Electricity Transmission (Compensation) Bill

2nd reading
Friday 21st April 2023 Lords Chamber

Second Reading

10:39

Moved by

[Lord McLoughlin]

That the Bill be now read a second time.

[Lord McLoughlin (Con)]

My Lords, this Bill comes to your Lordships’ House having completed its stages in the House of Commons. It was taken through the House of Commons by Dr Liam Fox and is based on his experience in his own constituency of what I think is a flaw in the regulations, which I will come on to say a little more about later. It has to be said that this is the second Private Member’s Bill in two years that Dr Fox has managed to steer through the Commons; the other one, the Down Syndrome Act 2022, was also successfully steered through your Lordships’ House. He seems to be having more success in taking legislation through from the Back Benches than he managed when we were both in the Cabinet together; I congratulate him on that.

The purpose of the Bill is to require the Secretary of State to lay before Parliament proposals for the use of the alternative dispute resolution—ADR—process to determine compensation in electric-related land acquisition cases. The intention is that the proposal will encourage and facilitate the use of the ADR process, thereby helping parties in dispute to avoid having to take their case to the Upper Tribunal (Lands Chamber). The Bill provides that there should be proposals for ensuring that any determinations are enforceable so that the outcome is binding on an electricity network operator.

I realise that one concern is that this Bill may somehow lead to delays in certain cases. I do not think that it will. Having to take a case up to the Upper Tribunal is a lengthy and expensive process; it therefore operates against an individual who feels that they have a complaint. Nobody is keener than me to see national infrastructure projects make progress and not be delayed but, when big national infrastructure proposals are coming forward, one must recognise the blight of them and the impact that they may have on individuals. This is a correcting Bill: it will bring in a system that is there for other availabilities. The Bill also requires that there should be proposals for ensuring that the ADR process operates independently and that

“the processes are accessible to landowners without undue difficulty or expense”.

Anybody who reads through the Second Reading debate held in the House of Commons in November will see there some of the cases that have caused Dr Fox and other Members of the Commons great difficulty as far as their constituents are concerned. As I say, this Bill does not seek in any way to delay infrastructure projects, but it puts a duty on the company that is involved to treat the people whom it affects in a fair way. The Bill has vocal support from the NFU because it has seen what it will do for some of its members.

I have some questions. I hope that, in her response to me, my noble friend the Minister will be able to give some indication of what the timescale will be for the creation of a task force; I know that her officials have been looking at what the consequences of the Bill will be. Also, can the Government provide further detail on how and when the composition of that task force will be decided? I realise that those questions possibly anticipate the Bill’s passage into an Act of Parliament. It is right, however, that reassurance on big issues of national infrastructure is given to those people who are directly affected that they will be treated fairly. That is really the main aim of this Bill.

Where electricity transmission takes place, this Bill will provide the same sort of rights that are available in other big national infrastructure projects. For some reason, electricity has been left out because of its national significance. Nobody doubts that— nobody questions the necessity of this infrastructure being taken forward—but people should be treated fairly by operators when they are seeking these acquisitions. I beg to move.

10:45

[Baroness Walmsley (LD)]

My Lords, this Bill addresses a perfect example of where individual rights come up against the duties and responsibilities of another organisation and an aspect of the public good. On the one hand, we have the Government seeking to achieve the transition to a net-zero energy system and the duty of National Grid to carry out its role on, over and under the ground to achieve that; that is a common good. On the other hand, we have the rights of the owners of land to enjoy whatever that land provides: an income, a home, food, enjoyment of the environment, a contribution to biodiversity, et cetera. All these things have a monetary value—and, indeed, other values too, which should not be ignored. So how do we reconcile these two demands on land?

We already have a lot of work going on to develop a national land strategy. That is important, given that we would need two sets of these islands to provide all the food, homes, infrastructure, industrial land, renewable energy, public spaces, protected biodiversity and leisure facilities that we all want. Difficult choices and balances have to be made. Add to that the need to expand and strengthen the national grid, in order to produce more renewable energy and transmit it to where it is needed so that we can exchange fossil fuels for net-zero electricity, and you have a problem.

What are the shortcomings of the existing system? As I see it, it does not provide equality of arms between small landowners and large public bodies. It also takes too long and costs too much. It currently operates at a time when the courts are overrun with a major backlog of cases. It needs to be replaced, as Dr Liam Fox said in another place, by something that is accessible, affordable, independent and enforceable. This Bill is an attempt to do that. I would also add “flexible” to take account of the changing value of land and land of different quality.

The questions that arise for me are fourfold: whether the new alternative dispute resolution system can be fairer to landowners and give them a fair crack of the whip, rebalancing the current imbalance between them and National Grid; whether the outcomes of the new system will give them justice while allowing the common good of a stronger electricity distribution system to be achieved; whether the new system can achieve that speedily and at smaller cost; and, finally, whether the system can take account of national priorities on land use. For example, we have recently been focusing—for very good reason—on the need for greater food security and energy security. Do the Government plan to start all over again with the new ADR task force or to incorporate the existing knowledge and capability? How can we be sure that the new system is designed adequately to take account of the views of the little guy—the landowners? How can we be sure that the outcome is enforceable and that the last resort of going back to the Upper Tribunal is still open to those who are not happy with the results of ADR?

If we get this right, it can contribute to the achievement of net zero. If we get it wrong, we are doomed to face more costly wrangling for years to come. Which is it?

10:49

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the noble Lord, Lord McLoughlin, for sponsoring the Bill which, as he rightly said, was introduced by Liam Fox in the other place. The main purpose of the Bill is to require UK Ministers to lay proposals before Parliament for the use of alternative dispute resolution processes in England and Wales, to determine levels of compensation in electricity-related land acquisition cases.

We completely agree with the need to improve the UK’s electricity infrastructure so that the UK can expand the grid to incorporate new energy sources and therefore achieve the ambitions around our net-zero objectives. From talking to all the different bodies connected with this area, particularly around infrastructure, I think that this issue is recognised as one of the major infrastructure challenges that the country is facing—how we scale up the grid to achieve our ambitions.

As outlined very clearly by the noble Baroness, Lady Walmsley, achieving the correct balance is paramount, and we need to find that balance between landowner rights and infrastructure development. As the noble Lord, Lord McLoughlin, acknowledged, there are serious concerns that the Bill could have unintended consequences, particularly around delaying infrastructure development and subsequently providing businesses with uncertainty. We all know how damaging uncertainty is in this sphere. The noble Lord, Lord McLoughlin, is laughing, because we have had very close engagement on other major infrastructure projects, which we will not name in this debate. Building investor confidence will be key to encouraging investment in this critical area.

I seek clarification from the Minister and will pose some questions for consideration at this stage. It is worth considering why the take-up of alternative dispute resolution has been slower than we would want to see, and how we can make the improvements necessary, perhaps without waiting for the consequences of this Bill passing. There must be measures we could take now to improve the uptake. Surely the preferred route is to go through mediation rather than into the courts, but what assessment has been made of this?

Last year’s energy security strategy set out the need to expand the connecting infrastructure to support the acceleration of electrification. Again, the central question that we have is whether the Government feel that this legislation could risk slowing down the process and therefore hindering the Government’s core mission in this area. We know that the proposals on ADR will not be drawn up until a later date, but the intention is still to encourage its use. But if that fails to enforce any determination, could there not be a risk that knowing that enforced outcomes will be binding, even if one party is not happy, discourages the use of ADR?

As I have said, it should be a positive that, under ADR, disputes will be settled out of court, but what are the Minister’s views on the extent of this benefit? Can she quantify the benefits of ADR processes, whether in terms of speed, cost or satisfaction of outcome? We have heard it eloquently expressed that this is a complex area. We need to be very sensitive to the needs of all parties involved. One of the criteria for what ADR procedures should address is that they are accessible to landowners without undue difficulty or expense. Does the Minister have any insight as to how they envisage guaranteeing this?

What is the status of the ADR task force? Is a serious attempt being made at this moment in time to look at the existing ADR system and to see how immediate improvements and therefore benefits can be made?

10:55

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank my noble friend Lord McLoughlin for bringing forward this Bill, which has already had a successful passage through the other place. I also thank noble Lords from across the House for their valuable contributions to today’s debate.

The Government are pleased to support this important Bill, which helps to ensure that landowners will have access to a clear, fair, affordable and enforceable system for dispute resolution. The measures in the Bill will support the vital transformation needed for our electricity network. We need to expand the grid at an unprecedented scale and pace to deliver more clean, affordable power and to increase our energy security, with electricity demand potentially more than doubling by 2050. In March the Government published our Powering Up Britain: Energy Security Plan, building on our commitment, made in the British Energy Security Strategy, to accelerate the delivery of transmission network infrastructure by at least three years, with an ambition to cut delivery times in half.

However, we still firmly believe that new network infrastructure must be built in a way that protects the rights of local landowners and communities. That is why, alongside our energy security plan, the Government have published a consultation on providing benefits to communities hosting transmission network infrastructure, to recognise the vital role that these communities play in supporting the delivery of cheaper, secure and low-carbon energy. Separately from the focus of the community benefits consultation, we are aware of the issues that may arise between landowners and transmission network owners, such as national grid electricity transmission, when installing network infrastructure.

Where transmission owners need access to private land, landowners are entitled to compensation, and in a small proportion of cases where compensation cannot be agreed on, this may cause disputes and raise challenges via the Upper Tribunal, which can be expensive and time-consuming for landowners. The Bill presents an opportunity to address this issue by ensuring access to alternative dispute resolution processes, which can play such a crucial role in offering a quicker and cheaper route to resolving disputes. It is very encouraging to hear the support across this House from the two noble Baronesses on the Front Benches; I will address some of the specific points shortly.

First, I shall cover the key reasons why the Government are supporting this legislation. The Bill was first introduced in the other place by my right honourable friend Dr Liam Fox. It was a response to his constituents raising concerns about disagreements with the transmission operator over land in the path of overhead transmission lines that were built to connect Hinkley Point C nuclear power station to the grid. The cost and risk of taking the case to the Upper Tribunal meant that some landowners would be reluctant to challenge compensation offered by the transmission operator. Dr Liam Fox acknowledged the importance of energy infrastructure development but said that more should be done to protect landowners involved in compensation disputes with network operators.

The Bill requires that government bring forward proposals on alternative dispute resolution processes in cases where land or land rights have been acquired for the building of electricity transmission network infrastructure and there is a dispute about compensation. The intention is that proposals would encourage and facilitate the use of alternative dispute resolution, thereby helping disputing parties to avoid having to take a case to the Upper Tribunal.

Clause 1 requires the Secretary of State to lay before Parliament proposals to improve access to alternative dispute resolution processes in electricity-related land acquisition cases. Proposals must ensure that alternative dispute resolution processes are available that could determine the amount of compensation paid to landowners and that these processes are enforceable, accessible and affordable for landowners. The processes must be managed in a way independent of the landowner and the transmission owner. Proposals must be set out in a report that will be laid before Parliament by the Secretary of State, who must consult any party they feel is appropriate.

The second clause clarifies the extent and the commencement date. The Bill extends to England, Wales and Scotland, and comes into force at the end of the period of two months, beginning with the day on which it is passed. However, in practice, the Bill will affect Scotland only in limited circumstances, as it applies to cases where a development consent order has been granted for electricity transmission infrastructure under the Planning Act 2008. However, the development consent order process does not apply in Scotland, except under limited circumstances that do not relate to electricity transmission.

As for the ongoing work to establish an alternative dispute resolution task force, the Government committed to establish a task force to bring forward proposals for alternative dispute resolution related to the Bill. My noble friend Lord McLoughlin asked for more detail on the timing and composition of the task force, as did the noble Baroness, Lady Blake. I confirm that the task force will be established this year; the department is engaging with network operators, representatives of landowners and experts in acquisition of land and alternative dispute resolution to ensure that it has the appropriate membership. The work of this task force will complement work already going on to reform land rights and consent processes for network infrastructure. The Government published a call for evidence in summer 2022 to establish how the land rights and consent processes affect stakeholders and to inform whether reform is required. The Government are considering all responses and plan to publish a response to the call for evidence this year.

Turning to other points made by noble Lords, the noble Baroness, Lady Walmsley, rightly pointed to the competing interests in land use and the inequality of arms between landowners and the developers of infrastructure. The Bill seeks to address this and will be a speedier and less costly recourse for landowners, but they will still be able to seek redress through the Upper Tribunal, should they choose.

Strategic planning plays an important role in delivering vital network infrastructure, initially through the holistic network design, which sets out the key strategic transmission infrastructure required to connect up to 50 gigawatts of offshore wind by 2030. I reassure the noble Baroness, Lady Blake, that the Government are still committed to accelerating the rollout of grid infrastructure and associated economic growth, levelling up and net-zero opportunities. We are also committed to ensuring the rights of local landowners and that communities’ rights are protected. This has been made clear, for example, through our recent publication of the energy security plan.

It is the role of the task force to develop proposals, including consideration of how to ensure the process does not delay the implementation of new infrastructure. Furthermore, in response to the noble Baroness, Lady Blake, access to enforceable alternative dispute resolution will provide an alternative route to the Upper Tribunal. This should save time and money for parties involved. The task force will develop proposals and the Government will consider how we assess their impact, including their timing and cost. Proposals that standardise access to alternative dispute resolution will increase awareness of existing routes, encourage uptake and avoid cases having to go to the Upper Tribunal.

To conclude, the Bill is vital to ensure that landowners have access to a clear, fair, affordable and enforceable system for dispute resolution. The Government continue to support the Bill and we are glad to see the level of support across this House throughout today’s debate. Again, I thank my noble friend Lord McLoughlin for taking this important legislation through the House. The Government wish it a speedy passage.

11:03

[Lord McLoughlin (Con)]

I am very grateful to my noble friend for her response on behalf of the Government on the Government’s attitude to the Bill. It is very encouraging. This area was left out as far as the ADR procedure is concerned and it will be very welcome.

I well understand the position that the noble Baroness, Lady Blake, took on not wanting to see delay. We worked very closely, when she was leader of Leeds City Council, on a number of infrastructure issues, and were often frustrated by the amount of time taken to get decisions and see them implemented. I fear that timetable has moved even further from when we were directly involved with some of the big infrastructure issues that affected her city of Leeds. I thank the noble Baroness, Lady Walmsley, as well for saying that, if anything, this could help speed up and not delay, because going to the upper lands tribunal is incredibly complicated and expensive. Big landowners could do it but smaller landowners did not feel that that opportunity was available to them.

I think this is moving in the right direction. It is in nobody’s interest to slow it down. I very much welcome today’s debate and look forward to seeing the Bill get further along the legislative framework.

Bill read a second time and committed to a Committee of the Whole House.