Water Bill [H.L.]

HL Deb 01 April 2003 vol 646 cc93-148GC

(Second Day)

The Committee met at a quarter before four of the clock.

[The Deputy Chairman of Committees (Lord Tordoff) in the Chair.]

The Deputy Chairman of Committees (Lord Tordoff)

The usual statement was read out at the beginning of the proceedings on this Committee stage, but perhaps I should remind those who were not here that if there is a Division in the Chamber while we are sitting in the Committee, we shall adjourn as soon as the Division Bells are rung and then return after 10 minutes.

Clause 7 [Rights to abstract for drainage purposes, etc]:

Baroness Miller of Chilthorne Domer moved Amendment No. 22: Page 9, line 12, after "board" insert "or from an adjacent main river under the provisions of a current Water level Management Plan

The noble Baroness said: The amendment would create an exemption from the need for an abstraction licence where there is a water level management plan already in place. The Bill will require all sites to have an abstraction licence for more than 20 cubic metres a day. Where there are internal drainage boards, abstraction from rivers is currently managed under the Land Drainage Act 1991, which requires consents to cover abstraction.

This is a probing amendment to discover the relationship between the water level management plans and the proposals in the Bill. Also, we believe that in some areas, such as those covered by water level management plans, a large number of new licences will be required. Far from streamlining the regulation process, those new licences would be in competition with the water level management plan. The imposition of the licences would not add anything to an already complex process. The management plans are negotiated at length and discussed with all the interested parties. That seems to be an adequate way of managing the abstraction of water because of high levels of flow in the river. That is what water level management plans are designed to address.

The abstraction licences are appropriate where they try to impose a volumetric limit, but if the river is already full, we do not believe that the extra imposition of a licence would add anything to the way in which water is managed. I beg to move.

Lord Dixon-Smith

I offer general support for the amendment. If we have water management systems that are working satisfactorily under the existing remit without new legislation, should we change things unless it is essential? I accept that we have to change things from time to time, but in the interests of simplicity, if we do not have to change them it would be much better to leave things as they are, unless that leaves some insuperable obstacle.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)

I recognise the noble Baroness's desire for a co-ordinated approach to water management, but the reality is that at a higher level the amendment would inhibit the ability of the Environment Agency to manage water resources sustainably in the future. The clause ends all exemptions. All significant users of water will be covered to allow for control of the total use of water when resources may not be as plentiful as they are now, given our expectations of climate change. The Environment Agency will need to be able to rebalance the needs of all abstractors and the needs of the environment. To exclude a significant amount of water from that would not be appropriate.

We recognise the view of the noble Lord, Lord Dixon-Smith, that we should not change unless we need to. We have retained the exempt ion for transfers within internal drainage districts. New subsection (1A) achieves that continued exemption. That reflects our confidence in the ability of internal drainage boards to manage the districts for which they have responsibility. The amendment would leave some transfers of large quantities of water outside control now and in the future, when our resources may be more scarce. That is contrary to the purpose of the Bill. The intention of the Bill is to ensure that transferring water into internal drainage districts, for whatever purpose, is not done at the expense of the supplying river, of its users or of the environment that is dependent on it.

We recognise the intention behind the amendment to ensure that water resources and flood management are more joined up. However, those two issues are covered by separate areas of legislation and are there for different purposes. From a legislative point of view, they are best not confused. The water level management plans referred to in this respect do not have a statutory basis. It would not be appropriate to use plans that do not have an explicit legal base.

I understand what the noble Baroness is trying to do, but it thwarts the overall purpose of this part of the Bill.

Baroness Miller of Chilthorne Domer

I am sure that the Minister remembers my suggestion that he should give a pound to WaterAid for every bad pun in the Bill. What will be the relationship between water level management plans and all the other mechanisms that the Bill will bring in, and the Water Framework Directive? If, as he says, the water level management plans have no statutory basis, how will the people who are taking part in the negotiations about them know where they then fit in? Why should they devote their time to those negotiations?

Lord Whitty

The water management plans for these purposes deal with flood management rather than water supply. The people who participate in drawing up those plans and managing the water levels understand their role. Transfers into the internal drainage board areas do not take place only during flood periods when there are high flows on the donor river. They could take place at any time. The exemption relating to the existence of a plan to deal with floods is not a relevant consideration. At all times the Environment Agency needs to be able to control all movement of water to balance the system, whether it is to deal with excess or drought or for ongoing water management purposes. The flood dimension deals with one aspect. It is an important aspect, but it is only one.

Baroness Miller of Chilthorne Domer

I thank the Minister for his reply, which I shall dwell on and see how best to achieve my purposes. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Livsey of Talgarth moved Amendment No. 23: Page 9, line 17, at end insert "; and (d) the sole purpose of the transfer is for trickle irrigation"

The noble Lord said: The amendment relates to a specific situation—

Noble Lords

This amendment has been withdrawn.

The Deputy Chairman of Committees

Perhaps it might help the Committee if I say that, although on the groupings the amendment is shown as having been withdrawn from the Marshalled List, it has not been withdrawn.

Baroness Miller of Chilthorne Domer

I apologise to the Committee. That was my mistake.

Lord Livsey of Talgarth

I assure the Committee that there is no evidence of domestic strife. I am sorry to disappoint the Committee.

The amendment would add a paragraph (d) to new subsection (1A), which lists specific circumstances in which abstraction is allowed without a licence. I want to probe the Government on whether this is an appropriate place for special pleading on behalf of trickle irrigation. I realise that there will be a longer debate on trickle irrigation later, but I am bringing it up at this point to see whether this is an appropriate place to put in a special mention. We need to pay particular attention to trickle irrigation and prioritise it over other means of irrigation and other uses of water. In particular, it is used for food production. This part of the Bill refers to transfers of water. In some circumstances there may be an inadequate water supply. It refers specifically to districts. Trickle irrigation is a specific function to enable food production, which is a vital renewable resource and should be higher on the list of priorities than many other aspects. I wonder whether this is an appropriate place for a reference to specific circumstances for allowances for trickle irrigation. I beg to move.

Lord Dixon-Smith

Once again, I am slightly hesitant about speaking on this amendment. There is no doubt but that trickle irrigation is the most efficient way of using water for irrigation. It should be encouraged and it would be very nice if it could be exempted. However, large horticultural units can abstract large quantities of water. To exempt a whole class of irrigation might lead to an inconsistency in the Bill. Somebody using spray irrigation, who would have to have a licence, might be using far less water than someone using trickle irrigation, who would have an exemption. That seems a little hard. Of course, it gives the person using spray irrigation every incentive to change his system if that is possible, but it is not always possible. Spray irrigation may be the only way in which some people can work.

I am hesitant about the amendment and I look forward with interest to the Minister's response.

Lord Carter

I was going to make the same point in a different way. Paragraphs (a) to (c) all preserve the stock of water, whereas paragraph (d) proposed in the amendment would use it up. The noble Lord is probably correct that this is not the right place in the Bill, because it does not run with the rest of the clause.

Baroness Young of Old Scone

I should like clarification of the intention behind the amendment. My understanding is that transfers of water within IDBs are exempt from the provisions of the Bill. The clause would be appropriate only if there was abstraction for trickle irrigation. I should like to press the noble Lord to clarify his intention.

4 p.m.

Lord Livsey of Talgarth

I make a special plea for trickle irrigation because Section 29(1A) says that, restriction on abstraction shall not apply to any abstraction of water from inland waters within the district of an internal drainage board". Specific exemptions are then set out. I take the point made by the noble Lord, Lord Carter, about whether this is the right place for this provision. Trickle irrigation is a very efficient method, but is this right place in the Bill to put it when one compares it with the other aspects mentioned there?

Baroness Miller of Chilthorne Domer

I support my noble friend. We should like to see what judgment the Government think can be made. The Environment Agency may not make value judgments about whether food production is a more important use of water than, for example, car washing. We may wish to return to that theme. I am pleased that the Prime Minister has decided to add his weight to those who have pressed British institutions to supply, where possible, British food. We want to explore as fully as possible what weight is given to the importance of agriculture as a user of water.

Lord Whitty

This provision is probably in the wrong place. The section deals with transfers made by internal drainage boards, whereas the noble Lord is thinking more of abstractions. Transfers within IDB areas will continue to be exempt. But abstractions above a certain level are licensable. Therefore, some trickle irrigation above the threshold—for example, the large horticultural premises to which the noble Lord, Lord Dixon-Smith, referred—will be licensable for abstraction purposes, but this deals with transfers.

If those transfers are to be exempt, they will be subject to the conditions set out by the clause. Therefore, adding this aspect to them would have the opposite effect to that which the noble Lord seeks. It could narrow the exemption to trickle irrigation by the drainage boards. It would be a narrower exemption than that provided by Section 29(1A). No doubt we shall return to the supply of trickle irrigation in general terms, but the amendment will not help the noble Lord's cause. He may therefore wish to reconsider it.

The noble Baroness raised the question of whether the Environment Agency can make a judgment on these matters. It depends on what one means by a judgment. One role of the agency is to decide whether quantities required for a particular use are reasonable. That is not an issue of whether one use is more important than another, but whether it is reasonable to use that quantity of water for that purpose. Therefore, a number of judgments must be made by the Environment Agency in that respect, but they are not subjective value judgments in the sense that the noble Baroness refers to.

I hope that the noble Lord will think better of the amendment and return to this matter in a general discussion on trickle irrigation.

Lord Livsey of Talgarth

The purpose of the amendment was to probe. That has been exercised in the arguments which have been deployed. I refer in particular to the comments of the noble Lord, Lord Dixon-Smith, about the differences between trickle and spray irrigation and whether both should be treated the same. I suspect that as trickle irrigation is more efficient it probably has pride of place. None the less, I accept the Minister's argument that the fight for this issue may not be in the correct place. I believe the noble Lord, Lord Dixon-Smith, wishes to say something before I sit down.

Lord Dixon-Smith

It is not really a probing amendment. A better way to deal with efficiency of irrigation, rather than through an exemption in the need to have an abstraction licence, would be through a charging system. I am sure that will be picked up. One could charge a higher rate per cubic metre of water used for spray irrigation than for trickle irrigation. That would provide a great incentive to people to change if it is practical for them to do so.

Lord Livsey of Talgarth

I thank the noble Lord for his intervention. Without detaining the Committee further, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer moved Amendment No. 24: Page 9, line 17, at end insert— or for the purpose of alleviating imminent flooding or domestic or commercial property.

The noble Baroness said: I shall speak also to Amendment No. 25. Amendment No. 24 is under the clause headed "Rights to abstract for drainage purposes, etc". I again question the need for any discouragement of people who, for good reasons, are trying to take water out of a river at times of high flows. I do not believe that spilling water over river banks or spillways is defined as abstraction. I am not sure whether it is the Bill's intention to redefine it as abstraction. If it is not abstraction, it should, not need licensing.

In times of heavy precipitation, river managers will wish to open sluices. Usually they are used for warping or irrigation, but in this case they are to be used to remove water from the river and to alleviate flooding in towns and villages downstream. Amendment No. 24 is designed to make sure that that activity is exempt from licensing and that the owners or operators of those sluices are not discouraged from using them, bearing in mind that the Environment Agency does not have any powers to make them apply for a licence or use them.

Amendment No. 25 would add a provision to the list of emergency abstractions that I am amazed is not there already. It would add the danger, of flooding to domestic or commercial property".

The Bill lists dangers to human life and health, quite rightly, as well as, serious damage to works resulting from any such operations", and, serious damage to the environment".

One important aspect, which receives a great deal of coverage from those whose properties have unfortunately been flooded, is the necessity to have regard to damage to property. Therefore, Amendment No. 25 is designed to make sure that damage to property is also included in the Government's list. I beg to move.

Lord Whitty

It might be helpful if I intervene at this stage. I think that these amendments are based on a misunderstanding. The noble Baroness assumes that the current exemptions are altered by the Bill, whereas it does not do anything to remove those exemptions relating to abstraction for the purposes of protecting land against encroachment by water, by floods or whatever kind of river overflow. The existing exemption under the Water Resources Act 1991 is retained. It applies to property on land as well as to land itself. All activities associated with the prevention of flooding are therefore exempted from the need for an abstraction licence. That is provided for already under the Water Resources Act, and does not need to be spelt out in this new legislation. Therefore, I think there is no necessity for these amendments.

Baroness Miller of Chilthorne Domer

I thank the Minister for that reply. It is probably reassuring on the first point. On the second point, why do the Government need to list the emergency situation under new subsection (2A)?

Lord Whitty

Other emergency situations could be lack of supply of water or diversion of water as well as flooding.

Baroness Miller of Chilthorne Domer

I shall return to the amended Bill the Minister kindly gave us and check exactly what he is saying.

Lord Whitty

For the benefit of the noble Baroness, it is Section 29(5) of the Water Resources Act—to which I believe she has a Keeling schedule—which is retained and the revised definition is substituted in Clause 7(6).

Baroness Miller of Chilthorne Domer

I thank the Minister for his clarification. I repeat my wish for a consolidated Bill. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

Lord Whitty moved Amendment No. 26: Page 9, line 42, after "not" insert ", or is no longer,

The noble Lord said: I shall speak also to the associated amendments. These are minor technical changes. I shall go through what each one does. Amendment No. 26 provides that the Environment Agency can serve a notice on an operator that what started off as an emergency abstraction is no longer considered to be one because the circumstances have changed. That will allow the agency to establish control as part of its control over the use of water resources over abstractions that otherwise could go on for ever, having started as an emergency.

As written, the clause would amend the Water Resources Act with a provision that could never arise in practice. Amendment No. 27 restores the current wording in the Act.

Amendment No. 32 changes the number of subsections to bring them into line. Amendment No. 33 brings the definition of flood defences for the purposes of defining minimum river flows in Section 21 of the Water Resources Act into line with that used for flood defence purposes in Section 113 of that Act.

Amendment No. 35 provides that the Secretary of State may delegate to a third party—the planning inspectorate—appeals against a water conservation notice, which brings it into line with other provisions in the Water Resources Act.

Amendment No. 47 provides that where a variation to a licence is being considered at renewal, the variation element is considered as if the expiring licence were to continue. Amendment No. 63 ensures that a protected right is not given to the new abstractor where a transfer licence falls away by virtue of being apportioned. That is consistent with the policy that abstractions for transfer do not benefit from protected right status. I beg to move.

Baroness Byford

I thank the Minister for explaining his amendments, which we followed happily. On Amendment No. 26 regarding the changed circumstance, are there rules already laid down—forgive me, I did not check this—in current Acts that cut in when an emergency is no longer an emergency or when circumstances change? If not, who will judge the changed circumstances and how?

Lord Whitty

All previous legislation defines when an emergency arises but not when it finishes. There will necessarily need to be some guidance to the Environment Agency on whether it can declare the emergency over and therefore subject to the normal abstraction licensing systems. That guidance does not currently exist, but the situation clearly would arise as a result of the new Act.

Baroness Byford

I thank the Minister for that, but I register a slight concern that again we are allowing the matter to be dealt with in secondary legislation. It will be in guidance, regulations or call-it-what-you-will. It is unfortunate that it is not on the face of the Bill. Perhaps the Minister might consider the issue and return to us at a later stage. It would help the Committee because the provision gives the Environment Agency—not the Secretary of State, if I understand correctly—the power to decide the changed circumstances either way. I am not pressing the Minister now, but I should be grateful if perhaps between now and the next stage we can give the matter some thought.

4.15 p.m.

Baroness Miller of Chilthorne Domer

In his reply to my most recent amendments about the sort of emergency situation that we might face, the Minister said that it might be not just flooding but all sorts of other things, including drought. That led me to focus on the title of Clause 7, "Rights to extract for drainage purposes, etc". What is included in the "et cetera"? What sort of emergency situations fall into the "et cetera" bit of the title?

Lord Whitty

What a good question. Parliamentary counsel should be advised not to put "et cetera" into the title of a clause; "and related matters" would be more appropriate.

The nature of emergencies is clear. They could arise from a lack of water, from an excess of water or because water is seeping through areas through which it is not supposed to go. In this context, we are dealing with emergencies that are, by definition, over. The Environment Agency will need to judge when an emergency is over. The noble Baroness, Lady Byford, made that point. I am not sure that detailed guidance is appropriate; emergencies will differ in nature. The way in which the agency decides that an emergency is over may be subject to general guidance. The need to have a means of doing that, as provided by Amendment No. 26, is clear.

Baroness Byford

I am happy with the Minister's explanation, although I agree with the noble Baroness, Lady Miller of Chilthorne Domer, that the use of "et cetera" is not good. Can I just establish the fact that, before the Bill becomes law, the decision on the emergency would be made by the Secretary of State? When the Bill becomes law, that responsibility will pass from the Secretary of State to the Environment Agency, so that is a new circumstance. If the responsibility still lay with the Secretary of State, we could bring the matter before Parliament. Once the responsibility passes to the Environment Agency, we will be at arm's length. Normally, we can question the Secretary of State on the Floor of the House, but we cannot call in the Environment Agency in the same way.

Lord Whitty

The Environment Agency is already responsible for managing this. It is a new exemption and does not relate to anybody in those terms at the moment. In future, it will relate to the Environment Agency, not the Secretary of State. That is not changing the situation. In practice, that is the situation already, but the amendment will make it the responsibility of the Environment Agency in legislation.

On Question, amendment agreed to.

Lord Whitty moved Amendment No.27: Page 10, line 2, leave out subsection (5).

On Question, amendment agreed to.

Baroness Miller of Chilthorne Domer moved Amendment No. 28: Page 10, line 7, leave out "warping,

The noble Baroness said: I rise with some trepidation about whether I have understood what it is intended that the Bill should do about warping. On the basis that I have got it right, I will continue.

The Bill includes warping in the definition of land drainage. Other Bills did not include it. Warping falls into two categories. I discovered that the word first appeared ill the dictionary in 1799. There is "fortuitous warping", which happens when, after extensive floods, silt and nutrient-laden flood waters spill over the riverbank on to farmland. I know that the Chairman will be particularly familiar with that in Somerset, but there has been a tradition of fortuitous warping in many lowland parts of the country. The second sort is "managed warping" which means that, historically, sluices have been in place to allow the flood water to overflow the bank. It has two benefits: first, there is the advantage that silt and nutrients pass on to the farmland and, over time, raise the level of the land slightly, which is important in lowland areas; and, secondly, such warping prevents the floodwater from making such fast progress downriver and affecting villages and towns downstream in times of great flood.

The Bill should not include warping. It is a useful and sustainable way of fertilising land. Amendment No. 30, tabled by the Conservatives, is sensible and, to some extent, addresses the issue. I believe that DEFRA and the Environment Agency have already had correspondence from the Association of Drainage Authorities, which does not agree that warping should be in the Bill. My amendment covers that point. I beg to move.

Lord Dixon-Smith

I support the amendment, although I have not seen warping done in our part of the world for a long time. It used to be a regular practice, and one can still see river meadows laid out with the channels all present and waiting for somebody with the energy to divert the river into them. Unfortunately, we do not have water-mills anymore, and, because of that, rivers are generally maintained at a lower level than was the case when we did. The water-mills kept water back for reasons other than flooding land. Because the rivers were maintained at a higher level to power the mills, they could also be diverted more easily into the channels.

Now that water-mills have passed into the history books, the gates are generally left open, with the result that the system is not used. Environmentally, warping is a beneficial process, but I would be interested to know whether it is practised anywhere in the country nowadays. I suspect that we may be discussing something that has been consigned to history.

Earl Peel

If, as the noble Baroness suggested, warping is a natural phenomenon that brings advantages, should we not keep it in the Bill? I can see no point in taking something out if there is scope for any environmental advantage.

Baroness Miller of Chilthorne Domer

I shall address the issue of whether warping is now a matter of history. It may have fallen into disuse throughout the country, but, as the Water Framework Directive comes into effect and there is more river basin management planning, more issues will arise about the sort of fertiliser that ends up in river water. There may be a wish to return to more natural forms of fertilising the land.

The structure to allow warping to happen is still in place in many areas where it did not just happen due to overflowing of the riverbank. Although it may have fallen into disuse in the past 30 years, it might well come into wider use over the next century. We should try, with the Water Framework Directive particularly in mind, to consider the use of water as a whole. That is why I tabled the amendment.

Lord Carter

The physical structure for the system that the noble Baroness describes might be there, but where will she find the drowners to work the sluices? The job requires great skill.

Baroness Miller of Chilthorne Domer

I bow to the noble Lord's knowledge, but I imagine that, if warping were to revive as a form of land management, people would have to develop the skills again, as has happened with hedge laying and so on.

Baroness Young of Old Scone

I might be able to help the noble Lord, Lord Carter, by pointing him in the direction of a drowner. I am not sure that they are still called that, but there are some people in places such as south Wessex and Yorkshire who still have that ancient skill.

As the noble Lord, Lord Dixon-Smith, said, water meadows are a good thing environmentally, so it is strange for me to be counselling caution in the use of warping. However, although warping can be an environmental benefit to a particular meadow, abstracting water to run through several meadows can deprive the donor river of a significant volume of water, while the meadow or subsequent chains of meadows are being filled. That would make the blanket exemption for warping suggested by the amendment rather risky.

We must also look to the future. As has been said, water meadows will, one hopes, become more prevalent under some of the provisions in the Water Framework Directive that will be of benefit to conservation, so we could be talking about substantial volumes of water. I urge the Minister to exercise considerable caution with the amendment. Specific "meadow-explicit" agreements, if I can coin the term, might be a more effective approach than simply removing the reference from the Bill.

Lord Livsey of Talgarth

The noble Baroness, Lady Young of Old Scone, was specific about some circumstances. Does she agree that the situation in chalkland areas, where there is a lot of natural spring water that sustains most of the rivers and where there are quite a number of water meadows, might differ from the situation in, for example, East Anglia?

Baroness Young of Old Scone

The noble Lord is right to say that there are big differences throughout the country. However, there are also big differences across the seasons and from year to year, depending on the state of the ground waters. Although there are high levels of ground water and large spring-fed wetlands in some counties, they have a distressing habit of drying up in drought periods. It is only because we have a regulatory framework that covers everything that balanced decisions can be made.

Lord Whitty

There is hugely greater knowledge about warping among Members of the Committee than I can bring to bear. There are two sorts of warping, and I suspect that, even when the mills were in operation and more water was held back, most warping was done in flood conditions. Effectively, it is controlled inundation of the land, when there is excess water, and, in that sense, it is natural. However, in those circumstances, there are no controls, and no controls are proposed in the Bill because that would be for flood control. It is in that situation, in the past, present and future, that warping takes place.

If we are talking about the artificial provision of warping, there is no reason why the use of water in that way should be treated any differently from the use of water in other ways. It would have to involve a significant amount of water before it came under the licensing regime. As the noble Baroness, Lady Young of Old Scone, said, we must consider the total environmental impact, not simply the environmental and nutritional benefit to the meadows immediately affected. Most warping is already exempt, and I am not convinced that we should exempt specific abstraction above the normal threshold outside a flood situation for that purpose rather than any other.

Baroness Miller of Chilthorne Domer

I understand what the Minister is saying. I think that he said that warping that happened because a river overflowed its banks—fortuitous warping—would be exempt anyway, as no one could prevent that. Fortuitous warping will not be included in the Bill. Historically, however, if it has been clear upstream that a river will overflow its banks and create problems downstream, structures have been built to encourage warping. Those practices will fall within the ambit of the Bill, but that does not seem to make sense.

4.30 p.m.

Lord Whitty

The noble Baroness refers to fortuitous warping. Warping can happen as a result of a river spilling over. When it is used for flood-control purposes, whether in the immediate vicinity or downstream, it is already exempt. But where water is deliberately held back and abstracted primarily for irrigation purposes, there is no reason why warping should not be subject to licensing above the threshold when all other uses are subject to such licensing. It is not a question of whether the warping is fortuitous but of whether the water is used for flood control or for the explicit purpose of irrigation.

Baroness Miller of Chilthorne Domer

I thank the Minister for that explanation. It indicates why a total river basin management approach is most needed. It will sometimes be difficult to define the benefit of the operation. Much of the time the benefit will be both flood management and field irrigation.

I thank everyone who contributed to the debate. I thank the noble Baroness, Lady Young, for supporting a perhaps limited exemption. I was not sure whether the Environment Agency had the power to create limited licensing exemptions if the circumstances were not defined in the Bill. I shall look at the issue again. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 29: Page 10, line 8, leave out from "irrigation)" to end of line 10.

The noble Lord said: This is a probing amendment to find out the exact meaning of the phrase that we suggest should be deleted. I have read it many times. On the face of it, land drainage does not include transferring water from one source of supply to another. But transferring water from one source of supply to another mainly to augment the latter will certainly affect land drainage, possibly adversely. With that in mind, we tabled the amendment to clarify the Government's intention in this phrase. I beg to move.

Baroness Miller of Chilthorne Domer

I would welcome further clarification of what is in the Government's mind as regards this subsection.

Lord Whitty

The overall intention of this part of the Bill is to bring all major transfers into the scope of the licensing regime so that there is a means to control them in future. That means restricting some current exemptions. Amendment No. 29 would allow the current exemption of transfer for the augmentation of water levels to remain. That would mean that a significant transfer could be exempt from licensing. I refer not to emergency transfers but to a general one within the internal drainage board. By changing the definition of internal drainage, as this amendment would do, we could exempt significant transfers.

If we are to establish the Environment Agency's control over the whole water supply, the needs of all abstractors need to be balanced, particularly in times of reduced water availability, rather than simply allowing transfers by abstractors for this purpose. That is why we are restricting the number of exemptions and taking a more comprehensive approach to licensing than at present. Any uncontrolled transfer can affect overall water availability. We see no reason to retain that exemption. It would be possible under a licence, but that is not the point. It should not be treated differently from other forms of' abstraction.

Lord Dixon-Smith

I am grateful for the explanation. Transferring water from one source of supply to another does nothing to alter the total quantity of available water. I accept that it might remove it from one river where there is a pumping station for supply and transfer it to another where there is not. But I cannot imagine that the internal drainage board would risk moving water unnecessarily from one stream to another. If it moved water to a river of restricted flow that required help, that would probably he beneficial, because it would balance the needs of the two streams. I accept that there is a potential water supply issue. In the light of the explanation, I see that circumstances might arise where the Environment Agency would need to know exactly what is happening. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7, as amended, agreed to.

Baroness Byford moved Amendment No. 30: After Clause 7, insert the following new clause—

"CONSULTATION ON EXTENSION OF SCOPE OF ABSTRACTION LICENSING Before the introduction of any scheme for extending abstraction licensing to warping or irrigation by virtue of section 7(5) above, the Agency shall consult such bodies appearing to it to be representative of persons whose business interests are likely to be affected by the proposed scheme.

The noble Baroness said: The amendment deals directly with trickle irrigation. I expect that the noble Baroness, Lady Miller of Chilthorne Domer, will wish to contribute following her earlier comments. It is a straightforward amendment, which would require the agency to, consult such bodies appearing to it to be representative of persons whose business interests are likely to be affected by the proposed scheme".

Clause 7 brings trickle irrigation within the abstraction-licensing regime for the first time. Although farmers and growers who trickle irrigate are not opposed to that in principle, they have genuine concerns about the implications for their businesses and how the new controls will be implemented. Trickle irrigation is a sustainable and efficient method of water use, but many trickle irrigators fear that their abstraction licences will be revoked or seriously modified, especially in catchment areas that the Environment Agency deems already to be fully licensed or over-abstracted.

I have received letters from people concerned about the changes. I shall outline some of the potential undesirable effects. The importance of trickle irrigation to unsupported producers of high-value crops such as fruit and vegetables cannot be overstated when the upstream or downstream dependant businesses are taken into account. One soft-fruit producer in East Anglia who is heavily dependent on trickle irrigation estimates that his business contributes some £3.4 million to the local economy. A further example is a soft-fruit grower in Kent who has a wage bill of approximately £2 million. We are therefore not talking about people picking the odd bit of fruit or some vegetables. Without access to adequate water, much of that type of production could be lost.

I received a letter from an organisation in We Norfolk area expressing concern about the particular plan for trickle irrigators as it stands in Grand Committee. It states: Elliot Morley has stated that Defra are still considering whether trickle irrigators could be provided with time limited licences automatically when the current exemption ends. However unless the present rules are amended trickle irrigators have two years to apply for a licence in our case and many cases like ours, the Agency is likely to refuse on the grounds that there is insufficient water".

Given our discussions today and in previous Committees, I accept that the restrictions will not necessarily affect all areas of' the UK equally. But it would be a disaster for this producer and his 64 employees. It is not just one producer and one employee, but a big rural enterprise. The producer's letter continues: The Bill offers the possibility of the Agency granting a licence in these circumstances, but they need to be willing to use these powers, and what they really need is some clear guidance from the Government on how trickle irrigators should be treated".

There is nothing worse for businesses than to be uncertain about those changes—as noble Lords who have employed people will know—and to be unable to make definite plans.

The producer also gave evidence to the Environment Select Committee, which stated in its Ninth Report into the draft Water Bill, where resources are scarce the needs of trickle irrigators whose use has been notified to the Agency must be considered equal to those of existing licensed abstractors".

The producer states that he hopes that at Committee stage he will be able to ask the Minister to agree to provide trickle irrigators with an automatic time-limited licence so that trickle irrigation licences could subsequently be reviewed on a par with other abstractions as part of the catchment abstraction management strategy (CAMS).

The industry has expressed genuine concerns. I know that areas of the country are affected differently. For example, I was speaking to someone whose son has a horticultural farm in Lincolnshire in an area that does not need trickle irrigation because the land is retentive enough. But dryness in other areas has a great effect on the crops.

My noble friend mentioned that trickle irrigators use a good deal of water. We seek clarity and some steer so that those whose businesses may be affected can plan accordingly. I am sure that the Minister will not be surprised to hear me express yet again my hope that we enable UK producers to compete in a global market rather than restrict them and make things more difficult for them. I beg to move.

Earl Peel

I support the amendment. Trickle irrigation will be brought into the abstraction licensing system for the first time. That is causing much concern among those who have invested in that horticulture system. My noble friend Lord Dixon-Smith pointed out that trickle irrigation was perhaps the most efficient form of water management in agriculture and horticulture. I am sure that the Environment Agency will bear that in mind when negotiating with trickle irrigators for the first time.

We will return to the issue many times when debating the clauses relating to abstraction. But we must take into account businesses' levels of investment, borrowing and business plans. As my noble friend Lady Byford suggested, some of the businesses affected have made substantial investments. Those investments hang on horticultural producers' ability to extract water and use it for trickle irrigation. It is not surprising, therefore, that many involved in the industry are extremely concerned about their future.

I wish to reiterate a point that I made at Second Reading about encouraging local food production. I can see that the Environment Agency could have difficulties if the Countryside Agency were actively encouraging local production while it found itself in the difficult situation of having to make a decision. But we must not forget that, if a horticultural business employing many people and producing a good deal of fruit or vegetables is put out of business because it no longer has access to water, production will be exported abroad, which will contribute to the balance of payment deficiencies on the product in question. A hugely important point is that that situation would involve the transportation of goods and would therefore create increased pollution. All those issues must be taken into account.

In many cases, that will not be an easy decision for the Environment Agency to take. However, it is essential that the various issues that noble Lords have mentioned are taken into account. Given the circumstances and very real concerns, we should take Amendment No. 30 very seriously. I hope that the Government will accept it.

4.45 p.m.

Lord Dixon-Smith

I, too, support my noble friend, but I do so in a slightly different way. Amendment No. 30 calls for consultation with representatives. of persons whose business interests are likely to be affected". I should not put words into my noble friend's mouth, but the reality is that we are asking for rather more than that. I think that we are really asking for an assurance that existing users who will come within the scheme in future will be treated similarly to those who already hold an abstraction licence. We have already discussed, although not specifically, whether licences should be automatically renewed unless there are very compelling reasons not to do so. However, if a large or a small business is already a very efficient water user and the resource is already catered for, if not actually licensed, there should be a presumption under the licensing scheme in favour of that business.

It would be another matter if there were subsequently an application for an additional abstraction, for trickle irrigation. That would be a new abstraction and could be treated absolutely fairly and squarely on the basis of whether there was sufficient water for that abstraction to be practical. I think that that is very different from the situation of someone who is already established in business and has the equipment and who has made the investment and got the system working.

I think that there is a very strong point there. I welcome the fact that, as we are in Grand Committee, we shall have to return to this issue. I think that we need to think carefully about the wording of the provision and about what we really want. As I said, I definitely want something more.

There is another side to the issue. Someone who wanted to start up trickle irrigation might have a neighbour who uses spray irrigation. If he could persuade that neighbour to switch to trickle irrigation, perhaps enough water could be saved to allow his trickle irrigation too. That would be an amendment of licence. The Environment Agency could perform a very useful function in such situations. I think that we need to think this issue through a little. I support absolutely the principle of what is being said, but I think that we need to determine precisely what we want to do.

Baroness Miller of Chilthorne Domer

I support the suggestion that we explore further the issue of trickle irrigation. I agree with the noble Lord, Lord Dixon-Smith, that we may need to consider options that are more proactive than simply consulting. That point was reinforced for me by a leaflet produced by the National Water Demand Management Centre which includes a very useful map. That map outlines in red the areas where abstraction is unsustainable or unacceptable; in yellow, where no additional water is available; and, in blue, the areas where some additional water is available. As the Committee will not be surprised to hear, the map indicates very few areas in England and Wales where additional water is available. Indeed, vast swathes of the South East are marked in red.

Bearing in mind that no additional water is available in an awful lot of England, it seems that trickle irrigators will be in a difficult position if the Environment Agency is not able to make a value judgment on the needs of agriculture as opposed to those of other forms of industry. I say that advisedly. Noble Lords may say that everyone has a right to their business, and of course I agree. However, I have been impressed by the actual amounts of water required by various businesses. Being a printer's daughter, I was particularly struck by the water usage of the Beacon Press. It now requires absolutely no water in its printing process. That is never likely to be the case for agricultural growers. Horticulturists in particular cannot manage without water. With new technologies, however, some industries that have historically relied on water have been able to change their systems to end their need for water.

I believe that we will have to revisit this issue in one form or another. If the Environment Agency had a duty to consider the efficient use of water, perhaps it could start to make a judgment about the position of businesses that cannot operate at all without water as against those that could operate with much less water or no water at all but have chosen not to invest in the necessary technology.

Finally, I associate myself with the remarks about the importance of the local production of food. I believe that that is extremely important. There is a great demand for, particularly organic, vegetables and fruit that is not being met by British producers. If we make life any more difficult for that sector, that demand will increasingly be filled from abroad.

Lord Whitty

We have had a wide-ranging debate. However, this amendment is about consultation, which I shall try to deal with first. The amendment requires consultation before the introduction of Clause 7. I think that there is a problem with the drafting of the amendment in that it should relate to Clause 7(6). Nevertheless, the principle and proposals to bring irrigation and warping into the licensing regime were part of the 1998 consultation and review of the abstraction licensing system. The subsequent decisions, set out in Taking Water Responsibly, were published in 1999. Therefore, on the principle of the issue, we have already had substantial consultation with all parties concerned.

However, if the question is whether we are having consultations with bodies representing users and others on how they will be affected by the changes and on the detail of how licensing will be introduced in practice, that is a somewhat different matter. The noble Baroness, Lady Byford, asked whether they will be consulted. They will be consulted about how the Environment Agency will approach licensing. If we are focusing on that, that is where a commitment to consultation is probably appropriate. However, it would not be appropriate on the face of the Bill itself.

We will no doubt return to the broader issues raised in this short debate. However, we recognise the value of trickle irrigation. We recognise also that it can be an efficient way of using water in horticultural and certain other applications.

The arrangements will operate as follows. All trickle irrigators above a threshold will have two years from enactment of this part of the Bill to apply for a licence. At that point, the agency will either grant an abstraction licence valid until the next review, or refuse a licence because the abstraction is causing environmental damage and try to work with the abstractor to try to find a more suitable alternative. In carrying out the assessment of any licence application, the Environment Agency must have a duty to take into account the costs and benefits of taking that decision, not only on the immediate business but on the rural community as a whole. It will therefore take into account some of the issues raised in this debate.

It is not true that trickle irrigation is always more efficient than spray irrigation—it depends on how the trickle irrigator operates his system. It is possible for trickle irrigators to use water inefficiently. One may think that trickle irrigation is always more efficient, but that is not so. Moreover, because of the amount of water involved, it can also have an adverse effect on other licensed use of the water which the Environment Agency would have to take into account. Therefore, the needs of trickle irrigators and the impact of their abstractions need to be considered against those of other abstractors.

This is a new area for licensing, but there is no presumption that trickle irrigators will be treated any less favourably than existing abstractors or other applicants for licences. We expect the Environment Agency to ensure that decisions are fair to all, and it is under a duty to act reasonably in that respect. I have no doubt that we will return to some of these wider issues, as we will to the issue of consultation. As the noble Lord, Lord Dixon-Smith, has already threatened us with alternative wording, I have no doubt that this will not be the end of the matter.

Lord Dixon-Smith

As it would not be proper for me to ask the Environment Agency this question, can the Minister tell us how the system currently works? In managing a catchment area, or whatever one calls it, does the agency take into account in its calculations of water usage and capacity whether there is already a large amount of trickle irrigation? It would seem a gross dereliction—and I am sure that there is no such thing—if a large water user, even one outside the existing licence regime, were outside the calculations of water use for a catchment area. I just do not believe that that is what is happening. If that were taken into account, it would reinforce the case for treating the existing user as the licence holder on his first application for a licence. It would be a roll-over situation rather than a totally new application for a totally new abstraction. We are talking about an existing set-up.

Lord Whitty

I think that the noble Lord has partly made my case. Where there is an existing trickle irrigator, that irrigation has clearly made a contribution to the current balance, excess or shortage of water within that area. It will already have been taken into account in performing the calculations. It is therefore not a new situation. What is new is that, should the situation require, that abstraction will be brought with other abstractions into licensing for future management purposes. That includes a situation in which the overall supply of water and the overall demand on the water system may deteriorate. That means that large trickle irrigators need to be brought into that system.

Part of the consultation has to do with how we apply the arrangements. In practice, most large trickle irrigators would immediately be given a licence. The noble Baroness, Lady Byford, referred to various remarks by my colleague Elliot Morley in that respect. However, the whole system, as well as the individual case, will still require the Environment Agency to take into account the effect on the environment and on other abstractors.

Lord Dixon-Smith

I do not think that there is anything between us in principle. I accept entirely that the issue has to be included in the overall calculation of water availability and water use. There is no difficulty with that. We are talking about trickle irrigators being in a rather specific situation because they are being brought into the scheme. For them, the situation is new and they must apply for a licence.

I am happy that when all the licences are reviewed together in 2012, or whatever the date may be, the trickle irrigators will be part of that review. I have no difficulty with that. What concerns me is the possibility that their circumstances will be reviewed with their licence applications. We shall be enacting this Bill and that will not alter their physical circumstances vis-à-vis their water supply, their employment or anything else, but it will alter their legal situation quite dramatically. That is why I believe that trickle irrigators deserve specific information at that stage in their licence applications.

5 p.m.

Baroness Miller of Chilthorne Domer

Before the Minister replies, I want to press him on the point about the map from the National Water Demand Management Centre, which states that there is no additional scope for licences in the areas coloured red or yellow and, in particular, in the areas coloured red. If there is no scope for additional demand, how will the trickle irrigators' licences be granted in the face of that advice?

Lord Whitty

Where there is an existing trickle irrigator, the calculations that help to define whether the colour is red, blue or yellow on the map already take account of licensed and unlicensed de facto use. Therefore, the calculations have already been made. However, I believe we all agree that a new threshold abstractor should be judged against any other applicant for a licence. But, in terms of the map, the calculation has already been made.

I also make the commitment that trickle irrigators will be treated no less favourably than any other applicants, whether they have been brought into the system anew or whether they have always required a licence. That will apply from the start of the new system. Therefore, although I understand the Concern—obviously there is always concern when one is brought into a system for the first time—I believe that no detriment will be suffered by those who use trickle irrigation efficiently. I hope that that gives some assurance and that more assurance is given by the commitment that the way the provision is applied will be subject to further consultation.

Baroness Byford

I thank all those who contributed to this debate, which, by its very nature, was always going to spread wider than the original amendment. I do not believe that one could consider the amendment without going wider than the written words. Therefore, I hope that, when I have finished speaking, the Minister will say to the noble Baroness opposite him, "I am very grateful and glad to accept your amendment", which, at present, he has not been too inclined to do. "Not today", I am being told. Perhaps I shall try again tomorrow.

I turn to one or two of the points raised. I know that they went wider than the amendment but I believe it is important to reflect upon them. My noble friend Lord Peel spoke, in particular, about the level of investment. I tried to raise that matter in my opening remarks. Several noble Lords spoke about local food production. I consider that to be a hugely important subject. Those of us who are concerned about pollution, which is part of our wider brief, are anxious to see whether we can achieve a greater reduction in what I call "food miles". Our food travels miles and miles and pollution is produced in the process.

My noble friend Lord Dixon-Smith—I shall come back to his comment in a moment—referred to the fact that the amendment calls for consultation. In reply, the noble Lord said rightly that the Government had already consulted over the years. He said that the results of the consultation were drafted in 1998 and published in 1999. Therefore, the Government feel that consultation has already taken place. However, when I read Hansard—I hope I am right—he went on to say that we shall have to consult now about the effects that the provision will have on businesses. That seems to me a little strange. I should have thought that, as part of the consultation exercise, the effect on businesses would have been considered in the first place and that that would be part of the original exercise. I simply put that down as a marker because I find it most strange.

I accept that people will have two years in which to make an application. From what the Minister said—again, we cannot question the noble Baroness, Lady Young—I understood that licences would be granted unless environmental damage had occurred or unless there was a very good reason why they should not be granted.

We then had a short debate on the subject of costs and benefits. The Minister recognised the importance of local rural businesses to the whole community rather than to the country as a whole. As I pointed out in the example that I gave of the gentleman, Mr Place, who manages a very good business, 64 people might well be put at risk. That number of people in a conurbation is a drop in the ocean, but when there are not many other options for employment, 64 people do not constitute a drop in the ocean. Therefore, I am glad that the Environment Agency will have to take that into consideration. The noble Baroness, Lady Miller, said that the agency will have to make a value judgment. Indeed, a value judgment is important and we establish that at some stages of the Bill.

I am sure that all Members of the Committee agree that food is an important commodity, but it could be placed at risk. The difficulty is that if, as my noble friend Lord Peel suggested, we export our business—a matter that I have talked about often—then we become dependent on food supplied from overseas. Sadly, we all know what is happening at present in the battles overseas. There is no genuine and long-term guarantee that food will be supplied forever. If food costs were to go up, that would have long-term implications for the country as a whole.

I turn to a final comment of the noble Lord, Lord Whitty. He said that when the applications were considered by the Environment Agency, they would be considered no less favourably. I do not believe that that is what we were trying to establish. We were asking that they should be considered favourably. My noble friend muttered to me the word "meaningless"; I uttered the word "useless". But we have digressed, and the noble Baroness is rightly shaking her head. However, that may help us to establish one or two points before we return to these matters later.

I return to where we should be, which is my reply to the Minister's response. I do not believe that the Minister replied directly to my request that the bodies should be consulted. Perhaps the Minister will reply to that point because that is the part of the amendment that we are debating and it is the only part to which he did not respond.

Lord Whitty

I thought that I had responded to that point. I said that, in our view, the existence of that clause and the bringing into play of the clause have been dealt with by the previous consultation. However, as regards the way that the clause is applied in practice, we would expect the Environment Agency to consult bodies representing those affected by the changes and to inform them and involve them in the detail of the way that licensing would be introduced in practice. If I did not get that right when the noble Baroness checked it on the previous occasion in Hansard, I hope that I have done so on this occasion. To that extent, I recognise the importance of consultation.

Baroness Byford

The Minister has always been very generous with regard to consultation. I am simply disappointed that, as he supports the thrust of the amendment, the Government cannot accept it. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Howie of Troon moved Amendment No. 31: After Clause 7, insert the following new clause—

"COMPENSATION After section 61 of the WRA there is inserted—

"61A COMPENSATION Where—

1. (a) an application for a licence to abstract water to prevent interference with any mining, quarrying or engineering operations (whether underground or surface) or to prevent damage to works resulting front any such operations is first applied for as a result of the coining into force of this section (which has had the effect of making the above abstraction an abstraction to which the restriction in section 24 applies); and
2. (b) that application is—
1. (i) refused; or
2. (ii) granted subject to conditions which result in the applicant being unable to implement or continue to operate any planning permission in respect of the said mining, quarrying or engineering activities;

• the Environment Agency shall pay to the applicant compensation in respect of any loss or damage which is directly attributable to the refusal of the application or imposition of the adverse condition or conditions, and the provisions of section 61(5), (6) and (7) shall apply."."

The noble Lord said: I realise that this amendment was debated last week during a series of discussions led by the noble Lord, Lord Sutherland. I shall give a brief explanation as to why I am here as opposed to the noble Lord. It is because he was looking at the Bill through the eyes of the Quarry Products Association, with which I have a friendly but not a financial relationship. I have come off the bench in his absence to look at the Bill from the same standpoint. In doing so, I declare a kind of interest. I am not directly associated with the Quarry Products Association but, as someone with a lifetime connection with the construction industry, I have used a great deal of the quarry industry's products while trying my best to cover the country in concrete. I am still at it.

Having said that, I understand that, in order to make one very small comment on the amendment, I have to move it so that I can withdraw it. We were very pleased to have the assurances which my noble friend Lady Farrington gave last week. But, on second thoughts, we believe that Clause 25 may not fit entirely into the scheme of things. I do not, under any circumstances, want to debate Clause 25 now. I merely wish to say that at some stage in the process we may well come to Clause 25 and we may have to think again. I beg to move.

Baroness Miller of Chilthorne Domer

We have one query about the amendment. We have debated this matter already. In her reply, the Minister mentioned that the Government proposed to make transitional measures to ensure that compensation would be available in the circumstances described in the amendment. Can the Minister tell me a little more about that? It is not clear to me whether the compensation payable will come from other licence payers. Has any assessment been made of how much the compensation would amount to if a substantial number of quarry owners were affected?

Baroness Farrington of Ribbleton

The compensation would come from the total abstraction budget. Therefore, in that sense, it would come from other abstractors. The circumstances under which compensation would be payable would be where a mine, quarry or engineering works operator was refused a licence or granted a conditional licence and, as a result, could not take full advantage of any planning permission granted for that operation. That was the policy to which I referred. It is already publicly stated at paragraph 3.17 of the document, Taking Water Responsibly. I hope that that answers the noble Baroness's question.

I note the interest declared by my noble friend Lord Howie of Troon and his warning that it will be an enduring interest. I note that he intends to return to this subject later, but perhaps I could offer to reply to any complex technical questions that he wishes to put in writing between now and Report. That might be more satisfactory and it would ensure that other noble Lords could read them.

I warn my noble friend that irony in politics is not always understood to be humour, and in a debate on a Bill from DEFRA it may be ill-advised to refer to covering the country in concrete. Someone may believe that he meant it and not realise that it was a joke.

Lord Howie of Troon

I did mean it. I am not up to irony. I thank my noble friend for her comments and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 [Amendments relating to section 7]:

Lord Whitty moved Amendments Nos. 32 and 33: Page 10, line 12, leave out "(5)" and insert "(6) Page 10, line 13, at end insert— ( ) In section 21 (minimum acceptable flows)—

1. (a) in subsection (9), the words from "and in that subsection" to the end are omitted,
2. (b) after subsection (9) there is added—

(10) In subsection (5) above, the reference to land drainage includes—

1. (a) defence against water (including sea water). irrigation (other than spray irrigation), warping and the carrying on, for any purpose. of any other practice which involves management of the level of water in a watercourse; and
2. (b) the provision of flood warning systems.""

On Question, amendments agreed to.

[Amendment No. 34 not moved.]

Lord Whitty moved Amendment No. 35: Page 11, line 29, at end insert— (8) This section is subject to section 114 of the 1995 Act (delegation or reference of appeals). ( ) In section 114 of the Environment Act 1995 (c. 25) (power of Secretary of State to delegate or refer in connection with appeals), in subsection (2)(a)(v), for "or 191B(5)" there is substituted "191B(5) or 199A".

On Question, amendment agreed to.

Clause 8, as amended, agreed to.

5.15 p.m.

Clause 9 [Power to provide for further exemptions]:

The Duke of Montrose moved Amendment No. 36: Page 12, line 29, leave out "cumulatively with" and insert "separately from

The noble Duke said: The amendment is in some ways a probing amendment. It would remove "be counted cumulatively with" and insert "separately from". What is meant by "cumulatively with"? Does it mean cumulatively in time or in amount? What are the possible combinations and permutations? I beg to move.

Lord Whitty

In the context of the clause, "cumulatively with" means in relation to amount. Under the clause, the Secretary of State would have the ability to make regulations to introduce further exemptions from licensing, which would lighten the regulatory burden. Those propositions could either be counted cumulatively with or separately from, so an amendment that changes one set of words for the other does not make a huge amount of difference. A particular proposition may be counted cumulatively with, in terms of calculating an amount, or it may have to he dealt with separately. The amendment, which appears to state the opposite from the Bill, does not alter the ability to approach each proposed new exemption on either basis. Therefore, I hope that the noble Duke will not pursue the matter.

The Duke of Montrose

It begins to sound to me as if the amendment should read both "cumulatively with" and "separately from" to cover all possibilities. However, in view of the Minister's reply, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clause 10 [Orders under section 33 of the WRA, etc]:

The Duke of Montrose moved Amendment No. 37: Page 12, line 38, after "made" insert "prior to the commencement of this section

The noble Duke said: In moving this amendment, I shall also speak to Amendments Nos. 38 to 40.

The problem to which Amendment No. 37 relates is that "any order made" may refer to any tense—past, present or future. Even the Explanatory Notes do not clarify the situation. The amendment would at least identify one possible tense, as it limits the time to, prior to the commencement of this section".

Will the Minister explain to us whether there are other areas in which the Government wish the clauses to have effect? My comments also cover Amendment No. 38.

Amendment No. 39 is a probing amendment. The difference in wording between subsection (4)(a) and (4)(b) needs to be explained. Does the latter mean that local and private Acts will be ignored from now on in relation to "underground strata"? Some businesses depend heavily on extraction from underground strata, and it would be detrimental to those businesses if the clause were to create uncertainty as to source of supply.

Amendment No. 40 is a probing amendment. Subsection (5) allows the Secretary of State to use the clause as authority to act as he would were he taking action under Section 27A(1) of the WRA. The subsection allows the Secretary of State to close the circle by using it to revoke something already done under Section 27A(1).

My problem may be that my brain has become waterlogged, because I live in a part of the country in which our winter rainfall has risen by 40 per cent and our overall rainfall has risen by 25 per cent, so that we are suffering from over 70 inches of rainfall per year or, in round terms, two metres plus. However, the combination of sections would almost qualify for the elimination heats for the plain English campaign. Will the noble Baroness explain the meaning?

Baroness Farrington of Ribbleton

Clause 10 gives the Secretary of State the power to remove exemption orders made under Section 33 of the Water Resources Act 1991 and to impose a threshold for abstraction licensing. It also repeals Section 33. Amendments Nos. 37 and 38 would not have any practical effect because Section 33 is to be revoked, so no new orders will be made anyway. Neither is it proposed to make any other orders before then. I hope that assurance satisfies the noble Duke.

The noble Duke spoke to Amendment No. 39 as a probing amendment. We welcome the way in which the amendment deals with issues that we would like to consider. It appears that the amendment would remove a limit to the application of the new clause that would make it difficult to operate the clause effectively. We shall take the amendment away and look at it.

Amendment No. 40 would set a threshold that could not be varied in future, which would seriously inhibit our ability to set an appropriate threshold for licensing in future should the availability of water reduce or, as the noble Duke said, increase as it has at times in various parts of the country.

We hope that, with those assurances, Amendments Nos. 37, 38 and 40 will not be pressed to a. Division. The Government will take Amendment No. 39 away for careful consideration.

The Duke of Montrose

I thank the Minister for that reply. We are grateful for her clarification when speaking to Amendments Nos. 37 and 38. It is also useful that the Government are prepared to reconsider the subject of Amendment No. 39. I should like to read the Minister's comments on Amendment No. 40 in Hansard. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 38 to 40 not moved.]

Clause 10 agreed to.

Clause 11 [Who may apply far a licence]:

Baroness Miller of Chilthorne Domer moved Amendment No. 41: Page 14, line 9, at end insert— ( ) he has a water efficiency programme which is regarded by the Agency as encouraging best use of the water resource;

The noble Baroness said: The amendment would restrict those who can apply for licences to those who have an efficiency programme in place. That programme should be, regarded by the Agency as encouraging best use of the water resource".

That would leave room for the programme to be proportionate, depending on the size and scale of the user. The agency has some discretion in that matter. It should be a basic requirement of licence applicants that they have some form of programme in place.

I was encouraged in my thinking on this matter when I read the "Water Efficiency Awards", published by the Environment Agency and Water UK. Those awards show what can be done when sufficient thought has been given to the matter. We have discussed horticulture and agriculture in our debate. In that context, an award was given to Osberton Grange Farms, where efficient ways were developed for watering pot-grown shrubs. That reduced water consumption by 60 per cent and increased profits by 20 per cent. Of course, that scheme also introduced associated environmental benefits.

On the same page of the publication, there is reference to a nursery that achieved an, 84 per cent reduction in mains water use through rainwater recycling".

The nursery cut its water consumption by 58 per cent an acre. The scheme improved the whole regime and the quality of the nursery's business.

The case for such programmes has been well made by those who have been motivated and brave enough and who have received awards. It should be a basic requirement of licence applicants that they produce some form of plan about how they intend to use the water efficiently. If they have nothing much in place in that regard, there might be a requirement for a year-on-year improvement. That may seem a little onerous to them in the beginning. However, the examples of businesses that have had efficiency programmes, of which I have quoted only two of many, show that considerable cost savings may result. That is what is known in the jargon as a classic win-win situation.

I remind Members of the Committee, although they may not need reminding, that under the Bill small users will be excluded completely from the abstraction requirement. The Bill applies only to larger users, which are the ones that we hope will start to consider efficiency savings. Therefore, the amendment is important. I beg to move.

Baroness Byford

I shall add a couple of comments. I hope that the Minister will not say that the amendment is not necessary, although I imagine that he will. I should not prejudge what he says, but the Government may he reluctant to add to a Bill of more than 200 pages.

The noble Baroness gave good examples of how efficiency programmes could aid in saving water and help businesses. My comment is in the form of a question. I had presumed that such a programme would he required by the agency as part of the proposed system. That is why I wondered whether the Minister might be saying no. We support the better use of water resources. That is key for all of us. The more water we can save, conserve and re-use in other areas, the more it will help not just local communities, but the wider community. Does the agency already require that? I think I am looking at the Minister, although I am also looking at the noble Baroness, Lady Young. I am not sure who will respond. I think it will be the Minister.

5.30 p.m.

Lord Livsey of Talgarth

I support my noble friend Lady Miller. The use of scarce resources is becoming an extremely important issue. There are computer programmes that will help. We have seen them used for energy saving. Water is a very scarce resource in some parts of the United Kingdom. The amendment encapsulates that making best use of the resource is a desirable objective.

Baroness Farrington of Ribbleton

I do not want to inhibit the discussion in any way, because the knowledge that everybody brings is valuable, but I remind Members of the Committee that a member of an agency cannot in any way be asked questions. All questions must be directed at the Minister.

Baroness Young of Old Scone

I thank the noble Baroness, Lady Farrington of Ribbleton, for that interjection. It is important for all of us. I recognise that I am not here to respond on behalf of the agency or to usurp the position of the Minister. However, I should like to contribute briefly on the amendment.

First, I thank the noble Baroness, Lady Miller, for her kind words about the agency's water efficiency awards. However, I shall incur yet again the wrath of the noble Baroness, Lady Byford, in similar terms to the wrath that I incurred in the previous Committee sitting on the Bill. We are going to talk about water efficiency at a number of points throughout the Bill. As I said on the previous water efficiency amendment, this one expresses an admirable sentiment. We all want water to be used more efficiently for a variety of reasons—for the environment, but also so that there is water available for all the many and varied needs of water users.

The amendment addresses the technical point of whether an application is made by an entitled person—I do not mean Members of the House of Lords; I am talking about whether the application is properly made. That is not the right point on which to be considering water efficiency. It would be more appropriately considered when we are discussing general issues of whether the licence should be granted, rather than simply whether the person making the application is the right one to do so. The amendment would add bureaucracy without necessarily delivering the water efficiency benefits that we are all looking for. The issue will come up on a number of occasions. There are other points in the Bill when water efficiency will be far more pertinent and could be more successfully delivered.

Lord Whitty

We all recognise that when the Environment Agency is determining a licence application it will need to assess whether the applicant has a reasonable requirement for water. That requires an assessment of the efficiency of the use of that water. The amendment would make an undefined water efficiency programme a precondition. More clarity about what that means would be needed were we to amend the Bill in that way. Because the efficient use of water is a key element, we need to make sure that what we put on the statute book is the appropriate way of dealing with the issue.

I suspect that we shall return later to how water efficiency is judged and the duties of the Environment Agency in considering licences. The amendment is not appropriate in its present formulation. It could lead to arguments about what is and is not a water efficiency programme rather than allowing the Environment Agency to make a judgment on how the abstractor was likely to use the water. I would not like to pursue the amendment in this form at this point in the Bill.

Baroness Miller of Chilthorne Domer

I thank noble Lords who have spoken and the Minister for his reply. By having several different amendments, we are at least narrowing it down to a point in the Bill where the issue will be acceptable. Maybe I have been misled by the titles of the clauses. I wanted to define who may apply for a licence with this amendment. I hear the argument of the noble Baroness, Lady Young, that it is better to consider whether the person has a programme of water efficiency later when their licence is being considered. I remind the Committee that we are talking about larger users, not all the small ones, who have been removed from the Bill. It is more appropriate for that to be considered as the first thing before the licence is applied for. That is why I tabled the amendment at this point in the Bill.

By Report I am sure we will have honed down the perfect place for the perfect amendment to achieve what many of us want. I hope that we shall also define a water efficiency programme. I am sure that the Government might feel inclined to help us with that task. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

Clause 12 agreed to.

Clause 13 [Applications: types of abstraction licence]:

Baroness Miller of Chilthorne Domer moved Amendment No. 42: Page 15, line 16, at end insert— ( ) the willingness of the applicant to have regard to efficiency and sustainability in their use of water; ( ) the likely effect of any abstraction on soil management.

The noble Baroness said: We are on the same subject again, although in a different context. The amendment would insert in Clause 13 a similar requirement that an applicant should be willing to have regard to efficiency and sustainability in their use of water.

The amendment is slightly different from the previous one in that it refers to the sustainable use of water. I am testing whether this is a more appropriate place in the Bill for such an amendment.

The second part of the amendment is slightly more specialised, referring to, the likely effect of any abstraction on soil management".

That is a reference to some of the thoughts in the Water Framework Directive. For example, an applicant's management of their soil may have compacted it to such an extent that it does not retain water well and needs more irrigation as a result. Whatever is sprayed on to the soil runs off fast. The direction of the ploughing and any subsequent way in which soil can be managed after that all leads to a need for ever more water to be abstracted and spayed on to the soil to achieve ends that, were the soil managed properly, would require much less water. We have not debated those soil management issues so far, but I believe that we should do so. Were the Water Framework Directive part of the Bill, we would most certainly be debating them at length. I beg to move.

Baroness Byford

I shall speak to Amendments. Nos. 43 and 44, which are in this group. Through the Minister, I shall also respond to the quiet rebuke of the noble Baroness, Lady Young, for my reaction to her comments at the previous sitting. The amendment then was not about efficiency, but about conservation. There is a great difference between conserving water and using it efficiently. They often run side by side, but there is a distinct difference that we shall return to.

Clause 13 provides for three forms of licence—transfer licences, temporary licences and full licences. Following an application for an abstraction, the Bill allows the agency to decide which licence type is most suitable for the applicant. The implication of Amendment No. 43 is that, in deciding the most suitable licence type, the agency should have regard to the needs of the business requesting the licence. The NFU considers it vital that the Bill ensures that the agency has regard to the operational needs of the businesses and the likely effect of any variation in licence when deciding which type of abstraction licence will be the most suitable.

On Amendment No. 44, I understand that the Water Resources Act gave national parks special rights relating to appeals against decisions on applications, which would be of special concern, according to page 41 of Butterworth. The clause seems to suggest that these special rights will not extend to appeals on the agency's decision on the types of abstraction licence. If so, why the change?

Baroness Farrington of Ribbleton

Clause 13 allows the Environment Agency to decide the type, number and groupings of licences that should be granted, based on the likely effect of the abstraction. That is the only issue relevant to that decision. Amendment No. 42 would add additional factors relating sustainability to those that the agency may consider in those circumstances. However, the type or groupings of licences are not relevant to matters of sustainability. When finally determining an application, whichever type is eventually issued, the agency must already have regard to sustainable development, which would include soil management where relevant. It must also take costs and benefits into account. Water efficiency is an essential element of considering the reasonable requirements of an applicant.

I hope that the intention of the amendment is therefore fully met and that, with those assurances, the noble Baroness will feel able to withdraw it.

The factor mentioned in Amendment No. 43 is already considered by the agency. In any case, the applicant will have a right of appeal against a decision on the type of licence if he believes that it will adversely affect his business interests.

The national park authorities are currently involved in the appeals process for licensing decisions in their area. That is right, because the licensing decisions can have implications for water resources in that area and, in turn, for the nature of the local environment. However, their involvement in decisions on the type of licence, as proposed by Amendment No. 44, would have no direct bearing on that and would involve the national parks in additional effort to little effect. I hope that clarification satisfies the concerns of the noble Baroness, Lady Byford.

Amendment No. 42 would add subjective matters to the determination of licence type, such as the willingness of applicants to use water efficiently. If the agency considers that water efficiency conditions should be imposed, it will impose those conditions and the abstractor will have to comply with them. I hope that reassurance satisfies the noble Baroness, Lady Miller.

The Environment Agency must have regard at all times to relevant considerations. The potential relationship between the water and soil to which the noble Baroness referred, such as absorbency and potential run-off, will be relevant considerations.

5.45 p.m

Baroness Miller of Chilthorne Domer

I thank the Minister for her reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 43: Page 15, line 16, at end insert— ( ) the likely effect on the applicant's interests of any decision to grant an abstraction licence, or licences, of a type other than the type for which the applicant has applied;

The noble Baroness said: The Minister said in her reply, for which I am grateful, that my request is already considered and that there is a right of appeal for someone affected. Who deals with that appeal, and on what timescale? Will the response be quick? I beg to move.

Baroness Farrington of Ribbleton

The noble Baroness refers to the process of appeal to the Secretary of State, which the Committee considered on the first day in Grand Committee. If the noble Baroness wants any further details, I should be happy to write to her.

Baroness Byford

I thank the Minister for that response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 44 not moved.]

Clause 13 agreed to.

Clause 14 [Publication of application for licence]:

Baroness Miller of Chilthorne Domer moved Amendment No. 45: Page 16. line 32, after "publish" insert "on its website

The noble Baroness said: Amendments Nos. 45 and 46 have been tabled to find out whether the Government have updated their means of publishing information to take account of developments such as websites. Amendment No. 45 inserts the idea of using websites into the Bill in order to test the proposition. Amendment No. 46 suggests that the prescribed means of publishing should, be reviewed regularly by the Secretary of State".

I believe that there is still a requirement for advertisements to appear in places such as the London Gazette. Many noble Lords may regularly see that organ, but I am not one of them. The Minister tut-tutted when I said that—I am sure that the London Gazette is very informative. However, we should consider the use of websites and more modern ways of notifying interested parties of what is happening. Will the Minister say something about the appropriate places in which to publish information? I beg to move.

Lord Dixon-Smith

I support the amendment. This kind of amendment is almost in the nature of a hardy annual, as it appears at every season in every Bill. I remember it arising during the passage of the Greater London Authority Bill. We suggested that that authority should publish some details of its consultations and decisions on a website as a way of supplying sufficient information. I wonder about that.

Nowadays, anyone running the sort of business in which they might be involved in water abstraction is almost bound to be computer literate. I shall immediately hear howls of protest and shall probably receive letters from people throughout the country saying that they have never seen a computer—such is life. Even I, albeit after a few years of drumming in this House, have had to become somewhat computer literate. I would not describe myself as completely computer literate, but I get by. I would have thought that, if the Environment Agency published on its website what was going on, that should be sufficient publication. For information of this kind, the London Gazette is a trifle antiquated. The information needs to be spread throughout the country, and my strong suspicion is that, in the provinces, the London Gazette is not widely distributed of a Friday afternoon. I am glad that the amendment was tabled. If the noble Baroness, Lady Miller of Chilthorne Domer, had not put it down, I would have done so myself. I am happy to support it.

It is perhaps a little unnecessary to suggest that the process should be reviewed regularly by the Secretary of State. If Amendment No. 45 were agreed to, it might be wise for the Secretary of State to make sure that the system was working adequately. However, once he had determined that it was, as I suspect he would, he probably would not need to review it again.

All the indications are that society is becoming more, not less, computer literate. If the publication of information were satisfactory at one point in time, it is unlikely that it would become unsatisfactory at some point in the future, unless someone devises a novel way of communication that we have not yet dreamt of. That may happen, given the changes taking place in communications. The information might come up on the television screen or something similar.

Lord Whitty

The legislation will require the Environment Agency to advertise applications for full and transfer abstraction licences and for impounding licences. The way in which that information is advertised is important.

We intend to make regulations that will provide the Environment Agency with the flexibility to use its website to provide the information, but we would not necessarily wish to confine it to using the website, as the amendment, by implication at least, would do. Other technologies—older and newer—might provide better or, at least, complementary ways of communicating the website. If we put the matter into regulations rather than into the Bill, we shall have the kind of flexibility that Amendment No. 46 was intended to provide without referring the matter to the Secretary of State. That is probably a better way of going forward on that front.

Not wishing to be outshone by the technological frontiersmanship of the noble Lord, Lord Dixon-Smith, I think that we must prepare for the future. We must also recognise, however, that some colleagues and some people involved even in this business may still be slightly behind the noble Lord.

Baroness Miller of Chilthorne Domer

I thank the noble Lord, Lord Dixon-Smith, for his contribution and the Minister for his reply. I do not believe that the amendment confines publication to the website. It simply adds that in and leaves open the definition of "prescribed way". As the Minister said, that is likely to appear in regulations. I do not believe that it is a confining amendment. But I hope that this debate will encourage in the review of the regulations the use of websites and appropriate newspapers, not simply those that have always been used, which few people now read. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 46 not moved.]

Clause 14 agreed to.

Clause 15 [General consideration of licence applications]:

Lord Whitty moved Amendment No. 47: Page 18. line 42, at end insert "(but as if the existing licence were to continue without expiring)

On Question, amendment agreed to.

6 p.m.

Baroness Byford moved Amendment No. 48: Page 19, line 2, at end insert— ( ) After subsection (2) there is inserted— (2A) In respect of any application for the renewal of any licence under this Chapter there shall be a presumption in favour of the grant of a new licence, except where in the opinion of the Agency the resource is already fully utilised, or there are other exceptional circumstances."

The noble Baroness said: I shall speak also to Amendment No. 53, which is tabled in my name. It is unusual to object to one's own amendment, but I shall do that in regard to Amendment No. 48. On reflection, if the Minister is not persuaded to come back with a provision on Report, I shall propose the introduction of a presumption in favour of granting a new licence.

New subsection (2A) states that the presumption should be given, except where in the opinion of the Agency the resource is already fully utilised, or there are other exceptional circumstances".

We are actually talking about the renewal of licences—where water is already being used—therefore I realize that I am arguing against myself, which is not what I intended. I hope that the Committee will bear with me as I speak to the amendments and interpret them as I hope to later. The amendment would provide that, there shall be a presumption in favour of the grant of a new licence".

It relates to the renewal of a licence; therefore, it is hugely important.

It is important that businesses have continuity for planning purposes. The NFU is one of the organisations that believes that the Environment Agency should offer a presumption in favour of renewal, especially in circumstances where the lifespan of plant and equipment might be greater than that of the licence available. Such factors must be considered when making decisions on borrowing capital. The NFU believes that a licence should be refused only if the Environment Agency can show that the water resource is fully used. As I explained, that is the aspect on which I have a problem with my amendment, so I shall move on to other points.

The CBI in its briefing expressed concern about how licences are granted. The British Soft Drinks Association, which I referred to during the previous Committee session, is equally concerned about the time lag on licences. It wishes us to consider introducing a 20-year licence. Soft drinks companies work on a long-term licence. They seek a presumption in favour of renewing those licences. When we debated quarrying, a presumption in favour of renewal was sought. So the amendment does not deal with any particular area; it relates to the general consideration of licence applications. We should bear in mind the issues raised.

Amendment No. 53 deals specifically with the term of licence that one might expect or hope for.

In our considerations last week, the Minister indicated that a 12-year lifespan might be selected. However, as we mentioned then, it is impossible for many businesses to work in such a short timescale. The amendment would provide for a 25-year licence. I shall be interested to hear what other noble Lords have to say about such a term. I might have proposed a period of 30 years or left it open-ended, but I think that the Government understandably wish to reconsider giving open-ended licences. Therefore, I understand their decision to tighten up the present procedures.

Clause 19 imposes an expiry date for all new abstraction licences. Although no likely time is set in the Bill, initially the Government and the agency have suggested that they are contemplating a 12-year lifespan. As I have already said, if a time limit is to be imposed on abstraction licences, it is important that the limit is sufficient to allow horticulture, agriculture and other businesses—I include them all—to recoup investment in their necessary capital equipment, which, by its very nature will be medium to long term and not short term. We also had a debate about water companies.

It is a clear example of the importance of giving adequate time limits. They can be seen in the process of many different kinds of businesses. If one takes a big business such as watercress farming, which is entirely dependent on the right to abstract water, most of its assets would have little value without this right. A supply of high-quality ground water is essential to commercial cultivation of items such as watercress. Safe, hygienic production standards are required for the cultivation of the crop, which is carried out on constructed beds, and associated works. It has a life expectancy of more than 50 years—one would not have thought so.

The practice of one of the largest companies in this field is to write off its capital assets at 2 per cent per annum, which is equivalent to a 50-year write-off period. There are many other examples that I could give. Certainly, many have raised queries and concerns as to the possibility of moving to a 12-year turnover.

The CBI is concerned about that. The Bill introduces a right to revoke a licence without compensation if it has not been used for four years. Mineral operators need to be able to plan their operations over long periods. They have given periods of 25 years and above in order to justify the high capital investment involved. That needs to be included in securing abstraction licences well in advance of any that may be required. A short time limit is unacceptable.

We have touched on the issue earlier. It is sometimes difficult when one is working through a Bill on which, by its very nature, one keeps returning to the same argument. As I have tried to reflect, the amendment does not apply to one particular little group. It applies to the sectors that I mentioned and many others—CBI, the soft drinks industry, quarrying, water companies and farming. Their needs are very different. One would not have thought that watercress worked on a 50-year cycle, but one would naturally have assumed that water companies do, by the nature of their infrastructure.

We hope that the Government will deal with the amendments sympathetically. I am prepared for the Minister to come back to me on Amendment No. 48. I shall return with a shorter version of that amendment, because I shot myself in the foot in arguing the toss on that matter. That certainly was not my intention. I beg to move.

Lord Livsey of Talgarth

I shall speak to Amendment No. 54, tabled in the name of my noble friend Lady Miller and myself. We have set out to strike a balance between environmental needs and the obvious needs of the operators, whether water companies or others involved in the use of water, who have to invest in equipment.

There are several reasons behind our proposal that an, abstraction licence shall be granted for 15 years". The principle behind the amendment is that the period is probably equivalent to half a working lifetime although for those who like me who have had the good fortune or misfortune to work for 45 years before coming to this place, one could multiply that period by three.

The amendment is closely related to Amendment No. 55, which tackles the investment question, the write-off of equipment and the depreciation in value of equipment that may be installed. It also relates to Amendment No. 60, which was tabled by the Liberal Democrats and the Conservative Members of the Committee. It is an important amendment, because it presumes that licences can be renewed.

I realise that we are not debating Amendment No. 60, but there is a close relationship between the two amendments. If a licence were granted for 15 years, there is a good chance that the licence would stand for 30 years, if Amendment No. 60 became law. I understand why the CBI and others have lobbied for a longer licence, and I note that Amendment No. 53—which was spoken to by the noble Baroness, Lady Byford—asks for not less than 25 years. However, given that we have intractable environmental problems such as global warming, even if there is an almost automatic renewal, we should be able to review a licence after a period of time. Good reasons should be given if a licence is revoked at any point. I press the Minister, as the noble Baroness, Lady Byford, did, whether it is intended within the purview of the Bill that a licence should last for 12 years? We are really debating whether renewal should take place at 12, 15 or 25 years.

Lord Borrie

I intervene from the Back Benches to support the amendment. On Second Reading I declared my interest as chairman of Vivendi Water UK, which is a water supply company. I apologise to the Committee for not having been present when some of these matters were debated last week. I support the points made by the noble Baroness, Lady Byford, particularly on the presumption of renewal. Twenty-five years would be an appropriate period.

There are other amendments on the subject and I do not want to speak for more than a few moments. Having a water company interest, I am particularly impressed by the argument about capital expenditure and the impossibility of imagining that people will be willing to put the sort of money that is needed into the infrastructure without an adequate period within which the money can be recovered. That is a strong argument for a lengthy period of licence.

I support what the noble Baroness, Lady Byford, has said and I hope that the Government will offer some help.

Baroness Farrington of Ribbleton

It would help me in responding if Members of the Committee could stick to the amendments in the group. I am getting slightly confused, because people are now speaking to a wider group. As the Government Whip, I am happy if Members of the Committee wish to group 12 amendments together.

Lord Howie of Troon

One of the worrying aspects of the Bill from my standpoint, which I mentioned earlier, is that a large part of it deals with the abstraction of water to be used as water, although there are other elements in the Bill as well, such as abstracting water as drainage from deep excavation. Westminster Tube Station might be an example of that.

Many years ago I was engaged at the entrance loch to Grangemouth harbour on the River Forth. It was a big project consisting of two parallel lines of caissons with a coffer dam at each end. This left inside a quadrangle a very big hole, after excavating the soil, which filled with water. That is no use if you are trying to build something at the bottom of it. We de-watered the hole, and in so doing we reduced the water table on the outside of the hole, which disturbed some of the buildings around the harbour—or at any rate caused them some alarm. We then put the water back into the outside at the same time as we were taking it out from the inside. Engineers do that kind of thing because they think it is useful, but it does not fit this Bill terribly well.

Something similar applies in draining a quarry. You take the water out of the quarry because you have to do the workings and you put it somewhere else—probably back into the aquifer nearby or into some other nearby water course— without having used it. You have just shifted it over a bit.

When you deal with a quarry, you have a problem. You have planning permissions for the abstraction of the rock, gravel, sand or whatever it happens to be, and, under the new proposal, you will need a licence for the removal of the water. That is fine as far as it goes, except that the lifetime of a quarry might be very long. I am acquainted with quarries which have been there— and are still working — all my life, which is now a considerable time.

A problem arises if the licence to de-water does not coincide with the planning permission. Twelve years has been suggested. Twelve years is hopeless for a quarry that might last for 50 years, 60 years or even longer. Fifteen years has been suggested. It is an improvement, but only a trivial one. Twenty-five years is beginning to look right, but only like half the thing. What really is required is for the extent of the licence to be as long as or nearly as long as the extent of the planning permission. Therefore, for the kind of reasons put forward by the noble Baroness, Lady Byford, the quarrying companies can invest, plan ahead and run their businesses in a proper capitalistic manner.

I hope that the Minister will pay some attention to Amendment No. 54A, which stands in my name. We hope that whatever happens there will be a substantial opportunity for appeal against the length of a licence.

6.15 p.m.

Baroness O'Cathain

I apologise for not being here at the beginning of the Committee, but, like other Members of the Committee, I have to cut myself into two and attend the Select Committee on Economic Affairs, which is dealing with minor matters such as Finance Bills. However, I came into the Committee and thought, "Goodness gracious, there is some repetition", because we dealt with quarrying last Thursday, which was highly educational and very interesting.

I return to the point. I support absolutely the noble Lord, Lord Borrie, who spoke on this point as chairman of Vivendi. I also must declare an interest as a director—not a chairman—of a water-only company. The position must be stated that since the privatisation of the water industry there is a regulatory procedure whereby Ofwat will allow a certain amount against investment. However, if Ofwat allows investment and takes it on board that the infrastructure produced by water companies will last, say, 30 years, not in its wildest days would it allow water companies to write it off against five, 10 or even 15 years. The Government must try and get their head around this. The investment requirement in terms of length of investment and return on investment is huge in this industry, and in particular in the water supply industry.

As I mentioned in my Second Reading speech on the issue, thankfully we still have Victorian pipes, which are 150 years old. Indeed, some of the wonderful investments made in the 1960s in PVC pipes now have to be replaced because they are not as good as the Victorian ones. Such problems have arisen with the infrastructure, and no one is really aware of them. I hope that DEFRA will keep close to the people who actually know the ins and outs and the problems of the infrastructure. That is not special pleading, it is pleading on behalf of all of us as water consumers. The last thing we want is to have no water running out of our taps.

Earl Peel

I support my noble friend Lady Byford's amendment, Amendment No. 48. I am glad that my noble friend has confirmed that she appears to have got herself into some muddle over the amendment. I have read it more times than I care to recall and I still cannot make any sense of it. I thoroughly support and understand the principles that my noble friend is getting at; that is, a presumption of renewal.

We had an extensive debate on Amendment No. 30. We addressed the need for consultation. If there was a presumption in favour of renewal, to a large extent Amendment No. 30 would be negated. One other key issue is that if an amendment to the effect that my noble friend seeks could be accepted, it would require the Environment Agency to explain carefully and in a robust fashion why a licence was not going to be given. That would be quite an advantage. It would add transparency to the way that the operation was going to be conducted. In essence, I am very much behind what my noble friend is trying to extract with Amendment No. 48.

I briefly speak to Amendment No. 53. We have had clear examples from a number of noble Lords as to how the 12-year lifetime for licences simply will not be enough for businesses to invest with confidence. My noble friend suggested 25 years. I suspect that at the end of the day there will have to be some degree of flexibility. Clearly, 12 years is not enough, and 25 years is probably more than enough in most cases. To hold it firmly at 12 years will quite frankly not be acceptable.

Baroness Miller of Chilthorne Domer

I shall keep my remarks about the length of the licence and associated investments for later amendments. I wish to make some remarks on Amendment No. 54A, which stands in the name of the noble Lord, Lord Howie. It is a particularly sensible amendment, given the complexity for planning authorities trying to weigh up all the different issues. I have in mind, for example, the issues surrounding Whatley Quarry's extension in Somerset. Those were whether it would be able to quarry extra minerals and the feared effects on waters as far away as under the city of Bath, which, obviously, is dependent on its spa waters, having recently invested considerably in renewing its ancient system.

If planning permission is not tied in with the length of abstraction licence granted, it could lay the ground for the payment of compensation where a planning permission was granted but could not be fully effected because, for example, the period of water abstraction licence was too short. I think the Minister earlier said that a payment would have to be made by other licence abstractors, which seems particularly unfair on them. It is not their fault that the two permissions were not coterminous. Therefore, I very much support the spirit of the amendment.

Baroness Young of Old Scone

I comment briefly on Amendments Nos. 53 and 54 in order to highlight how there are considerable investments in assets by water companies and others that do not seem to cause problems in terms of renewal of discharge licences as well as abstraction licences. Previously in Committee and at Second Reading, I drew a parallel with licences granted to sewage undertakers on discharges, which are reviewed at between four and six-year intervals without any difficulty. Indeed, the water resources strategies that are drawn up between the economic and environmental regulators of the water industries with the water industry are, I think, an extremely good 25-year framework for such issues to be worked through.

The Water Framework Directive will set a rolling six-year review period and therefore 12 years seems a sensible balance between the concerns of people about long-term assets and the needs of the Water Framework Directive.

I also comment on Amendment No. 54A, standing in the name of my noble friend Lord Howie of Troon. I shall probably repeat what I said when the issue arose when last we were in Committee. However, he was not here to hear it in person, so I shall say it again.

Lord Howie of Troon

I read it.

Baroness Young of Old Scone

There is no doubt that planning permission for mineral workings and for quarries can take an extremely long time and in some cases are not time-limited, or they are dependent on aged minerals permissions of which it is difficult to see the origins. Quarry and mineral de-watering is also incredibly unpredictable as quarries expand and go deeper. The new point that I want to raise with the noble Lord is that, if quarry de-watering is simply going to return water to the environment in the way he described with the hole in Scotland, I suggest that he need not be concerned about the withdrawal of the licence because it demonstrably would not have an impact on the environment—if indeed what he describes is the situation that was being licensed.

Lord Howie of Troon

If that was so, then what is my noble friend worried about?

Lord Dixon-Smith

The problem we face is that we have a country with a growing population, we have a growing economy, and, although unquestionably there are economies and efficiencies which can be made in the use of water, the likelihood and the reality is that water consumption will increase. The issue is how we deal with it.

One thing that bothers me about the whole licensing regime is that most of major water infrastructure in the country was produced long before licences were even thought about. We see the licensing regime as a means of managing the water supply. It may be; it is a tool. But the real question we must ask ourselves, and which we have not really addressed is this: what we are going to do to enhance the volume of usable water? There is a great deal of usable water and we let an awful lot of it run out to sea.

If we return from that broad perspective to a specific catchment area, which is finding itself in difficulty, the real question we must ask is: do we start to restrict users, who have a jolly good reason for needing the water, or do we tackle the problem from the other end and see what we can do to enhance supply? That is the big issue that really lies behind the questions raised by so many Members of the Committee who have already spoken. I am very grateful for the words, in particular those of the noble Lords, Lord Borrie and Lord Howie, and of my noble friend Lady O'Cathain in making this point.

What worries me a little is that if the licensing regime is seen as a tool for managing water, we may miss the real point, which is how we enhance the required volume of water. If one asks that question, then one finds oneself in slightly difficult territory because the question is: whose responsibility is that? We can say that perhaps it goes with the major water utilities. But their real interest now is to provide for their own security of supply. I am not quite sure whether their remit—and perhaps the Minister in his response will reassure me on this—really runs to this wider issue of enhancing the national available water resource, because there is plenty of water there but we do not do perhaps enough to conserve it.

When we come back to how we deal with that problem, we come hack to the huge timescale mentioned by the noble Lord, Lord Borrie. There is a 20-year planning process that must be gone through, before we can begin to find major solutions, such as Rutland Water or Graffham or whatever it is now called. That issue must be faced. If such solutions are to be found, people will need certainty.

We can review what happens in a catchment area every 12 years, or we can review it every six years, but we do not need to review the licences as part of that process. The licences can continue. They are the measure of the demand that must be met. Fiddling around and withdrawing licences or reducing amounts by 5 per cent because an area is under pressure is not the solution. If an area is coming under pressure, the solution is to enhance the available water. That is the approach that we must adopt.

One accepts that global warming might make the situation impossible. I went to a fort in Oman that was in pristine—almost unused—condition. It was built for defensive reasons when there was a jolly good water supply, but, within only a few years, the water went and the area became desert, leaving that magnificent building useless. If we had that sort of shift, there would be nothing that the Environment Agency could to about it, and I would not blame it. Going by the projections about global warming that I have heard, I am concerned that it is likely that precipitation will increase. It will become more seasonal and more freaky. If that is the case, it enhances my argument.

We must think about security of available water. That is the big issue that lies behind the amendments. I support what has been said. It is not sensible to have licences lasting for 12 years. We shall come to the question of the presumption of renewal later.

6.30 p.m.

Lord Livsey of Talgarth

I must respond to the debate on Amendment No. 54.

The problem is that we have different types of water user and different types of industry consuming water. We have been discussing depreciation, in one sense, and I can give a few examples. In the Elan Valley complex, which supplies Birmingham, the pipes are 100 years old and are still in use, although, by accounting methods, they were written off some time ago. There may be some mileage in examining accounting conventions for depreciation. For example, the water bottling industry may have equipment that can be written off over a 25-year period. There may be other industries connected with water for which shorter periods would apply.

We must not neglect advances in technology. After all, in accounting or business, it is not always a good thing to write off equipment over a long time. In some industries, there are grants made as tax allowances that depend on the short-term writing-off of equipment, so that industries can keep up with technology. There may be a case for publication—it is only an idea—of an accounting convention for different parts of the water industry that could be related to licences. That is particularly important.

I make one other point. At the time of water privatisation, the assets of the water industry were reduced from £30 billion to £7 billion—at a stroke.

Baroness Farrington of Ribbleton

I begin by thanking noble Lords for eventually dealing with the group before us. To the noble Lord, Lord Dixon-Smith, I say what, I believe, I said in answer to a point raised on the first day in Committee by the noble Baroness, Lady O'Cathain: the Environment Agency has responsibility for water resource management in total. I stress that it is not a case of either/or; it is both that and many other things as well.

In spite of all that has been said, the Water Bill does not fix the duration of any new abstraction licences. It simply requires that a time limit be placed on licences. It does not prescribe. There is a clear presumption of renewal, as set out in Taking Water Responsibly.

The noble Baroness, Lady Byford, admitted that there were some difficulties with Amendment No. 48. It would significantly limit the ability of the Environment Agency to refuse to renew a licence to a very narrow set of circumstances and would affect its ability to manage our water resources sustain ably. The agency has set out three tests for a request for renewal: environmental sustainability must not be in question; the need for the licence must be demonstrated; and water extracted under the licence is being and will be used efficiently. The agency will determine whether environmental sustainability is in question. In certain circumstances and if there are concerns about local conditions, the applicant may be required to supply supporting information. Demonstrating that the water is used efficiently and that there is continued justification of need will depend on the provision of information.

The agency is required to give reasons for decisions, in cases in which a licence is granted or not granted or departs in any material way from the form in which it was sought. That said, a presumption of renewal will apply to all time-limited licences. That commitment was given by the Government and by the agency in its recent guidance. Time limits are there to provide an opportunity for review in the light of climate change. I think that the noble Lord, Lord Dixon-Smith, made the point that there could be dramatic change over a certain period, but the 25-year option would be too long to allow such changes to be taken properly into account. Having said that, I say to the noble Lord, Lord Livsey of Talgarth, that the 12-year period is not fixed either. Other durations are allowed. If, as I have said, an applicant objects to the duration, not only is there a right of appeal but the agency must have considered costs and benefits in the licence that it granted.

We worry that it would be dangerous to stipulate the duration of licences in the Bill. Licences could be of longer or shorter duration, or there may need to be investigations over a few years. As the noble Earl, Lord Peel, said, flexibility is necessary. We believe that we have built that flexibility into the Bill. It is up to the Environment Agency, as the licensing authority, to decide on duration case by case. Incorporating a criterion such as a minimum duration, as proposed in Amendment No. 53, or a fixed period, as proposed in Amendment No. 54, could override other criteria, to the disadvantage of all.

Amendment No. 54 would remove from the Environment Agency the responsibility for determining the time limit to apply to all licences for de-watering activities. I reassure my noble friend Lord Howie of Troon that quarry and mine operators will have the same opportunities as other abstractors to submit to the Environment Agency a business case in support of their application. That business case could address issues relating to the proposed lifespan of the licence. The time restriction on the operator would form part of the submission, which the agency must take into account.

I was fascinated by my noble friend's account of his experience of the return of water to the same source. However, although it is not a common experience, if de-watering in mining has taken place, it is not always possible to return the water to the source from which it came, although the total water available to the community may be the same at the end of the process. I think that that was the point that was made by the noble Baroness, Lady Miller of Chilthorne Domer, who spoke of the impact on other abstractors of quarrying in a situation in which there could be a dramatic change in the water table. That is why the Environment Agency should have the opportunity to take into account all those factors.

The lifetime of the infrastructure inseparably associated with the authorisation will extend over the exact and desired period of validity. That is one of the choices that the Government insisted in Taking Water Responsibly must be included. The agency's original guidance, Managing Water Abstraction, published in 2001, picked that up, along with the various points that it used in support.

Throughout our debates, noble Lords have expressed concerns—occasionally, they are opposing concerns—that have equal validity. That underlines the need for the Environment Agency to have the flexibility to meet the diverse circumstances that arise. I hope that my noble friend Lord Howie of Troon will join us later on, because I am sure that he will learn that there is a wide range of knowledge here and the diversity that has underlain this debate will also be a feature of later stages.

Earl Peel

I am not certain where the figure of 12 years came from. It may be a recommendation that emanated from some government advisory document. I suggest that, if 12 years is written down somewhere, it should be removed, and some flexibility should be built into the guidelines.

Baroness Farrington of Ribbleton

I believe that it is two review periods that are indicated. As I said, there is enormous scope for variation in the licences issued. Each case must be considered on its merits.

Earl Peel

I accept that, but the point that I am trying to make is that the flexibility on which the noble Baroness puts such stress—I concur with that— is being undermined by the figure of 12 years that seems to have emerged. We seem to be getting stuck on it. Can the noble Baroness assure us that that figure can be eliminated?

Baroness Farrington of Ribbleton

There must be a deemed review period, in order for people to have a working strategy. There is enormous value in not going through the Bill and trying to dot every "i" and cross every "t", which is what would happen if there were a presumption of a fixed term for all types of licence or for all types of licence in a particular area, such as quarrying.

6.45 p.m.

Baroness Miller of Chilthorne Domer

Before the noble Baroness sits down, I wish to press her on my question about the amendment of the noble Lord, Lord Howie. If a quarry is granted planning permission for the extraction of a certain volume of minerals where the work might continue for 20 years but, say, 12 years later it has its application for an abstraction licence denied and cannot extract the material for the remaining eight years, who is liable to pay compensation?

Baroness Farrington of Ribbleton

Obviously, it comes from the pool of money available from the proceeds of abstraction. Such a situation would occur where there has been a radical change in water availability. A refusal of permission to continue abstraction would not be an arbitrary decision. An abstraction licence would be refused because the impact of changes to the water resource in the locality was so great that the quarry could be denying any water at all to others with abstraction rights.

Lord Howie of Troon

I am grateful to my noble friend for her kind remarks and for her invitation to return to the Committee. I have tabled further amendments, so I shall return. It will be interesting to hear the diversity of views. But the Minister must realise that I have been in the Labour Party for 50 years and am quite used to a diversity of views. I have seldom heard anything else, so there is nothing new in that.

I take some encouragement from what the Minister says, but I impress upon her that water abstraction in quarrying is different from water supply. I assume, therefore, that the Environment Agency, which has kindly been in attendance throughout, will observe the difference. When the agency grants licences with the flexibility that my noble friend mentions, she will realise that the difference is acute.

Baroness Farrington of Ribbleton

I would not like my noble friend to interpret my remarks as meaning anything other than that the Environment Agency must have regard to all the individual factors on a case-by-case basis. There may be occasions when the inference drawn by my noble friend is deemed correct; equally, there may be instances when it is not.

Baroness O'Cathain

I suggest to the noble Lord, Lord Howie, that he should not think that he will sleep well over the next few weeks. He ought to go further into the Bill, where he will find that there are many other problems. I support his points, but I also support those of the Environment Agency. There are ways and means of getting over the problem. We are talking about sustainable development, environmental impact and all such issues, but sometimes we cannot see the wood for the trees. The situation is not as easy as the noble Lord says. I do not think that he has received any sort of satisfaction from the Minister.

Lord Howie of Troon

Sometimes you cannot see the trees for the wood.

Baroness Byford

I thank everyone who contributed to this crucial debate. On a lighter note, the Minister said that it was interesting to hear many differing views from all sides of the Committee—that is what democracy is supposed to be about. The Minister did not suggest otherwise, but the comment made me smile wryly, because that is exactly why we are here.

It is lovely to see the noble Lord, Lord Borrie, in his place. The Committee was aware that he could not attend our deliberations last week. He highlighted a problem mentioned by other noble Lords—a lack of willingness to invest if the time-scale is too short. The noble Baroness said that she felt there was no need for that consideration because there was a presumption of renewal. If there is such a presumption, it should be in the Bill. If the Government are not willing to include it, I, and, I suspect, many other noble Lords, would infer that there must be some reason for its absence. I wish to establish that immediately.

The question of whether the period is 25 years, 15 years or whatever is important to different industries, as we discussed. I am sure that the Environment Agency will take that into account. I support the suggestion of several noble Lords that a degree of flexibility is needed. However, the Committee faces the challenge of writing into the Bill provision for flexibility on the one hand and long-term investment on the other. We shall definitely return to the issue on Report. It is important to realise that certain industries require longer-term investment. I agree with the noble Lord, Lord Howie. We reflected during our deliberations last week that planning permission and licensing for quarries is perhaps a sensible approach. It may well be the same for water companies, but I do not wish to deal with specific areas at this stage.

Everyone who spoke agreed that the timescale was a problem. The Minister acknowledged that also, but she said that a presumption of renewal was already taken into account. Most members on all sides of the Committee would like to see that written into the Bill. If the Committee could divide, I would ask that it do so on this amendment. The wording may not be perfect, but the principle has been established today and was reflected last week. I hope that the Government will think about the amendments and return on Report with a way to meet the concerns that were so clearly expressed.

On the 12-year licence, no Member on this side of the Committee questions the requirement of the need to review. Nobody objects to a six-year renewal period or whatever it is. But, within that, there is no use in creating uncertainty. It may be pointed out to a company in the review that there is a growing concern about water availability or climatic change, for example. But businesses must be able to make long-term plans. I hope that I have reflected that clearly. My noble friend Lord Peel and others rightly said that flexibility was needed.

The most important aspect to emerge from the discussions on these amendments is timescale. A balance must be struck as regards what is possible or what is not possible. I have not seen anything written down, as far as the Government are concerned, to suggest that they are looking at 12 years. But the difficulty is that "12 years" has been picked up in the general domain and therefore people and businesses are looking for a 12-year cycle. So if the Minister could in some way clarify that there is nothing about 12 years, that would be sensible and would, as I hope that I have indicated, show that there is a degree of flexibility and an acknowledgement that reviews need to be held.

Baroness Farrington of Ribbleton

I stress that 12 years is not fixed—other periods are allowed. I hope that that reassures people.

Baroness Byford

It is immensely helpful to have that recorded again. I hope that the Government will look at the amendments to see whether they can return on Report with suitable words to reflect the concerns expressed by the Committee. We seek a common-sense ability for long-term investment, a degree of flexibility for those who do not require as long a period as others, and a presumption in favour of renewal. Had I not had a more satisfactory answer from the Minister, and if the Committee could divide, I would have called for a Division on this amendment. I will be grateful if those few words spur the Government to meet some of our concerns. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Livsey of Talgarth moved Amendment No. 49: Page 19, line 7, at end insert— (4) In subsection (3) after paragraph (b) there is inserted "; and (c) meeting the established needs of abstractors not previously subject to licensing."."

The noble Lord said: We wish to know whether businesses and users not subject to licensing at present can expect, when granted a licence, to have their established needs met. Trickle irrigation is an example. The Bill does not appear to specify the whole gamut of abstractors to be brought into the licensing system. Many affected businesses have made investments and use specific amounts of water to sustain their businesses. If the quantity of water that businesses may use is reduced their viability may be adversely affected. Will the Minister publish a list of abstractors who will be brought into the purview of the Bill? I beg to move.

Lord Dixon-Smith

I shall not repeat everything that I said about existing use. I support the principle of these amendments.

Lord Whitty

We have discussed this point. Existing use by licensed and unlicensed users must be taken into account. The Environment Agency already has a duty to have regard to all relevant considerations, as subsection (3) indicates. If it does not do so, it could be challenged. Likewise, reasonable demands will have to be taken into account. In that sense, the amendment is unnecessary. It would be odd to pick out a consideration applying to one group of abstractors without dealing with others.

The noble Lord requested a list of the abstractors. An abstractor is anyone who exceeds the threshold. Trickle irrigation has been picked out because previously a special exemption applied to it. But anyone exceeding the threshold will come within the purview of the licensing system. The use of the water, the efficiency of water use, its relevance, the impact on other abstractors and other such aspects must be taken into account. That is but one of the relevant issues that the Environment Agency will have to address, and it will address it. I hope that all Committee members understand that. Pursuing this specific amendment would not be helpful.

7 p.m.

Lord Livsey of Talgarth

I would like to know, and I am sure that current abstractors who are not licensed would like to know, whether they will come within the Bill's ambit. I suspect that they already know. However, I would not like to think that they would wake up one morning and find that they are covered by the controls of this legislation. Perhaps we can return to this issue and consider the whole range of those who will be affected by the Bill. One thing that I have noticed in other legislative processes in which I have been involved is that, however careful we are and however much we nit-pick in regard to certain provisions, people will discover whether they are covered by the legislation only when it is implemented. As we have plenty of time left to consider the provisions, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15, as amended, agreed to.

Clause 16 agreed to.

Clause 17 [Protected rights]:

The Duke of Montrose moved Amendment No. 50: Page 20, leave out lines 10 to 14.

The noble Duke said: This is another probing amendment. It perhaps also demonstrates again a slight inability on my part to make practical sense of some of the wording—which may be plain to other noble Lords. It seems to me that when the environment authority issues a licence, it will also be issuing a right. The mention of a "protected right" seems to bring into play the possibility of two classes of right. Some who have a licence may find themselves without a right if it becomes necessary to empower only those with a protected right.

I am puzzled by one other matter. Why does this clause talk of only exactly 20 cubic metres? How many licensees extract exactly 20 cubic metres, as is suggested by the wording in the provision? Why should they be more entitled to a protected right than is someone extracting, say, 21 cubic metres?

What does new Section 39A mean? Under Section 27A, the Secretary of State has power to vary the small quantity threshold. Is the effect of new Section 39A to ensure that he cannot reduce it? I beg to move.

Lord Whitty

I think that we have already touched on this issue as well. The issue of protected rights relates to those who are protected prior to the previous legislation. We do not want to interfere with that. Nor are we attempting to create new protected rights under this legislation. The approach taken in the Bill is therefore to keep the protected rights as they were under the earlier legislation.

The implication of Amendment No. 50 is that there would be more protected rights if the threshold were increased and, despite previous legislative protection, fewer rights if the threshold were decreased. That does not deal with what is effectively only a residual problem, albeit a significant one, concerning those who had rights prior to 1991, whose rights will continue to be protected under this legislation. Anything that alters that would unravel the previous protection. It would threaten that protection or suggest that there are additional protected rights which are not an extension.

I therefore believe that the amendment is misconceived. It would not help those who currently have protected rights or provide clarity on the future licensing system.

Baroness O'Cathain

What about 19 cubic metres or 19.5 cubic metres? The provision seems to deal with exactly 20 cubic metres—or am I being completely stupid about this?

Lord Whitty

The abstractors are able to take no more than 20 cubic metres without a licence. Their protected rights in the previous legislation are therefore limited to that.

Baroness O'Cathain

The provision refers to abstractions, amounting in aggregate to twenty cubic metres. I am simply asking whether that could be 19 cubic metres.

Lord Whitty

To which wording is the noble Baroness referring?

Baroness O'Cathain

Lines 11 and 12 on page 20 refer to a, 'series of abstractions amounting in aggregate to 20 cubic metres". Do they always have to hit the total of 20 cubic metres?

Lord Whitty

No. There is a protected right to an abstraction, amounting in aggregate to twenty cubic metres". In other words, if you exceed an aggregate of 20 cubic metres, you would lose the right. If you are below that, then you are still within the protected right.

The Duke of Montrose

I thank the Minister. I think that it would be much clearer if the Bill stated that the amount was up to 20 cubic metres.

Lord Borrie

As is so often the case, the Explanatory Notes are clearer than the Bill.

The Duke of Montrose

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 51: Page 20, line 26, leave out "four" and insert "seven

The noble Baroness said: In moving Amendment No. 51 I shall also speak to Amendment No. 64. Although the two amendments affect different parts of the Bill, both deal with the proposal to reduce the time limit from seven years to four years. There are many concerns about the effect of the time limit, one of which is to do with agriculture. The Minister will know well that the Government are encouraging farming to make a come-back and perhaps to develop in a more sustainable fashion. One of the ways of achieving that is to ensure a longer rotation of crops. As many noble Lords will know, infection can recur from one crop to another. Longer rotation periods and greater crop diversity can decrease re-infection.

A reduction in the time allowed for non-use would affect unsupported sectors in agriculture that habitually do not use an irrigation licence for a seven-year period, for example, in order to meet crop protection standards. If the Bill implemented the reduction in the time period, many businesses would find it no longer commercially viable to continue to produce an irrigated crop. It would not be possible to reduce a crop rotation to only four years because of the risk of crop diseases such as potato cyst nematode and because of the requirements in assured produce contracts and with customers such as producers or supermarkets. At a time when we are trying to encourage and promote UK food production, it would be unfortunate to introduce legislation that disadvantaged such production.

Potato growers in various parts of the country, including Humberside and Lincolnshire, have supplied us with examples of the potential implications for their businesses. The schedules to the Plant Health (Great Britain) Order 1993 provide for the conditions under which the land can be declared free of potato cyst pest. For seed potatoes, DEFRA guidance which must be adhered to prior to certification states that there should be a rotation period of a full seven years.

Furthermore, the European and Mediterranean plant protection organisations provide a standard that should be used for soil testing for such diseases. That standard confirms that there are cases where land should be left free of that particular crop for at least 10 years to ensure that it is disease free. Additionally, requirements in supermarket contracts with growers stipulate that onions require a six-year rotation period. If memory serves me correctly, the pea industry is subject to a cycle of more than four years. We must take into account both crop rotation and climate change.

I have a few questions for the Minister. Why has four years been chosen rather than seven? Why not five or six? Will this change be made by other EU countries? Have they implemented it? Why are they doing it? If they are not doing it, have the Government considered asking for a derogation for agriculture and horticulture? If not, why not? My comments directly apply also to Amendment No. 66, which will be considered later.

It is hugely important that the Government explain the reason for the proposed change. I look forward to the Minister's reply. I beg to move.

Lord Livsey of Talgarth

I strongly support the noble Baroness, Lady Byford, in this amendment. It is very important that her comments on rotation and disease are taken fully into account. As she said, there is a big difference between four years and seven years in sound rotation practice. Who has DEFRA consulted in deciding the reduction? Has it consulted the organisation LEAF, which has a function in this respect, or others who can offer sound advice'? They might think that four years is too short a period for sound crop rotation and good quality production.

Baroness Young of Old Scone

Perhaps I can offer some examples which might cast light on why the reduction from seven to four years is sensible. I very much take account of the needs of the agriculture industry, in particular the horticulture industry, pointed out by noble Lords. I am sure that there is no intention to get in the way of legitimate agricultural rotation, which would simply be nonsensical. However, there are other water users who apply for licences but subsequently do not use them. They may, for example, be new entrants to the water market, particularly as water competition increases. They may even be speculative water users who set off in the direction of creating a business enterprise but then discover that they cannot quite pull it off. Although they may not need their water licence at that point, they may, under the provision of seven-year licences, hang on to it and thereby deny other water users the ability to get at that water supply.

The catchment abstraction management process reviews all users or abstractors around a catchment area on a six-year basis. If a seven-year licence were unused for seven years, then the whole period of the catchment abstraction management plan would be working under the assumption that the licence could be used but that, effectively, water would be denied to the process of review when it could be reallocated to a user who was in need of the licence and the abstraction right.

I hope that noble Lords can be persuaded that this provision is not intended to hit the agriculture industry. Indeed, it is intended to ensure that water is available for other users, some of whom will be farmers, at the time that they need it rather than being frozen in licences which are simply speculative and unused.

7.15 p.m.

The Duke of Montrose

It may help the Committee as much as it would help me if we could be told exactly what is meant by the words, does not carry out any such abstraction as would have been authorised". Let us suppose that someone had been authorised to use a large volume of water. If for a period of four years he used only 50 per cent of that water, would that be considered as not using what had been authorised? Perhaps he had used only 5 per cent of the water. Would that count as not being authorised? It seems possible to me that if an agricultural enterprise felt that it would lose its licence, it could turn on the pump for a day and pump the 20 cubic metres, or whatever amount had been authorised. Would that then mean that it had used its licence within the four-year period? What will trigger whether the licence has been used?

Lord Whitty

This part of the Bill deals with protected rights. It does not deal with other issues which may appear to be similar, such as sleeper licences or the reduction of the period over which compensation would be paid. As I tried to explain previously, protected rights have come about as a result of trying to protect people's positions under previous legislation.

The non-use of those rights could, in certain circumstances, deny other legitimate abstractors access to the water. Therefore, the intention of this part of the Bill is that, if the protected rights are not used over an extended period, the granting of a licence to someone who needs the water should not be obstructed.

The fact that the protected right has gone does not necessarily mean that the abstraction is not lawful. Therefore, I believe that we are considering the wrong target here. Protected rights, which are grandfather rights, are a legitimate part of the system but they are not the key issue concerning how abstraction licences will work.

If failure to use protected rights over a period of time prevents the Environment Agency considering the possibility of a neighbouring farm or a neighbouring business having access to that water, then there must be a cut-off period. In our judgment, the previous seven-year period was too long and we can reduce that to four years. But the provision will not affect people who are already using their abstraction licences and doing so on a rotational basis.

Some of those issues arise later in the Bill, as the noble Baroness said, but here we are talking about protected rights. I hope that that attempt at clarification will mean that we do not pursue this dimension of the argument, although we shall return to some of the points later.

Baroness Byford

I thank the Minister. Obviously he will not be surprised if I say that I am not satisfied. I understand what he is saying, but I believe that he of all people, because he is the Minister responsible for food and farming, knows very well the tremendous pressure that the farming community is under at present.

I believe that we shall be seeking changes. At present, some of those changes relate to matters that the farming community does not have control over. As the Minister knows, we are waiting for the CAP reform to come into fruition this summer. We are also waiting for the WTO talks to take place and are awaiting the outcome of the review of the way that DEFRA works by the noble Lord, Lord Haskins. We are also awaiting the report of the Curry commission. The fact that all those things are coming together at the same time is bringing huge uncertainty to an industry that has been struggling enormously over the past few years.

One thing clearly recommended by Curry, and which the Government are encouraging, is that the agriculture industry should consider ways of using land other than for food production. It is being encouraged, for example, to consider the possibility of non-food energy crops. I know that this Government have at last—that seems ungracious; I do not mean it in that way—accepted that such crops can play an important role.

Therefore, if we are to move away from a system that has been in place for many years to a new system which is still unknown, I believe that it would be even more unfortunate if, at this stage, the Government withdrew the seven-year protected right and put in its place a four-year protected right. I am sure that the noble Lord understands my argument, even though he probably cannot agree to it. I accept that. However, I believe that there are very good reasons why, at present, these proposals are unfortunate at the least and, at the most, unacceptable.

At this stage, I shall withdraw the amendment. I suspect that it is a matter to which we shall return because of the very uncertain current situation in which the industry finds itself. It is aware of the difficulties that it faces. I would hate to think that some of the new ideas and new possibilities that may come up over the next year or 18 months would be closed to the industry because we reduced the time period. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17 agreed to.

Clause 18 [Register of certain protected rights]:

Baroness Miller of Chilthorne Domer moved Amendment No. 52: Page 21, line 20, at end insert—

• "(f) details of how the existence of a register will be made known to potential registrees."

The noble Baroness said: In moving this amendment, I simply seek to discover from the Government how potential registrees will know about the existence of the register. In Clause 18(2)(d), the Government talk about, the procedure for applying for a protected right to be included in the register, including any information which is to accompany the application".

But it is not at all clear how that will work, apart from the fact that the Government say that the register will be available for inspection by members of the public. Can the Minister tell us how people will know that the register exists if they are not already on it? How will new entrants know about its existence?

I believe that if competition for abstraction rights is likely to increase, it will be very important for people to decide at what volume they should enter the register. Will a person apply for an abstraction licence with a usage of more than 20 cubic metres or will he apply for it with a usage of less than 20 cubic metres? People will not only need to know, and see, who else is on the register; they will also need to know of its very existence. I beg to move.

Lord Whitty

First, clearly the Environment Agency will start the system with a record of former licence holders who now no longer need a licence because the threshold has fallen. Secondly, I draw the noble Baroness's attention to Schedule 6, which provides a procedure for the setting up of the register. That will require us to bring in an order, which we propose to do, to establish a register and for the register to be advertised in the local press. That mechanism will be required of the agency and will provide access both to those who should be on the register and to those who are seeking to find out what rights already exist. Therefore, I believe that that point is already covered in the procedures in the schedule.

Baroness Miller of Chilthorne Domer

I thank the Minister for his reassurance and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 agreed to.

Clause 19 [Form, contents and effect of licences]:

Baroness Byford moved Amendment No. 53: Page 22, line 19, at end insert "which than not be less than 25 years after the date on which it takes effect

The noble Baroness said: I want to speak again briefly to Amendment No. 53 because the Minister did not answer the two questions that I asked him when I spoke to it earlier. I asked him what other countries might be using this initiative and whether they had considered seeking any derogation for horticulture. I beg to move.

Baroness O'Cathain

Over the past 15 minutes or so we have been given some documents from the Environment Agency about the time-limiting of licences. They specifically state that the normal renewal period for time-limited licences is 12 years. For each catchment area in England and Wales there are published dates when the time-limited licence will come into effect. The documents also state that, in exceptional circumstances, a time limit for a period longer than 12 years will be considered.

The noble Baroness, Lady Farrington, said that there was no reference to a period of 12 years and that there was no time limit. I simply want to place on the record that this information comes from the Environment Agency for circulation and is headed: Time limiting of licences: Guidance for stakeholders—draft for Water Bill".

Lord Borrie

I do not know where the disturbing comment made by the noble Baroness comes from. She is privileged in a way that I am not. The information may have been sent to some Members of the Committee but it was not sent to me. Therefore, I am puzzled by those remarks.

Earl Peel

Perhaps I may help the noble Lord. It is a document published by the Environment Agency entitled, Time limiting of licences: Guidance for stakeholders. It is in the public domain.

Lord Whitty

That concerns a matter to which we referred earlier. I am not sure what the point is, but we said that the Environment Agency had indicated that the period of 12 years relating to two review periods would seem to be the most appropriate, as my noble friend Lady Farrington said. That piece of paper, which I have not seen—I am sure that I have seen it at some point but I do not have it before me today—reflects the Environment Agency's view that, in reference to the Water Framework Directive, the double six-year period would lead one to conclude that the normal period would be 12 years.

However, first, that is not on the face of the Bill, and we are not proposing to put it on the face of the Bill because we require flexibility. Secondly, even the extract which the noble Baroness, Lady O'Cathain, read out indicates that there is flexibility in that 12-year period, as my noble friend said. I believe that we are two clauses away from considering the subject of time limits again, but at present I am not clear whether we shall reach it tonight. However, I am not sure that that alters what my noble friend said to the Committee at an earlier stage.

Baroness O'Cathain

I was left with the distinct impression that there was no 12-year time limit. Perhaps I am the only one in this Committee who has been left with that impression.

Lord Howie of Troon

I wonder whether I could add just a threepenny bit to the question. I have not seen the interesting document referred to, but I was interested in my noble friend's comments on flexibility, which may mean an extended period. That throws a certain doubt into my mind, and I suspect that my amendment, Amendment No. 54A, is beginning to look a little otiose.

Lord Whitty

My noble friend is rarely, if ever, otiose.

The record should show that my noble friend Lady Farrington referred to the double six-year period as being the norm proposed by the Environment Agency, but that there was flexibility. In any case, nowhere in the Bill does it refer to a specific time limit, and we are not intending so to amend the Bill or to agree to amendments that agree to that directly or indirectly. We spoke on that matter several times.

Amendment No. 53 deals with the duration of the licence on a case-by-case basis. The minimum criteria required by that amendment and by Amendment No. 54 would achieve what we are not intending to do, which is to place a fixed period in the Bill.

The noble Baroness, Lady Byford, asked about derogations in other countries. I cannot tell her about them in detail, but I am not aware of any derogation as sweeping as the exclusion of the whole of agriculture or horticulture. I would be surprised if any member state was intending to transpose any part of European legislation in that respect. However, that deals with matters beyond the issue of the Water Framework Directive, while not dealing with all the issues covered by it. A direct analogue with what other countries are doing is not necessarily the best guide, but I am not aware of any such derogation. If I am wrong, I shall write to the noble Baroness.

Baroness Byford

I thank the Minister. In his last few words, he has shown again how difficult it is to deal with a Bill that deals with another Act, which in turn dealt with several other Acts. However, time is up, as they say.

I thank the Minister for his courteous response to our queries. We are simply trying to ensure continuity, success and sustainable development. That is what it is all about. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 54, 54A and 55 not moved.]

The Deputy Chairman of Committees (Lord Hogg of Cumbernauld)

The Committee stands adjourned until Thursday 3rd April at 3.45 p.m.

The Committee adjourned at twenty-seven minutes before eight o'clock.