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Lord Davies of Oldham moved Amendment No. 8:

The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendment No. 9. Clause 46 inserts a new Section 78A into the New Roads and Street Works Act 1991 providing for undertakers to make a contribution to the costs of resurfacing roads in certain circumstances. The amendments provide that regulations under subsection (7) are able to make substantive provision for payments and so on and are not simply intended to give powers to the Secretary of State to require payments. The drafting amendments are to make clear the scope of provisions. I beg to move.

Viscount Astor: My Lords, will regulations provide undertakers with a choice, or will they prescribe the circumstances in which an undertaker is entitled to pay a sum with regard to resurfacing? It would help if the Minister could give me some understanding of how they consider the regulations will be framed. In principle, we support the amendment.

Lord Davies of Oldham: My Lords, I am grateful to the noble Viscount for asking that question. The regulations will indeed prescribe. I believe that clears up the uncertainty that he expressed.

On Question, amendment agreed to.

Lord Davies of Oldham moved Amendment No. 9:

"( ) The power in subsection (7) includes power to make provision corresponding to provision that may be made under subsections (1) to (5)."

On Question, amendment agreed to.
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Lord Lucas moved Amendment No. 10:

"( ) No contribution may be requested under this section in respect of works carried out before regulations under this section have first been made."

The noble Lord said: My Lords, I thought that we knew where we were on this new section, and that through the process of Committee and Report we had gained an understanding that no retrospection was involved. But then it appears from comments made very recently by Ministers that there is to be retrospection, and that the way in which this section of the Bill will work is that it will be brought into effect next year some time, but the regulations will not be promulgated for the first time until some years afterwards. When the regulations are promulgated, the whole period between the Bill coming into effect and the regulations being agreed to will then be covered by the section, and there will be an immediate back-charging of the utilities which have done works in that period.

My objection is not that utilities should be charged for such things; we are all agreed on that point. I object, however, to the idea that an unspecified and unquantified charge will suddenly materialise in five years' time. Utilities are presumably meant to reserve for that eventuality—but how can they reserve for something when they do not know the scale and extent of the charges? The Minister has said that these cases will be rare and occasional, but there is nothing in the Bill to say that; it all depends on the nature of the regulations.

The Minister must be straight and keep to what he has said before—that there will not be retrospection. Until it is possible for the utilities to know when the charges will arise and how large they are likely to be, they should not be asked to pay them. That seems to me the very basis of fairness and reasonableness, on which we thought we had agreed.

My decision on the amendment depends very much on how the Minister replies. Given that we are at this stage, I shall not know until he has whether this is a matter that I want to take seriously. I would hope that if my noble friend Lord Astor and the Liberal Democrats have some reason for me not to divide the House on this matter, if the Government are going retrospective, they will let me know—because I certainly shall divide the House if they are. I beg to move.

Lord Borrie: My Lords, I do not find myself very often in agreement with the noble Lord, Lord Lucas, so it is a pleasure to agree with him today. It seems quite unreasonable that utilities should engage in work tomorrow, next week or the month after on the basis of the present law, then find that because regulations are made retrospective some time in the future their liabilities are much greater than they thought. I hope that the Minister will be able to reassure the noble Lord, Lord Lucas, and myself, that that is not intended. Otherwise, I believe that the noble Lord has an important point.
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Viscount Astor: My Lords, I understand the point that my noble friend Lord Lucas is making, and I entirely agree with him. I had thought, although I may have got it wrong, that the Minister had given assurances about this matter before. I may not be right, and it would be very helpful if the Minister could clarify the situation.

Lord Davies of Oldham: My Lords, I shall address myself to the issues, although I regret that I shall have at one stage to indicate in a rather technical way that the amendment would not quite achieve what the noble Lord seeks. However, it would do the noble Lord a disfavour if I merely addressed the technicality and not the real issues that he has raised.

As the noble Viscount, Lord Astor, said, we have had considerable debate on these issues in Grand Committee and at Report. The concerns of utilities about the resurfacing powers have been raised previously, and it is right that they should be today. There is not a great deal to add to what I said before; I had sought to meet these points in the assurances given about the use of the powers. The assurances have been given, not only during the proceedings of the Bill in this House and in another place but outside the House by my colleagues in the department.

I emphasise the point that the provision is not a way for authorities to get their roads resurfaced on the cheap. The Government envisage that the powers would be used only where problems were most serious, and where a succession of works had left roads in a particularly bad condition. Regulations will place the appropriate limitations on the circumstances in which these powers could be used. We gave the assurance on Report that the first of the regulations will be subject to affirmative resolution, so both Houses of Parliament will have the opportunity to consider them.

We envisage that the authority itself would still be expected to make the largest contribution to resurfacing costs even when the new powers were triggered. The basis on which costs are to be shared between undertakers and the authority would of course be part of the regulations, so there will be an opportunity for this House to scrutinise the powers before they come into effect. As and when the regulations are brought forward, they will be developed with the help of undertakers and authorities, and will be subject to full public consultation.

The amendments that the Government tabled at Report already limit the liability of undertakers to exclude any works before commencement of these clauses. Amendment No. 10 seeks to stretch that exclusion to the time when regulations are made. I understand the concerns about how contingencies for resurfacing costs can be dealt with by utility companies. But we need to balance that against the principle that where utilities' street works have made a significant contribution towards damaging a road, the utilities in question should contribute towards the necessary resurfacing.
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As I said at Report, the Government have increased substantially the funding of maintenance on our roads, and we do not want to see that investment prejudiced. We do not of course want to make it difficult for utility companies to operate. I can assure your Lordships that all these matters will be the subject of proper discussion and consideration when developing the regulations so that we can come to a reasonable conclusion, which will take on board the point that the noble Lord has made.

The amendment itself in fact only partially addresses the concerns that the noble Lord articulated so clearly. This is where I shall lapse into the slightly more technical argument. While the amendment would add a subsection making liability start only after the regulations have been made, it leaves intact subsection (2)(a), which was amended at Report to make it clear that the starting point is that, subject to the eventual provisions made in regulations, liability may start at commencement of the clause, irrespective of whether regulations have been made. So the amendment would inadvertently cast doubt on the intended effect of the provisions in new Section 78A, if it were made. That would be deleterious to how we envisage these issues developing and to how the noble Lord addressed them.

Returning to the point of principle, I want to give the assurance that I have given in the past about these powers. The regulations will be developed in conjunction with the undertakers and authorities. They will take into account all the points that have been raised during the passage of the Bill. They will be subject to the fullest public consultation and of course they will be subject in the first instance to parliamentary scrutiny under the affirmative procedure for regulations. On that basis I hope that the noble Lord, Lord Lucas, will feel able to withdraw the amendment.

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