HL Deb 01 March 1994 vol 552 cc936-7

2.54 p.m.

Baroness Fisher of Rednal asked Her Majesty's Government:

Who will be responsible for compensation paid to home owners suffering from subsidence of their properties caused by mining after the privatisation of British Coal.

Viscount Goschen

My Lords, this matter is dealt with in legislation currently being considered in another place. That legislation provides for each mine operator to be solely responsible for claims involving any subsidence damage which arises within his area of responsibility, which will be defined in his operating licence. Everywhere else, the new Coal Authority will have the responsibility.

Baroness Fisher of Rednal

My Lords, is the noble Viscount aware that in South Wales subsidence: is perhaps more serious than in many other parts of the country? Up until the present time, house owners have been recompensed by British Coal. However, what will happen to home owners who suffer subsidence in the future? No one can forecast its occurrence, and it cannot be the responsibility of the house owner. Who will take responsibility for any repairs that may be necessary in such an event?

Viscount Goschen

My Lords, the structure of the Bill on the matter is extremely simple. Operators will be responsible within the areas of responsibility specifically defined within their licences. Beyond those areas of responsibility, the responsibility for subsidence will lie with the Coal Authority.

Lord Mason of Barnsley

My Lords, is the noble Viscount aware that prospective purchasers of coal mines must accept the historic liability of damage before the takeover and any subsidence damage which takes place thereafter? Will there not be a problem in the coalfield communities if a large claim is made against the new mine owner— for example, for a fall of houses or damage on a major estate and he cannot find the finance for compensation? The question is: who is going to pay? At present, the British Coal Board pays subsidence damage. Therefore, should it not be the responsibility of the proposed new Coal Authority?

Viscount Goschen

My Lords, the historic cost to which the noble Lord refers will indeed he included. However, the Bill and the licences provide for regular monitoring of subsidence liabilities by the authority. The establishment of financial security arrangements such as trust funds can be constituted so as to be effectively ring fenced for subsidence claimants in the extreme event of insolvency.

Lord Ezra

My Lords, is the noble Viscount aware that British Coal (and, previously, the National Coal Board) developed a considerable expertise and capability for dealing with subsidence claims? Is he suggesting that the new Coal Authority will have the same degree of expertise and resources as British Coal has at present?

Viscount Goschen

My Lords, we have every confidence that the new Coal Authority will be able to perform its statutory function.

Lord Ashley of Stoke

My Lords, does the Minister recognise the fact that there is a vast difference between the protection now offered by British Coal and the provisions in the Bill to which he referred, which state that home owners will be protected so far as is practicable? That will create a massive loophole which will certainly be exploited. Will the noble Viscount explain to the House why home owners should have less protection after privatisation than they had before?

Viscount Goschen

My Lords, we do not believe that home owners will have less protection. The provision in the Bill relating to a subsidence claim is one of security and simplicity. As is the case at present, every claimant will be able to pursue one body which must discharge that claim. That is backed up by a very strong regulatory framework to protect the rights of those affected by subsidence.

Lord Elton

My Lords, if it is the case that legislation on the matter now going through the other place will eventually come to this House, would it not be proper to discuss such matters then rather than during Question Time?

Viscount Goschen

My Lords, I would not want to say anything to pre-empt the Committee stage when the Bill eventually reaches your Lordships' House.

Lord Morris of Castle Morris

My Lords, why does the Coal Industry Bill propose the repeal of Sections 34 and 35 of the Coal Mining Subsidence Act 1991, which provide important safeguards for anyone proposing to build in a mining area?

Viscount Goschen

My Lords, the 1991 Act is being amended because of the consequences of the privatisation process. As I have already stated, where the mining activity is the direct responsibility of the new privatised mine operator, subsidence within his area of responsibility will be his responsibility. Beyond that area, it would be the responsibility of the new Coal Authority.

Lord Molloy

My Lords, can the noble Viscount clear up the vital question posed by the noble Lord, Lord Ezra? The noble Lord was talking about people who are specialists and who know all about subsidence. They can give warning when subsidence may take place. However, will the private people who are to take over the industry employ such individuals so that the present state of security will continue?

Viscount Goschen

My Lords, I have detailed the fact that the Coal Authority will be monitoring subsidence. The new authority will be a public body.