---

Brian White (Milton Keynes, North-East) (Lab): Lords amendment No. 52 refers to

"whether or not regulations . . . have been made".

The industry is concerned that that could be several years later, and that it could be faced with not knowing what the Bill will be. Will the Minister assure the House that the times that that clause is brought into effect and that the regulations come into effect will not be several years apart?

Mr. McNulty: Certainly, I give my hon. Friend that assurance. That is not the plan in terms of the timing. I take those concerns seriously, and I will write to my hon. Friend in more detail about timing as and when the time lines are more ready than at present.

Lords amendment No. 42 clarifies that undertakers can be subject to the resurfacing requirements where an authority has issued a notice under section 58A of the 1991 Act indicating its intention to place a restriction on works after substantial street works. That would apply if the undertaker had given notice of its intention to carry out works in the part of the road where the restriction will apply. It would also apply where the undertaker has given the usual section 54 or 55 notices.

Lords amendments Nos. 44 and 52 provide that only works carried out after commencement of these clauses could carry a liability for an undertaker, although, depending on the details in the regulations, the scope may be extended to works carried out before any regulations are made.

Lords amendments Nos. 51, 53, 54 and 55 provide for regulations to ensure that all the undertakers are aware of their liability, and to establish a basis for apportioning the costs between the parties that leads broadly to the same result, whoever carries out the resurfacing works. Those Lords amendments also provide for regulations to include safeguards to cover insolvency of undertakers, and to deal with the interaction of the resurfacing powers with other duties in the 1991 Act, such as reinstatements under section 70 and long-term damage under section 78, in ways that avoid unnecessary works and unreasonable costs for utilities.

Lords amendment No. 56 widens the regulation-making powers of the Secretary of State to allow for a more targeted regime for inspections of the quality of undertakers' work, to enable more inspections of the poorest performers. Regulations would allow disputes to be settled by arbitration.
 
15 Jul 2004 : Column 1621
 

As I said at the beginning, we agree with all those amendments from the other place. They improve matters, for which we are grateful. I commend the Lords amendments to the House.

5.15 pm

Mr. Chope: I understood the Minister to say in response to the hon. Member for Milton Keynes, North-East (Brian White) that he would accept my amendment (a). I hope he will confirm that. As has been said by the hon. Gentleman and many others, we cannot have retrospection.

If the Bill were enacted later this month, a commencement order were introduced and the resurfacing clauses became active soon afterwards, but the regulations were not made until, say, July 2010, under the present rules highway authorities would be able to request resurfacing, or a contribution towards the cost, dating back to the time of the order. The retrospection could amount to five or six years, or perhaps even longer. That would cause utilities both regulatory and balance-sheet uncertainty. They would be forced to put aside money for charges that might or might not materialise at some point in the future. Regulators would not accept that such provision would be made until regulations were imminent.

In the other place Lord Davies, the Minister, assured everyone that the Government did not want to make it difficult for the utility companies to operate. If the Government do not accept the amendment, it will indeed be very difficult for utility operators to cope, as was suggested by the hon. Member for Milton Keynes, North-East. I hope the hon. Gentleman will seek to catch your eye, Mr. Deputy Speaker, if it becomes apparent that the Minister will not accept the amendment—although the tone of the Minister's response to the hon. Gentleman implied that he was going to.

Mr. Redwood: During the Minister's rather garbled and hurried presentation, did my hon. Friend catch his statement that he welcomed an increase in retrospection in one of the amendments because he thought there could be circumstances in which people should have to pay even if the work had begun before the regulations were made?

Mr. Chope: My right hon. Friend has picked up a detail that I had not cottoned on to. I hope he will have a chance to go into it further during this debate, even though it is short.

Lords amendment No. 56 deals with inspection fees. The Government have introduced an element of variability related to the track record of the company carrying out the work that is the subject of inspection. I do not think that anyone would disagree with the principle, but the only examples given by the Minister in the other place and in correspondence are those in which the fees would be higher. The amount of work to be inspected would increase in the case of a poor record. We need to ensure that in the case of a good record, the burden of inspection is reduced. That underlines the Opposition's continual plea for minimum regulatory intervention in the private sector.
 
15 Jul 2004 : Column 1622
 

I hope the Minister will be able to assure us that the variability will be both upward and downward. I hope he will be able to tell us that if a utility operator delivers high-quality work and an inspection shows no need for further work, the burden of inspection will be reduced. I hope he can also assure us that when inspections are paid for, that means that they are actually carried out. It has come to my notice that in Dorset, in certain circumstances, utilities pay for inspections that are then not carried out by the inspection authority. That is basically another stealth tax.

John Thurso: Retrospective charging, to which the hon. Member for Christchurch (Mr. Chope) referred, is an issue that concerns me as well, particularly given that it will put a much larger burden on many plc utilities' balance sheets than the Government perhaps appreciate. I chair the audit committee of a plc—it is not, I should hasten to add, a utility company—so I know of the problems that auditors mention when they ask how one is going to account for such liabilities in the balance sheet. I urge the Minister to give some comfort to the utilities in this respect.

On inspection fees, the basic principle of being able to vary fees to punish those who are bad and, more importantly, to reward those who are good must be a good one, so I broadly support proposed new clause 56. But in the light of the correspondence that has been referred to, it appears that lots of stick and very little carrot will be used. An assurance from the Minister that good use will also be made of the lighter touch of the carrot would be extremely helpful.

Mr. Redwood: I support amendment (a), which was tabled by my hon. Friend the Member for Christchurch (Mr. Chope), and I hope that we will have an opportunity to do something about it. The hon. Member for Milton Keynes, North-East (Brian White) is right to be concerned about this issue. This group of amendments, which the Government hope to nod through, give further powers to Ministers that I am not sure they deserve, and they offer further threats to businesses operating in this area. There could be an added element of retrospection, as the Minister said, and there will definitely be variable charges and fees of a kind that could be quite damaging; that will make the private sector's life much more difficult.

This is another example of a well-intentioned Bill—which is trying to do something about the chronic congestion that this Government's transport policy has created—miscarrying and turning into a traditional Labour Government Bill that attacks the private utilities, invents very complicated bureaucracy and creates extra expense. So I hope that we will at least have an opportunity to do something about the very important point made in amendment (a), even if the Opposition are none the less going to go along with the other, rather dubious, complicated and bureaucratic amendments.

Mr. McNulty: I am afraid that I am going to disappoint the hon. Member for Christchurch (Mr. Chope). I agreed broadly with the sentiment expressed by my hon. Friend the Member for Milton Keynes, North-East (Brian White), but I certainly did not agree with what is a flawed amendment that does only half the
 
15 Jul 2004 : Column 1623
 
job that it purports to do. On the assurance that I gave to my hon. Friend and what I subsequently put to him in writing, it is not in the interests of the Government or of anyone else for a massive and significant delay to occur between the commencement order and the subsequent regulations. In any event, this flawed amendment does not overcome the problem, because it deals with only one of the two references that are made to such matters. But although we do not accept amendment (a), I do accept the point made by my hon. Friend the Member for Milton Keynes, North-East.

The regulations can allow for lower inspection fees as well as higher ones, and as with other aspects of the Bill, that will be a matter for discussion with the people most directly affected. It is true that the provision allows work undertaken between the commencement order and the subsequent regulations to carry a liability, but I hope that the reassurances that I have given to my hon. Friend the Member for Milton Keynes, North-East deal with that issue. If one makes it clear that a particular system will prevail, and if there is some delay before it prevails, that is not retrospectivity. If we make clear that we will come in and minimise, as much as we can, the gap between the commencement order and the regulations, and if we then speak to the very people affected by the regulations, we will see that the characterisation of the regime by Opposition Members is a complete nonsense.

---