Merseyside businessman John Lewis is winning his David and Goliath battle with a Spanish-owned energy firm which he says was potentially threatening 1,000 jobs at a North-west business park.
For nearly nine years Mr Lewis has been locked in a legal dispute with energy company SP Manweb to get pylons and overhead cables removed from The Heath Business and Technical Park in Runcorn. SOG Ltd, which owns The Heath, wanted to free up land in the vicinity of the pylons to be sold for housing, with the proceeds financing a multi-million pound new-build programme. SP Manweb repeatedly argued that SOG would not secure planning consent for housing but they were proved wrong, with outline planning consent being granted last month.
The dispute has involved two lengthy and complex Wayleave inquiries involving the Secretary of State for Energy and Climate Change. Halton MP Derek Twigg took up the issue with various Government Ministers and the Secretary of State.
The saga began in April 2007 when SOG served a notice on SP Manweb to remove the pylons and cables, which SOG maintain had no permission to be situated at the site, to enable ten acres of land to be freed up for residential development. Funds raised were to be channeled back into the business park to finance a redevelopment and re-modelling programme.
SP Manweb then applied for a ‘Necessary Wayleave’ to keep the electricity lines in place, triggering a Wayleave hearing. The initial hearing concluded in March, 2012 and eleven months later, in February 2013, the Inspector indicated that it was his intention to rule in favour of SP Manweb – even though just 14 days before that first hearing, the energy company disclosed that one of the two lines running across The Heath did not actually carry any power, having been de-energised in the 1950s.
In July 2013 the Secretary of State said he was ‘minded’ to overrule his Inspector and refuse to grant SP Manweb’s ‘Necessary Wayleave’ on the grounds that the detriment to SOG, the landowner, exceeded the cost of burying the electric lines. However, under the Wayleave process, SP Manweb was able to challenge the Secretary of State’s view which led to a re-opened hearing in 2014.
Last month SOG obtained planning consent for the homes and now SP ManWeb must pay fair compensation for the actual losses incurred by SOG, arising from its inability to develop its own land free of hindrance from the pylons and electrical lines.
SOG Managing Director Mr Lewis has condemned the tortuous and costly process facing landowners who want to re-route power lines that do not have permission to be on their property.
After winning his long drawn-out battle to establish that planning consent would be granted, despite SP Manweb’s claims to the contrary, Mr Lewis’ lawyers believe the issue could be resolved in the next six months if SP Manweb make a fair compensation offer. Otherwise it could take up to a year for a Lands Tribunal to determine the amount of compensation the energy company should pay.
Says Mr Lewis: “Overall this saga will have taken 10 years to settle with SOG incurring astronomical legal fees. When you take into account the massive amount of time that myself, my co-directors and SOG’s senior managers have spent fighting this case along with the fees we have had to pay to so many expert consultants, it is impossible to calculate the total cost.”
Mr Lewis adds: “This is a classic ‘David and Goliath’ situation where SOG, a small business, took on SP Manweb whose Spanish owners are the world’s third largest energy company. The pylons and two power lines running across our land do not have permission to be there and I would welcome SP Manweb agreeing to remove them but they have refused. It has so far taken nearly nine years to fight this injustice and gain an opportunity to force SP Manweb to pay us fair compensation.
“The impact of the pylons has potentially cost SOG over £10million in lost revenue and threatened future expansion at the business park which would generate another 1,000 jobs, to add to the 2,000 people currently employed by businesses at The Heath.
“While competitor locations have access to millions of pounds of Government grants, SOG is privately-owned and cannot obtain grant funding. We are therefore reliant on investing our own money to extend and improve the site. We wanted the power lines to be buried or diverted to a less intrusive area of the business park to enable us to maximize the park’s potential but SP Manweb refused to agree to this or offer us fair compensation.
“They forced us to engage in a process which, whilst time consuming and expensive, will at last enable us to obtain fair compensation for the loss which they have caused us.”
Giving evidence at the 2014 hearing Mr Lewis spoke of his frustration at the length of time the process had taken. He said it had ‘cost SOG, a small business, a hell of a lot of money’ and yet the re-opened hearing appeared to be going over points covered at the original hearing.
He maintains SP ManWeb’s application was flawed from the outset because when the company applied to the Secretary of State to retain the two circuits it did not disclose that one of them had not been connected or in operation for 60 years. SP Manweb had not mentioned it to SOG or their legal team during five years of protracted negotiations or during two pre-hearings.
Mr Lewis argues that the entire Wayleave process, based around 1967 legislation, is outdated and weighed heavily against landowners who cannot retrieve their costs even if they win their case. “At a time when the UK is desperate for housing this prehistoric legislation and cumbersome Wayleave process should not be allowed to hinder such developments,” says Mr Lewis.
Mr Lewis’s legal team made a ‘Freedom of Information’ request in 2014 to assess the number of successful cases landowners had won against energy companies in the UK. John Lord of TLT Solicitors says that over a six year period statistics showed there had been 239 Wayleave applications with only one finding in favour of a landowner. Mr Lord says it demonstrates that the process and the cost of taking a case to a hearing are weighted strongly in the favour of the large energy companies.
Mr Lewis says: “You cannot recover your costs in the Wayleave tribunal, so there is no motivation for energy providers to do anything other than prolong the process in the hope that the landowner will back down. Many landowners will do this because they are unable to afford the colossal costs associated with fighting a case. Most small businesses and developers cannot afford it, so the energy companies win because their pockets are generally deeper.
“Despite SP Manweb knowing that it must pay fair compensation to SOG and despite it knowing that any compensation will go to the improvement of The Heath and create jobs, it has not, during the course of the last 18 months, approached SOG in order to voluntarily offer fair compensation for its use of SOG’s land – and it has not paid a penny piece in 16 years for its pylons to be sited on SOG’s land.
“The Wayleave system is unfair and favours the energy company over the needs of businesses. In my view the Government need to address this unfairness immediately.”
Mr Lewis says The Heath is a good employment centre which provides work for lots of people. It has been recognised by government, royalty and high-profile business leaders many times as a model that should be replicated and is identified in the Government White Paper ‘Transforming UK Life Science Sites’. However the location has ageing buildings which are costly to maintain. The only way to raise capital to invest in the site is sell some of its land assets to finance a new-build and refurbishment programme.
“The presence of the pylons and cables has prevented expansion and led to lost business opportunities. This needs to be taken into account when assessing the impact of the pylons on our business, or any other land owners business. Hopefully, through our experience, we have developed a platform and a process which will be of benefit to other unfortunate land owners going through similar distress.”