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Viscount Ullswater: These amendments all seek to make particular changes to some of the basic provisions concerning liabilities in respect of contaminated land.

Amendment No. 229A, moved by my noble friend Lord Jenkin of Roding, would change the definitions of "owner" used in the provisions for England and Wales and for Scotland, particularly as it could apply to financial institutions.

Following our overall review of policy on contaminated land and liabilities, and in particular the many responses we received to our consultation paper Paying for our Past, we have sought to clarify the potential liabilities of financial institutions. The Government are committed to the view that banks and others should not be treated as "deep pockets" to pay for the restoration of environmental damage for which they bear no real responsibility. The Government accept that any attempt to treat financial institutions in that way would serve only to threaten the supply of normal financial services to many sectors of the economy. In particular, the Government believe that the simple act of lending money should not of itself be considered as causing, or indeed knowingly permitting, the contamination of land which might arise as the result of the activities of those borrowing the money.

The issue of secured lending raises complex questions, however, as reflected in this amendment. In some cases, a lender could be acquiring a net liability if he took possession of contaminated land held as security, if the costs of necessary remediation exceeded the land's subsequent sale value. The Government consider that the lender should retain the right to walk away from his security in those cases, effectively limiting his financial exposure to the potential loss of the value of his loan.

The Government have noted concerns from the banking community, however, that in some cases the decision over whether to take possession of mortgaged property is effectively removed from the hands of the

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mortgagee, for example if the mortgagor hands over the keys to the property. It has been suggested that in those cases, the mortgagee could find himself potentially liable for contamination on the site without having any opportunity to exercise his right to walk away, as my noble friend indicated in his remarks. The Government are willing to consider this question further, and to examine whether changes to the definition of "owner" are justified to deal with the possibility of mortgagees finding themselves involuntarily in possession of land.

However, the Government do not accept the formulation set out in this amendment as being appropriate. It would provide an exemption from liability for a mortgagee in possession of a site, so long as he performs no operational function on the site and is in possession only for the ultimate purpose of selling it. That would serve in many cases to prevent prompt and necessary action to deal with environmental problems. It might also do little to protect the commercial position of the mortgagees, as they would still face the task of attempting to sell contaminated sites which would potentially be open to early action by the regulators requiring works to deal with the contamination.

This amendment raises the additional question of whether trustees with no beneficial interest in land should also be exempt from any liabilities. The Government would wish to consider that question further, particularly as the creation of an exemption of this kind could, if implemented in an inappropriate manner, create a possible route for unjustified evasions of liability.

Amendment No. 238D, in the name of my noble friend Lord Peyton of Yeovil, would amend the existing provision concerning the transfer of liabilities from the person who caused or knowingly permitted the contamination to the current owner or occupier of the land. The Government are keen to ensure that the polluter does not, in effect, pay twice. We consider that it would be inequitable for someone to have to accept a low sale price for land which had been contaminated, and then have to pay for the costs of action to remediate it. We therefore wish to provide that, where the original polluter has legally transferred the burdens and responsibilities associated with his property, including those relating to contamination, the regulatory system should also respect that transfer.

I am grateful for my noble friend's amendment and for all the comments and suggestions that we have received from elsewhere as regards how we might shape the statutory provisions necessary to bring about our policy intention. If the noble Lord, Lord Annaly, who moved the amendment would agree to withdraw it, the Government would wish to consider the question further and to bring back their own amendment at a later stage.

Amendments Nos. 238AA and 238E tabled in the name of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Beaumont of Whitley, seek to change the provisions which would apply in any case where the current occupier of contaminated land, who was not himself the appropriate person to receive a remediation notice, refused consent for the appropriate person to enter on to his land to carry out remediation. The

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amendments would provide for a court to issue a warrant authorising entry, with or without conditions, and order the appropriate person to pay such compensation as it sees fit.

The Government believe that it is essential that some mechanism exists to ensure that remediation can take place even if the current occupier of the land does not wish to give his consent to entry on the land. However, we are not attracted to the system of warrants proposed here, which would appear to be unnecessarily cumbersome.

In looking again at our own provisions, which provide that an occupier who refuses consent in those circumstances would himself become an appropriate person to receive a remediation notice, we note possible concerns that there is no explicit recognition that in some cases there may be reasonable grounds for consent to be withheld; nor is there any overt provision for any compensation to be payable. If the existing amendments are withdrawn, we would wish to re-examine those questions.

Amendments Nos. 242B and 242C would apply to the circumstances where an enforcing authority might be seeking to recover some, or all, of its reasonable costs incurred in carrying out itself the steps specified in a remediation notice which have not been carried out by the original recipient. The first of those amendments would make explicit that that is a discretionary power to recover costs, and that there is no obligation on the enforcing authority to do so. However, that sense is already present, as the existing provisions refer to an "entitlement" to recover costs and not a duty.

The second of those amendments would have the effect of removing the duty for an enforcing authority to consider questions of hardship which might arise from its recovery of costs. The Government did not intend that hardship should be the only ground on which enforcing authorities could decide not to seek to recover their costs. However, we believe that enforcing authorities should be required to consider at least that question. I would therefore ask noble Lords not to accept the amendments.

The noble Earl, Lord Lytton, indicated that he would like the Committee to consider Amendments Nos. 245AZA and 245AZB which relate to the provisions to limit the potential personal liability of any insolvency practitioner. The issue of the liability of such practitioners was raised during our policy review. It was felt by many to be important that insolvency practitioners, and others acting in a similar capacity—such as the receivers of land referred to in the noble Lord's first amendment—should not be held personally liable for the costs of dealing with contaminated land. This is an area that again the Government would like to consider very carefully and on which they also intend to bring forward their own amendments at a later stage. It will probably be convenient to leave it at that. Having said what I hope is of some comfort to my noble friend Lord Jenkin, he may consider withdrawing the amendment.

Lord Jenkin of Roding: I would only say to my noble friend that he has undertaken to do an immense

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amount of reconsideration with this group of amendments. I assure him that I speak on behalf of all Members of the Committee who took part in this short debate when I say that we are very much obliged to him. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 230 and 231 not moved.]

[Amendment No. 232 had been withdrawn from the Marshalled List.]

[Amendments Nos. 233 to 237ZA not moved.]

Lord Northbourne moved Amendment No. 237A:

Page 49, line 40, at end insert
("( ) The appropriate Agency or the local authority may consult with the owner of the land in the preparation of any remediation statement and also regarding any alternative action which that person might take to remedy the contamination on the land.").

The noble Lord said: In moving this amendment I wish to speak also to Amendment No. 237B. These are two further amendments about the procedures for remediation. The first relates to the fact that the Bill as drafted does not seem to make any provision for consultation between authorities and landowners so that agreement can be reached about the most useful and appropriate method of cleaning up. It merely provides for a remediation notice to be served, and when it has been served the Bill does not seem to provide any machinery for variation of the terms as a result of consultation between the parties. This amendment seeks to correct that position.

I regard Amendment No. 237B as important. It provides the local authority with a power rather than a duty to serve a remediation notice. As regards the Bill as currently drafted, where local authorities have identified any contaminated land in their area, they have a statutory duty to serve a remediation notice. They have no discretion to decide whether to serve a remediation notice. As a result local authorities will not be able to give priority to the most affected areas but will be obliged to deal with all cases of land deemed to be contaminated. However slight the degree of contamination is irrelevant. This is neither a sensible nor a practical approach and will put local authorities under unjustified strain, and it directly contradicts the Government's policy on priorities as set out in the framework for contaminated land. I beg to move.

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