Radio 3, to 894 listen to the "Today" programme on Radio 4. This morning it ran a most interesting item on the Child Support Agency and the alleged ineffectiveness of its attempts to ensure that errant fathers did not escape their responsibilities. We have the same thing here because Amendment No. 56A is a substantive amendment designed to ensure that licensed operators cannot escape their obligations. I put it down in an attempt to be helpful in enforcing something which I think is only loosely present in the Bill as it stands.
§ A licensed operator will have liabilities to the Coal Authority in respect of payments due under his lease and licence. He is also likely to incur obligations to other people totally outside the contract between himself and the authority; for subsidence, and for impacts on the environment and on his neighbours' property. The Government recognise that the authority should be concerned to ensure that the neighbouring communities of mining operators and indeed the public in general are recompensed for any damage they suffer, but they make a distinction between subsidence damage and other kinds of liability.
§ In the case of subsidence, it is proposed to give the Coal Authority a discretion to insist that an operator make financial provision for meeting his liabilities. In respect of other obligations the authority's duty is weaker. It merely has to satisfy itself that the operator is able to finance the discharge of his liabilities.
§ This distinction between subsidence and the other kinds of damage is a theme which runs through this Bill like a golden thread in a fabric—like a leitmotif in the music dramas of that much overrated German composer, Richard Wagner—though why the neighbour of a coal mine should mind less if his water is contaminated than if his house sinks into that water is not at all clear. In practice, the neighbour will want recompense for whatever damage has been done and will be just as concerned that the mine operator has the means to pay the proper compensation.
§ Nor do the Government in this Bill make clear where the authority will obtain its crystal ball to foresee the future financial position of the operator. The Bill is not concerned only, or even chiefly, with the compensation which may be payable when a licence is granted. Damage, and especially environmental damage, may manifest itself at any time during coal mining operations or indeed long after they have ceased.
§ We are all aware of major and reputable companies and businesses—in which the Coal Authority, or anyone else, might have every conceivable confidence—which have found themselves nevertheless in the hands of the receiver or otherwise insolvent. How can the Coal Authority or the Minister be confident that the same will not happen to an operator licensed by the authority; and what recourse will the neighbour or the public have then?
§ That question has been raised in another place and the Minister has said that in the last resort, taking one thing with another, boiling it down and straining off the water, the Coal Authority would be responsible. He said that in the Official Report of Commons Standing Committee D on 10th February 1994 at col. 175. If that is the case, why can we not have this made clear on the 895 face of the Bill? When pressed on that matter the Minister produced (Official Report, Commons Standing Committee D, 3/3/94; col. 532) what he called a "convoluted"—and what might much more accurately be called a tortuous and unsatisfactory—chain of responsibility in relation to subsidence damage.
§ First, he said that the authority would be responsible for subsidence damage under Clause 43(3) (b), which in fact says that the authority is responsible for subsidence damage if no licensed operator is responsible. It says nothing about the authority being responsible if the operator is unable to meet his responsibilities. Secondly, the Minister said that under Clause 37 the Coal Authority could terminate an operator's area of responsibility for subsidence, whereupon the authority would be responsible for subsidence claims in that area. That is tortuous but possible and in a way neat. But there is no way that the authority can be made to do this by an aggrieved claimant, and since the main effect of such a termination would be to add financial liabilities to the authority, we might perhaps expect it to be at least reluctant to do so.
§ Even if the chain of events envisaged by the Minister, hard pressed in Standing Committee D, should occur, what effect will that have on claims already made, and perhaps even agreed? Will not the claimant simply be an unsecured creditor of the insolvent operator? There is nothing in the Bill about transferring the debts of an operator if his area of responsibility for subsidence is terminated, and it would be rather surprising if there were. And even the unsatisfactory chain of responsibility set out by the Minister above does not apply to damage claims not based on subsidence. The Minister has repeatedly said that in the last resort the Coal Authority will be responsible for at least subsidence claims. As far as we can see, the wording of the Bill simply does not provide this.
§ It would be preferable, in our view, simpler and better all round—and amendments are tabled to this effect—if the Coal Authority were to be responsible for settling all subsidence and environmental claims, reclaiming the costs from licensed operators. That way we know which way we are going. If that strategy is not to be adopted, the public are surely entitled to have their interests safeguarded by the provision of proper financial security for the payment of third party claims.
§ This issue was raised by a number of Peers at Second Reading of the Bill in your Lordships' House on 11th April, including my noble friend Lord Mason (Official Report, 11/4/94; col. 1312), the noble Lord, Lord Ezra (col. 1305), the right reverend Prelate the Bishop of Sheffield (col. 1315) and the noble Viscount, Lord Caldecote (col. 1333), not all of whom are fully paid up members of the Labour Party so far as I am aware.
§ Concerns about financial security were also expressed in the debates at Report stage of the Bill in another place. Many people are worried about this. Their worries have not been laid to rest. I beg to move.
§ Lord Strathclyde
I believe that as the evening goes by the noble Lord becomes even more eloquent, and indeed more elegant in his choice of phrase and 896 language. I was delighted to hear about his cornflakes in the morning. But as he went on I slightly lost the thread of what he was saying. I suspect also that he strayed into the areas of some of the amendments that we shall come to in the next few minutes.
I understand that his basic anxiety is what we are going to do about the potential financial liabilities arising out of subsidence. We already know that the Coal Authority has a special duty under Clause 2(1) (c) to seek appropriate subsidence security where this is necessary. It also has a duty under Clause 2(1) (b) as to the financing of liabilities generally. Clause 29 assists the authority to discharge these duties. Making the security requirement mandatory, which is the basis of this amendment, would not only unnecessarily constrain the authority in performing its duties but also burden financially robust parts of the industry. Every pound of capital which is tied up in security will be a pound less available for other things such as investment in new equipment for the mines.
I am not surprised that the noble Lord should be taking this belt and braces approach because again he does not trust the private sector. However, the question of whether one trusts the authority should not be the premise. The authority has a duty to make sure that the mining company is financially viable and that it has methods of generating enough cash to look after its liabilities, and particularly its subsidence security. However, at least that provision puts the responsibility into the hands of the authority and it can make up its own mind. The effect of the amendment would be entirely negative. It would simply place that additional and unnecessary overhead on all financially robust operators, and even some very big companies would be obliged to put down a security.
As far as insolvency is concerned, the Bill provides that these arrangements can be set up to ensure that the security is effectively ring-fenced for the protection of subsidence claimants. If there were an insolvency, subsidence claimants would be able to obtain their compensation through the financial security arrangements, if necessary.
The Bill gives the Coal Authority the right to apply for the deferral of a dissolution of a mine operator. It is intended that this will stand in the way of a coal operator who wants to escape his subsidence responsibilities by engineering his own dissolution. For the same reason, the Bill also makes it clear that a liquidator cannot disclaim the operating licence, and with it the area responsibility for subsidence, so as to escape subsidence liabilities. However, the licence will nevertheless be transferable subject to appropriate conditions. It will also be possible for the insolvency practitioner himself to carry on the mining.
As is the case with so many of these amendments, I can understand why noble Lords have tabled them and it is right that these matters should be debated. It could well be that the Government have not thought of every single eventuality, but I think that we have covered most of them. I am satisfied that the whole regime for dealing with the effects of subsidence has been extremely carefully thought out and is the very best protection available.
§ Lord Morris of Castle Morris
Interesting; helpful in parts; makes progress; gets us forward but not fully satisfactory, especially on the distinction between subsidence and other damage. We shall return to it. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 29 agreed to.
§ Clause 30 [Publication of licensing arrangements]:
§ [Amendment No. 57 not moved.]
§ Clause 30 agreed to.
§ Clause 31 [Enforcement orders]:
Viscount Goschen moved Amendment No. 58:
Page 26, line 42, at end insert:
("(8) This section and sections 32 and 33 below shall be without prejudice to the right of the Authority, where the conditions of any licence under this Part contain provision for a sum determined by or under those conditions to be paid to the Authority, to enforce that condition in proceedings for the recovery of the sum as an amount due to the Authority by virtue of an enactment.").
§ The noble Viscount said: The purpose of this amendment is to give the Coal Authority power to recover sums due to it under coal operating licences as civil debts. The authority would anyway be able to recover such sums through the enforcement order procedure in Clauses 31 to 33 of the Bill. However, this will be a relatively complex process which would not be appropriate for the simple recovery of debts. I therefore commend the amendment to the Committee. I beg to move.
§ On Question, amendment agreed to.
§ Clause 31, as amended, agreed to.
§ Clauses 32 to 41 agreed to.
§ Clause 42 [Subsidence damage to which 1991 Act applies]:
Lord Morris of Castle Morris moved Amendment No. 58A:
Page 37, line 26, at end insert:
("( ) For the avoidance of doubt, any reference in sections 42 to 48 of this Act to "subsidence" shall be read as including references to disused former colliery mineshafts, shafts or adits and "damage" shall include a diminution in value or a reduction in prospects of sale of any property.").
§ The noble Lord said: In moving Amendment No. 58A, I should like to speak also to Amendments Nos. 64 and 65. We are talking here about blight. Blight is a form of uncertainty which can cause damage, loss and misery. A typical example in the ambience of this Bill would be an uncapped mineshaft 20 metres away from a property which the owner is wishing to sell. There is no subsidence yet, but it is now a well-attested fact that mortgage companies simply will not lend on such properties, and the owner cannot sell. That could well apply to hundreds of properties in all the coalfields of this country.
§ I have had a lot of correspondence about this matter, especially on individual cases, and Members of another place have received vast amounts of correspondence. Noble Lords on all sides of the Committee will be familiar with the phenomenon whereby when something is being debated in your Lordships' House, it is an 898 excuse for Members of another place to dump sackfuls of constituency correspondence on to our tables on the grounds that they are sure that it is going to be helpful.
One of my honourable friends wrote to me as follows:
This is a complicated and difficult issue which has only properly come to light since the property market started to move, although it relates back to the 1991 Subsidence Act.
In a nutshell, an area like ours"—
it does not matter where it is—
has former disused colliery mineshafts and adds literally everywhere—on football pitches, under pavements, in back gardens and on school playing fields.
Where former colliery land has been made good under Derelict Land Grant schemes, then the former mineshafts/adits have been capped and made good too. However, the real problem lies with the numerous shafts and adits peppered about the entire length and breadth of this county. You will see from the House of Commons Library that it is only as a result of the voluntary agreement between British Coal and the Law Society that the location of these shafts and adits is now coming to light. As no one is able to say whether these former shafts have been made good or continue to present problems of possible future subsidence, properties are becoming blighted".
My honourable friend enclosed a large number of letters, some of them handwritten cries for help; some of them complaints and moans; some of them from people who should have known better. One struck me particularly, and I have permission to quote from it. The correspondent said:
We bought our house in June 1989 in good faith with a clear mining report, and were given a mortgage by Britannia Building Society for £38,000. In January 1993 we decided to put our house on the market as our family has grown and we needed extra space".
These, by the way, obviously are not people of high education and social standing. Even the spellings in the letter could do with a little attention. She goes on:
Due to the recent change in mining regulation reports we found that we could not sell our house as an adit has shown on the current mining report and is not acceptable to building societies to lend out a new mortgage.
If we could establish whether the adit has been capped British Coal will add this to the mining report and our problem should be solved. If the regulations were to be changed back then our problem would definitely be solved. I have desperately tried td find this information out but cannot find anyone who will provide me with this information".
She then lists a number of places to which they have gone. She continues:
As you can see we have tried to find out the information we need but cannot get satisfactory help. We feel that we just cannot afford to pass this on to a solicitor as we do not qualify for legal aid. Please can you help us as we do not know where to turn next. Yours hopefully".
§ Are the Government aware of the scale of the problem? Within the context of the Bill, what do they propose to do about it? I beg to move.
§ 9.15 p.m.
§ Lord Strathclyde
The noble Lord, Lord Morris, produces an interesting problem. I am aware of it, and a part of it has of course been caused by the alteration of the form in 1991. That means that in some cases shafts some distance away from the property will now be disclosed. I had gathered that the number of properties in that category is small, but the noble Lord does not think so. I do not know what the reality is.
In considering the first of these amendments.., it might be helpful were I briefly to summarise the present position. If lawful coal mining subsidence damage 899 occurs, then British Coal has an obligation under the Coal Mining Subsidence Act 1991 to remedy it, including where the ground movement is attributable to an old mineshaft.
The issue of old shafts usually arises if such a shaft is disclosed on a mining search provided by British Coal to the solicitor acting for a purchaser. The information is generally provided on a search form agreed between the Law Society and British Coal.
I appreciate fully the need to remedy actual damage caused by coal mining subsidence damage. That is why Clause 43 preserves the position under the Coal Mining Subsidence Act 1991 that the owner or occupier is entitled to have the damage put right or be paid to put it right himself. But the amendment would go beyond that. It would mean that claimants could seek compensation against private coal operators to which they are not currently entitled against British Coal. That is the point the noble Lord is making. Because it is virtually impossible to predict the level of compensation with any degree of accuracy, that could place an intolerable burden on the coal mining industry.
The 1991 Act, which received considerable all-party support, struck what was in my view an entirely reasonable balance between the interests of British Coal and subsidence claimants. It provides not only for subsidence damage to be remedied but also for a number of other remedies; for example, for compensation for inconvenience during works and home loss payments. Those remedies will be carried forward entirely after privatisation. To amend that Act so as to grant additional remedies would upset the balance of interests to which I have referred. I understand the noble Lord's intention, but that would be difficult.
I turn now to Amendments Nos. 64 and 65. It might assist if I were to explain the thinking behind Clause 45. The mining companies will have to notify all those who may be affected by subsidence and include information on how to claim. However, that does not guarantee that everyone who wants to claim will have the notification to hand, particularly if some time has since elapsed.
We have therefore proposed Clause 45 and made available proposed draft regulations under it. The purpose is to oblige mining companies and the Coal Authority to supply any owner or occupier who could claim against them with the information they need to make a claim. I agree that prospective purchasers may wish for information. But the regulations under Clause 45 are not the right channel for that. I oppose Amendment No. 64 because prospective purchasers could not claim anyway because they would not yet have suffered damage. At present prospective purchasers can obtain a mining search from British Coal, as I have explained.
As to Amendment No. 65, the proposed draft regulations we have published require that, if an inquiry is received from outside the area for which that operator —or the Coal Authority—is responsible, it is to be forwarded to the Coal Authority, which will pass it on or deal with it as the case requires. In other words, we 900 have already provided for inquiries from elsewhere and this will of course include inquiries from owners and occupiers of adjacent land.
The noble Lord began with the question of blight. I apologise for dealing with the issue at some length, but it is important. He referred to the disclosure on the search form of the presence of old mine shafts. He mentioned in particular the circumstance where a shaft may be disclosed on the current version but would not necessarily have been on earlier versions. The issue has caused some public disquiet. The Law Society and British Coal have commendably acted to advise those concerned. In December they issued a joint press release advising that, if an old shaft had been or can be located and properly treated in normal circumstances, there should be no problem. That is worth emphasising because it shows that the impression that has gained currency in some quarters that such a disclosure renders that property worthless is in fact wrong.
I hope that that will help the noble Lord in replying to his honourable friend's constituents. Although it will always depend on the circumstances of the case, there may be instances where the property owner has a right to remedy. The Law Society and British Coal have made available the names and addresses of a number of firms which at no charge will supply initial advice to concerned members of the public. I have been encouraged to learn that British Coal and the Law Society have found that to date there have been very few cases of people living in houses where shafts have recently been disclosed which were not disclosed when they originally bought the property. It would appear, therefore, that the problem is not as severe as I thought it was when I got to my feet. I hope that that explanation is helpful.
§ Lord Morris of Castle Morris
I am grateful to the Minister for that reply, which was most helpful. I am pleased he agrees that we have uncovered a problem. The fact that I have enunciated it and he has replied to it might go some way to reassure those who are in the blighted position, though I am not sure that we have solved the problem completely. We shall need to think about it and to take further and better particulars and advice from our advisers. I thank the noble Lord for all that he has said and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 42 agreed to.
§ Clause 43 [Persons responsible for subsidence]:
Lord Morris of Castle Morris moved Amendment No. 59:
Page 37, line 30, leave out from ("substitution") to end of line 32 and insert:
§ The noble Lord said: In moving Amendment No. 59, I shall speak also to Amendments Nos. 60, 63, 90, 91 and 92. They are somewhat more distant but appear to 901 have been grouped with everyone's consent. I hope that Members of the Committee opposite will not consider that they are in any way irrelevant; they are connected.
§ We are concerned to focus on Clause 43, which sets out responsibilities for subsidence after the restructuring date in relation to the Coal Mining Subsidence Act 1991. Presently, in the event of any surface damage, there is a single point of contact: good old British Coal. British Coal's Surface Damage Unit officers conduct regular advisory and consultation meetings with representatives of the planning authorities in various areas, who, in turn, are able to assist subsidence claimants with their claims.
§ When the restructuring date has passed, the responsibility for subsidence will pass to a number of persons where active coal mining continues. For damage subsidence arising from past mining operations and redundant mine sites with no boundary with an active mine, the Coal Authority will assume all responsibility. Private coal operators will continue to be responsible for subsidence arising from mining operations prior to their ownership or leasehold of a mine—that seems clear.
§ The DTI's Coal Division maintains that those proposals are simple and workable and that operators will continue to be bound by the 1991 Act. In the event of a lease of licence being transferred, the responsibility will also be transferred. Where different operators share boundaries with each other, then responsibility will be a matter of mutual interpretation of the interaction agreement to which both (or all) will be parties.
§ In the event of insolvency, the Coal Authority will assume responsibility and claimants will then be required to file their claims with the authority. Operators will be required annually to inform residents within their areas of responsibility of their rights—that is, the residents' rights—and the name and address of the operator will be clearly stated in the locally issued Guide to Claimants' Rights. Operators are also required to file, with local authorities, their projected five-year extraction plan, which they must update and amend on an annual basis. In the event of a claimant failing to obtain proper redress, he or she may appeal to the subsidence advisor who may consider the case and make due recommendations. What a lot of things to do!
§ The procedures set out in Clause 43 could perhaps be described by the ill-intentioned as a bureaucratic recipe for confusion and, above all, delay. If the Coal Authority, as the licensing authority, requires compensation claims to be met as a licensing condition, the authority itself should be the single point of contact for claimants. Also, considering the extent of subsidence responsibility that the authority will assume after the restructuring date and the extent to which it will continue to inherit such responsibilities as mines exhaust, it would seem to be an obvious and simple solution for all subsidence claims to be referred through the Coal Authority.
§ In recent weeks further detail has emerged on the issue of subsidence in the form of six statutory instruments and a draft subsidence guide to claimants. It is, perhaps, unfortunate that the content of the statutory instruments was not drafted into the Bill from the very 902 beginning—indeed, that would have helped—thus enabling both Chambers to have the opportunity of full and proper scrutiny.
§ To us, it is essential that the Coal Authority from the outset should have the power to obtain indemnity against all payments and expenses incurred under subsection (1) of the clause by the person who is the responsible person. In the event of insolvency or the transfer of a licence, the authority should have the means by which claimants can be compensated with the compensation recovered by the authority from the subsequent operator. Accordingly, we propose Amendment No. 59.
Amendment No. 60 inserts a new subsection (1A), which reads:
The Authority shall be entitled to be indemnified against all payments, costs and expenses made or incurred under subsection (1) above by the person (if any) who is the responsible person under subsection (2)".
§ The purpose is to provide one respondent—that is, a one-stop shop—for all claims made in respect of subsidence damage, and to ensure that claimants do not suffer by any failure of licensed operators to pay proper compensation.
The Government may argue that elegant simplicity such as we propose is not preferable to the Byzantine ingenuity of Clause 43 because they have thoughtfully, and in their wisdom, provided a subsidence adviser. But, the draft, Subsidenc: Guide to Claimants' Rights, recently issued by the DTI clearly states that the subsidence adviser will have no statutory powers and that his rulings will,
not have the force of law".
The guide goes on to say that the prospect of the involvement of the adviser may be enough to force operators to settle disputes as quickly as possible. If you believe that, you will believe absolutely anything. This is at least, and at best, wishful thinking. The sad fact of human nature is that we are all sinners, and people often do not do what they know they should do until they are threatened with certain dire consequences if they do not —witness the Serbs in Bosnia.
§ Having stated that the adviser has no more than the powers to make critical judgments, and having failed to indicate clearly the stage at which he or she will intervene, there is very little reason to believe that: the, appointment of this terrifying ombudsman will have any deterrent effect whatever on a colliery operator who is intent on delaying or deferring costs, as well he might. It is the absence of a uniform procedure for claimants and the reliance on the claimants to obtain compensation claim documents from operators which is bound to complicate and prolong the claims procedure.
§ We suggest that if the scheme is to work effectively it should be simple and operated from the beginning by a public body in whom the public can have confidence. The Coal Authority, which from its inception will inherit the bulk of historical liabilities and which will continue to inherit subsidence liabilities as collieries close in the future, should be that public body to which all surface damage claims are referred. I beg to move.
§ Lord Prys-Davies
I am glad to support the amendment which has been moved by my noble friend 903 and I am also glad to acknowledge that the subject of mining subsidence claims is dealt with at some length in the Bill—that I readily acknowledge. I welcome the six draft SIs, but of course we do not know how well they will work in practice. I also welcome the appointment of the subsidence adviser, but of course that particular appointment presupposes that there will be disputes between the householder who submits his or her claim and the mine operator. I suspect that, in practice, difficulties may arise in two main areas. First, there is the obvious example where the mine operator appoints a receiver and eventually goes into liquidation. If a claimant is caught up in that net there will inevitably be a long period of uncertainty where it will be impossible to get a decision on the claim. In my view, a claimant ought not to be a part of that net.
The second situation which will present problems is the case where the licensee is entering into an area which in the past has been heavily mined. I am advised by chartered surveyors who have immense experience in settling subsidence claims in South Wales that in that kind of situation, where the operator enters into such an area, there can be arguable cases as to the cause of the subsidence; or, to put it in the language of causation, which is the proximate and which is the remote cause? It seems to me that the Minister in another place did not really address those difficulties in this potentially troublesome area. We would say—as my noble friend said—that we would much prefer householders to be able to look to the Coal Authority to judge their claims, subject obviously to the Coal Authority being indemnified by the licensed operator if the responsibility is his.
I believe that the amendment has two other advantages. These have been referred to by my noble friend. We have to accept that we are moving from a situation in which all claims for subsidence are now considered by a single central body for Great Britain, the Coal Board, to a situation in which they will be dealt with by tens if not hundreds of different operators, most of whom will have no experience of handling claims for subsidence damage. Therefore, it follows that there will be great variation in the way claims are treated.
It seems to me wrong that the way your claim is treated depends on the part of the country in which your claim originates. In certain parts there are likely to be operators who will be very resistant to claims. They will want to incur the minimum expenditure possible on subsidence.
Therefore, we invite the Minister to consider the principle that in future the treatment of claims should not vary in any significant way in different parts of the country. For claimants to be treated differently depending on the area in which they live is unfair. We believe that the best way of achieving parity of treatment is to place the responsibility for testing claims on the Coal Authority.
I turn to the second advantage. It is relevant to remind ourselves that in certain circumstances the Coal Authority will have responsibility for subsidence. That is clear. That being so, the authority will need to 904 maintain a substantial claims investigation department. I believe that that claims department should also handle the claims made against the private operators.
Against that background it would be in the best interests of all householders and claimants if the Coal Authority continued to have sole responsibility for the investigation and payment of all claims, subject to a right of recovery where appropriate, against the operator.
§ The Earl of Lytton
As Amendments Nos. 90 to 92 inclusive are included in the grouping I should like to speak to those amendments specifically. However, before I do so I wish to say that I believe that Amendment No. 59 moved by the noble Lord, Lord Morris, represents a case which needs to be answered.
The Minister's right honourable friend in another place said in Standing Committee D on 10th February something along the lines that if an operator could not meet the obligation, then, first, there would be a remedy through the courts. If that failed and there was insolvency, the Coal Authority would pass the mine on to a new operator, although I cannot see who would wish to take it on in those circumstances. Thirdly, financial security should have been ring-fenced and available to cover those costs. If none of those worked, then, and only then, the claims would be handled by the Coal Authority. That is too long-winded. It makes for a very indirect line of responsibility. I was particularly interested in the comments that the noble Lord, Lord Prys-Davies, made about chartered surveyors dealing with such cases. I have never dealt with a coal subsidence case, so I cannot speak on that subject.
In cases of insolvency it is my experience—and I have some experience in this area—that it is seldom the result of just bad luck and financial mismanagement. These are companies which have tended to cut corners. They cut environmental corners; they cut employment corners; and they cut insurance corners. One needs to consider the whole background.
I do not believe that the steps outlined by the Minister's right honourable friend can do anything other than impose unreasonable delay and great uncertainty. It looks very much like a bureaucratic version of pass the parcel. Unless some reassurance can be given, I do not believe that the Bill can be left as it is. I shall be interested to hear what reassurance the Minister can give.
Perhaps I may speak to Amendments Nos. 90 to 92 which stand in my name on the Marshalled List. I had anticipated that they would arise on Schedule 9. However, I am happy that they are dealt with as they apply to subsidence. The amendments make further changes to the Coal Mining Subsidence Act 1991. The provisions extend the entitlement to compensation for consequential losses to all property and remove the limit which restricts compensation to small firms only. I remind the Committee that small firms are those employing 20 or fewer people.
In another place, in Sub-Committee D on 10th February, the Minister for Energy said:The Bill deals with the subsidence because it allows for the continuation of an extraordinary right—the right to undermine other people's property".905 That has been referred to previously in the debate. It is an exceptional matter of which we have to take account.
The 1991 Act made provision for dealing with small businesses but it does not cover all businesses. That is my concern in this group of amendments. It is a narrow point. It has never been explained to me why this uniquely discriminatory and arbitrary approach is adopted. Are larger companies in some way better breeched to shoulder the losses for themselves? Why is that? I shall be interested to hear what the Minister says.
The Bill gives unique powers to a private operator. In the hands of the state, those can be justified only for reasons of overriding national interest. I believe that it is wrong to pass those powers on in the context of the Bill without some good explanation as to why such provisions should remain. Leaving matters as they are is not an option in the absence of an explanation.
I am advised that there is clear evidence to support the view that the risks of subsidence to larger businesses —if we are talking of those employing more than 20 people, they may not be very large—are real. They are not speculative. I do not believe that there will be a realistic possibility to insure against those risks. I have some professional experience of dealing with insurance companies and with insurance valuations. Therefore I can speak with some authority, coming from an area of heavy weald and clay in the middle of Sussex where we know a thing or two about structural movement.
I find it difficult to accept that the polluter pays principle, about which we hear so much, is being properly applied even if that polluter is a nationalised industry and the pollution took place some considerable while ago. However, on Amendments Nos. 90 to 92, the real point is this. There is a grave economic disincentive to inward investment in the very areas which may be most in need of reinstatement both physically and economically. I cannot underscore that point too much. What large employer will take the risk in those areas which so badly need investment? How many businesses employing fewer than 20 people will be necessary to make good that deficiency? I suspect that it is a large number.
I look forward with great interest to hearing what the Minister says in the context of the acknowledged need to attract new business in deep-mine areas.
§ 9.45 p.m.
§ Viscount Goschen
As has been described, the six amendments deal with various aspects of coal mining subsidence. Amendments Nos. 59 and 60 would give the Coal Authority the job of meeting all subsidence claims, including those which are the financial responsibility of licensees. We cannot agree that that would be desirable. In our view, it is essential that coal mining companies should have, and be seen to have, real and meaningful responsibility for their own subsidence. They must accept their responsibility to meet claims for damage due to their mining.
There are real practical difficulties in separating the meeting of subsidence claims from the actual liabilities themselves. The liabilities, I believe it is agreed, must rest with the mining companies. Even if the authority were to settle claims, the companies would still have to 906 pay the bill and would, no doubt, have an understandable desire to be involved in the way in which claims were settled. The Government maintain that that would be a recipe for confusion in which claimants would be unclear as to who they were really dealing with.
That is the principal concern on which the noble Lord, Lord Morris, bases his argument. The companies must be seen to have real and meaningful responsibility for the subsidence which they cause. If the Coal Authority meets the claims, that will take away the direct link which ought to exist between the mining company and those who are affected by its activities.
There are, of course, strong provisions in the Bill designed to make sure that companies meet their responsibilities. I am sure that the companies will see the benefit of establishing good relations and good reputations for the handling of claims, both in terms of their standing in the local communities and in relation to future applications which they might make for planning consent.
For those reasons it would be wrong, in the Government's view, to obfuscate the real responsibilities of the companies to the local community by placing the Coal Authority as a buffer between the two parties.
To address the point raised by the noble Lord, Lord Prys-Davies, who focused on the question of blame and responsibility for the subsidence, under the provisions of the Bill the blame is not really an issue, The issue is whether the subsidence occurred within the, area of responsibility of the operator, in which case it is the responsibility of the operator, or without that area, in which case it is the responsibility of the Coal Authority.
I turn to the question of the possible insolvency of an operator. We believe that it would be quite wrong to start from the position where everyone is implicitly turning to the taxpayer. The Coal Authority will have a statutory duty to look carefully at the financial standing of mining companies, especially in relation to their ability to meet subsidence liabilities. Where necessary, the authority will require operators to form special. financial security arrangements and the Bill provides that those arrangements can be set up so as to ensure that the security is effectively ring-fenced for the protection of subsidence claims.
Subsidence liabilities can, of course, generally be predicted and we expect operators to budget for and, meet their own liabilities. No business would conduct its mining except on the basis of confidence about the amount of any consequent liabilities and its ability to meet those liabilities.
If an operator attempted to avoid his obligations to subsidence claimants it would be for them in the first instance to seek redress in the courts. If an operator cannot meet his liabilities—for example, because of insolvency; the point addressed by the noble Lord, Lord Prys-Davies—the mine could well pass on to a new operator who would pick up subsidence claims in the usual way. Alternatively, the financial security would be available.
In the end, if an area of responsibility were to be terminated rather than re-assigned in the process that I have described, then claims would be handled by the 907 Coal Authority in the same way as claims from other parts of the country where no company was allocated an area of responsibility.
Turning to Amendment No. 63, the present position is that British Coal have very considerable expertise in matters relating to mining subsidence, from predicting its incidence to remedying its effects. They have developed this expertise because they need it to run their business and meet their obligations.
The concern behind Amendment No. 63 seems to be to ensure that such expertise is not lost. But it will not be lost. It will be preserved, and developed, for reasons very similar to those which led British Coal to develop it in the first place. It is quite right that that expertise and that resource should be retained. And the reason they should be retained is that they will be vitally important. The mining companies will be obliged by their licences to provide regular, detailed forecasts of expected subsidence and the costs of the damage. The Coal Authority will have to approve those proposals regularly as a condition of consent to continuation of mining. Both will need expertise and resources, therefore.
So far as remedying subsidence damage is concerned, both the Coal Authority and the operators will have to meet the detailed requirements of the 1991 Act, which have been described this evening. They must be equipped to do so, including in terms of expertise, resources and experience.
Not only is Amendment No. 63 unnecessary; it is positively unhelpful. By requiring the authority to retain sole responsibility for these matters it would deny the licensees the resources that they need to meet their obligations, as well as placing a needless duty on the authority. Thus Amendment No. 63 manages at the same time to disadvantage the companies, their subsidence claimants and the authority.
Turning to Amendments Nos. 90 and 91, these would continue the position currently facing British Coal in relation to the payment of compensation due under Sections 27 and 30 of the Coal Mining Subsidence Act 1991. These sections deal with compensation for crop losses and consequential losses for small firms.
The present position is that operators are liable to pay interest even where payment was delayed because of the claimant's failures. The Bill would put an end to that, but would preserve the right of claimants to interest for any periods where payment is delayed by the operator.
Finally, I turn to Amendment No. 92, which would impose a general requirement to pay consequential loss in respect of all claims. As was described by the noble Earl, Lord Lytton, the Coal Mining Subsidence Act 1991 already makes considerable provision for consequential loss. In the case of house-owners it provides for the provision, in appropriate circumstances, of alternative accommodation and home loss payments and, as the Committee is aware, Her Majesty's Government propose to make regulations under the Act in respect of inconvenience payments and blight.
In the case of businesses, the 1991 Act provides for payments to farmers in respect of loss of farms and crop 908 losses. It also imposes a general consequential loss obligation on British Coal in respect of small businesses —currently defined as those employing up to 20 people.
This all amounts to considerable provision in respect of consequential loss. What the 1991 Act does not do is provide for general consequential losses incurred by larger businesses, which are by nature of their size better placed to deal with localised problems. To require the coal industry to make payments to reimburse loss of profit in respect of businesses generally would impose a crippling burden on it. In addition, general consequential loss is very difficult to predict and extending the right to claim it would make it much harder for the industry to predict subsidence costs. Indeed, there would be a risk that coal would be sterilised by the cost and uncertainty.
During the passage of the 1991 Act a compromise was reached. It was accepted that claims for consequential loss should be allowed in specific cases, such as small firms, where undue hardship might otherwise result. The Bill preserves that position, and there is nothing inherent in the changes that we have proposed for the industry which would justify altering that position. In the light of those explanations of this broad group of amendments, I invite the noble Lord to withdraw his lead amendment.
§ Lord Morris of Castle Morris
I have carefully examined the noble Viscount's reply. My examiner's report must be: It will not do. It is not convincing. The candidate has not fully addressed the question and has sadly failed to consider the manifest advantages of changing the system of subsidence compensation that we have put forward. He must try harder next time when we re-visit this question at Report stage, as we assuredly shall do. Meanwhile, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 60 not moved.]
Lord Ezra moved Amendment No. 61:
Page 37, line 42, at end insert ("or
§ The noble Lord said: In moving this amendment I shall speak also to Amendment No. 62. We have already dealt at some length with the whole question of subsidence. The more I have listened to the explanations, the more I have been concerned at the convoluted and complex system with which claimants for subsidence compensation will be faced. Putting forward a claim for subsidence in any case is complicated. British Coal and the Coal Board before that could not accept every claim as soon as it was submitted. A process had to be gone through. But at least people knew where they had to go. Now they are very uncertain. There could be delay and doubt.
§ We heard the Government's reasons why they feel that the obvious solution, which many from this side of the Chamber have put forward—namely, that the Coal Authority should deal with the claim in the first instance and then recover as appropriate—would not work. Nonetheless, we remain very concerned. There was a 909 great deal of sense in the point made by the noble Lord, Lord Prys-Davies, that the Coal Authority would have to retain a large subsidence section or group in order to deal with the claims that inevitably would come its way, and therefore why not deal with the lot and then reclaim.
The two amendments to which I speak do not go so far as that. They are a kind of half-way house. Amendment No. 61 seeks to provide a further degree of assurance for claimants by including in the list of persons by whom claims may be made those who:
at any time had responsibility for subsidence affecting that land
That gives further protection to possible claimants.
§ I should like particularly to emphasise Amendment No. 62. If the Government are adamant that they do not wish the Coal Authority in the first instance to deal with all the claims, they ought at least to consider whether, after an interval of delay on the part of the operating company—we have said three months—the claimant could turn to the Coal Authority. The noble Viscount spoke about going to the courts. He knows as well as we do that that is a lengthy and costly business which increases the degree of uncertainty. I believe that, after a certain period of time has elapsed and when it is quite obvious that the operating company is seeking to delay, as well it might, there ought to be a right that the claimant could turn to the Coal Authority for compensation. The Coal Authority could then reclaim, including the costs of delay, from the operating company.
§ In those circumstances the operating company would not be able to argue at all about whether the claim was properly settled. It would have been given the chance to settle the claim but would deliberately have delayed (in the supposition that I make) and therefore it would have to bear the consequences. On this issue I should like to emphasise to the Government that there is a great deal of uncertainty among the people whom presumably this measure is intended to help. The provisions, as they are laid out in the Bill at the moment, are not at all satisfactory. If the Government are not prepared to go the whole length that we are proposing, at least there should be a half-way house to give claimants some degree of reassurance. I beg to move.
§ 10 p.m.
§ Lord Peston
Perhaps I may intervene briefly on these amendments as my name appears on them. We shall probably have to return to them on Report but there are some additional points that need to be made.
One point in particular must be made in connection with the response of the noble Viscount to the previous amendment. It is obvious that any subsidence caused until the Bill becomes law must be the responsibility of the state—of British Coal—which means the taxpayer. There can be no doubt about that. A public operation will have caused the subsidence and there is no way that one can argue that a blank cheque cannot be written for it. The blank cheque has already been written because the organisation was in the public sector. I hope that when the noble Viscount gave his answer he was not trying to back away from that.
910 The only question that arises in relation to Amendments Nos. 61 and 62, as the noble Lord, Lord Ezra, said, concerns what happens in the future. 'The 1991 Coal Mining Subsidence Act, which I remember dealing with from these Benches, is most satisfactory. We went to a lot of trouble to congratulate the Government on the Act and say that they had at long last solved a problem which had troubled many people for a long time. What worries me is that in this new phase we may be undermining—that is not meant to be a pun—a perfectly good piece of legislation.
I shall come back to this matter. My only point is that in so far as the licensee is the cause of the subsidence, the licensee must be responsible. The Coal Authority will have granted the licence and, speaking as an outsider, I do not see how the Coal Authority can suddenly say that the matter does hot concern it. Without conjuring up the usual images, we are concerned with a lot of relatively small people whose lives may be ruined by subsidence. It cannot be said that it is only a small matter. It may be small to the Treasury, but it can ruin people's lives.
That is why Amendment No. 62 is vitally important. The Coal Authority must be pressurised to intervene. Even if the problem is felt to be the fault of the licensee, the Coal Authority must act on behalf of those affected, bail them out and, if necessary, get their money back. At this late hour I do not expect the Minister to say that he can do that, but in terms of the impact of the Bill it is serious enough for the Minister to at least reflect on the matter and see what can be done. In particular, we do not want to undermine the 1991 Act.
§ Lord Strathclyde
Something interesting is happening in the course of this debate. There is a substantial difference of opinion about the regime between myself, the noble Lord, Lord Ezra., and the noble Lord, Lord Peston. The new regime is as clear as crystal. I find it surprising that noble Lords opposite somehow think. it is confusing or that people will not know where they stand. It is absolutely plain. My noble friend Lord Goschen explained it rather well, but I shall do so in my rather more humble tones and that may help.
When the Coal Authority gives a licence to someone to take over a mine, a line will be drawn on the ground. On one side of the line the claim goes to the Coal Authority and on the other side of the line it goes to the mining company. The reason why it must go to the mining company is because the mining company must bear some responsibility for dealing with the claims. We made absolutely clear under Clause 2 that the mining company only obtains its licence when the Coal Authority is satisfied that it has the right kind of financial backing to deal with the claims.
If that is not simple then nothing is. People will know exactly where to go to have their claims sorted out. Noble Lords opposite may pose the problem of the licensee going bust or not dealing with the issues, but then again the Coal Authority is under an obligation to make sure that the problem is sorted out. That deals with the remains of my noble friend's explanation.
§ Lord Strathclyde
It cannot be in the interests of the mining company to indulge in undue delay. It will agree to the same kind of good neighbourly policy under which British Coal has always operated. When the noble Lord, Lord Ezra, comes up with Amendment No. 61, which allows claims to be made against anyone who had previously been the licensee in the area, I suspect he thinks he is being helpful. However, I think the amendment would have a profoundly negative effect on the scale of future deep-mining activity. That is because in the event of a sale the vendor would never be completely free from the risk of future claims. I have explained the regime which we propose and which I think is simple and clear.
A major advantage of that regime is that claimants know the identity of the person responsible for subsidence in their area. The noble Lord's amendment would remove this clear structure since it would not be clear who would bear the primary responsibility for subsidence damage. Therefore, his amendment is unnecessary.
Amendment No. 62 appears to be intended to deal with possible delays in the discharge of subsidence damage claims by mine operators. However, again its effect could be to delay and increase the cost of such remedies in many cases. It forces the Coal Authority to step in and take over the discharge of any claim which was not completely dealt with within three months of a claim being accepted as valid. This would happen regardless of whether the mine operator was actively dealing with the claim. Again I foresee real disadvantages for everyone concerned. I am not just trying to protect the privatised company. I am trying to protect everyone involved in the chain.
A claimant whose repair was proceeding satisfactorily towards completion would at the very least face delays arising from the handover in any case where the repair needed more than three months to complete. The Committee will appreciate that to ensure that they are done to a proper standard, many repairs take longer than three months. Worse still, the amendment might provide an incentive to corner-cutting in order to complete work within the three-month time limit. I understand that when the noble Lord writes "three months" into his amendment he does not necessarily mean three months. It could be six months or 12 months. But again I think the same point applies.
As I said at the beginning, the Bill provides a simple and clear structure for claimants which avoids unnecessary delays. The Bill gives licensees a strong incentive to establish a good reputation in their discharge of subsidence claims. Householders will have rights of access to quick, cheap and effective dispute resolution procedures and the help of the subsidence adviser if their claim is mishandled. This includes complaints about delays.
Our proposals would bring forward the essential features of the arrangements currently operated by 912 British Coal, which everyone welcomes. Each mine operator will be responsible for claims involving subsidence damage which arise within his area of responsibility. Making mining companies directly responsible for claims will ensure that they are aware of the damage for which they are responsible and deal face to face with the persons affected.
In conclusion, our proposals already contain adequate measures to deal with delay. Mine operators and the Coal Authority will be liable to investigation of such complaints by the subsidence adviser, whose recommendations might result in the award by the Lands Tribunal or arbitrator of an inconvenience payment. Under the operators licences, mining rights will be conditional on continued compliance with their subsidence obligations.
I like to think that we have covered the problems envisaged by Members of the Committee opposite and by the noble Lord, Lord Ezra, and I hope that they agree.
§ Lord Peston
I am sorry, but I certainly do not agree. I am not sure whether the noble Lord is being wilful in refusing to understand the argument, but I shall try again. If there is a unitary authority called British Coal and there is subsidence, one knows exactly who is responsible and who is causing it. One goes to them. It does not mean that one just writes a letter, "Dear Sir, I have had subsidence. Please send cheque by return". But at least one knows who one is dealing with and how to set about dealing with them.
We now have a new problem. Perhaps I may first make the logical point where I agree with the Minister. The person responsible should be the person who then has to bear the cost. That is not at issue. The Bill says that because it refers to the responsible person. The trouble is that there are two responsible people from now on; there is the Coal Authority responsible for subsidence, looking backwards and the licensee responsible for subsidence, looking forwards. That is the nature of the problem. If I say that I am suffering from subsidence the licensee can say, "Don't tell me about that. That is not being caused by my activities; that was caused in the past". I put the matter differently: if that is not the case—namely, there can never be any argument as to who the responsible person is—then there is no trouble. My reading of the Bill is perfectly clear. Not only can there be argument but there always will be.
§ Lord Strathclyde
When the noble Lord possibly accused me of being wilful I thought that the noble Lord was, but that is not the case. The noble Lord has misunderstood the situation. When I explained about the line being drawn around the area of responsibility, the mining company takes on the liability and responsibility for all claims for all subsidence—it does not matter when it was caused—within that area. Everything outside it is dealt with by the Coal Authority. If the noble Lord misunderstood that point, I suspect that by now he is deeply comforted.
§ Lord Peston
I am not comforted. I certainly did not understand that point. I am now wondering whether the licensees will understand it when it comes to obtaining 913 licences. Is the noble Lord seriously saying that someone is going to bid for a licence incurring the complete liability for all subsidence within the pits from that point on? If he is saying that, then it is news to me. I certainly hope that Rothschilds make clear beyond a doubt that that is what you are buying when you buy a licence. I go back to my earlier point: who in their right mind would buy such a licence? That is completely beyond me.
§ Lord Strathclyde
it would be up to the private sector to decide. This point was made absolutely clear by my noble friend Lord Goschen. Even I understood what he was saying so that I was able to explain it just now.
§ Lord Prys-Davies
I should like to reserve my position as regards this area of liability. I note what Mr Eggar said:It will be possible within an area designated for lease and licensing precisely to determine where the contingent liability would lie for new operators".—[Official Report, Commons Standing Committee D, 10/2/94; col. 175.]The advice which I have received is that the area is blurred and that these words of Mr. Eggar, with the greatest respect to him, border on unreality. I am instructed that there is an area of possible argument here. I wish to read what the Minister has said, take advice on that and reserve the right to come back to it at Report.
§ Lord Peston
Before we conclude this matter, perhaps I may make sure that I understand the point because it is very serious. A licensee will be responsible for all subsidence damage from the moment he gets a licence for the pits. At that point the taxpayer will cease to have any responsibility for that. Is that what the Minister is saying? He is saying that the licensees will know that and that at this time they do know that. If the noble Lord says that, I find it quite interesting.
§ Lord Strathclyde
Whether the licensee will know that or not will be up to him and his legal advisers. As far as I am concerned, it is clear to me and my noble friend. I hope that by now it is clear to the noble Lord. Let us imagine that the Palace of Westminster is a mine and the noble Lord, Lord Peston, is given a licence to mine it. The Coal Authority will draw a line around the Palace of Westminster and all subsidence liabilities within that area will fall to the noble Lord, Lord Peston, as the representative of the new mining company.
§ Lord Strathclyde
No matter when the subsidence was started off. The operators accept all the subsidence which subsequently occurs no matter when it may have occurred. It is a pity that my noble friend Lord Crickhowell is not here. It would not matter even if the mine had originally operated in the Phoenician era.
§ 10.15 p.m.
Not too long ago the noble Lord, Lord Peston, very much amused the House and was, in fact, extremely funny. However, with his usual charm 914 and great expertise my noble friend Lord Strathclyde put him down. I would not like to try to be funny and, if I was, my noble friend would put me down. But it seems extraordinary to me that noble Lords opposite are looking after and attending to the interests of landowners and people who will be potentially damaged by both deep mining, new or present, past or future, and opencast mining, yet on this side of the Committee the Government and my noble friend seem to be going entirely against their interests.
Perhaps I may beg my noble friend to recognise that, as the noble Lords, Lord Ezra and Lord Peston, have said, many people affected by the provisions of the Bill are not landowners in any way but small householders, small people, with interests, and they will believe—whether rightly or not—in what my noble friend has just said and in what the noble Lord, Lord Peston, has just extracted from my noble friend—because it was certainly not understood previously by many of us that the operators would be entirely responsible for what went on within what he called the "circle" of their responsibility. We must be most grateful to my noble friend the Minister for making that clear, to the noble Lords, Lord Peston and Lord Ezra, for getting that statement from my noble friend and, of course, to my noble friend Lord Goschen.
§ Lord Ezra
We have had a long discussion on this issue and I think that it is time to draw it to a close. should like to be clear on only one small point. Am right in supposing that if a claimant against one of the operating companies (which has the responsibility that has been fully described) feels that his case is not being properly or expeditiously handled, he can have recourse to the Coal Authority for help?
§ Lord Strathclyde
He can go to the subsidence adviser if the claim is mishandled. Ultimately, the mine operators will be liable to investigation of such complaints by the subsidence adviser, whose recommendations might result in the award by the Lands Tribunal or arbitrator of an inconvenience payment. In other words, the answer to the noble Lord is yes.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 62A not moved.]
§ Clause 43 agreed to.
§ Schedule 6 agreed to.
§ Clause 44 agreed to.
§ Clause 45 [Information to be provided by responsible persons]:
§ [Amendments Nos. 63 to 65A not moved.]
§ Clause 45 agreed to.
§ Clause 46 [The subsidence adviser]:
Lord Morris of Castle Morris moved Amendment No. 66:
Page 40, line 20, leave out ("may") and insert ("shall").
§ The noble Lord said: I shall speak briefly also to, Amendments Nos. 67 and 68. The purpose of the amendment is to ensure the appointment of a subsidence adviser with powers and resources and teeth. The 915 Government hope that self-regulation by means of an interaction agreement will lead to speedy agreement in matters of dispute and subsequently redress. It is our view that such a light hand of regulation will only encourage bad practice and unaccountability. It is for that reason that a subsidence adviser with powers of intervention and enforcement is required. Mandatory powers as opposed to discretionary functions should be put in place from the beginning in order to ensure that the public is confident that best and speediest practice will prevail. A subsidence adviser who can do nothing but offer good advice will be worse than useless.
§ Amendments Nos. 67 and 68 have the object of ensuring that the subsidence adviser can obtain all the information necessary to carry out his investigations. There seems to us no reason why the information to be supplied by the authority should be restricted to information relating to subsidence claims for which it is responsible. Since the authority will be holding considerable information from its licensees, it is likely to be administratively simpler and therefore cheaper for the subsidence adviser to obtain information from the authority, whoever is actually responsible for it.
§ The subsidence adviser should, in our view, be able to look at the sequence of information provided by an operator to the authority and compare it with any matters put forward by an operator in defence of a subsidence claim to check the consistency of that information. The subsidence adviser will hardly be able to carry out his functions unless he is entitled to obtain information from all those operators who may have contributed to any damage, including those who may not be the current designated responsible person. That seems to us to be perfectly clear.
§ If we make the comparison, in other privatised industries regulatory procedures are based upon the fullest disclosure of commercial information. We can see no possible reason why in the case of the coal industry information regarding operators' activities could not be scrutinised by a statutory body, in confidence, in exactly the same way. That would give the subsidence adviser some powers, some information, some teeth and some authority. I beg to move.
§ Lord Strathclyde
We come here to the amendment dealing with the subsidence adviser about which we have talked to some extent earlier. The Bill gives the Secretary of State power to appoint a subsidence adviser. The amendment would seek to give him a duty to do so. But, as the Committee knows because it has seen the draft regulations, we intend to use the power to put the subsidence adviser in place at the first opportunity. The amendment is therefore unnecessary.
Turning to the obligation to assist the adviser, I think it would help the Committee if I explained the position under the Bill and the operating licences. The Bill places the Coal Authority under a duty to assist the adviser where it is the responsible person; that is to say, when he is looking into matters to do with claims against the authority. The same duty is placed on responsible persons by their operating licences, model drafts of which have been published. The duty on operators 916 appears in licences, not the Bill, because the appropriate method of enforcing against bodies subject to private rather than public law is through the licence enforcement machinery. The Coal Authority will thus have powers to make a reluctant licensee co-operate with the adviser.
The amendment seeks to incorporate in the Bill the duty on licensees. As the Committee will have gathered, I would be the first to agree that the duty should apply to licensees. But I do not think that it should appear in the Bill because that would make it harder for the adviser to make progress if an operator were uncooperative. Is the adviser supposed to take the operator to court? Is there to be a criminal sanction, with the high standard of proof necessary for conviction? Resort to those mechanisms would almost certainly involve significant delay. In other words, they would worsen what may very well be the problem that the adviser is attempting to investigate. I agree with the noble Lord, Lord Morris, that we are trying to find the right kind of mechanisms to solve those problems if they were to arise.
The last limb of the amendment would oblige the Coal Authority to provide the adviser with information and assistance in any case rather than only those where the authority is the responsible person. This proposal is flawed because in practice the kind of information the adviser will want in connection with investigations into licensees' claims handling will not be in the possession of the authority. But I take the spirit of the amendment to be that the Coal Authority should be subject to a duty to assist the adviser in all areas of its activity, and not only in its role of discharging subsidence claims.
The amendment is unnecessary because, as I said, it is already proposed that the authority should enforce the obligation on licensees to assist the adviser through the licence enforcement mechanism. As I explained, that is the appropriate approach and why the obligation appears in the licences rather than the Bill.
I understand the noble Lord's anxiety and I believe that we have met it through a different mechanism. I hope that he agrees.
§ Lord Morris of Castle Morris
I am grateful to the Minister for that explanation. No, I do not agree. If I were offered the job of subsidence adviser on the terms currently laid out I would instantly demand a salary of not less than £1 million per annum to take it on. It would be no job at all. I would have no authority, no staff and no mandatory power to get anything done. At present, the situation would be difficult to fill because no one who was any good would want the job as stated.
I thought that I detected a chink of charity in the Minister's voice. I may be wrong; perhaps it is late at night and he is not proposing to weaken. Will he go so far as to say that, without commitment to anything further, he will take the question away and see whether in the blinding light of hindsight the subsidence adviser should not have slightly more power and authority? If he considers that there is anything in that, will he come back with an amendment at a later stage or consider concocting one with me? That would be helpful.
§ Lord Strathclyde
The noble Lord has made a kind offer. He is right that sometimes the light of hindsight is blinding. It could be that the idea behind the noble Lord's amendment is worth merit. Therefore, I would like to accept his offer without commitment. I will look carefully at the issue and if we consider that there is something which we have overlooked I shall produce an amendment or suggest an amendment for the noble Lord.
§ Lord Morris of Castle Morris
I am grateful to the Minister. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 67 and 68 not moved.]
§ Clause 46 agreed to.
§ Clause 47 [Disputes etc. as to subsidence matters]:
Viscount Goschen moved Amendment No. 69:
Page 42, line 14, at beginning insert:
("Subject to subsection (4A) below,").
§ The noble Viscount said: In moving Amendment No. 69, I shall speak to Amendments Nos. 70, 71 and 72. The need for Amendments Nos. 69, 71 and 72 is simply to clarify certain matters relating to enforcement where an arbiter in Scotland requires a person with responsibility for subsidence to take steps for remedying any contravention of a subsidence requirement.
§ Amendment No. 70 would rectify a minor drafting defect. Clause 47(4) provides that where a dispute about subsidence has been referred to either the Lands Tribunal, under Clause 47(1), or an arbitrator, under regulations made under Clause 47(2), they are to have the power to award compensation for inconvenience caused by the contravention of a subsidence requirement where this does not otherwise fall to be compensated. Clause 47(4) (c) refers to compensation not falling to be compensated for apart from "the regulations" when it should have referred to "this paragraph". The amendment puts this right.
§ If hope that the Committee will accept these somewhat technical amendments. I beg to move.
§ Lord Peston
I entirely accept that the amendments are technical. Certainly, I am totally lost as to how Scots law got into the matter all of a sudden. However, having freely admitted that my understanding of the Bill was rather limited in regard to the previous amendment, I cannot forbear to point out that the Minister told me that 918 there can never be any question of who is responsible. The whole clause is about dealing with the situation where just who is responsible is in doubt; in other words, it must be possible if we need Clause 47.
As the Lands Tribunal will include any question as to who is the person with responsibility, it simply cannot be right. Either we do not need Clause 47 or the Minister must be wrong in telling me that there can never be any doubt as to who is responsible. I made that comment just to amuse myself at this late hour. Perhaps, in due course, the Minister and I can have a chat about that aspect. As I said, I have no objection to the present amendments which seem to me the most admirable, technical amendments that I have seen for many a long day.
§ On Question, amendment agreed to.
Viscount Goschen moved Amendments Nos. 70 to 72:
Page 42, line 29, leave out ("the regulations') and insert ("this paragraph").
Page 42, line 29, at end insert:
("(4A) In the application of subsection (4) (b) above to an arbitration in so far as relating to subsidence affecting land in Scotland, the words "by order" shall be disregarded and the reference to requiring the person to take remedial steps shall not be construed as prejudicing any other provision of Scots law as respects enforcement of a decree arbitral.").
Page 43, line 12, after ("above") insert ("(or, as respects the application of that subsection mentioned in subsection (4A) above, a decree granted by virtue of subsection (4) (b))").
§ On Question, amendments agreed to.
§ Clause 47, as amended, agreed to.
§ Clauses 48 and 49 agreed to.
§ Schedule 7 agreed to.
§ Clauses 50 and 51 agreed to.
§ Viscount Goschen
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
§ House resumed.