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The Deputy Speaker: My Lords, there is a misprint in the Marshalled List. The word "mortgagee" has been mistyped as "mortgage". Therefore, the amendment proposed is:


4.45 p.m.

Lord Jenkin of Roding: My Lords, my noble friend Lord Kinnoull very kindly referred to the earlier debates we had on this point. Perhaps I may in turn refer with gratitude to my noble friend the Minister, who has written me a long and comprehensive letter as to why the Government feel that nothing more can be done on this matter. The speech from my noble friend which we have just heard must leave the Government with a feeling that all is not yet well with this issue.

How far should a bank or building society be held liable to the whole of the proceedings under the new Clause 54 merely because they have stepped in, as a mortgagee, to secure the land and perhaps reduce the impact of the contamination which is happening? And that by that act alone they will become liable to all the proceedings and procedures which this clause sets out.

I believe that my noble friend is totally sincere in saying that the Government do not expect or want this clause to interfere with the normal process of lending and borrowing. But, as my noble friend Lord Kinnoull has said, if there is to be no protection for these circumstances—and there are many others—which he has in mind and which I have described, that is precisely what will happen; namely, it will become difficult to find lenders for premises and small businesses and so on where there may be a risk of contamination. I have mentioned some of them in the past such as petrol stations, dry cleaners and people of that kind who handle chemicals and other substances which may give rise to contamination.

I cannot believe that it is the Government's intention that that situation should be so. I beg my noble friend to look at this matter again and to go back yet again and discuss it with the lawyers, the mortgage lenders, building societies and banks and the other people who do the great mass of lending in order to find out whether there is some way in which they can build in protection.

In his letter to me my noble friend said:


    "In practice, an alternative course of action to taking possession of secured assets may be open to lenders. They may be in a position to send in insolvency practitioners, or other receivers, who would benefit from the protection against personal liability which is provided under the new section 78P(3)".

There must be many cases where a lender is very reluctant to take that step. He may want to find a way forward for saving the business and so perhaps gaining in the longer term the benefit of his security, and therefore get repayment of the loan.

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We have just had the decision of the House of Lords about redundancy payments which is already causing much consternation to insolvency practitioners, as they are described in my noble friend's letter, because of the decision that, if they keep a business going for more than a certain number of weeks, they may become liable for full contractual redundancy. Here we have another example where, if they try to keep a business going for a while, the insolvency practitioners could find themselves subject to all the rigours of Clause 54. The only consequence is that, faced with this situation, the banks are going to rush in and appoint receivers and everyone will be dismissed. The business will be scattered and while it may have been possible to save something from the financial wreck, it will turn into an asset-stripping exercise.

My noble friend must recognise that the Government have not yet found a solution which meets the very justifiable concerns of lenders. I hope that if the Government cannot accept the amendment which my noble friend has moved this afternoon, between now and the Bill coming before another place a further effort will be made with the relevant associations to find a solution.

Viscount Ullswater: My Lords, we have considered this matter very carefully indeed. These amendments moved by my noble friend Lord Kinnoull intend to exclude mortgagees or, in Scotland, creditors in standard security, from the definition of the "owner" who might be liable to receive a remediation notice where the polluter cannot be found. This exclusion would apply whether or not they had taken up their security and were in possession of the land.

During our discussion on a related amendment moved by my noble friend Lord Jenkin of Roding at Report stage, as he has indicated to the House, I explained the Government's thinking in this area. Lenders should not be liable, as deep pockets, merely on the basis that they have lent money. However, they should not expect to be treated any differently from any other owners of land if they take up possession of the land. My noble friend Lord Kinnoull, having taken legal advice, has indicated that there are no hard and fast rules about taking possession. However, I believe that mortgagees have a peculiar experience and should not be treated as if they have no experience at all. There appears to be no good reason for departing from the current position at law where a mortgagee in possession is potentially liable to pay the outgoings of the property and any other liabilities under various statutory provisions. That was the content of my letter to my noble friend Lord Jenkin.

Mortgagees in possession are currently potentially liable for other liabilities arising from their ownership. The occupier's potential liability to abate a statutory nuisance would be an example. It would not be right to allow mortgagees in possession an exemption from liability for what could be a long period before they sell the land when other owners could be liable. Any other conclusion would have the effect of underwriting, at public expense, the investments of lenders.

Lenders have already developed procedures to ensure that, wherever possible, they do not find themselves in this position. I must also stress that lenders will retain

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the right not to go into possession of land over which they hold security if they believe that the land could have a negative net value.

I do not know that I can go any further beyond what I have said both today and on Report. For the reasons that I have set out, the Government do not want to accept the amendment and I therefore ask my noble friend to consider withdrawing it.

The Earl of Kinnoull: My Lords, I thank my noble friend for his reply although, as I am sure that he will understand, I do not accept that this is the end of the picture. I should also like to thank my noble friend Lord Jenkin of Roding for his powerful support throughout the passage of the Bill in your Lordships' House. He has advocated the case with a great deal of logic and practical sense.

The amendments were purely for probing purposes. I regret that there has been no change or advance in my noble friend's thinking. Nevertheless, I hope that there will be room for further discussion between now and further debate in another place, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 18 and 19 not moved.]

The Deputy Speaker: My Lords, in calling Amendment No. 20, I should advise the House that if it is agreed to, I cannot call Amendment No. 21.

The Earl of Lindsay moved Amendment No. 20:


Page 48, line 46, leave out ("the person") and insert ("a person (other than a creditor in a heritable security not in possession of the security subjects)").

The noble Earl said: My Lords, I spoke to Amendment No. 20 with Amendment No. 15. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 21 and 22 not moved.]

Viscount Ullswater moved Amendment No. 23:


Page 51, line 36, at end insert:
("(3A) If, in a case falling within subsection (1) or (7) of section 59 above, the land in question is contaminated land, or becomes such land by reason of the deposit of the controlled waste in question, a remediation notice shall not be served in respect of that land by reason of that waste or any consequences of its deposit, if and to the extent that it appears to the enforcing authority that the powers of a waste regulation authority or waste collection authority under that section may be exercised in relation to that waste or the consequences of its deposit.").

The noble Viscount said: My Lords, I rise to move Amendment No. 23, and to speak also to Amendment No. 24. During the debate on Report, in response to an amendment that was moved by my noble friend Lord Stanley of Alderley—

Lord Williams of Elvel: My Lords, is the Minister also speaking to Amendment No. 24 or Amendment No. 44?

Viscount Ullswater: My Lords, I am moving Amendment No. 23 and speaking also to Amendment No. 44. If I said that I was speaking also to Amendment No. 24, I beg your Lordships' pardon; I meant Amendment No. 44.

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During the debate at Report stage, in response to an amendment moved by my noble friend Lord Stanley of Alderley, I undertook to reconsider the position of landowners whose land may have become contaminated as a result of fly-tipping. These amendments will have the effect of restoring the existing exemption from liability for the costs of any clean-up currently provided for the innocent victims of fly-tipping under the terms of Section 59 of the Environmental Protection Act 1990.

Amendment No. 23 disapplies the contaminated land provisions where, and to the extent that, the land has been contaminated as a result of illegal waste deposits prohibited under Section 33(1) of the 1990 Act. Amendment No. 44 removes a provision which would have disapplied the powers of waste regulation and collection authorities under Section 59 of the 1990 Act to take action to remove illegally deposited waste.

The amendments effectively restore the status quo. Full responsibility for dealing with illegal deposits of waste is returned to the waste regulation and collection authorities, which will be best placed both to discover fly-tipping promptly and to identify who might be responsible for it, as a result of their other responsibilities in waste regulation. The Government will consider the question of whether any specific guidance to the agency is needed on the priority that it should accord to action under the powers in Section 59 to remove illegal waste deposits.

I hope that your Lordships will accept these amendments, which I believe answer the considerable concerns expressed on this question at Report stage. I beg to move.


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