HL Deb 14 July 2000 vol 615 cc534-45

4.17 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty) rose to move, That the draft regulations laid before the House on 15th June be approved [22nd Report from the Joint Committee].

The noble Lord said: My Lords, in moving the regulations, I draw attention to the fact that they flow from a European IPPC directive agreed in 1996. Our domestic legislation, the Environment Act 1990, was used as a model for that directive. Under the domestic legislation, pollution from industry is regulated under the integrated pollution prevention and control (IPPC) regime for larger and more polluting processes, or the local air pollution control (LAPC) regime which governs other processes which generate emissions to air.

The new integrated pollution prevention and control regime will bring with it a number of improvements. One very important improvement is the inclusion of energy efficiency among the factors which the regulators must consider. These energy measures will not only bring environmental benefits but could result in financial relief to industry itself.

These regulations are the product of extensive consultations which my department has carried out over the past four years. The consultation process has involved regulators, industry, trade associations, environmental interests and the public. In fact, this review of the existing legislation has been a good example of effective dialogue between government, industry and other stakeholders. In the light of the contributions that we have received, we have developed the regulations in a way which we believe strikes a fair balance between environment protection and the concerns of the various sectors of industry which are covered.

I also draw attention to the fact that these are affirmative resolution regulations. Indeed, we are, committed to ensuring that any changes made to provisions previously contained in primary legislation will continue to be the subject of affirmative resolution, thus giving this House and those in another place the proper degree of parliamentary control over changes to the legislative programme.

In that context, the Government's clear preference is to implement European directives through domestic primary legislation in this field. Clearly, the alternative would have been to implement the directive directly, using the powers under the European Communities Act 1972. However, that would have left us with a complicated and burdensome arrangement consisting of three different pollution control regimes and would have given the courts and, indeed, industry considerable difficulty in interpreting the law. The CBI, for example, was not in favour of that approach; neither was most of industry.

My department has estimated that approximately 7,000 installations in England and Wales will be subject to the directive. New installations will be brought in with immediate effect. However, existing installations must be brought into the new regime by the directive deadline of 30th October 2007. To ensure an easy transition from one regime to another, we have devised a phasing timetable which will commence early next year. The timetable has in part been determined by the availability of the European Guidance on Best Available Techniques as well as reflecting existing permitting cycles under the current system.

The timetable has also reflected other concerns. The Government recognise the important role that farming, in particular pig and poultry farming, plays in rural communities and understand the potential seriousness of the economic crisis in which the industry now finds itself. Therefore, we have decided to defer implementation of IPPC for the pig and poultry sectors until 2007, which, under the directive, is the last possible moment.

We also supported and encouraged the discussions that took place between the Environment Agency and the farming industry in developing general binding rules. Those rules will reduce the regulatory effort required by the agency and consequently, therefore, the fees paid by farmers while at the same time maintaining a high level of environmental protection.

There is one exception to the clear timetable set out in Schedule 3 to the regulations for commencement of IPPC. The entry date for bringing in landfills to IPPC is at this stage notional. The Government are currently considering how to implement the landfill directive, which covers both integrated pollution and control sites and others, and will shortly issue a consultation paper. It is expected that landfill sites will be phased in from 2002 although, until the nature of the phasing is determined, we have entered a nominal date on the timetable.

The timing of bringing this set of regulations before the House also needs to be noted. The deadline for transposing the directive into domestic legislation was October last year. At present, therefore, we are behind a number of European member states which have either transposed or implemented the directive. This is a potentially embarrassing situation for us, especially in view of the fact that the directive was in no small part based on our own current pollution control regime.

We believe that this regulatory framework is by its very nature adaptable and will allow the sharing of experience both here and across Europe. The process of regulation promoted development and improvements, both in technologies and techniques, which in turn will bring wider and greater benefits to the environment, to the various sectors of industry and to local people.

Finally, I can confirm that in my view the provisions of the draft regulations are compatible with the European Convention on Human Rights. I commend them to the House.

Moved, That the draft regulations etc.—(Lord Whitby.)

Lord Dixon-Smith

My Lords, it is an indication of the problems that the Government face with regard to pressure on their legislative programme that we take regulations of such significance at this hour on a Friday afternoon.

The Delegated Powers and Deregulation Committee produced a scathing report on the 1999 Act, because it consisted of one very large Henry VIII clause. About 30 clauses of the 1990 Act were repealed, to be replaced by these regulations, which are, in effect, a significant item of primary legislation. In other circumstances I would have preferred a different way of dealing with them. Their significance is such that it is unsatisfactory that our only choices are to approve them or not. However, that is the situation that we are in.

The Government's excuse for passing the Bill in that form was that we were under time pressure. The same excuse is used for the regulations. I sympathise with the Minister to the extent that action is being initiated against the United Kingdom on the other side of the water in Brussels because we have not taken the appropriate action under the 1996 directive. It is not in this country's interests to be taken to court in that way, so I shall not oppose the regulations, but I have a number of questions.

I have received briefings from the CBI and the NFU. The Minister said that there had been wide, detailed and satisfactory consultation. The CBI gives a different impression, saying that there has been an underlying theme of a lack of detailed information. None of us would say that that was satisfactory and I am sure that it is not what the Government intended.

The CBI has raised a number of questions. The EC Directive 96/61 refers to "industrial-scale" activities. In transposing that directive into regulation, the Government have introduced the term "commercial" in place of "industrial-scale". The CBI is concerned about that, because it could exclude some of those who cause pollution, such as research establishments, perhaps run by a university or a charitable foundation.

The Minister might not have time to answer that, but I hope that he will be able to answer my next question. As he said, there is a link between the IPPC regulations and the climate change levy. As I understand it, only companies regulated under the IPPC Part A can negotiate for agreements that comprise binding energy efficiency targets under the climate change levy. Companies will want certainty that, in meeting the negotiated requirements, they will be deemed to satisfy the CO2 and energy efficiency requirements under the other side of the legislation. It is not unreasonable to expect both sides of the equation to balance.

There is a problem with site restoration under these regulations. Again, the CBI is concerned because it can cause a major problem for industry after the process is completed and the disposal of the site becomes an issue. There is a question as to the fitness of the site, the problems of site surveys and so on.

There is also a very serious question from the CBI as to what constitutes a "site". The relationship between an installation and a site appears to be vague. The CBI would have preferred to have "installation" and "site" separated by using the word "establishment" which is used under the control of major accident hazard regulations. Under those regulations, an establishment is defined as, the whole area within which one or more installations are located, under the control of the same operator or, where multi-operator or operationally interdependent installations exist, the relevant group of operators, and for this purpose, two or more areas under the control of the same operator or group of operators and separated only by a road, railway or inland waterway shall be treated as one whole area". Having accepted that as an establishment, the CBI would have preferred an "installation site" to be that area of land used primarily for the operation of a particular installation or a separately permitted installation thereon because there are a number of industrial sites with a number of separate permitted installations. So there is a problem there.

That illustrates the sort of difficulties which the CBI still have with these regulations. It also has a problem on the question of commercial confidentiality. Under Clause 31, the regulator decides what is commercially confidential and has to give notice that that determination is taking place within a specified time. If that notice is not given, the applicant must assume that the information is deemed not to be commercially confidential and the applicant has 21 days from the 28 clays that were originally allowed for the ruling in order to appeal that the information he has given should be commercially confidential.

Since we are now dealing with what I would call a voluntary declaration by the regulator, there is a problem for the applicant. The situation becomes more difficult because when the regulator believes the information is commercially confidential but should be on the register, he is obliged to contact the applicant to enable him to provide more details to inform the decision.

The CBI feels that in that instance, the notice should always be given by the regulator stating whether information in relation to an application is either commercially confidential or not. So the applicant always has a reply from the regulator and does not have to guess what is happening by whether or not he has received a response. That would make matters rather more straightforward for both the regulator and for applicants. I ask the Minister to give consideration to that matter.

Commercial confidentiality leads me neatly to the agricultural sector. For the first time various intensive agricultural operations are included. The agricultural industry is in a politically sensitive situation in relation to intensive installations and intensive farming. In considering some of the wilder things that, unfortunately, have happened over the past few years in the context of fur farming and, more recently, experimental badger trapping in parts of the West Country, one realises that if information giving map and grid references and titles to intensive farm operations is available on a website, as indeed is required by the legislation, that could have a difficult effect on the security of otherwise perfectly reputable agricultural operations. A few people may take a rather unfortunate, not to say an extremely unfortunate, view of that process.

The definition of an agricultural installation for the purposes of the regulations seems to depend upon numbers of animals. We are talking of units of more than 40,000 laying hens or other birds and more than 400 farrowing sows and 700 fattening pigs. I raise this point because the number of animals on a farm, in an installation where those animals are kept indoors, is one thing, but increasingly nowadays, where the environment is right and the soil types are suitable, pigs are kept out of doors, particularly farrowing pigs. It would not be wise perhaps to do that with fattening pigs. I have visited farms where I have seen small huts consisting of curved sheets of corrugated iron, which make perfectly adequate shelters for pigs, stretching as far as the horizon and there is no installation on the farm at all. I find the use of numbers as a definition rather strange.

There is a problem, which arises in two ways, with the competitive position of the United Kingdom in regard to these regulations. We know that, unfortunately, the agricultural industry at present is in deep trouble, hut we have a much higher proportion of our pig and poultry industries in this country in large units that will be subject to these regulations. In the United Kingdom 7.4 per cent of our pig holdings would come within this category. The figure for Denmark is 5.1 per cent and for the Netherlands it is 5.4 per cent. That may not seem significant, but in Denmark I understand that the cost of a licence will be £1,000 and in the Netherlands it will be nothing. Here we are talking about the cost being or the order of £3,000.

Can the Minister give me an assurance on this matter? It would be interesting to know how the charges are arrived at. I understand that the Environment Agency has an obligation to cover only its costs. I have no difficulty with that as a proposition, except that an obligation to cover only costs gives no incentive to business efficiency. The Minister and I have debated matters of best value in regard to local government oil a number of occasions. In fact, if all a local authority had to do was balance its budget and have no consideration for value for money, that would not be a happy situation. The Environment Agency is apparently to be permitted to operate with nobody monitoring costs or making sure that the agricultural industry receives value for money. The industry simply has to meet the costs presented to it. That is not good enough.

I believe I have raised sufficient questions on the regulations to show that we have real concern over their content. In another situation I would have wanted to table reasoned amendments. This shows the weakness of the regulatory procedure. We can only approve or disapprove. I believe circumstances will dictate that the Minister will need to return to this House before very long with amendments to these regulations. However, I shall not be opposing them. It would be neither appropriate nor in this country's interests for me to do so. But on a purely personal level, I cannot approve of them in detail.

Baroness Miller of Chilthorne Domer

My Lords, we on these Benches welcome these regulations in that they will give an added impetus to cleaning up our environment and to the new technology as an investment in that operation. We also welcome the inclusion of energy efficiency.

I read the regulations in conjunction with the new consultation draft document from the Environmental Agency, Creating an Environmental Vision, which I found to be extremely interesting. It helped to give one a feel as to how the agency may carry out its duties with regard to these regulations.

I shall not take up the time of the House repeating the questions raised by the noble Lord, Lord Dixon-Smith, in relation to the agricultural industry. But I should like to ask one specific question about the difference between new or substantially changed units in that regard. The regulations appear to refer simply to "new" units. What will happen to a producer who adds on some additional houses—for instance, for extra egg-laying hens? At what point will the regulations kick in? At what stage will it be considered that he has substantially changed his facility? I should welcome clarification on that point.

Another area on which I should like clarification is in relation to what is meant by the change in permits covered in Part II, paragraph 5, on planning. The link between planning, development control and the implementation of the regulations appears to be much closer. It is already difficult for councillors to balance the need for sites for producers and industry, which will be covered by the regulations, and the volume of local objections that arise from such applications. If there is to be a closer link and more applications have to go through the development control process—a perfectly worthwhile process when we are trying to clean up the environment—guidance for councillors would be extremely useful. I should be most grateful if the Minister could cover that point in his response. In conclusion, I believe these to be useful regulations and, subject to my questions being covered satisfactorily, I give them a wholehearted welcome.

4.45 p.m.

The Earl of Longford

My Lords, may I ask whoever is in charge of the business of the House whether there is any hope of the debate on the disabled being dealt with shortly? We were told that it would start between three and four o'clock. It is now a quarter to five. Many people have to make their way home to fairly remote parts of England. I repeat: is there any hope of the debate coming on shortly?

Baroness Farrington of Ribbleton

My Lords, we have three further orders to deal with before it will be possible to begin the Unstarred Question.

Baroness Byford

My Lords, like my noble friend. I am quite concerned as regards the implications of the regulations and their effect on the farming fraternity. Therefore, my remarks will focus on that particular sector. We welcome the implementation delay date and thank the noble Lord for it. As he well remembers, I tabled several Questions as to why the regulations were being introduced early. When part of his reply referred to the "convenience of regulators", I nearly hit the roof. So I am truly grateful that the Minister has decided to put off the implementation until the year 2007.

However, I believe I am right in saying that the regulations obviously apply "straightaway" to any installations established since October 1999, so those concerned will have to pay for this now. Moreover, I understand that birdcage sizes will have to be altered before 2007. But if, as a result, substantial changes need to be made to that farming practice, will those concerned fall into the category of having to pay the IPPC charges at that stage, or will they be allowed to wait until 2007? I should be grateful to receive an answer on that point and I hope that the Minister understands my logic.

Although we are anxious to see pollution and its prevention controlled, as clearly explained by my noble friend, there are immense pressures on the farming industry at present. Indeed, of all sectors, probably the pigs and poultry sectors are the ones facing enormous problems. According to the NFU, the Government promised earlier this year at the farming summit to avoid gold plating the legislation, its implementation and enforcement and to regulate in the least bureaucratic and burdensome way. But here we have extra burdens, extra costs and extra regulation. It is most unfortunate.

I also understand that a pledge was given at the farming summit to reduce permit charges by 50 per cent when general binding rules are in place. However, the NFU has expressed to me its concern that the charges are excessive and higher than any others imposed on agriculture for environmental purposes. Perhaps the Minister can also comment on that issue. Moreover, any changes that add to farming costs, such as this permit, will obviously not be recoverable through the market-place and are therefore a straight tax on those producers of pigs and poultry. Here, again—and for the second time today—I should declare an interest. We have a family farm on which we produce pigs. However, we are not big enough to fall into this catchment.

At present, competitiveness is everything to the pig and poultry producers in the country. I know that we are somewhat behind in introducing this directive, but perhaps the Minister can tell us how many of the member states will have implemented it at this stage and how many remain outstanding.

As my noble friend said, we already know that the full cost recovery of the implementation for Denmark is only £1,000—there is no charge in Holland—whereas ours, as the Minister knows, is much higher. I should be grateful to hear the Minister's comment. Perhaps he can also tell us whether any other countries are taking a similar view. For example, do we know what the situation is in other member state countries? Are there any interim charges in place?

My noble friend made another extremely important point with regard to the free availability of information on addresses and the possible availability of national grid references. This year there has been increasing pressure from pressure groups—I may not have expressed that well, but I think that noble Lords know what I mean!—on mink producers. Recent GM trials have been trashed. There are problems with the ongoing badger trials. Recently I had great difficulty finding a perfectly kept and well organised poultry establishment. The owners of such establishments sensibly try to make it difficult for people to discover where they are situated.

As regards poultry, a 40,000 bird layer unit typically produces some 12.2 million eggs a year. Average costs of production per dozen are 45p and the average returns per dozen (on the wholesale market) are approximately 54p. Even to reduce the charges of the permit and subsistence by half (to £6,000 and £2,768 respectively) would increase the costs per dozen by 0.86p and reduce profits made by 9.6 per cent. This is at a time when, as I say, the industry is in immense difficulty. Returns for producers supplying eggs under contract for a packer are negative, so losses would, of course, be increased.

My noble friend said earlier that we tend to have bigger pig units here than on the Continent. An 800 breeder/finisher could expect to produce 16,420 pigs per annum. Therefore an additional charge of £8,768 would increase costs by 53p per pig. For a 2,500 finishing place unit finishing 8,000 pigs, those charges would increase the cost by £1.10 per pig. In the current crisis in the industry this would add considerably to the losses those businesses are already suffering. The noble Baroness, Lady Hayman, who is the Minister responsible for agriculture, is present. I say to her that I am aware that prices in the pig industry have recovered a little but there is still a long way to go, as I am sure she accepts.

I have read the debate of the Standing Committee that took place in the other place. I have already mentioned the position of Danish and Dutch producers. When asked about other regulations, the Minister in the other place was not exactly direct in his reply. He referred to the regime in Ireland. When my honourable friend Owen Paterson pressed him further, he said that he would write to him and to other Members of the committee on the arrangements in Holland. I understand that no such letter has yet been received. I hope that the Minister will comment further on that.

In this country we have the highest welfare standards. British farmers are proud to set such standards. However, if those high standards, and the extra burdens and costs that they incur, drive farmers out of business, we are not handling the regulations in the way that I am sure all noble Lords would wish. Our welfare regime has standards far above those of most of our neighbouring countries. A report in the Farmers Guardian last year showed that 80 per cent of Dutch pig farmers did not respect the welfare regime in Holland.

I reiterate what my noble friend Lord Dixon-Smith said earlier. It is such a shame that the Pollution Prevention and Control Act 1999 conferred huge Henry VIII powers. Normally regulations comprise a document of one or two pages. However, the regulations we are discussing comprise a book of some 83 pages. As my noble friend said, we cannot alter what is happening. We can only raise our concerns with the Minister. We can only approve or disapprove. I have expressed my particular concern for the pig and poultry sectors. I appreciate the desire for a cleaner environment, but if that pushes our producers out of business when those in other countries do not have to bear these burdens, we are going about it the wrong way.

I have spoken at this stage only about the EU regulations; obviously we operate in a global market. I look forward to the Minister's response.

Lord Whitty

My Lords, a number of points have been raised. Perhaps I may turn immediately to the last point made by the noble Baroness—which was the first point made by the noble Lord, Lord Dixon-Smith—as regards the nature of the regulations and the nature of the legislation which was passed last year. We had lengthy and interesting debates on this issue which, at the end of the day, led to a degree of understanding about the approach we were adopting under the new legislation. Since 1996 the Houses of Parliament have debated the essence of the directive some five times; and, so far as concerns outside consultation, these regulations have been the subject of no less than three rounds of consultation. Admittedly they are larger and more complex than many regulations, but, even so, that is a substantial degree of consultation with all sectors of industry, including agriculture. The regulations reflect much of the feed-back from those consultations.

Turning to answer a number of specific points, the noble Lord, Lord Dixon-Smith, asked about the reference to "commercial purposes" rather than to "industrial scale". In our view the wording of the directive was not sufficiently precise for our legal structures to ensure that operators and regulators were clear as to what was and was not regulated. Based on the size of world markets, "industrial scale" could range from 1 million tonnes a year to something very much smaller. We have therefore referred instead at the start of Chapter 4 to, producing in a chemical plant by chemical processing for commercial purposes substances or groups of substances". We believe that that indicates what we are talking about here.

The noble Lord referred to the cross-over with the climate change agreements and to those agreements that can be separately negotiated by sector. It is true that the IPPC dividing line also divides and defines those sectors which can engage in such agreements and which can count for purposes of energy efficiency requirements under these regulations. I am glad to confirm that it would be the same for those sectors.

He also asked why "site" is not defined under the regulations—or, rather, why "installations" and "sites" are not defined. It is true they are not defined, but there is guidance in the practical guide that, for the purposes of the site report, the site should include the land on which the activity takes place and any land that is integral to the installation and needed for satisfactory operation. That could include, for example, land used to store raw materials. So there exists more substantial guidance than is on the face of the regulations.

The noble Lord then went on to refer to the issue of confidentiality in two senses: one in relation to procedure and the other in relation to the designation of the names and addresses of poultry and intensive pig farms. I am not sure that I followed the noble Lord's procedural points; it may be better if I write to him to explain how the procedure operates. I appreciate his concerns in relation to a possible vulnerability to attacks from animal rights activists. However, I understand that the agency's plan to put information from its public registers onto the Internet is in its early stages. Any plans to take that forward will obviously be subject to detailed consultations with the various sectors concerned. I understand that my right honourable friend the Minister for the Environment has indicated that to the NFU and that further discussions will follow.

The noble Lord also referred to the question of what was meant by an installation and whether pigs which were outside would count in the same way as pigs which were inside, if I can put it that way. I am not sure whether the terms we are using are more intensive than extensive, but only the intensive rearing of pigs and poultry in installations will be covered, and only then when they exceed the sizes stipulated.

Therefore, rearing pigs outdoors would be excluded from the regulations, whatever the number of pigs involved. The position is slightly different with poultry because free-range poultry can be covered and therefore could in theory come under the regulations. But I doubt whether there are many free-range installations with 40,000 birds. The implications for that kind of farming are perhaps fewer than was thought.

There are concerns in the pig and poultry industry. I appreciate the views of the noble Baroness, Lady Byford, and the noble Lord, Lord Dixon-Smith, about the current economics in those industries. The Government have responded sympathetically in terms of the timescales, as the noble Baroness graciously pointed out. We understand those difficulties and we are trying to respond in terms of both the timing and the costs of the regime.

The noble Lord, Lord Dixon-Smith, questioned whether the nature of the charging is leading to efficiency gains. Later this year we will be conducting an overall assessment of the Environment Agency's efficiency and effectiveness. We will be looking at the charging regime in that context, as in others, which, it is to be hoped, could result in efficiency savings that could be passed on to the operators through reduced charges in the longer term. So that is being addressed in a slightly different context.

The noble Baronesses, Lady Miller of Chilthorne Domer and Lady Byford, asked whether any changes in the existing poultry installations, particularly in relation to changing welfare provisions elsewhere, would mean that they were defined as new installations. The substantial change criterion indicated in the regulations is one which may have a significant negative effect on the environment. We do not therefore expect that extending a poultry installation so as to rehouse birds to a new minimum standard to comply with those new welfare regulations would of itself create a substantial change in these terms. All other things being equal, we do not think that such a change would make that into a new installation for the purposes of the regulations.

The noble Baroness, Lady Miller, referred to the linked planning arrangements. We are currently revising Planning Policy Guidance No. 23 on pollution control. There will be further consultation on that later in the year.

The noble Baroness, Lady Byford, referred to the situation in other countries both in terms of the transposition and in terms of the charging regime. I indicated that we were behind the transposition date. Permitting is already in place in at least Ireland, The Netherlands, Sweden, France and Finland, but with slightly different mechanisms. There has also been some progress in Belgium and Portugal. But it is not yet transposed in any sense in Germany or Greece and it is only partially transposed in Italy. We are roughly half way down that table in that respect.

I have some fairly detailed information on the different charging regimes. By and large, there is a different approach in this country. The Environment Agency has to cover its costs. It is not the case, as farmers occasionally suggest to us, that there is no charging in other countries although in some countries, such as The Netherlands, there is a subsidy. But in most European countries there is some degree of charging, although, by and large, less than in this country. If the letter to which the noble Baroness referred in the exchange in the other place has not yet gone, I shall ensure with my colleagues that the noble Baroness receives a letter spelling that out in more detail.

As far as concerns the actual price, partly in the context of the summit a month or two ago to which the noble Baroness alluded, the original proposition of the pricing in this context has been substantially reduced. On permit application, the original agency proposals pitched it at around £12,000. That has now been reduced. Where there is a general binding rule, applications are under £3,000 and for site-specific applications, the figure is £5,900. I accept that those are still significant costs, but nevertheless they are an improvement on what the Prime Minister referred to in a statement after the meeting as a 50 per cent cut. We have therefore fulfilled that commitment.

I hope that I have been able to answer most of the questions put to me. If I have not done so, I shall write to noble Lords. As I said earlier, I also undertake to forward to the noble Baroness the letter to which I have referred. I commend the regulations to the House.

On Question, Motion agreed to.