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Mr. Anthony Steen (Totnes): I am sure that the House will be pleased that this important Adjournment debate has begun so early. It is good to see that we have a quality Minister here to reply: I assure him that I shall give him plenty of time to respond.
I once secured an Adjournment debate on English wine, which began at 4 pm. It ran for six and a half hours, and I think that Members who were present learned quite a bit about English wine, including the wines on the House of Commons wine list. They come from various parts of the country, and some excellent wines come from my constituency.
This debate is a little later than the English wine debate, but there is plenty of time--I think that there are two and a half hours or more--to amplify on the extraordinary misfortunes of my constituent. I am sure that when the Minister hears about the case, he will wish to do all that he possibly can to help my constituent. More important, the debate raises national and international issues, on which he will perhaps need time to reflect in considering what steps the British Government can take: if not before the general election, we will have an opportunity after it to deal with some of the issues that I shall raise.
A well-established principle of British law is that, when a state sequestrates land or buildings through compulsory purchase or otherwise, it pays compensation to the affected party at market value. Everyone in this country accepts that, and rightly so. However, I am advised that in France, planning permissions go through very quickly when the state wishes to carry out major infrastructure works because it offers more than the market value in order to get cracking. Roads, airports, railways, reservoirs and the like get built in record time as landowners fall over themselves to encourage the development that the Government wish to have on their property.
The payment of compensation to those affected by state-funded enterprises does not work so well in all European Union countries, particularly in some Mediterranean ones. Portugal, Spain and Greece do not offer the same protection or compensation to residents affected by infrastructure programmes that the state wishes to carry out. The idea of restitution--putting the affected party in no worse a position in monetary terms than he was in before the development--is a well-established principle in Britain. If a Government choose to drive a motorway through someone's garden, they are committed to restoring not the garden but the value of the property to which the garden is attached, providing recompense to its unfortunate owner for giving up his property. I am not sure that there is quite the same arrangement in Roman-Dutch law, or in the current laws of Romania, the Czech Republic or Estonia, but they are all new entrant countries that will inevitably apply for large tranches of EU money to modernise their infrastructure when they join the EU.
This debate is about compensation for individuals adversely affected by EU-funded projects in other member states; whether it should be paid; if so, who should pay it; the level at which it should be paid; and the
In Europe, EC directive 337/85 states that the environmental effects of public works such as new roads, including increased levels of noise, should be assessed and published as an environmental statement with legislative orders for schemes to allow public comment. I cite the case of my constituents, Mr. and Mrs. John Wood of South Brent in the Dartmoor national park, to illustrate how the EU has stood by and allowed EU nationals and British subjects to suffer damage and loss. They saw the value of their property in Portugal nearly halved without any compensation.
The way in which Mr. Wood conducted himself in making inquiries regarding the purchase of the property in Portugal in 1987 was exemplary. He carried out inquiries with the best possible firms and spent much time there. There were no plans for any motorways at that time. The house that he bought was known as Quinta da Madeira, a 100-year-old farm house in Portuguese style set in a peaceful and tranquil idyll with wonderful views to the south taking in the coast. It was a perfect spot to retire to. Today, Mr. Wood's property is positioned like one of those castles between England and Wales that the marcher lords built: it is high on the embankment directly over the motorway, with a sheer 100 ft drop to the carriageway below. He is very careful when he opens his front door.
In January 1991, Mr. Wood received a letter from the experienced agents that he employed, Abreu and Marques, in which the senior partner stated that no developments were planned regarding building a motorway. Two months later, the director of roads stated that the motorway was already under construction and mentioned something about lost correspondence.
The IP1 motorway, as it is now known, is constructed with pre-stressed concrete, which generates far more decibels than a Bakerloo line train coming into Piccadilly Circus. If you, Mr. Deputy Speaker, have ever been on a platform at Piccadilly Circus when a Bakerloo line train has come in, you will know that it is pretty noisy, but it is less noisy than the IP1 motorway when cars travel on the pre-stressed concrete, which went out with the ark in Britain. Hearing is believing: the noise is continuous and ever growing. I am told that, in Portugal, on warm summer evenings, as lorries pound over the surface at the speed limit or above, the noise can be heard 12 km away or more. The peace and tranquillity of the area have been shattered.
The failure of the Portuguese Government to choose an appropriate surface, such as porous asphalt--with which the Minister will be familiar--which dampens sound, or whisper concrete, as it is known, cries out for explanation. Was it to save money that they put that pre-stressed concrete down--the slabs of concrete that we saw on
In 1991-92, the Portuguese Government told residents that the motorway would be a garden highway. Perhaps the Portuguese have a different idea of gardens because there are no trees by the motorway, and no plants by its sides. There are no flowers. As there are no sound barriers, the garden highway gives off a piercing noise day and night.
After the motorway was constructed in 1994, the noise levels were so appalling that Mr. and Mrs. Wood decided to put the home on the market. Their haven of tranquillity had turned into an unmitigated nightmare. Quinta da Madeira is a most beautiful property by all accounts. It is just the place that any of us would love to retire to, but the sound from the motorway, which is directly underneath the house, was so great that the Woods, in their retirement, could not face the prospect of living there. Therefore, they approached Hamptons International--there is no better estate agent in that area--which said that it was
During 1995, 1996, 1997 and 1998, many people viewed the house, but not one person made an offer. In July 1999, a new agency was appointed, which placed the property on the market at the 1995 price. More than 25 people viewed the house and, in January this year, the Woods received their first and only offer. Before I reveal what it was, and to keep the Minister in suspense, I shall quote the agency's words. It is an exclusive property consultancy, known as Lifestyle Properties, affiliated to none other than Sotheby's International and it reached the following conclusion:
We still find the asking price of £395,000 very competitive in the current market, and as discussed . . . without the motorway, an asking price of around £500,000 would not have been unreasonable."
For the past six or seven years, the property has been a dead investment. After seven years, the Woods calculated that they had lost some £250,000 of taxed earnings through no fault of their own, and despite having taken every precaution before they made the purchase. Apparently, there were some rumours in 1992 that the trans-European motorway would be built, and although it is not yet connected to Lisbon, that is the intention.
I am told that the motorway is only the first in a series of trans-European motorways, so this is a test case, and I am delighted to have plenty of time to explore it with the Minister. Such motorways will be built not only by Mediterranean European countries, but--no doubt--by all the countries that join the EU through enlargement. Mr. Wood is a victim of the process, and I am sure that the Government, in the dying days of this Parliament, will note his case as an issue that needs to be addressed.
The Government will be relieved to hear that I place no blame on them at this stage. However, they can use their influence as one of the most powerful members of the EU to see that the situation is rectified--if not for the past, then for the future.
When the Woods heard about the rumours of the planned motorway, they tried to find out its exact route from the Portuguese authorities. The EU insists on a consultation process, but in this case, apparently, it was a shabby affair and was not a consultation process as we would understand it. The conduct of the Woods could be used to illustrate a good practice manual, but the Portuguese authorities failed to consult or to listen to local residents.
The motorway will eventually stretch across the Algarve from Lisbon to Spain. The authorities were anxious to build it quickly for Expo '92, and the concrete was probably laid for that reason. Thousands of people, including British, German, Dutch and Swedish people, will have had their investments badly affected by the motorway, and noise nuisance will have taken millions of pounds off the value of the properties affected, for the Portuguese and many other EU nationals.
I have set out the problem, and I now wish to explore what can be done. It is irrelevant that the Woods are successful and attractive people, with many friends in both South Brent and the Algarve. They are popular and generous, and it is worth noting that they are not sharks or harsh--they just wanted a little place in the Algarve to which to retire.
What can be done? The Portuguese Government have been a net receiver of EU funds since 1974. I do not begrudge them that, because the money has been necessary. The EU has done a good job, and the Portuguese recognise that. However, I doubt whether the Portuguese would have embarked on the construction of the trans-European motorway but for the injection of EU funding. I visited Lisbon recently as a member of the European Scrutiny Committee, and we were well received by Portuguese Members of Parliament and officials. We were seen as a fair and popular country with which they would like to do business. That is why the Minister's reply, which will be beamed across the Algarve, will be of especial interest, as many people see Britain as fair in such cases.
I do not begrudge the Portuguese any EU money, because it has revolutionised--if that is the right term--that country. The Portuguese economy is now very strong, and I am advised that Portugal will soon become a net contributor to the EU. That is good news. However, in granting funds for the motorway in the 1990s, the European Commission must have been guilty of neglect, indifference or both. It must have failed to inquire about the materials that would be used in the construction or to satisfy itself that no individual would suffer financial loss as a result of the construction.
Did the Commission fail to ask the right questions of the Portuguese authorities? Did it also fail to take the necessary steps to ensure that the road surface would not infringe its objectives on noise and pollution? After all, those are buzz words for the EU and a series of rules, regulations and directives about noise have been introduced since 1970. The current EU legislation on noise deals with emissions at source, mainly cars, aircraft, generators, lawn mowers, food mixers and coffee grinders. A Green Paper was published last July that outlined the action that might be taken at Community level, and set out indicators and legislative proposals. A draft directive has since been published not on the question of compensation, but on noise. The Commission ducked the issue by saying that the matter had nothing to do with it, but clearly noise emanating from a motorway built with EU funds has an EU dimension and locus.
The argument may be that compensatory awards for the impact of major infrastructure works are a matter for the member state under the umbrella of the popular term "subsidiarity". Not many people know the meaning of the word, but it appears to translate as "the EU is not responsible". It is fair enough to argue that the member state was responsible, but the Commission was negligent in failing to satisfy itself that the Portuguese had appropriate legislation to cover the issue before it granted the funds. To ensure what is called a level playing field, EU grants should not be given to a member state that does not have legislative procedures to provide at least minimum compensation for those affected by infrastructure developments that are funded by EU money. However, it is not a level playing field and the money should not have been paid until the legislation was in place.
Once that condition had been satisfied, the trans- European motorway could have been constructed in Portugal, as the Commission would have been satisfied that no individual would be adversely affected financially by its construction without being able to claim compensation. The Commission has done that in other areas by attaching conditions to its grants, so why not here?
The Commission had previously agreed to give money to the project, but this aid will be cut off because the Portuguese authorities responsible (i.e. the Ministry of Public Works) have 'infringed community rights in not having had sufficient regard for the likely impact of the work on the local environment.'
This Norm, (directive 337/85) should have been written into the Portuguese Legislature, but wasn't. Because of this there were no legal guidelines for questions such as expressways, airports, and industrial pollution in Portugal, and this has led to E.E.C."--
As the EU relies on a difference basis of law from that which is applied in the United Kingdom, the Commission should have--and could still--take action in enlisting the first protocol of the European convention on human rights, to which Portugal is a signatory. The protocol deals specifically with the right of individuals to enjoy tranquillity and peace in their own property. I do not wish to limit the argument to the breach of the first protocol or to article 288/EC, which established that an individual could be successful when the Commission acted directly and caused him damage and loss as a result of its actions.
In the case of Mulder v. Council (1992) ECR 1-3061, milk producers in the Netherlands had agreed to stop milk production. As a result, the Council wrongly assumed that they had gone out of production and fixed a new levy scheme without taking them into account. There was a direct failure on the part of the Commission in that case, so compensation was paid. In this case, although the Commission is not directly responsible because it has channelled the money to Portugal, I argue that this is a question of the Commission not acting directly but employing agents--the Portuguese authorities--to act for it. Just as when our Government build roads they commission the county councils to carry out work on their behalf, I suggest that the Commission got the Portuguese authorities to act as its agent and gave them money to spend on a particular project. Although the Mulder case is not on all fours with this one, it indicates that when the Commission is found to be responsible for loss, as it was in the Mulder case, it pays what it should have paid in the first place.
I hope that the Minister will acknowledge that individuals in any member state should not find their lands or properties sequestrated or devalued by the actions of another member state using supranational funds. The Portuguese authorities siphoned off some of the superstate's funds to which member states had contributed. As matters stand, Mr. Wood has no way of being recompensed.
The Portuguese Government applied to the EU for money from our taxpayers. The Commission gave money from our taxpayers to the Portuguese to build a motorway. In so doing, and in not ensuring that the compensatory mechanisms were enshrined in Portuguese law, a British national has lost money that he invested in another member state. That has very serious ramifications for how the EU works and how it spends its money.
The Portuguese Government have thrown up their hands and said that it is nothing to do with them. The British Government, I am sure, will express similar sentiments, saying that they cannot look outside their own geographical boundaries. The EU, while recognising noise nuisance--and it was responsible for granting money to build a motorway in the first place--will no doubt deny its negligence, exalting the principle of subsidiarity in its defence. It cannot have it both ways. The EU can argue that this has nothing to do with it and that a member state is responsible, in which case it has a duty to ensure that by giving money the conditions should be in place that the compensatory powers exist in the member state. I am quite comfortable with the subsidiarity argument, but the
This debate raises major constitutional principles and questions of legal responsibility. It is not really fair on the Minister, at this time of night--early though it is--suddenly to land him with a matter that is probably more suitable for the Prime Minister. However, I have great ambitions for the hon. Gentleman, and I am sure that this is good training to see whether he can get out of this spot and deal with the matter as a future Prime Minister would. Clearly, he does not like to see injustice being done--he is a man of principle, well known for his sympathy and tolerance. I feel sure that now that I am raising a major constitutional principle, one of his first appointments tomorrow will be with the Prime Minister to say that in a fascinating Adjournment debate, matters of great concern were raised in a responsible, balanced and mature way.
In effect, the EU has raided its kitty--currently standing at £54 billion a year--because one member state wanted to accelerate the speed of its economic development without regard to the implications for the environment, noise emissions or individual properties. Surely it should do that only if the laws in the member state are up to speed in terms of pollution, noise management, environmental damage, accounting principles, value for money, public consultation procedures and the like. However, that can happen only if there is a new raft of officials, which I would be very reluctant to support. How can the EU enforce its rules and regulations unless it employs inspectors, enforcement officers and officials who are outside the responsibility of any member state?
We have a superstate giving out supranational funding to individual member states without sufficient monitoring. To have sufficient monitoring, the superstate would need inspection teams of supranational officials swarming around, checking, reporting, having endless meetings, occupying office buildings and administering budgets. That is what the British citizen was told would never happen, but it will happen if the case of Mr. Wood is to succeed.
If the EU is to avoid setting up another tier of bureaucracy, it has to use the bureaucracies of other countries, so that there is cross-border enforcement. Under that scheme, money given to the Portuguese would result in enforcement by the Germans, for example. Existing officials in member states could police each other. That would avoid having another layer of bureaucracy to enforce EU handouts.
There are two other possible ways to tackle the problem. First, a compensatory element could be included in all infrastructure grants to member states. That would cover claims made by individuals in member states affected by such developments. Once paid out by the member states, those sums would be recompensed by the EU, on receipt of proof of payment. A new EU law might be required to determine the levels of compensation available. However, whereas subsidiarity--under which member states pass their own laws--is delegation locally and regionally, power would be centralised if a compensatory element were added to the infrastructure grant. That compensation would then have to be accounted for.
My second solution would be for Mr. Wood to go the whole hog: having lost as much as £250,000, why should he not lose the same amount again by resorting to the European Court of Human Rights? That is guaranteed to cost a lot of money, as top lawyers argue that his rights have been infringed.
Mr. Wood has recently retired, having sold a successful business--which, paradoxically, manufactures motorway signs, among other things--but I am not sure that Mr. Wood would want to throw good money after bad. That would no doubt be the result if he employed a fistful of lawyers to fight his case in Strasbourg.
What will the Government do? What can they do? No doubt, thousands of British nationals have been affected, or will be affected, by economic distortions resulting from EU intervention to fund public infrastructure works to be installed in a member state, which the member state could not fund without EU money.
Mr. Wood's case vividly demonstrates individuals' vulnerability against the superstate. As bureaucracy gets bigger, it will be harder and harder to pin down those responsible. Everyone will pass the buck, and the problem will be exacerbated by all the different languages involved.
I have given an example of an abuse perpetrated by the European superstate against an individual in one of its own member states. Britain is one of the richest countries in Europe, but we are ceding ever more authority to the supra-authority that the EU has become, and which is answerable to no one.
Last Friday, the National Audit Office reported on the level of bureaucratic waste and funding in the EU. The report should concern every taxpayer in the EU. Not only are we not getting value for money, but the supra- European state is failing to protect the interests of its individual constituents.
I am sure that the Minister will have read the main findings of the NAO report, which have been highlighted by NAO head Sir John Bourn. Those findings include significant weaknesses in the management of the budget and an unacceptably high rate of error in payment transactions--a rate similar to what had been found in previous years. There was also serious concern that little progress had been made since 1999. That huge bureaucratic monster has been allowed to deprive my constituent of the hard-earned cash that he had accumulated over the years to buy his retirement property. There is something very wrong about that.
Mr. Wood is not just a victim of the system. He is illustrative of the way in which assets can be sequestrated by state intervention, without anyone caring a toss about an individual's future welfare or health.