Grand Committee Report of 27 March 2003

Official Report of the Grand Committee on the

  Water Bill [H.L.]
  (First Day)
  Thursday, 27th March 2003
  The Committee met at a quarter before four of the clock.
  [The Deputy Chairman of Committees (Lord Haskel) in the Chair.]
  The Deputy Chairman of Committees (Lord Haskel): Before I put the Question that the Title be postponed, perhaps I may make one or two housekeeping points. The first relates to the microphones. The gentleman in the corner will switch them on and off, so Members of the Committee do not need to touch them. Secondly, there is a revised list of groupings which Members should have in front of them.
  It may be helpful to remind your Lordships about the procedure for today's Committee stage. Except in one important respect, our proceedings will be exactly as in a normal Committee of the Whole House. We shall go through the Bill clause by clause; noble Lords will speak standing; all Lords are free to attend and participate; and the proceedings will be recorded in Hansard. The one difference is that the House has agreed that there shall be no Divisions in a Grand Committee. Any issue on which agreement cannot be reached should be considered again at the Report stage when, if necessary, a Division may be called. Unless, therefore, an amendment is likely to be agreed to, it should be withdrawn.
  I should also explain what will happen if there is a Division in the Chamber while we are sitting. The Committee will adjourn as soon as the Division bells are rung and then resume after 10 minutes.
  Title postponed.
  Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer moved Amendment No. 1:
  Before Clause 1, insert the following new clause—

  PART A1 WATER FRAMEWORK DIRECTIVE GENERAL PURPOSE OF THIS PART
  (1) The purpose of this Part is to make provision for, or in connection with, protection of the water environment, including making provision, and enabling provision to be made, for, or in connection with, implementing in England and Wales Directive 2000/60/EC of the European Parliament and of the Council of 23rd October 2000 establishing a framework for Community action in the field of water policy (referred to in this Part as "the Directive").
  (2) In this Part "protection of the water environment" includes, in particular—

  (a) preventing further deterioration of, and protecting and enhancing, the status of aquatic ecosystems and, with regard to their water needs, terrestrial ecosystems and wetlands directly depending on those aquatic ecosystems,

  (b) promoting sustainable water use based on the long-term protection of available water resources,

  (c) aiming at enhancing protection and improvement of the aquatic environment through, amongst other things, specific measures for the progressive reduction of discharges, emissions and losses of priority substances and the cessation or phasing out of discharges, emissions and losses of the priority hazardous substances,

  (d) ensuring the progressive reduction of pollution of groundwater and preventing further pollution of it, and

  (e) contributing to mitigating the effects of floods and droughts, with a view to contributing to the achievement of the aims specified in subsection (3).

  (3) Those aims are—

  (a) the provision of a sufficient supply of good quality surface water and groundwater as needed for sustainable, balanced and equitable water use,

  (b) a significant reduction in pollution of groundwater,

  (c) the protection of territorial and other marine waters, and

  (d) achieving the objectives of international agreements, including those which aim to prevent and eliminate pollution of the marine environment, in relation to which measures arc adopted under paragraph 1 of Article 16 of the Directive in pursuance of a proposal under paragraph 3 of that Article."

  The noble Baroness said: The purpose of the amendment is fundamental to the Bill. It is to put the principles of the Water Framework Directive into the Bill. It will ensure that the implementation of the directive is timely, appropriate and maximises the opportunities that are offered by it. I am aware that directives are always transposed by secondary legislation and I ask the Committee to consider whether this may be the time to consider changing that. Perhaps they should not always be transposed by secondary legislation.
  Perhaps the lack of scrutiny is one of the reasons why they were often inappropriately or badly transposed and certainly often too late. It is a case of good European theory sometimes turning into bad practice. I believe that in this case we can transform the way in which the world of water and its management is undertaken by including the Water Framework Directive in the Bill.
  That is not my opinion alone. I am sure that Members of the Committee will be well aware of the recently published report on the Water Framework Directive from the Environment, Food and Rural Affairs Select Committee of another place. I am tempted to read it almost in its entirety, but I will not. It is adamant that the Water Framework Directive offers the chance of giving real meaning to the nebulous concept of sustainable development, an issue I touched upon in my Second Reading speech. In the conclusions and evidence, it is striking to see how

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  many different bodies from all sections of the community believe that the directive should be transposed into primary legislation. I refer to bodies as various as the National Trust, several of the water companies and the RSPB. The overwhelming evidence is that the directive should be in the Bill.
  Is it a question of timing? I do not believe that it is. The directive must be transposed by the end of the year. We are considering the Bill in March and by the time that another place has considered it, it will almost be the end of the year. I believe that the opportunity could have been taken to include it in the Bill at this stage.
  I was somewhat shocked to discover that within DEFRA there are two completely separate teams; one is working on the framework directive and the other on the Water Bill. Will the Minister tell the Committee who is the person co-ordinating the teams? I am surprised that the same team is not working on both measures.
  I have asked myself why the Government have not chosen to implement the directive. Is it that they are not prepared, which having two teams may suggest? Is it that politically they do not want to include the directive in the Bill because it is complicated, or that there is a frightening effect that I do not yet understand? However, having spoken to all interested parties, I understand that it is a more cost-effective way of dealing with the management of water. Scotland has led the way in this—it has its water Act and it has already transposed the directive. I beg to move.
  Baroness Byford: I support the noble Baroness, Lady Miller of Chilthorne Domer. She beat us to it in tabling an amendment incorporating the directive into the Bill. Rather than having two amendments on the same directive, I am happy to support the principle of her amendment. Although I cannot anticipate his answer, I suspect that the Minister in response will say that it was all right in Scotland but it will not be appropriate for England.
  I want to add to some of the comments made by the noble Baroness, Lady Miller. I want to refer to several matters raised in the report of the Select Committee on the Water Framework Directive because I believe that they need to be put on the record. It is important to establish what we are talking about.
  At page 13, it is clearly stated:
  "Perhaps the most important of these questions, at least initially, is that which asks what is the current state of water quality in surface and ground waters in England and Wales. Before decisions can be made about what policies are needed to meet the objectives of the Water Framework Directive, it is vital that a clear understanding is reached of the current status of these waters, as currently no comprehensive overview exists of the ecological state of waters in England and Wales".
  I hope that the Minister will answer that question in his response.
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  At page 22, the Select Committee deals with changes in land use. It states that limiting diffuse pollution will be a costly and expensive undertaking for industry,
  "and will impact on the agricultural industry which is already under severe pressure. It is likely to require changes in agricultural practice—perhaps even to the direction and the ethos of the CAP".
  a matter which will be under consideration this summer. The report continues:
  "As such it is emblematic of the significance and wide-ranging impact of the Water Framework Directive".
  Yet, as the noble Baroness, Lady Miller, said, it is not included in the Bill.
  Paragraph 57 at page 24 states that.
  "we recommend that a scientific Steering Group be set up to advise Defra and the Environment Agency on the science surrounding the Water Framework Directive".
  My question to the Minister is: has it been set up? If not, why not?
  Page 26 deals with resourcing. Paragraph 63 states:
  "Any failure adequately to resource the Environment Agency to perform its responsibilities under the Water Framework Directive would be wholly unacceptable".
  Are the Government happy that they have put in adequate resourcing?
  At page 27, it is stated:
  "We recommend that the Government examine concerns about possible conflicts of interest arising as a result of the designation of the Environment Agency as competent authority".
  Later the report refers to a democratic mandate, an issue to which we shall turn later.
  I move to page 31 and paragraph 78, which states:
  "In short, there is a palpable lack of urgency—perhaps even a sense of complacency—in the approach currently taken to making administrative arrangements to implement the Directive".
  These are critical observations by the Select Committee.
  Page 32 relates to costs and gold-plating, an issue which noble Lords often raise in the House. Paragraph 81, referring to agriculture, states that,
  "agriculture can ill-afford the significant expense that it would incur if that approach was applied to diffuse pollution. 'End-of-pipe' treatment is likely to prove expensive to water companies and their customers, and will not tackle the root of the problem".
  These are important issues and I am grateful to the noble Baroness, Lady Miller, for putting them forward today. The individual items should be discussed, rather than rushed through.
  I turn to look at another piece of legislation to which the noble Baroness, Lady Miller, has not referred. It is the regulations on Water Resources, England and Wales, 2003 No. 164. It was made on 30th January 2003, laid before Parliament on 31st January 2003 and comes into force on 1st April 2003. So far as I am aware, we have not debated it in the House. If I am wrong and we have done so, I apologise.
  The regulation is important because it has an impact particularly on agriculture. I want to ask the Minister why, for example, at paragraph 3 is the requirement for an environmental impact assessment to be carried out only for the projects appertaining to agriculture, particularly irrigation projects. Is it because all other

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  industries, interests or businesses are covered under some other heading? Why has this requirement not been included in the Bill? Why has it been separated out and why have we had no opportunity to debate it? I should be grateful for the Minister's comments on that.
  Water resources are hugely important. We are anxious not only about how we use water, but about its quality. In supporting the noble Baroness. Lady Miller, in moving the amendment, I have tried to add greater body to her shorter introduction. These issues are important and the Committee needs to consider them. If one is not careful, it is easy at the beginning of the Bill to omit references to issues, particularly when the Select Committee has highlighted many of them. I look forward to hearing what other Members of the Committee and the Minister have to say.
  4 p.m.
  Earl Peel: I, too, broadly speaking support the amendment. I do so in the context to which I drew your Lordships' attention at Second Reading. I am personally involved with a scheme in north Yorkshire on the River Ure. The original purpose of the scheme was to try to overcome what we regarded as being over-extraction of water during the summer months by Yorkshire Water. I am pleased to say that that was ultimately resolved through the good offices of the Environment Agency. On the back of that developed a programme designed to secure a more comprehensive structure of the river catchment area that would deal not only with the question of water supply and water quality, but also of the surrounding land with all the conservation and environmental implications.
  Through the Environment Agency, we identified the main problem areas and how best they could be tackled—in theory, at any rate—given the various schemes and resources and funding that were available. But there were too many voids, so it was abundantly clear to us that such a scheme was unlikely to work successfully given the conditions at the time.
  Somewhat inevitably, we hit major snags. One of our major objectives was to try to secure a project manager. That was clearly essential if the project were to be taken forward in a cohesive and effective way. I suspect that that has not come about simply through there being a lack of funds available to the Environment Agency.
  One helpful development was that we commissioned the services of a local ecologist and his equally well-qualified wife to undertake a full survey of the wildlife of the river, which I believed would provide a useful baseline in order to establish any future trends in the river's ecological status. Surely, that should be undertaken in all river systems if we are to be able to understand the changes that are likely to take place in future.
  I bring the case forward as an example of a well-intentioned scheme, which is struggling through a lack of co-ordination and the inability readily to identify sources of finance. There was a great willingness to succeed, but the whole scheme needs lifting to a higher plane, with the proper enabling framework.
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  I appreciate that it is the Government's view that the Water Resources Act 1991 gives a wide range of powers to the Environment Agency, including the control over water abstraction from rivers. I also believe that the Environment Agency has powers to instigate the baseline monitoring of river systems. However, I should be most grateful if the Minister could explain whether this is a statutory obligation or simply a power and the extent to which it is occurring, or will occur, throughout the river catchment areas of England.
  Will the Minister also explain whether it is the Government's intention to see such monitoring schemes being translated into action, thus ensuring that comprehensive river basin management schemes are put in place to ensure that each system has a good supply of water, both in terms of quality and quantity? The important point I want to make is that that should be accompanied by environmentally sympathetic land management schemes.
  I am aware of the all-embracing objectives of the Water Framework Directive to which the amendment refers and the high degree of subsidiarity attached to it. That is a welcome change among most European directives. But the question remains: will the Government be able to achieve a comprehensive river catchment management system through a combination of this legislation, previous legislation and the Water Framework Directive?
  My noble friend Lady Byford referred to the House of Commons Select Committee report. Paragraph 71 on page 28, which refers to the transposition or the directive into national law, states:
  "But until the administrative arrangements which will enable the Environment Agency to function as the competent authority have been properly explored, Defra cannot be certain that primary legislation is not required".
  My personal experience on the River Ure project, to which I have referred, highlighted the lack of cohesive responsibility available to the Environment Agency to follow through proper river catchment management objectives.
  I therefore welcome Article 14 of the directive that requires that members states shall encourage the active involvement of all interested parties in its implementation, in particular the production, review and updating of the river basin management plans. But can the Government genuinely meet these objectives through regulations? Does the Environment Agency have the power to enter into management agreements with owners and occupiers? If not, I do not see how proper catchment area management will be achieved.
  Furthermore, I say to the noble Baroness, Lady Miller, that I am not certain that Amendment No. 1 addresses the issue. I hope she will say that it does, but I am not entirely certain. And inevitably, I must ask: will the resources be made available for such a national undertaking?
  Pesticide run-off is costing the water industry about £120 million a year. Many river systems are in dire need of sound sustainable comprehensive

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  management plans which deliver what most interested parties want. It is about engaging people; making them feel part of the overall scheme. I do not believe that it must be over-administrative, but without having a scheme and structure in place and a project manager to bring everyone together in a cohesive fashion, I am not sure how the system as we see it will work.
  I therefore hope that the Minister will be able to assure me that at the end of debates on the Bill we will have in place a scheme which will be able to deliver the kind of requirements I have outlined.
  Lord Carter: I want to speak briefly not about the merits of the argument but about the words "General purpose of this Part". This is a purpose clause—only for this part of the Bill and obviously not for the whole Bill. However, over the years, there has been long debate on such clauses, which were used a great deal. Gradually, they have fallen into disuse because they can lead to many legal problems on interpretation.
  The noble Baroness should bear that in mind when considering the proposal. In laying down the purpose, it must be absolutely right because there could be much debate about the meaning of the various words used. I shall also be interested to hear from my noble friend whether having this purpose for this part of the Bill will have any effect on the rest of the Bill.
  The Duke of Montrose: I, too, want to speak briefly in support of the amendment. The Bill covers regulation of quantity rather than regulation of quality of water. It would be good if a larger emphasis could be put on quality, a point made by the noble Baroness, Lady Miller. Because we are dealing with water, one has a vital link with the other: the more concentrated the water becomes, the worse the pollution.
  The Water Framework Directive contains a logic which I like and it would be nice if our legislation followed the same pattern. It first sets the standards for water; it then sets out regulation for discharges of polluting substances; and then goes on to ensure that the rates of extraction are sustainable.
  As the noble Baroness, Lady Miller, mentioned, the Scottish Parliament has passed the Water Environment and Water Services (Scotland) Act 2003. Interestingly, that is enabling legislation which will be followed by subordinate legislation. The question being asked earlier was whether we have the legislative framework to which the secondary legislation that is being proposed will be attached. I should be interested to hear to which part of our legislation it will be attached.
  My noble friend Lord Peel mentioned the problem of how one will designate the responsible agency. It seems we shall run into an additional problem. Even in the second consultation paper on the Water Framework Directive, the issue of the cross-Border river basin districts has not been resolved. Who does
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  one appoint and do we have an adequate idea of how we appoint the responsible agency for such awkward problems?
  The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): I am grateful to the noble Baroness, Lady Miller, for moving the amendment. I am even more grateful that she did not read out the whole of the Select Committee's report. We are faced with the basic question. These amendments propose that we can depart from our basic procedure and transpose directives from the EU by primary legislation. That is not unprecedented but it is unusual.
  The key issue today is not whether the Water Framework Directive is desirable—most contributions indicate that it is—but whether we should give it legal effect via the Bill or follow our intention to do so by secondary legislation under the European Communities Act 1972. That is the normal way of doing so and we have already begun the consultation period.
  A number of noble Lords raised the matter at Second Reading and I wrote to them. Following the example of the noble Baroness, Lady Miller, I shall not read out the letter, compelling though it is. Part of the issue is that some of the directive already exists in English and Welsh legislation. Some of the existing legal framework therefore already exists for the transposition of the directive and some of the provisions in this Bill will help the transposition. However, other parts can be transposed in the normal way and some may not be transposed even were the amendment to be accepted. Although in moving the amendment it has been stated that it will put the framework directive into primary legislation, in practice it will not.
  I want to return to the position on process. We have already carried out two major consultations on transposition of the directive and a third is planned this year. In that third phase, we will want to put forward the proposed draft regulations and an updated regulatory impact assessment. In relation to the first consultation, we asked for views on precisely the issues raised by the amendments and our use of secondary legislation. Responses to that consultation generally supported our approach.
  My noble friend Lord Carter has asked whether a purpose clause is appropriate here. The purpose as described in the amendments would not be fully carried out. Because one would not be transposing the totality of the directive, it is a flawed purpose clause. However, it also raises general issues to which my noble friend referred.
  That has allowed us to have a debate on the provisions of the directive and it has raised a number of related issues, some of which are raised in the Select Committee report. On the central issue, the report is rather tentative on primary and secondary legislation and does not come down in favour of either route. While it raises the issue, Members of the Committee cannot call it in support of what they propose in these amendments. However, it makes recommendations about assessing the legislative implications of the

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  directive—clearly we are already engaged in that—and keeps an open mind on what should appear and in what form.
  A number of related issues were raised. The noble Baroness, Lady Miller, raised the issue of joined-up DEFRA; whether people working on the Water Framework Directive and people working on this Bill are sufficiently cohesive. The answer is that they are. They are working on the same policy structure and they actually sit next to each other in the same offices in the department. In terms of ministerial responsibility, they are all accountable to my colleague Elliot Morley for delivering water policy in general. I do not believe that that is an issue. They deliver different aspects of the same policy in different ways.
  The noble Baroness, Lady Byford, raised the issue of whether we should start from an assessment. I believe that the noble Earl, Lord Peel, also wondered whether we should start from an assessment of the status of water. The directive requires us to do that by 2004, to monitor it through to 2006 and at various stages to set objectives through to 2008. That is all in the directive and it will be transposed from the directive, but it is not appropriate to deal with that within the scope of the Bill because it can be dealt with in normal transposition. Nor is it the intention of the Government to gold-plate that transposition, unless there are circumstances of which I am not yet aware, where the benefits hugely outweigh the costs of such gold plating.
  A number of other issues were raised in relation to the approach to water management and water quality. Many of the water quality requirements and procedures, referred to in the directive, are already provided for in earlier legislation. Therefore, the Bill is primarily about quantity and quantity controls and the way in which we approach those matters. This is not the place to deliver the precise management structure operated by the Environment Agency and other agencies, but the combination of the Bill, existing legislation and the regulations that are to be transposed will give the basis for comprehensive management as required by the directive and as referred to by the noble Earl, Lord Peel. To develop comprehensive river catchment management is a big challenge. We certainly intend to go down that road. There are technical and operational challenges to be faced to take us up to 2015 and beyond.
  4.15 p.m.
  Baroness O'Cathain: As I understand the position, the Minister is suggesting that we do not need the Water Framework Directive in the Bill. However, in simple terms he is saying that we shall have the new Water Bill, the Water Framework Directive and the other regulations. One point made in the EFRA Select Committee report was that it recommends that DEFRA should take action on engaging the public in the Water Framework Directive. It recommends that DEFRA should involve local government and industry in discussions on the implications of the Water Framework Directive. In effect, it says that it should have the widest possible exposure so that not
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  only those involved in the industry, but also consumers, know eventually what they are supposed to do, what the framework will be, what the water industry will look like and how it will be managed.
  It seems to me that this will be extremely complex. If one wants to achieve greater comprehension of all the long-term needs and structure of the industry, surely there is greater merit in doing precisely what the noble Baroness, Lady Miller, has suggested, as supported by the noble Baroness, Lady Byford; in other words, try to sort out the situation in one go. Or am I completely wrong?
  Lord Whitty: We are already involved in a substantial exercise of engaging the public in consultation on the transposition of the directive in relation to some of the procedures leading to the Bill. Also the Environment Agency is developing a public participation strategy and we are setting up a stakeholder communication group on the totality of water strategy. That will pave the way for developing effective ways of engaging people at the catchment area or river basin level. I agree entirely with the Select Committee that that is a desirable process.
  However, the noble Baroness and the amendments jump from there to saying that while we need to engage people in the comprehensive basis of what we are doing about water management, which I accept, we also need a single piece of legislation that covers all those aspects. Effectively that would mean producing a consolidated Bill that includes all the regulations, all the old legislation and all new legislation. No doubt that would detain us in Grand Committee in the Moses Room for considerably longer than the five days allocated for this Bill.
  Given that much of that legislation already exists, we are consulting on much of the legislation coming from the directive. We have a perfectly adequate way of transposing that—as we normally do. The amendment suggests a novel way of dealing with a European directive and a novel way of dealing with policy. Whether ideal or not, almost every area of public policy has different pieces of legislation, of whatever status, and at the same time extant. Were the Committee and its equivalent to spend their time trying to consolidate everything, we would lose focus and not be able to make changes that are imposed upon us by the environmental challenges or by European directives.
  Moving away from the procedure on environmental directives and other directives for their transposition under the European Communities Act would be a difficult step for Parliament to take. I accept some of the criticisms of the inadequacy of scrutiny, but there are some aspects of primary legislation that may not be scrutinised in the most optimal way. I believe that people understand that. People have to apply the legislation and those affected by it understand that once we have a European directive, it is transposed in a particular way into UK legislation.
  There are exceptions to that but in the amendment the noble Baroness suggests that the totality of water legislation, past and present, should be before us today

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  in a single Bill. That would be a novel and a rather over-radical change in the procedure of the House and of Parliament as a whole and would seriously delay some aspects of the transposition of what is desirable in the European directive.
  Other issues were raised, such as the resources that the Environment Agency has to deliver its part of the Bill and related matters. There has been a significant increase in the resources available to the Environment Agency. The figure has risen from £620 million in 1999 to just short of £800 million this year. The grant in aid from the department has increased from £103.7 in 1999 to £116.7 in 2002–03 and a proposed increase for next year will bring it up to £128.4 million. That is in recognition of a number of additional obligations that have been imposed on the Environment Agency and against a background of other areas of DEFRA and government expenditure not receiving anything like that degree of support.
  In addition to references to the Select Committee and its rather tentative conclusions, there is also a reference to Scotland. Unlike some noble Lords, I am always willing to learn from Scottish examples, and sometimes they are good examples. In this respect, Scotland started from a different starting point. The structure of the water industry is entirely different in Scotland—effectively it is still in public ownership— and the state of legislation in Scotland is entirely different. Prior to the new Scottish Act, for example, the powers to control abstraction in Scotland were extremely limited. In a sense that reflects the climatological situation in Scotland. but our framework is much more developed than the preexisting framework in Scotland. In addition, the Scottish Act does not put everything into primary legislation; substantial aspects of it are being dealt with in the Scottish Parliament by secondary legislation.
  I do not believe that we can point to the Scottish example as being the one to follow here in the sense that the amendments suggest. Therefore, while we have had an interesting debate—no doubt the issue of the Water Framework Directive will rightly be touched on at various stages during our deliberation— I urge the noble Baroness not to return to this procedure. It would set an undesirable precedent and it is not the most appropriate way of dealing with the various requirements of water management with which the directive and environmental challenges present us.
  Earl Peel: I took heart from the Minister's commitment that the Government intend to go down the route of river basin management schemes, although I find the timescale rather distressing. If such management schemes are to be effective, clearly they will require a certain amount of land management negotiation. Water quality and water quantity are inevitably tied up with the management of the land within the river catchment areas. Who will negotiate with the landowners and the farmers, if that is necessary—in many cases it will be necessary—and who will have the responsibility and the power to enter
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  into the management agreements? Without that, I do not understand how there will be effective river basin management schemes.
  Lord Whitty: The Environment Agency would be the strategic body bringing together all the interests. Some of the arrangements may be between the water companies and the landowners and some between the Environment Agency and the landowners, or between different landowners and other users of water. The strategic and catalytic role would be played by the Environment Agency.
  Baroness Young of Old Scone: On the point raised by the noble Earl, Lord Peel, many of the provisions required to implement the Water Framework Directive have nothing to do with water; they concern land management and development in the widest sense, including planning, agriculture, forestry and a huge range of issues. If we were to bring all those points into a Bill called the "Water that may be a step further than the Minister has indicated. I would be interested to hear his reason.
  Lord Whitty: The noble Baroness and the noble Earl are right. But there are many matters outside the direct area of water management—what the water companies and the owners of water do—that will affect the way in which we fulfil the responsibilities under the Water Framework Directive. I do not believe that either the noble Earl or I were suggesting that the Environment Agency should have total planning control over all those activities. I am unsure whether the noble Baroness will be relieved or disappointed about that. We are talking of bringing together the various forces that give a coherent way of managing particular water basin and river catchment areas. In most circumstances. the Environment Agency would have a lead role in such a situation. but it would not have a management or a direct regulatory role.
  4.30 p.m.
  Earl Peel: When I next stand in Masham town hall, in front of those who are interested in bringing together the River Ure management scheme, what am to say? I shall tell them that the Minister has said that the Environment Agency may have a role; that it may do this and it may do that. Among a whole range of people there is a great willingness to bring the situation together in an effective way. I do not expect the Minister to answer me now, but perhaps in writing he could explain how best such a scheme could effectively be administered and taken forward. There is a great willingness among people to do it, but there is a lack of steerage and, at times, commitment. Unquestionably there appears to be a lack of responsibility.
  Baroness Byford: I shall respond to a couple of comments made by the Minister and then I shall ask him to answer some questions that I put to him. Returning to the secondary legislation issue, the Minister said that the Select Committee report did not say that primary legislation was essential. He

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  mentioned that it was a possibility. The report stated quite clearly that until the administrative arrangements which will enable the Environment Agency to function as the constant authority have been properly explored, DEFRA cannot be certain that primary legislation is not required. That is what the committee said. I cannot agree or disagree with that. That is what the report says and I think the Minister is pushing that statement away a little too quickly. That is unlike him, because normally he is very generous.
  The Minister said that a third stage of consultation is taking place later this year. When will that end and when shall we have a response to the consultation? If it does not happen until later in the year, we may not receive the results until next year, and the time for the directive will have overrun and the Bill will have completed its passage through the House.
  I ask the Minister to think seriously about the important point made by my noble friend Lady O'Cathain that people should be made more aware. Clearly people should be brought into this process and should have better information. I record my thanks to the Minister for eventually helping us to find our way through four Acts. It was nearly impossible. Many noble Lords may wonder why we have tabled certain amendments, but they were tabled to find out certain matters. I am sure it was a challenge to the Government as well.
  If it is said that the Government want the general public to understand and to take part in the system, the public will not wade through four Acts and try to look at Butterworth. My noble friend has raised an important point that I hope the Minister will address with greater seriousness than he may at the moment feel is necessary.
  The noble Lord, Lord Carter, said that the noble Baroness, Lady Miller, may have difficulties with her amendment as it stands. I do not believe that that detracts from what she is trying to achieve. It would be wrong of me to put words into her mouth, but she may want to reconsider it. I hope that this debate will add to what she is hoping to achieve.
  I want to raise two other matters with the Minister. The Minister answered the first question raised by my noble friend the Duke of Montrose, but not the question of cross-river basin management. I would be glad if he would do so. And I did not receive a response on the Water Resources, England and Wales, statutory instrument, 2003, No. 164, to which I referred in great detail. Perhaps the Minister could respond to those points. In that document it clearly states that some small changes may take place and an environmental assessment will be carried out on all agricultural projects. The Environment Agency will judge whether it is likely to have a significant effect on the environment. I would like such matters clarified because they are not in the Bill.
  The NFU is anxious to give guidance to its members on the regulations that take effect from 1st April, which is not many days away. The Minister did not respond to that. Could he also mention the cost of' the impact on trickle irrigation?
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  I also understand that there is a slight change in statutory instrument No. 164 of 2003. My understanding is—the Minister will correct me if I am wrong—that originally it did not include areas of less than one hectare. One hectare does not sound much, but it is two-and-a-half acres. One can carry out a lot of horticulture on two-and-a-half acres. I believe it slipped the Minister's mind to answer my question on statutory instrument No. 164.
  Lord Carter: The noble Baroness has mentioned the NFU. We have all received a letter from that organisation and a briefing from the CLA. There is also one from the RICS, but I do not believe that any of them have mentioned the directive.
  Lord Whitty: The noble Baroness raises a number of points. It is intended that the third consultation will take place over the summer and will include the draft regulations, as I believe I said, and a public response to those. We intend to meet the deadline of transposing that part of the directive by the end of 2003. That is a fairly quick timescale, but I make no commitment that that will be in place while we consider the Bill. It deals with a different aspect and not the primary aspects covered by the Bill.
  It is true that the Select Committee said that we should consider that, and we may need to look at the issue of primary legislation, but the point in the report to which I refer is paragraph 71, which states:
  "the important point is the effectiveness of the transposition of the Directive into national law, not the means by winch that is achieved".
  That gives no primacy to doing that by primary legislation.
  In relation to cross-Border river basins, some complex technical problems are involved. The body for England and Wales is already a cross-Border body. Cross-Border matters between England and Scotland involve rather smaller catchment areas than between England and Wales. Detailed discussions are taking place between the English authorities and the Scottish authorities, primarily between the agency and SEPA.
  I apologise to the noble Baroness for not picking up the point relating to the application to agricultural projects. That covers a gap in the regulations where it is necessary to transpose the directive. That means that it will apply to those sectors of agriculture that are not already subject to the planning controls or to abstraction controls and covers a gap in the 1987 directive.
  On the environmental impact assessment. the test has significant environmental effects. That is the same test as was in the 1987 directive. On our estimation the number of new projects that would be covered would be relatively few. Therefore, most land use that fell under that requirement would already be covered by previous directives. It may help the noble Baroness if I write to her setting out the terms of the earlier regulation in that respect.
  Rather than write the speech that the noble Earl will deliver at Masham town hall, I shall write to him about the way in which we see the development of coordination on river basin water management. The key

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  role, as I and the noble Baroness, Lady Young, have indicated, would be with the Environment Agency, but clearly it is a little more complicated than that. The powers of the agency would play a significant part, but other aspects would require private landowners and other private operators to play their part.
  Earl Peel: It is important for the noble Lord to appreciate that in our case there is a great willingness for all interested parties to co-operate in such a scheme. Matters appear to have gone wrong, whether through lack of finance or through direction or whatever, because the project officer has not been appointed by the Environment Agency. Without such a project officer to act as a catalyst the scheme will not work. If we could get that far down the line, I believe that there would be a tremendous willingness among many interested parties to make the scheme work without necessarily calling upon the Environment Agency to produce substantial resources.
  Baroness Byford: Before the Minister answers that point, perhaps he could reply to two points that I raised: first, the difference between the directive, including land under a hectare; and, secondly, he said that the directive would not affect many in agriculture at the moment, but trickle irrigation, which I believe many people will use, is not included.
  Lord Whitty: I shall have to write to the noble Baroness about the situation on less than one hectare. I am unable to respond to that immediately. On the second point, trickle irrigation is introduced under the Bill and indirectly by some of the transposition. However, if it were to require an EIA (environmental impact assessment) it would need to have a significant environmental effect. Some projects would automatically go through and for others, where there was a query that the environmental impact would be large, we would require the full EIA procedure in the estimate. That would be a limited number of projects of all kinds, including trickle irrigation.
  Lord Livsey of Talgarth: Perhaps I could comment on some of the Minister's responses before my noble friend replies. He stated that there were four pieces of legislation. In promoting a Bill it is perfectly normal to state on the face of the Bill that it will amend the Water Resources Act 1991, the Water Industry Act 1991 and the Reservoirs Act 1975. The noble Baroness, Lady Miller, was trying to bring a piece of European legislation, the Water Framework Directive, within the ambit of the Bill. That is straightforward; it is a one-off. I point out to the Minister that the amendment refers to the England and Wales Directive 2000/60 EC. I have that document which states clearly that this is the directive of 23rd October 2000. It establishes a framework for community action in the area of water policy. Why will the consultation on that directive not be completed until the end of 2003?
  Lord Whitty: I thought I had explained. The consultation on the directive has been a three-phase matter. Two of those phases have been completed. The
  GC 52
  third phase will be completed this year well in time to meet the deadline set out in the directive. I do not believe that there is an issue of slow progress by the Government on it. We have engaged many people to look at how the directive should be transposed. On his more general point, the issue is not what we describe the Bill as, even if we were to adopt a catch-all purpose clause; but what is the normal procedure of this Parliament in dealing with European directives.
  4.45 p.m.
  Baroness Miller of Chilthorne Domer: Will the Minister be more specific on that point? He says that we have engaged a lot of people, but what is a lot of people in the terms of something as wide as the directive?
  Lord Whitty: I am sorry; I did not quite catch that.
  Baroness Miller of Chilthorne Domer: The Minister says that we have engaged a lot of people in the consultation. In his terms for the directive, is that 1,000, 5,000 or 20,000 people?
  Lord Whitty: I have absolutely no idea. We write to a lot of organizations—probably hundreds—in the course of consultation, as Members of the Committee know. I have no way of telling how many people they then engage in discussion. I would assume that those who respond have themselves engaged with many of their members and those whom they claim to represent. However, I am afraid that there is no way for me to give a definitive answer.
  We have engaged in a three-stage consultation on the directive, as we would with any detailed legislation. The directive itself gives us three years to transpose it. The timescale towards its complete implementation takes us in some respects as far as 2015. That is why I referred to 2015 earlier, which the noble Earl criticised. We are at the beginning of a long-term process in which, as Members of the Committee have said, we have to engage and inform people, and to bring them together to deliver the intentions of the directive and the Bill.
  I am clearly unconvinced, however, that one way to do that is to spend an awful lot of time trying to produce one consolidated piece of legislation to reflect all the different aspects, many of which are already in place and with which people are already reasonably familiar.
  The Duke of Montrose: I have a note that states that the programmes of measures for water-basin districts must be operational under Article 11(7) by 22nd December 2012. Will the Minister help me with that?
  Lord Whitty: Different parts of the regulations have to be completed at different times.
  Noble Lords: Oh!
  Lord Whitty: That applies to primary legislation as much as it does to European legislation. I do not think that the noble Duke should be seriously surprised at that.
  Baroness Miller of Chilthorne Domer: I thank all Members of the Committee who have spoken to the amendment. Each one, at least on our side, has given an interesting picture as to why we feel that it is necessary. The Water Framework Directive is all-embracing. The noble Earl, Lord Peel, and the noble Baroness, Lady O'Cathain, outlined very well why it will affect people, not only in land management terms. It will affect them socially, through their pockets in terms of the bills that they pay, and in many other ways with which I do not think the Government have yet been fully seized.
  One point that has been made again and again is that of costs and benefits, and how they will vary in terms of transposition. The Minister says that he has consulted a lot of people, and I suggest that consultation begins with Parliament, with democratic consultation. For that reason, I am particularly disappointed that the Government continue to resist having the Water Framework Directive in the Bill.
  I must declare an interest at this stage, because my husband chairs a voluntary committee in Somerset that is trying to bring together land and water managers, the Environment Agency, the voluntary sector and others to conduct a pilot into the management mentioned by the noble Earl. The evidence from the Select Committee gives the Government's official terms, stating at question 22 that they have made only a belated decision to conduct one pilot in the Ribble valley. I do not call that broad consultation. Until one has had some pilots and people can see how they are working on the ground, they cannot understand what the idea is about. It is an exciting opportunity, but very complicated to put into practice.
  I certainly bow to the knowledge of the noble Lord, Lord Carter, which is far superior to mine as to whether my amendment achieves the purposes that I wish. If it does not in his judgment, I will certainly look at it again.
  Lord Carter: It is not the judgment of Lord Carter about which the noble Baroness has to worry, but that of the judges if the provision is challenged.
  Baroness Miller of Chilthorne Domer: In any case, I hope to come up with something that will more exactly achieve the purpose that I wish, if the amendment will not achieve that.
  Without a kick-start, the directive is still likely to be implemented by the Government in a piecemeal, late and unco-ordinated way. I feel great sadness that we cannot scrutinise and debate it so as to give us much more influence over how it is transposed. The noble Lord, Lord Carter, says that the CLA, the NFU and the RICS have not mentioned the directive in their briefings, but they certainly mentioned it in their evidence to the committee. I suggest to him that they have not mentioned it in their briefings because they have become depressed by the Government's attitude and the fact that it will not be in the Bill. When they see that there is a will in the House to put it in, I am sure that they will brief us and the Government at length on it.
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  The Minister said that consolidation was too difficult. I do not accept that we should be held back by that. Let us be a bit more ambitious. I found it refreshing to read the Scottish Bill—and with that, I should say that perhaps we should have fines whenever a bad pun about water is committed, and at the end we could give the funds to WaterAid. The Scottish Bill was in extremely plain English. I accept that Scotland does not have all the complications that England does, but nevertheless I feel that we should focus on a consolidated Bill.
  Perhaps the provisions are a good place for the Government to start. They could put into practice a principle, which they should have, that the general public can understand what on earth legislation is about. It is difficult for Members of the Committee to understand. I too appreciated the Government's efforts in giving us amended copies of the previous Bills so that we could see what the effect was. My goodness, I should think that even the draftsmen have huge difficulty. It would be nice if we could start on that principle for something as important and basic as water.
  The Minister mentioned that there would be delay if the amendment were agreed to. The directive has to be transposed in principle by the end of the year, so I do not accept that the delay would be likely to be very long.
  I am not sure how the Environment Agency views the lack of transposition of the directive. I suspect that it will work one way or the other, whichever it is given, because it will have to. The noble Lord said that it had adequate resources. I would have thought that it would have welcomed the certainty of the directive being transposed. Many others have wanted to be sure in that way, notably the water industry, for which certainty was particularly important. That wish for certainty ran through many pieces of evidence, including from the Wildlife Trusts. If the Environment Agency were frank, it might welcome it too.
  Scotland is different, apparently. but I do not believe that it is different in relation to the amendment. It has to transpose the legislation, as do we. As the Bill goes through Committee, I for one will watch out sharply for when we need primary legislation. We are certainly unlikely to see another water Bill within the next five years, so I suspect that we may even see some government amendments tabled, because the Government will recognise that pieces of the directive will need primary legislation. In the meantime, heartened by the support that I have had, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 2 not moved.]
  Baroness Byford Baroness Byford moved Amendment No. 3:
  Before Clause I, insert the following new clause—
  "DUTY TO CONSERVE WATER RESOURCES
  The Secretary of State shall take all necessary steps to encourage the efficient use of water by all users and consumers."
  The noble Baroness said: The amendment is tiny compared to the first two. I am very hopeful that the Minister might look sympathetically on it, because I would have thought that it was in the interests of all of us to wish to conserve water resources. We have all said clearly that we desire to use water carefully. Indeed, our subsequent amendments look specifically at that. However, to state that on the Bill would give greater encouragement not only to those in the industry or in business using water. but to us as individuals.
  I well remember my noble friend Lady O'Cathain saying that when she turned the tap on and then put the toothpaste on the toothbrush. she realised that she had allowed the water to run. Ever since, I now do that in reverse. Such silly actions are hugely important. The amendment is only very small, but I hope that it will receive great support from the Committee. I want to speak to it more fully after that broad introduction.
  The Water Industry Act 1991 lays a duty on water undertakers to encourage efficient use of water. The amendment would widen the responsibility and should result in a government campaign similar to the good campaigns currently under way on, for example, energy conservation. Government departments and agencies should be set targets for improved use of water. Private industry already does that. Rio Tinto, for example, is introducing a scheme throughout the company. It has wider aims of increasing water-use efficiency, especially by increasing its use of recycled water and reducing its need for fresh water.
  There is also a need to inform the public—we touched on that in great detail on the previous amendment—about water usage. We must encourage them to use water sensibly and to conserve it. There was much information during the drought years, but since then our minds might have slipped away from the need to conserve water.
  As Members of the Committee will know, the Bill has taken three years to come before us. In fact, it was originally a reaction to a drought. Since then we have had extensive flooding, often unfortunately at the wrong time of year. There has been a lot of water. However, that should not take our eye off the ball. There is a need to require people to conserve water, even when it is in abundance. The Select Committee report states on page 35 that,
  "the first—and perhaps over-riding—conclusion of our inquiry is that the Directive needs much greater public promotion".
  That is hugely important.
  I am trying to encourage the Minister that the amendment is only a few words—five—to accept. I hope that, with the support of others around the Committee, we can persuade him to accept it to the Bill. I beg to move.
  Baroness O'Cathain: My noble friend says most disarmingly that the amendment is only five words, but those five words are fundamental to the whole future of water in this country. I will not go back to the toothbrush analogy, but people simply do not realise
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  how valuable water is or how easy it is to conserve. They do not realise that it is in their interests to do so, not only as consumers now, but for following generations.
  One big issue that came out at Second Reading was the stunning information given to us by the Environment Agency about the shortage of water per capita in parts of this country, by comparison with Sudan and Ethiopia. If those facts were brought home to the public in a greater way. I am sure that everyone would be prepared to act. It is not as though the Government are saying, "Don't drive your car". That would inconvenience people, but being sensible about conserving water would not. It merely means that they become slightly more responsible, and I support the amendment absolutely.
  5 p.m.
  Baroness Young of Old Scone: I was delighted to hear the noble Baroness talk about the water shortages that I pointed out at Second Reading, particularly those in the south and south-east of the country. A number of requirements are already laid on elements of the water industry to promote water efficiency. Ofwat requires water companies to undertake a basic minimum level of activity unless supplies are under pressure, when a more active approach is necessary. Such an approach is not defined. In practice, some water companies do the minimum that they think that they can get away with in the face of Ofwat's requirement.
  It is not just the water companies that are involved. Households could save up to 40 per cent of water through efficiency measures, both in design of houses and low-water appliances. Industry could save 30 per cent with even the most simple and cost-effective measures. There has not been as much estimation of the water efficiency savings that could be achieved in agriculture. but the dairy industry could probably make savings of upwards of 20 per cent. More effective irrigation methods could have a major impact on water use. There is a long way to go if we are to have the water efficiency level necessary in view of pressures on the water system.
  From all that, one might think that I would support the amendment, but I am afraid that I do not, It seems to be one of those nice, motherhood-and-apple-pie amendments that admonishes the Secretary of State to admonish the rest of the world. A number of amendments on water efficiency take a more targeted approach, including Amendment No. 74, whenever we get to it. The noble Baroness has raised an important issue, but the amendment may not be the one to deliver the right action in practice.
  Lord Livsey of Talgarth: I certainly support the amendment. Contrary to what the noble Baroness said, I believe that it lays out some very important principles relating to the conservation of one of our most precious commodities. We have to be responsible in that respect.

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  In the Water Industry Act 1991, the industry itself had to ensure that wastage was minimised. There is still a lot of wastage in the industry, but it is better than it was in 1991. There are still tales of about 25 per cent wastage, but we have to look at the state of the infrastructure. It was probably put in place by our great-grandparents, and has done very well for the past 120 years or so.
  We debated metering at Second Reading and how there were scarcities of water in different parts of the UK, as the noble Baroness, Lady O'Cathain, said. In the South East, metering could be very effective so far as consumers and users are concerned. In other parts of the country where population pressure is not so great, the infrastructure is often in quite a state. Indeed, the pressure for metering in such places may not be so great. That will have to be resolved, and it will no doubt be debated further in greater detail.
  Sadly, we have heard recently of other problems to do with the supply of water in the Middle East and how scarce it is. We need to do everything that we can in terms of the efficient use of water, and ensure that conservation is right at the heart of the legislation.
  Lord Dixon-Smith: I also want to speak in favour of the amendment. In doing so, I reiterate an interest that I declared at Second Reading, which is that I hold an abstraction licence. By declaring that, I keep my hands well washed —that is another pound into the pot suggested by the noble Baroness, Lady Miller. I also want to put on record how grateful I am to have been briefed by the water industry, the Environment Agency and Ofwat before the Bill. Those briefings have been extremely informative and helpful.
  I shall not lay any responsibility or say who the offender was, but in those briefings we discussed water resources and how one might have additional ones. It transpired that in the territory, shall we say, of one major water company, the nearest and most easily accessible additional water resource that it had was the water leaking out of its own pipes. The quantity was very large. When we put the duty to conserve water resources in that context, it is very significant.
  It has already been said that many water companies have had enormous success in terms of improvements, and that becomes extremely hard work below a certain point. However, if one installs the correct recording procedures so that one knows exactly what is happening—some water companies have done so—one can tackle leakage, and leakage is a resource. It is a significant factor.
  Metering has been mentioned. If the development suggested in the South East goes ahead, it will help metering, because the practice in this part of the world is that all new houses are metered. The proportion of houses with meters will by definition rise.
  My final observation on good use of water resources is a different aspect of the same point, and I am persuaded of it by looking abroad. One finds that other countries, especially the drier parts of the United States, are terribly good about ensuring that irrigation
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  water is already soiled water that has been rough-cleaned to a state in which it is suitable for such a use. The irrigation process becomes part of the recycling process and the cleaning process.
  We can do a great deal if we set about that. However, in this country we do not work and think in that way enough. We might if the principle were enunciated in the Bill. I am sorry that the noble Baroness, Lady Young of Old Scone, would not support the amendment, as it would help enormously by enunciating that significant principle. If it were included in the Bill, everyone would then know that they had to take the principle into account.
  Earl Peel: I support my noble friend. If one is to have a water Bill, it seems totally logical that:
  "The Secretary of State shall take all necessary steps to encourage the efficient use of water".
  I cannot think of anything more sensible, frankly.
  Like my noble friend Lord Dixon-Smith, I was disappointed that the noble Baroness. Lady Young, did not support the amendment. I think that she said that she preferred the targeted approach. To me, that conjures up the idea that the Government, and through them her agency, will take a selective approach. I am not sure that that puts out all the right messages. I noticed, of course, that she was selective and chose agriculture as an example on which efficiencies could be made. She was absolutely right. However, we must not forget the fact that agriculture is responsible for only 2 per cent of the total a mount of water abstracted.
  Baroness Miller of, Chilthorne Dinner: I would certainly like to support the amendment. Later amendments are targeted and I welcome the support of the noble Baroness, Lady Young, for our Amendment No. 74. However, the amendment tabled by the noble Baroness, Lady Byford, lays the ground that efficient use of water should be a basic principle of the Bill.
  I am not entirely sure what has happened to the Government's resolve, as stated in Taking Water Responsibly. Perhaps the Minister will say where that went. They stated:
  "The Government will bring forward legislation, when Parliamentary time allows, to place water companies under an enforceable duty to conserve water in carrying out their functions. It will also bring forward legislation, when Parliamentary time allows, to place all other abstractors under an enforceable duty to use water abstracted … in an efficient and effective manner".
  They went on at great length in promotion of efficient use. I accept that they did not seem to lay a responsibility on themselves to ensure that that happened, but that duty was implicit on the Secretary of State throughout Taking Water Responsibly, Why else would the Government publish something with that title?
  I was also very struck by some words at the beginning of Water Wise, an excellent little book produced by the Environment Agency. They state:
  "By investing a little time and money in implementing a simple water management plan, your organisation could reduce its water consumption by up to 80 per cent. releasing money to be invested in other parts of your business".

  GC 59
  I suggest that that would apply to public bodies, private businesses and private households. By simply encouraging people or organisations to take that line, and by having a duty to enable them to do so, the Secretary of State would be doing a great service financially to many organisations and people. Companies could justify to their shareholders that they were making investments because they had to.
  I further remind the Minister of the statements that he made yesterday, when he was talking about encouraging the labelling of appliances and so on to be energy efficient. He was replying to my Question on the successful Are You Doing Your Bit Campaign, and talked about the fact that the Government would do more to encourage efficient use of energy. He did not use the word resources but, in considering the Bill, we must regard water in the same way in which we regard energy. I shall return to that subject later in terms of water conservation. After all, it takes a large amount of energy even to clean water up, so the two are linked.
  The amendment paves the way for the more targeted amendments later in the Bill, and I assure the noble Baroness of my support for it.
  Lord Whitty: I assure the noble Baroness, Lady Byford, that I have some sympathy with what she is saying. Water used efficiently is very important, and we should ensure that the Bill and other measures increase the efficiency with which water is used. My problem with the amendment is that it could confuse the situation as to the burden of responsibility rather than clarify it.
  Water companies, Ofwat and the Environment Agency all have duties and powers to promote water efficiency. To put a general duty on the Secretary of State could well confuse that. It would cut across the duties and powers already in place and those proposed in the Bill and elsewhere, and could lead to confusion of roles.
  Water undertakers are already under a duty to maintain and develop an efficient and economic system of water supply in their areas. That duty provides the basis for setting annual leakage reduction targets, to which reference has been made—leakages have been reduced by 25 per cent during recent years. Water undertakers are also under a duty to promote the efficient use of water by their customers. There is therefore a two-tier responsibility. Ofwat continues to require leakage reduction where that is economic, so the regulator is already involved in the matter.
  A number of responsibilities fall to the Secretary of State. For example, the Government play an important role in ensuring that leakage targets are set and achieved. The Green Technology Challenge, a scheme introduced in last year's Budget, will offer enhanced capital allowances for investment in designated technologies to minimise water use and improve water quality. So there is a direct role for the Government, but the responsibility in existing statute, the rest of the Bill and the various directives that apply relates to the water companies themselves, to their
  GC 60
  responsibility to encourage water efficiency on the part of their consumers and to the regulators, not to the Secretary of State or the Government.
  We may return to the issue when we discuss the amendments to which my noble friend Lady Young of Old Scone and the noble Baroness, Lady Miller, referred, including her own amendment. That may be a more appropriate point at which to consider some form of amendment to the Bill—without committing the Government to accepting those amendments. But here in the Bill and in this form, such an amendment would confuse existing responsibilities. Whatever the merits of raising the issue. the Government do not support such an amendment, five words though it may be, at this point in the Bill.
  5.15 p.m.
  Baroness O'Cathain: An idea has just struck me. The Minister says that there is a duty on everyone to promote the efficient use of water. That is fine. But there is a difference between conservation and efficiency. One can be efficient in the use of water—for example, one can use one's sprinklers only at night, so that there is no great evaporation—but it would be much better to specify conservation, because some plants do not require to be sprinkled at night. There is a subtle difference. Many people understand the idea of efficient use of water but, because from time to time we are deluged—we have floods and what seems to be constant rain—everyone thinks that there is plenty of water and so are not concerned about conserving it. There is a subtle difference that we should consider further.
  Baroness Byford: I am grateful to all Members of the Committee who spoke in support of the amendment. I am deeply disturbed that the chief executive of the Environment Agency does not think that it is a good idea. Members of the general public will view that with slight concern—I certainly do.
  Baroness Young of Old Scone: I hope that I did not leave the impression that I do not think that water efficiency is a good idea; I simply said that the amendment was perhaps not the best way to achieve that outcome in practice.
  Baroness Byford: I hear what the noble Baroness says, but I shall read Hansard carefully tomorrow. I do not regard the amendment as in any way an apple-pie amendment; it is hugely important. So I am disappointed that someone who heads the Environment Agency, who will have to deal with the Bill and try to encourage us all—whether we work for water companies or are just private individuals—to ensure that it works, reacts in that way. But there we are.
  I must say the same for the Minister; he will not be surprised at that. He said that he was sympathetic, but on this occasion we need more than sympathy. He said that he felt that the amendment cut across duties and confused other roles. Nothing is more confusing than what we are having to do, which is to go through the Bill, which refers to so many different Acts, let alone

  GC 61
  the statutory instruments and everything else. The amendment would clearly insert at the front of the Bill just a few words, so I am bitterly disappointed that both the Minister—although I do not mean him personally, but the department—and the Environment Agency take that view.
  I am grateful to Members of the Committee who have supported my amendment. My noble friend Lord Dixon-Smith made an interesting suggestion concerning how the issue is being addressed in America. As we all know, some parts of America are very dry.
  So I am not at all happy, and if we were on the Floor of the House, I should call for a Division. I register my objection. I am not satisfied, however kindly the Minister put me down, that the Government are unable to accept the amendment. We shall certainly return to it. My noble friend Lord Peel mentioned that agriculture accounts for only 2 per cent of total water drawn down. We as householders should be declaring an interest—we all use water. Each of us uses a lot of water and there are ways in which we can help.
  My amendment is so small and refers to,
  "all users and consumers".
  However, we are where we are. With reluctance, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 1 [Licences to abstract water]:
  The Duke of Montrose The Duke of Montrose moved Amendment No. 4:
  Page 2. line 9, after "days" insert "in any period of twelve calendar months"
  The noble Duke said: This is a probing amendment to ascertain whether the temporary licence is intended o cover a continuous period or whether, for example, an abstractor could take water once a week from April to September to restock water storage containers. The amendment is also intended to establish whether the temporary licence may be renewed year on year for the same purpose.
  Perhaps those Members of the Committee who are modern-technology literate will forgive me if I fall back on old-fashioned imperial measures. I realise that it would take a big bowser for stock to fill one with 4,400 gallons per day before the operation fell within the 20 cubic metres at which a licence is required. However, if someone was in the habit of refilling a swimming pool once a week, he might well exceed the 20 cubic metres threshold on one day of the week, but not as an average over the whole week. I beg to move.
  Lord Whitty: The temporary licences are intended to be used to cover one-off abstractions of a duration of fewer than 28 consecutive days where large volumes of water are needed for short periods—for example, at a summer fair, for pressure testing of pipelines or other episodic events. Under the Government's definition, the Environment Agency will be able to assess the effects of short-duration abstraction of that order in relation to the time of year and current pressures on the system.
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  With that clarification, the effect of the amendment moved by the noble Duke would be undesirable in several respects. It would allow abstractions on any 27 days in a 12-month period, rather than on 27 consecutive days. It would also allow short duration abstractions at a fixed time over many years—for example, for 27 days, or almost the whole of February, every year for 12 years. I do not think that that is the noble Duke's intention, but that is what his amendment would allow. It would also allow short-duration abstractions over many years at any time of the year—for example, any 27 days in any one year for 12 years.
  Any of those cases would represent a fundamental change to what is intended to be the use of temporary licences. In all of them, the Environment Agency would have difficulty assessing what would be the impact and enforcing its decision. In turn, that would increase the time needed to determine the application and would defeat one objective of having a temporary licence provision, which is to deal with situations that may arise suddenly by providing a short-duration licence that can be issued quickly, without going through the lengthier process required for a permanent licence.
  With that explanation, I hope that the noble Duke will understand what is intended by temporary licences and that his amendment would significantly worsen the situation.
  The Duke of Montrose: I thank the Minister for his reply. What he said makes the meaning of the Bill's wording much clearer. We shall have to consider whether what he said is enough to make it clear for ever and a day, or whether some wording still needs to be added to ensure that anyone reading the Bill understands what he has explained to us today. On that basis, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 5:
  Page 2, line 9, at end insert—
  "( ) Where the issue of a licence also concern, the construction of engineering facilities that are related to the supply or storage or processing of the water that is the subject of the licence applied for, the licence issuing authority shall take into account the expected life of those related facilities when considering, the duration of the period for which the licence is to be issued."
  The noble Lord said: The amendment is grouped with Amendment No. 55, which picks up a similar point. That point was mentioned on Second Reading by several of my noble friends—Lord Elliot of Morpeth, Lady O'Cathain and Lord Peel—and by the noble Lord, Lord Borrie. Indirectly, it was mentioned by the noble Baroness, Lady Young of Old Scone, who sought to give reassurance on the issue of discharge licences, which are subject to a four-yearly review that, she says, appears not to cause any problems. I accept that. It may or may not be an argument, but how many times have we all read in legislation that a Minister may decide on different courses of action for different cases? I hate to think how many times I have read that since I have been in the House.
  The problem is the glaring inconsistency between the problems of long-term planning and financing of the water industry—especially of infrastructure—and what we know of the suggested licensing regime under the new system that will operate on 12-year blocks. If one simply considers the problems of providing major reservoirs—or, indeed, catchment area transfer schemes—to supply water over big distances, they probably have at least a 20-year planning and lead-in time before they can be brought into action.
  No one, and I seriously mean no one, will consider anything of that nature—it will not even get to first base—on the basis of an assurance of an abstraction licence for 12 years. That is unreal. So we have an immediate and apparent problem. One Member of the Committee has already referred to the fact that parts of the water industry are still running on essentially Victorian infrastructure. I do not suggest that one would necessarily want to introduce a licence that would match the lifetime of the infrastructure, but I hope that we can ensure that, even today, the industry builds to similar standards. The disruption that is caused if we do not is usually a hidden on-cost that the whole of society must reluctantly bear.
  One would not build a house on the basis of a 12-year supply of water, but the Government are blithely talking about adding about another 500,000 houses in the south-east of England, where water supplies are already supposed to be under pressure. That is a glaring inconsistency.
  This is a probing amendment—although I regard the whole Grand Committee process as a probing process. The amendment would simply require the "issuing authority"—I used that wording deliberately because, without wanting to hurt anyone's feelings, nothing lasts for ever and the Environment Agency may not last as long as much of the infrastructure that it sees installed—to,
  "take into account the expected life of those related facilities".
  I shall listen to the Minister's reply with interest, but I suspect that the wording might have been slightly more appropriate if I had used the words, "the funding period", which would at least have allowed the installer to get out of financial trouble. Major infrastructure for the water industry is enormously expensive. It is expensive for whoever undertakes it. If a farmer creates an impounding reservoir to take winter run-off and use it for irrigation in the summer, relatively for him, that is a very high cost. The same argument applies to someone using boreholes for aquifer recharge—as can be done. All those systems are expensive for the person undertaking the work. That is a fundamental point.
  I hope that the Government may be somewhat more sympathetic to this amendment than to earlier amendments that, in my view, are equally important. We shall come to the question of licences later, but if there is concern that it will be impractical to manage the abstraction of water in the interests of the catchment area sufficiently well if the licence period is too long, I suggest that that is the problem not of the
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  person holding the licence but of the person issuing licences. We must think carefully, but there is no reason why in particular cases involving major infrastructure costs, or an individual who is undertaking high relative expenditure, people should not have a licence for the full period—at any rate for them to recover their costs. That would make planning such operations much easier.
  I shall say no more. I could enter some slightly less productive areas that are, to an extent, red herrings to the issue, but the fundamental point stands. I accept and place on record that the existing system is working extremely well. In my briefing, I am assured that long-term planning continues and that the system is beginning to work extremely well. But if we look for the legislative authority that makes it work, it does not really exist. At least, it is not spelled out.
  I am encouraged to the extent that people will undertake what needs to be undertaken regardless of the law. That has always been the case. But some provisions should be in primary legislation, so that everyone knows what is the background and, more importantly, so that some lunatic cannot get hold of the system and make a mess of it. I beg to move.
  5.30 p.m.
  Baroness Miller of Chilthorne Domer: My name and that of my noble friend Lord Livsey are attached to Amendment No. 55, along with those of the noble Baronesses, Lady O'Cathain and Lady Byford, because we, too, want to probe the issue and discover the Government's thinking.
  We feel encouraged by the balance in the Bill that ensures that the habitat side of the business will be protected in a way that it has not been before. However, to have proper regard to sustainability, we must ensure that when people decide to invest in something, the agency will get its judgment right. The amendment places an additional onus on the agency to get its judgment right, so that it does not jeopardise someone who makes an investment only to discover that it was not as good as he thought.
  The Bill includes sufficient safeguards for eventualities that we may not predict, such as periods of drought. The amendment is geared more to times of normality. I look forward to hearing the Minister's reply.
  Baroness Byford: My noble friend Lady O'Cathain is absent at the moment, so I shall speak to Amendment No. 55 on her behalf. It asks the Government to take into account the costs that my noble friend mentioned when speaking to a previous amendment.
  We have received correspondence and telephone calls from and held interviews with people who are involved in the industry who are worried about future investment if there is no relevant life-expectancy. That will put them off investing. I know that the Minister is well aware that, unfortunately, many of the water companies' existing pipes, and so on. are from the Victorian era. Although they were well built, it is a

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  long time since then and much of the infrastructure will have to he replaced. Thereby attaches a huge problem.
  My noble friend Lord Dixon-Smith touched on new build and the associated costs. In passing, I ask the Minister what costs included in the recent announcement by John Prescott about the anticipated new house build in the South East were directed towards providing water and sewerage. I understand that those costs were not included in that estimate. If so, why not? Was it because the costs were too high; or was that just an oversight? We all know that those costs are significant, and it is unfair to expect those who will carry the burden, whether as an individual business—my noble friend Lord Dixon-Smith acknowledged his interest in that respect—or as companies, to undertake work when they cannot cover their costs.
  If the Minister does not like the amendment—he may well say that he has reservations about it—perhaps he will explain to the Committee what time frame he would consider practical. Other, later, amendments, consider specific businesses, but I do not want to go into the specifics at this stage. This is an overriding, wide-ranging amendment, and it would enormously help the Committee if the Minister were to respond to the questions posed by my noble friend Lord Dixon-Smith and the noble Baroness, Lady Miller. We do not want to put people off investing but to ensure that our future structure is strong and sound.
  We all know that we waste so much water, especially through leakage. if licensees will not get a proper term of life-expectancy, is it really fair to expect them to invest as they have during recent years? I support Amendment No. 55, as well as Amendment No. 5.
  Lord Sutherland of Houndwood: I support the amendment, because it encapsulates an important principle that applies to other amendments that we shall consider. That is that to judge the effectiveness and fairness of legislation such as this, one should take into account its impact on users of water, the industries that must use water and the many other constraints under which they work—such as, in the end, setting adequate investment and planning horizons. The amendments would help the setting of investment and planning horizons that would lead to the efficient use of water, and therefore increase the worthiness of the Bill.
  Earl Peel: It is worth adding that any such business is likely to have bank borrowings. The bank will of course seek security when negotiating such borrowings, so I support the amendment from that perspective, which is integral to businesses that rely on abstraction licences.
  Baroness Young of Old Scone: I am afraid that the noble Lord, Lord Dixon-Smith, rather took the wind from my sails by citing my example on Second Reading of sewage treatment works, which are regularly reviewed on a four to six-year basis and may have their licences altered with no compensation, although they have a right of appeal. So a 12-year
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  licence is more secure. Since the noble Lord stole that example, I was trying to think of others from other regulatory fields, but I could not think of one that was not parallel to the Bill's provisions, as opposed to those of the amendment.
  For example, under the integrated pollution prevention and control regime, factories, including some of our major chemical complexes, are regularly regulated. In many cases, they involve extremely high-cost, long-term investment, but their licences are renewed every six years. Nuclear power stations and reprocessing plants have an asset life-span of not just tens or fifties but of thousands of years, bearing in mind the waste legacy issues, but they also have licences that are reviewed over a few years.
  Investment occurs right across the industrial and commercial world where it is not posiible for businesses to say with absolute certainty that they will hold a single licence of an entirely predictable nature for the entire length of their business. If we look elsewhere in the regulatory regime, we will understand that that is not a deterrent to investment.
  Indeed, water company investment is in a blessed state, in that it is one area of life where we have a long-term, strategic forward view. The sustainability of an abstraction proposition is assessed at the point of licensing to ensure that it is environmentally sustainable over a number of years. That decision is made against the background of the company's long-term water resource plan and the nation's water resources strategy, which stretches 25 years in advance.
  When it comes to renew such licences, it would be strange if there had been such substantial change from the forward look over that 25-year period that the water resources strategy implies that there needed to be huge dislocation in the licence. It is more likely that there would be fine-tuning, such as the other industries that I mentioned—our major industrial complexes and nuclear power stations—take in their stride as part of their normal business process.
  5.45 p.m.
  Lord Whitty: Investment in water facilities of all sorts is very important for the Government and the regulators. Part of the reasoning behind the amendments is probably misplaced, in that the Bill does not fix the duration of any new abstraction licence, it simply requires a time limit to be placed on every licence. When considering the length of licences or their renewal, the Environment Agency, as the noble Baroness, Lady Young of Old Scone, said, must take account of the abstracter's reasonable needs, which includes the need for investment. Indeed, if the agency were not to take such needs into account, it would be open to challenge. If that led to a decision that a long-term licence was needed, the agency would have to act accordingly. But it is up to the agency to decide the licence duration on a case-by-case basis and in a way which fulfils its primary duty to consider local water resources.

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  It would therefore be inappropriate to incorporate a criterion such as fixed duration or to include a single unilateral criterion on asset lifetime which would be seen to override other criteria, not least the basic environmental criteria that are the objectives of the Bill.
  The agency must consider costs and benefits in the exercise of its powers by virtue of its obligations under Section 39 of the Environment Act 1995. That will clearly include some of the issues referred to in this debate.
  The agency has recently published guidance on how it will address the duration and renewal of licences. Licences longer than what it regards as the normal 12-year period will be considered if the tests set out in Taking Water Responsibly are met and therefore justify a licence for longer than 12 years. Neither the duration nor the exemption from the duration are matters for the Bill. They require the Environment Agency to use its judgment on a case-by-case basis.
  The Government accept many of the more general points made in this discussion about the need for investment, to ensure that planning takes account of that need and that the regulatory provisions are sensitive to it. However, it would be inappropriate to write a single criterion into the Bill. With all respect to the noble Lord, it is quite a crude criterion relating to the lifetime of a specific asset with no cross-reference to the environmental outcome. Although many of the considerations to which he refers are appropriate for consideration by the agency, I do not think that including them in the way he suggests would help.
  Lord Dixon-Smith: I am grateful to my noble friend Lady Byford, the noble Baroness, Lady Miller of Chilthorne Domer, and the noble Lord, Lord Sutherland of Houndwood, for their support for the principle of the amendment—even if the wording is not perfect. I also thank my noble friend Lord Peel for what he said.
  The noble Baroness, Lady Young of Old Scone, spoke about industries being regulated under the integrated pollution prevention and control legislation. I, too, had something to do with that passing through the House. I have lived not exactly under the shadow of a nuclear power station, but there is one not far from where I live, for a long time, so I am well aware of the problems that they can create.
  It is essential that industries producing discharges which can cause immediate and direct environmental damage if they escape should be regularly reviewed. I do not doubt that those industries are only too aware of that and review their own procedures even more regularly than might the Environment Agency. That is different from this instance, where we are dealing with the abstraction and use of a natural resource.
  If we are considering, as we are obliged to do in the long-term planning process, the construction of a new major reservoir costing many millions of pounds and all the infrastructure involved in processing that water and getting it to customers, that process will not start.
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  As I understand it, there is no presumption of renewal of a licence. We shall come to that later in the Bill, but it is absolutely fundamental.
  I am aware, as the Minister has acknowledged, that the Environment Agency can, if it wishes, consider a longer-term basis for abstraction licences. If major problems are to be resolved in the future, longer-term abstraction licences must be considered.
  I was a little concerned when the Minister said that licences for longer periods could not be issued without a concern for the environmental criteria, which is the primary reason behind much of the Bill. In a way, that is right and proper, but that consideration must be made before we even begin to consider issuing a licence, if it is to be issued at all. Once one has a licence and infrastructure costs mount up, one is committed on behalf of communities across the country, one by one. One cannot, at some point, turn off the tap because a wetland might be becoming a little dry. That is impractical.
  We shall have to return to this issue. We are considering what should be in the Bill. I have always believed that one should try to write into the Bill the primary matters which make it comprehensible for ordinary people, so that they understand the guiding parameters backing a service such as the water industry. Most thinking people would feel concern at the possible inconsistency—I put it no higher than that—between practice on the ground and the reality with which the industry has to work. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause I agreed to.
  Lord Livsey of Talgarth Lord Livsey of Talgarth moved Amendment No. 6:
  After Clause 1, insert the following new clause—
  "IMPOUNDING TO CREATE LARGE RESERVOIRS
  (1) The Agency, prior to granting a licence to a water company to impound water in a large reservoir, shall conduct—

  (a) an environmental impact assessment;

  (b) a social impact assessment; and

  (c) the subjection of plans to the local planning authority to obtain planning permission.

  (2) The Secretary of State in England and the First Minister in Wales shall have the power to refer such planning applications to a public inquiry."
  The noble Lord said: We are addressing three amendments. Amendment No. 6 deals with the impounding of large reservoirs; that is specific to reservoirs that have a capacity of more than 25,000 cubic metres. Amendment No. 7 relates to smaller reservoirs—my noble friend Lady Miller will speak to it. Amendment No. 8 addresses compensatory flow into river systems from reservoirs.
  Amendment No. 6 relates to impounding to create large reservoirs. The new clause states that the agency, prior to granting a licence to a water company to impound water in a large reservoir, shall conduct three things in principle—an environmental impact assessment, a social impact assessment and the subjection of plans to the local planning authority to obtain planning permission. The second part of the

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  new clause would ensure that the Secretary of State in England and the First Minister in Wales shall have the power to refer such planning applications to a public inquiry.
  This is a very important new clause. Indeed, as someone who comes from Wales, I believe it is crucial. We believe that the Bill should guide the conduct of the water company in increasing the water capacity, if that is its wish. When one dams a valley or other area, which is often in an environmentally sensitive area anyway, the impact can have an enormous downside and completely change the environment of the area where the reservoir is created. Local communities are often completely disrupted where a valley has been dammed. In the past, entire communities have been lost under the waters—drowned, literally—and the inhabitants have had to be relocated elsewhere.
  It is obvious that any plans would have to come within the ambit of the local planning authority to obtain planning permission. As a fallback position, there must he an appeals mechanism so that an appeal can be made on all those aspects—perhaps to oppose any such development. The purpose and function of the proposal is to try to prevent communities from flooding, with the loss of livelihood, housing and community facilities and amenities, in addition to the environmental factors that I mentioned.
  There is another aspect to that in that reservoirs can also be extended. A proposal is being considered that might extend one of the reservoirs in mid-Wales to twice its size. That is in the Elan valley.
  I see the amendment as a protection of communities and a way to give them the means to appeal against someone coming along and basically saying, "We are going to drown your valley".
  I point out the number of reservoirs in Wales and the large city conurbations which they supply. I will write out their names for the benefit of the Hansard writers. One at Llandegfedd, near Pontypool, is a totally different type of reservoir to the ones in mountainous areas, and is basic to the water supply to south-east Wales.
  The Talybont reservoir in the Brecon Beacons supplies Newport, along with the Usk reservoir; the Crai reservoir supplies Swansea; the Taf Fechan system in the Beacons supplies Cardiff—there are three of those reservoirs; the Ystradfellte reservoir supplies Swansea; and the Llyn Brianne supplies Swansea and also transfers water. The Elan valley complex, which was very wisely invested in by the citizens of Birmingham in Victorian times, supplies almost, but not entirely, all of Birmingham's water supply. The Vyrnwy supplies Liverpool. The Celyn, which also supplies Liverpool, involved the flooding of Tryweryn. That did more for creating Welsh nationalism than any other act of any body in the United Kingdom in the past 50 years. The Brenig reservoir supplies north Wales, the Clywedog regulates the River Severn and the Llys-y-fran reservoir supplies Haverfordwest and Milford Haven.
  That is just a few of the reservoirs in Wales—there are many more. People in Wales will say that they do not want any more of their valleys flooded, thank you very much, and they do not want to lose a single additional community. In 1970, two valleys were saved from damming—the Senni, in the area I come from, near Brecon, and the Dulais, in Montgomeryshire. Indeed, my noble friends Lord Hooson and Lord Thomas of Gresford became local heroes because, with the flood defence committee, they prevented both valleys being flooded. They contained substantial communities, not just farmhouses. During drought conditions, it is sad to see heaps of rubble in low water that used to contain communities, very often Welsh speaking.
  The amendment would ensure that that historical situation does not repeat itself. We were talking earlier about the conservation of water. An efficient use of water should, if conducted properly, prevent such things from happening in the future. However, I fear that doubling the size of one of the Elan valley reservoirs will be quite an issue. It will impact entirely on another river system as well, so it is very important for the environmental aspects to be fully considered.
  Amendment No. 8 is all about compensatory flow from reservoirs into river systems. It states:
  "The Agency shall set volumes of compensatory water flows to be released from reservoirs and impoundments into rivers in sufficient quantity to sustain the water quality and ecology of river systems".
  This Bill is all about sustainability. I assure noble Lords that there are many instances, particularly during long summers, when acute observation shows rivers becoming ecologically unviable. One can see what happens to oxygen levels; there are dead fish in the river, and insect life is reduced. During the summer there is very often a conflict of priorities. The great demand for water conflicts with the need for sustainability. Decisions are taken, orders are made and often, because consumers or industries are running seriously short of water, the poor old river's compensatory flow becomes reduced. This can he very damaging; in bad drought years, the impact on the ecology of river systems can last for at least the next five years.
  The purpose of the amendment is to ensure that throughout the year volumes of compensatory water flow from reservoirs continue to be released into rivers to ensure that they remain ecologically sustainable. It is my privilege to speak to Amendments Nos. 6 and 8, and my noble friend Lady Miller will address Amendment No. 7. I beg to move.
  6 p.m.
  Baroness Miller of Chilthorne Domer: Amendment No. 7 is different from those spoken to by my noble friend Lord Livsey of Talgarth, which I wholeheartedly support. But I believe that what they have in common is the proportionate nature of regulation. As my noble friend has outlined, there clearly needs to be a strengthening of regulation. However, Amendment No. 7 would lighten the regulation with regard to small impoundments that

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  farmers, in particular, make on their lands when precipitation is at its greatest—in January, February and March.
  The purpose of Amendment No. 7 is to encourage farmers and landowners to store winter water and to obviate the requirement for multiple consents for a very simple operation. Let me explain how complicated the Bill will make such a simple exercise as creating a small pond on a farm either for wildlife, for use later in the year to irrigate crops or for any other reasonable use.
  The 25,000 cubic metres that I have suggested seems large when written down but it is not a large amount of water. Under the Bill as it stands, farmers who wanted to store that amount of water, would need the following consents; they would need consent under the Land Drainage Act 1991; an obstruction licence time-limited consent; an impoundment licence; and certification under the Reservoirs Act 1975. I will be encouraged if the Minister tells me that farmers will not need quite that many consents. However, for the creation of a small pond on a farm, that is over-regulation.
  Furthermore, some of the other laudable efforts that the Government are making in terms of their agri-environment schemes are encouraging the creation of small ponds and habitats that can be created by ponds.
  Habitat creation would be one benefit. A second would be that at times of floods, not quite so much water would be going downstream. Therefore, flooding problems further down the system could be alleviated if several landowners and farmers followed this pattern of working.
  Thirdly, if water were flowing that fast, it would be likely to trap some of the silt and diffuse pollution so it would keep water quality downstream better. I have already mentioned the important subject of habitat.
  So there would be a lot of benefits to the environment and the public. This is one area that the Water Framework Directive catchment management system could encourage, but the small amounts of water specified in the Bill discourages this approach. It will mean more paperwork, more licence fees and will discourage the farmer. The Government have spoken about better regulation; I remind them that of the five principles of good regulation, which I have here, the first is to be proportionate; regulators should intervene only where necessary. My amendment would take out a completely unnecessary regulation.
  The Duke of Montrose: At the risk of being accused of being a little boring about the amendment spoken to by the noble Baroness, Lady Miller, Scottish legislation has introduced the concept of a water use licence that allows for both abstraction and discharge activities. Bringing everything together under a single licence might be a step towards simplification.
  Lord Dixon-Smith: I support these amendments in principle, although I have some hesitation about parts of them. Again, this is a question of what should be on the face of the Bill.
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  I should like to speak first to the amendments proposed by the noble Lord, Lord Livsey, and then come back to Amendment No. 7, which the noble Baroness, Lady Miller, spoke to afterwards. Amendments Nos. 6 and 8 refer specifically to issues relating to very large reservoirs. While I may sympathise with the number of inundated Welsh valleys, it sounded as though an awful lot of that inundation was for the benefit of the people of Wales. However, I have some sympathy about Birmingham.
  The noble Lord will correct me if I am wrong, but with regard to Amendment No. 6 it would be quite remarkable if an environmental impact assessment were not already required in planning a really large reservoir, so I think that point would be covered. So, indeed, would the planning issues: one simply could not build one of these reservoirs nowadays without planning coming into it. The planners would have their say and demand their fee. It is slightly different for the very small reservoirs, but planning, as well as planning inquiries, can already be authorised.
  I am sure that no responsible water service provider would undertake work without having made a social impact assessment. However, when making such an assessment, it is difficult to know where to draw the boundaries? Do we draw them within the confines of the reservoir or at the limits of the wider community that might benefit? If there is to be a proper social impact assessment, one needs to look at the wider issue rather than the narrow one. Ultimately, it would come down to proper compensation. Very often in this country, proper compensation is restricted by the current compensation law, a separate issue which is nothing to do with the Bill.
  If we had more flexible and easier compensation laws so that people were better and more fully compensated for the very real loss and disruption that they might suffer if a valley in which they were resident were flooded, many of the difficulties in the planning process would disappear. We do not have such a system, unfortunately, but perhaps it is as well to mention that point yet again. I think we will find, when the Minister replies, that the points proposed in Amendment No. 6 are largely covered.
  Amendment No. 8 proposes a new use for reservoirs—I am sure that it is being considered— slightly stronger than the current practice. Reservoirs are used largely for storage and, to a certain extent, to maintain flow, but not as the primary purpose of constructing a reservoir.
  If the noble Lord, Lord Livsey, is serious about his amendment, the almost certain consequence will be that reservoirs will need to be somewhat larger than they are at present. If we are going to use reservoirs as a proper part of water management to maintain flow during periods when it would otherwise be low, and to reduce flow when it is high, larger reservoirs will be needed than are provided at present. The principle of good water management is inherent in the amendment and it merits serious consideration.
  I support Amendment No. 7. We should keep reservoirs of the size referred to in the amendment as much out of the regulatory process as possible. We

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  should bear in mind that we will he impounding what would otherwise be surplus water that is running down rivers and out to sea. It might be necessary to be slightly more flexible about the dates suggested in the amendment, but that problem is covered to a degree by the words "in time of flood".
  For the benefit of those Members of the Committee who are not immediately literate in metric measures of water, 25,000 cubic metres is about 5.5 million gallons. It is 25 megalitres, which is half the volume of water eligible for competitive supply under the competition rules suggested in the Bill. It is a large amount of water, but it is not massive. Expressed another way, it represents 50 acre inches. If you wish to put 4 acre inches on a crop from sowing to maturity—which is about average—you can work out how many acres can be irrigated throughout the season.
  This is very important for farm storage, horticultural storage and irrigators. It is a part of water management to the extent that it is using water which would otherwise run out to sea. It is something that should be encouraged in every way. We may need to look at the exact wording of the amendment but it definitely deserves strong support. We should do everything we can to support the principle of the amendment.
  6.15 p.m.
  Baroness Farrington of Ribbleton: The noble Lord, Lord Livsey, took us so far around Wales that perhaps I should declare a family interest. Llyn Brianne I know; some of the other reservoirs I do not know. So, if I do have an interest in any of the valleys the noble Lord seeks to protect, I declare it now. I wish that during this beautiful week we had all been able to meet at Llyn Brianne reservoir.
  I can reassure the Committee with regard to Amendment No. 6. As the noble Lord, Lord Dixon-Smith, said, the proposed development of any large reservoir is subject to planning consent under town and country planning law. The developer of a large reservoir must apply for planning consent from the local planning authority and, in the same way that the planning law refers to the ability of the Secretary of State to call-in a planning issue and to call for an inquiry, in Wales that role will be undertaken by the Welsh Assembly. There is also an appeal mechanism.
  An impoundment to store in excess of 10 million cubic metres of water—for a horrible moment I thought the noble Lord, Lord Dixon-Smith, was going to set the Committee mental arithmetic tests—would require mandatory environmental impact assessment under the Town and Country Planning (Environmental Impact Assessment (England and Wales)) Regulations 1999. Smaller impoundments are subject to environmental impact assessment if they are likely to have a significant environmental effect by reason of factors such as size, nature and location.
  Where a project is subject to environmental impact assessment, an environmental statement has to be produced to inform the planning decision. The statement must address a range of issues, including the
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  effect of the development on the local population. Noble Lords have raised an important point. Although we appreciate their concerns, I hope that when they have had an opportunity to read my response in detail they will agree that the amendment is not necessary in the light of current planning controls.
  Amendment No. 7 does not achieve what is sought and could give rise to some practical problems. However, to some extent we support the intention behind the proposal to facilitate the storage of floodwaters without unnecessary bureaucracy. As the noble Baroness, Lady Miller, said, this would help reduce flooding and provide stored water for other purposes during drier periods.
  We should bear in mind that the controls that are the subject of the clause deal only with impounding works that are constructed across a natural watercourse. By their very nature, such works are usually permanent and can cause significant disruption to flows passing on downstream to neighbouring owners and beyond, with the potential environmental disbenefits that could follow.
  Baroness Miller of Chilthorne Domer: Perhaps I can help the Minister in a practical sense. When a stream is in full flow you could construct a run-off similar to the ones that mills used to have—which would be activated only at times of high-flow—thereby avoiding interruption of the stream. I am grateful for the Minister's support. There are ways round the mechanical difficulties to which she has referred.
  Baroness Farrington of Ribbleton: Yes. But, for the reasons I have outlined, it would not be possible to impose the controls that we are seeking to improve by this clause only during defined months or during periods of flood. I shall obviously give further consideration to the point made by the noble Baroness. It is obvious from the way in which she spoke to her amendment that we share a common aim.
  I can give some reassurance in regard to exemptions for water that is diverted into off-stream storage areas in the circumstances covered by the amendment. There is already an exemption in the Water Resources Act for abstractions for land-drainage purposes, which includes,
  "protection of land against…encroachment by water".
  That is the other half of the equation to which the noble Baroness referred with regard to flooding.
  While we propose in the Bill to reduce the scope of activities which fall within the exemption in Clause 7, the words I have quoted will remain unchanged. I hope that reassures the noble Baroness that, both now and in the future, water abstracted from a stream or river in times of flood is already, and will remain, exempt from the need for an abstraction licence.
  Of course, that deals with only one of the criteria for further exemption suggested by noble Lords. The other is that storage during January to March should also have an exemption. This is more difficult. Sometimes, if we have dry winters, flows during these months may be severely limited. There are sonic areas

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  of the country—I know that the noble Lord, Lord Dixon-Smith, will say that farmers work well together—where several irrigators seek to fill their own reservoirs from the same source of water and there is simply insufficient water for all to have a free hand. The Environment Agency is encouraging the storage of winter water and, rightly, will grant winter water storage licences only in those areas. However, control is needed to ensure that there are fair shares for all.
  It is proposed that exemption would be available only if the land-drainage consenting process were applied to the scheme. We understand that the noble Baroness wishes to reduce bureaucracy. The Bill contains no proposals to make storage schemes more complicated. All types of permissions are covered to take into account different issues, such as a scheme's impact on water resource, on flooding and on safety in the case of a large and raised reservoir.
  We do not believe that it is good practice to use one regulatory regime to achieve the objective of another. Impounding controls are aimed at ensuring the protection of other users and the environment from the potential stoppage of the flow, whereas the land-drainage systems are there to ensure that we do not aggravate flooding. Any new on-stream impounding structure will require both an impounding licence and a land-drainage consent. We expect the Environment Agency to ensure that applications are co-ordinated to minimise the bureaucracy involved. I hope that that explanation reassures the noble Baroness.
  We believe that Amendment No. 7 is not necessary and would not work in practice. I hope I have shown that the removal of controls during January to March would not be advisable in certain circumstances.
  As to Amendment No. 8—I have visions of the noble and learned Lord, Lord Williams, talking about river systems being affected to the disadvantage of those who prefer to catch sewin—the agency already has a duty to protect and, where possible, enhance the environment in exercising its powers and can apply conditions to the licences it grants.
  In the grant of any new abstraction or impounding licence the agency will consider the needs of the environment and the rights of existing abstractors. Where it is necessary to attach conditions to the licence in the kind of case referred to by the noble Lord, Lord Livsey, the agency can, and already does, constrain the licence to ensure that it is part of a sustainable extraction regime. These licences are in operation and include management arrangements to ensure that the environment is protected.
  I hope that I have given noble Lords the assurances they seek. The subject is quite complex. I have covered a range of issues but, if anyone requires further information after the Committee stage, I shall be delighted to write to them.
  Lord Dixon-Smith: I apologise to the Committee. I made an arithmetical error—I knew it was wrong as
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  soon as I had said it—because I cannot read my own writing. In fact, 25 megalitres is 250 acre inches and not 50.
  Baroness Farrington of Ribbleton: If the noble Lord, Lord Dixon-Smith, is going to set the mental arithmetic test, answer it and mark it himself, I shall be much relieved.
  Baroness Miller of Chilthorne Domer: I thank the Minister for offering to help further in regard to Amendment No. 7. She seemed to support the spirit of the amendment in part, but then said that she did not support it. I would welcome further discussions on exactly what I am seeking and how it might be achieved.
  6.30 p.m.
  Lord Livsey of Talgarth: The noble Lord, Lord Dixon-Smith, referred to a number of issues, including compensation. There is no compensation for losing the house in which you were born or the community in which you were brought up. To understand, you need to talk to someone who can tell you, "I was born there", and who points to the middle of a piece of water; who deliberately goes there in the middle of a drought to see where he or she was brought up. It is a very sensitive issue indeed.
  The noble Lord referred to the new use of reservoirs in terms of compensatory flow. As the noble Baroness said, reservoirs are used already for compensatory flow. Amendment No. 8 seeks to ensure that it is on the face of the Bill that compensatory flow into rivers should be at a sustainable level and not damage the ecology. I am afraid that, so far as compensatory flow is concerned, some river systems are totally inadequate.
  Perhaps the noble Baroness will write to me—or perhaps inform me in a later debate—and specify precisely where these flows are protected in existing legislation. I suspect that it is in the part of the 1991 Act which deals with the water industry.
  As to Amendment No. 6, the Minister said that the Secretary of State and the Assembly can call in various applications and that there is an appeal mechanism. Again it would be helpful to know where these assurances can be found in legislation. She said that I should be reassured—I am sure she is right— but one of the reasons for the amendment is to provide reassurance to communities that mechanisms are available to protect them and that there is a proper appeals mechanism. People would be reassured if that were the case.
  I did not hear what the Minister said about the environmental impact and its relationship with the local population. I shall need to read Hansard in some detail if I am to return to the issue on Report. I may wish to return to certain aspects of the amendment in the future. In the mean time, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 2 [Restrictions on impounding]:
  [Amendments Nos. 7 and 8 not moved.]
  Clause 2 agreed to.
  Clause 3 [Existing impounding works]:
  The Duke of Montrose The Duke of Montrose moved Amendment No. 9:
  Page 4, line 39, leave out "otherwise" and insert "in relation to England"
  The noble Duke said: In moving Amendment No. 9, I shall speak also to Amendment No. 10. Clause 97(5) makes it quite clear that the Bill applies to England and Wales only. The use of the word "otherwise" in Clause 3(12)(b) makes one wonder whether we are entering the areas of cross-border and river-basin districts and all the other issues referred to earlier. Or does it hint at some future development to which the Committee is not so far privy? Perhaps the Minister will enlighten us as to the wording in the clause.
  Amendment No. 10 is a probing amendment which seeks to remove the words,
  "appears to the Environment Agency"
  and to more clearly define the relevant person. It would not, for example, be reasonable to serve notice on a civil engineer or a contractor who was doing work at the behest of a landowner, even though the constructor may well be "responsible" at the time of those works. I beg to move.
  Baroness Farrington of Ribbleton: As regards Amendment No. 9, the provisions of the Bill apply to England and Wales only. The clause already defines he National Assembly for Wales as having jurisdiction over appeals in Wales and so, by definition, the Secretary of State can have jurisdiction only over appeals in England. Therefore Amendment No. 9 is not necessary.
  There seems to be a misunderstanding as to the nature of the clause. Unless I am advised to the contrary before I have dealt with Amendment No. 10, the specific point raised by the noble Duke concerns cross-border river basins. I remember getting into terrible trouble banning lead shot on one side of the border between England and Scotland, so I shall await enlightenment on that issue.
  As to Amendment No. 10, Clause 3 allows the agency to serve a notice on a relevant person which would require that person to apply for an impounding licence. The agency will not do this for each and every unlicensed impoundment but only for those where it believes a licence is necessary to secure the proper management of water resources or to protect the environment.
  The agency may serve a notice on a number of people—landowners, tenants. those operating impounding works or benefiting from them in other ways. The wide scope of the definition of "relevant person" is to ensure that the person who is in a position to implement the required changes can be identified. Any person who is aggrieved by service of a notice can appeal against it.
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  The amendment would restrict the range of persons upon whom the agency could serve notice. This could result in the agency not being able to serve notice upon the person who, in all the particular circumstances, bears responsibility for the impounding works.
  The Secretary of State would be responsible for the part of a river in England and the National Assembly for Wales would be responsible for the part on the other side. This is where I got into trouble on both sides of an estuary over the issue of flying ducks with lead shot in them. The situation is clearer here because there are simple, physical boundaries.
  I see that I may not have convinced the noble Duke. Perhaps I may write to him to clarify the matter.
  The Duke of Montrose: I would like clarification. It is a puzzle why it should state "otherwise" in the Bill. There is another strange situation. The consultation document outlines river-basin districts. The head waters of the River Tyne begin in Scotland and then flow into England. It would appear that the river basin district will be coupled into the English side of management. If the Secretary of State can exercise his powers only up to the border, what will happen to the part of the River Tyne that is outwith England?
  Baroness Farrington of Ribbleton: I shall need to come back to that question. That part of the River Tyne will stay there. Obviously there are other rivers where the same problem will apply. I can see the noble Lord, Lord Livsey, about to rise to speak about the River Severn. It is a complex issue and concerns the judgments that will have to be exercised. Quite clearly a consent in one jurisdiction would have to have regard to any impact it would have along the length of the particular river or waterway. However, before I get into deeper water, it would be wiser for the noble Duke to wait for my letter.
  It will be clear cut where such a case arises in Wales because it will fall to the Assembly for resolution. In England it will fall to the Secretary of State. There is not a cross-border basin sub-text. Where the Water Framework Directive has cross-border implications, these are under consideration. The drafting will be a matter of convention.
  I have now reached the stage where I am not quite sure that I have followed what I have said myself. It may be wise that we both read Hansard and for me to write to the noble Duke.
  The Duke of Montrose: I thank the Minister for taking so much trouble to try to unravel this difficult problem. We shall return to the issue at a later stage. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 10 not moved.]
  Clause 3 agreed to.
  Clause 4 agreed to.
  Clause 5 [Rights of navigation, harbour and conservancy authorities]:
  Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer moved Amendment No. 11:
  Page 6, line 21, column 1, leave out—
  "A supply reservoir of the authority's"
  The noble Baroness said: Amendments Nos. 11, 12, 13 and 14 are intended to probe why the Government believe that the water controlled by British Waterways is better left out of the regulatory system which the Bill seeks to introduce. It is water that will be caught in a catchment and the fact that British Waterways may choose to use it for a canal system, or for any other purpose, will simply mean that that water will be unavailable to other systems. That is not a satisfactory situation.
  If the Water Bill intends that water will be better managed on a national basis by the Environment Agency, then to leave out a major water user—and perhaps when he replies the Minister will indicate how much water British Waterways has under its control—would seem irresponsible unless there is an extremely good reason for doing so. I cannot imagine that there is one.
  If British Waterways is outwith the regime, it could choose, for example, to sell its water for commercial gain—the Minister will correct me if that is not the case—but why should it not be subject to the same rules and regulations as everyone else?
  Baroness Young of Old Scone: I hope that the Minister will take these amendments seriously because they do have merit. There are about 68 British Waterways reservoirs, of which 40 could be exempt from the provisions of the Bill if the amendments are not considered.
  Indeed, in the early discussion on Taking Water Responsibly, those reservoirs were included in the system that the Bill was intended to control, but they disappeared from the Bill itself. We can only speculate why. The amendment would bring those reservoirs back into the system of control under the Bill. I have a number of reasons for asking the Minister to consider the amendment. First, the whole system regulated under the Bill is in a state of change. I refer to changing environmental conditions and climate change. Many canals are being upgraded and restored and their use is changing dramatically. Indeed, some reservoirs are being expanded. It is important that reservoirs are included in the licensing system to enable them to be reviewed and reassessed in terms of their environmental impact and their impact on water for other users.
  Secondly, I refer to reservoirs discharging only to canals. The issue in terms of their water use is not where the water goes to, but where it comes from in terms of the catchment. All reservoirs impact on catchments. Negotiations are already under way with British Waterways on improving the control of some
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  of the reservoirs which will remain outside licensing control under the Bill as presently drafted. However, that process is based on good will.
  Thirdly, if the Water Framework Directive has an integrated approach to catchments it is highly likely that abstractions that impact on catchments will need to be subject to the control system if we are to comply with the directive.
  Last but not least, I refer to a lack of equity. If the Bill is enacted in its present form, some reservoirs will be exempted from the measure but controlled by the canals Acts—some of the canals Acts are as aged as the hills—whereas others will be controlled by licences under the Bill. I believe that that signals a lack of equity, a two-tier approach and a lack of control with regard to some reservoirs which could impact on the environment and other users. I hope that the Minister will consider the amendment.
  6.45 p.m.
  Lord Dixon-Smith: It is a pleasure to be angling from the same bank as the noble Baroness, Lady Young of Old Scone, and, indeed, the noble Baroness, Lady Miller of Chilthorne Domer. I rather felt that on the previous group of amendments we had England and Scotland angling on opposite banks of the River Tyne and that they had their lines crossed.
  The amendment contains a serious point on which I believe there is general agreement. I hope that the Minister will give an encouraging response. In one sense British Waterways is not a water abstractor in that the water comes out of the system and goes back into it. However, as the noble Baroness, Lady Miller, said, for as long as British Waterways has that water it is not available for other use and there is an abstraction problem in that regard.
  The group of amendments that we are discussing merits serious consideration on the part of the Government. I look forward to hearing the Minister's reply.
  Lord Livsey of Talgarth: I was interested to hear the comments of the noble Baroness, Lady Young. There is no doubt that problems exist in this regard. I am particularly interested in Amendment No. 12, which states:
  "A water system of the authority's with which that reservoir is connected".
  Some canals are fed directly from river systems via weirs. Obviously, to keep the canal system going, particularly during the summer, it has to be supplied with enough water. However, that undoubtedly has a serious impact on some rivers. A balance needs to be struck here—which can be achieved only by means of a licensing system—between the water requirements of the canals and the need for adequate flows in rivers.
  I believe I am right in saying that British Waterways sells water from its canals to industry and to other users, as it has every right to do. However, if that is to be deregulated, problems could arise as there may be competition for water which is required elsewhere in the system. On the other hand, canals have become

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  extremely popular. The Brecon and Monmouth canal in my area has attracted much investment. I take off my hat to British Waterways for the work it has done on that canal. However, the issue we are discussing needs to be resolved in a fair and equitable fashion so that the water resource is properly managed. I question whether that part of the water resource to which I have referred should be outside the licensing system.
  Lord Whitty: There is misunderstanding about the provisions that we are discussing. I am not prepared to accept the arguments that have been put forward for the amendment. We are not talking about British Waterways and other navigation authorities being exempt from the main provisions. Their reservoirs that feed an ongoing system, which connects with the rest of the system, are part of the abstraction process. What we are talking about now is the proposed exemption in the Bill which is limited to reservoirs whose sole outlet is directly to a canal, and where there are no other waters which are dependent on the flows from those reservoirs; in other words, it is a closed system.
  As the noble Baroness, Lady Young, said, British Waterways has about 40 reservoirs which would qualify for that exemption. All the other reservoirs of British Waterways and the other navigation authorities would be subject to all the requirements of the system. Many of the exempted reservoirs are small and most are close to the canals they serve. Some do not even have any catchment as they take excess canal water in wet weather in order to return it to the canal in dry weather. Therefore, there is no way in which that water could be used for other purposes. However, if the water from those reservoirs were to be sold at any point, it would become subject to abstraction licensing as it would become subject to the terms of the Water Resources Act.
  Further, if that water were needed in a drought, the water from those reservoirs or the canals which they serve could be requisitioned by a drought order. It is not as if the water that we are discussing is totally exempt. However, the same considerations do not apply to a closed system as apply to systems which are not closed; it is not a question of a lack of equity. We are talking here about reservoirs in the context of closed systems. However, as I say, if the water from such reservoirs—irrespective of whether they belong to British Waterways or to other navigation authorities—were to be sold, it would become subject to abstraction licensing and it could be requisitioned under the terms of a drought order.
  Baroness Miller of Chilthorne Domer: I shall have to read carefully the Minister's reply. I believe that he mentioned a different sort of reservoir, but presumably it is still the same sort of water. If the Bill is to cover the very small reservoirs that farmers tend to construct on their land, I do not understand why British Waterways is able to keep its reservoirs outside the system. As I say, I shall read carefully the Minister's reply and take further advice on the matter. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 12 to 14 not moved.]
  Clause 5 agreed to.
  Lord Sutherland of Houndwood Lord Sutherland of Houndwood moved Amendment No. 15:
  After Clause 5, insert the following new clause—
  "COMMENCEMENT AND EXPIRY OF LICENCES
  (1) A licence granted under this Chapter to abstract water to prevent interference with any mining, quarrying or engineering operations (whether underground or surface) or to prevent damage to works resulting from any such operations ("de-watering abstraction") shall be stated to take effect and to expire simultaneously with any planning permission or any extension or amendment to any planning permission granted for such mining, quarrying or engineering operations instead of a specific date, or dates, in the licence for the de-watering abstraction itself.
  (2) In all other respects, reference in this Chapter to the date on which a licence is stated to take effect and on which it expires is to be taken, insofar as a licence for de-watering abstraction is concerned, refers to the commencement and expiry dates comprised in any planning permission authorising the mining, quarrying or engineering operations relevant to the be-watering abstraction."
  The noble Lord said: In moving Amendment No. 15, I wish to speak also to Amendments Nos. 31 and 61 with which it is appropriately grouped. In so doing I declare an interest as the non-executive chairman of Quarry Products Association.
  All the amendments in the group relate to specific— but I should like to think unintended—inappropriate consequences of some of the provisions of the Bill for the efficiency of the quarrying industry. Without an effective quarrying industry many of the Government's policies cannot be carried through, not least the building of the 500,000 houses of which we have already taken note. Therefore, if the consequences I mentioned are unintended, it is important that we note them now.
  My basic contention is that the abstraction of water to enable mining and quarrying to continue below the level of the water table is not equivalent to the abstraction of water for any other purposes. The water in question is either stored or returned immediately to the same water catchment area without contamination. Therefore, the abstraction of the water is on a different footing from the abstraction of water for use or for sale or for other purposes. Basically, as the holes in the quarry fill up to the level of the water table, the water is pumped out, additional quarrying is carried out and the water is returned. There is no loss.
  I noted and welcomed the comments that the Minister made earlier; namely, that the Bill is essentially concerned with quantity of water. In the case of the quarrying industry, the quantity is not at issue. Should there be any minor sediment extracted at the same time as one gets to the lower levels of the abstraction process, the water is cleaned and then returned and the sediment taken out. Therefore, I believe that the provisions of the Bill should not apply to that form of abstraction. That is the point behind Amendment Nos. 186 and 187, which we are not discussing at the moment. However, it is a context within which the amendments we are discussing have

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  to be seen because if the later amendments were to be accepted the earlier amendments would not have the same force or perhaps necessity.
  However, I now address the amendments before us, starting with Amendment No. 15. Amendments Nos. 15, 31 and 61 concern effectively time, money and location. The issue in Amendment No. 15 is time. It concerns the appropriateness of having a consonance of time periods between the licence granted to abstract water and the planning permission granted for mining and quarrying purposes. If such a consonance of time periods occurs, the industry will remain in good health because effective planning horizons for investments can be observed. But if the time period covered by the abstraction licence does not accord with that of the planning permission granted for the extraction of minerals, the industry faces a double hazard. The point behind Amendment No. 15 is that the licence to abstract water should run concurrently with the relevant planning permissions.
  Amendment No. 31 deals with the implications of that not being the case. It is effectively a request for compensation and eligibility for compensation to be written into the Bill.
  Amendment No. 61 deals with a slightly different but very specific point. It is an attempt to seek clarification. The clarification which is sought has to do with the expression in Clause 20(2)(a),
  "for abstraction from the same point as the abstraction licensed".
  I refer in particular to the phrase "from the same point". If a new licence is granted for abstraction from the same point, that should not be taken in a semi-Euclidean fashion but should apply to the whole footprint of the planning permission already granted. So it would effectively be a licence to abstract water within the same quarry and within the curtilage of the same planning permission.
  Those are the reasons for the amendments that I have tabled. I believe that they have real significance, particularly if the later amendments are not accepted. I beg to move.
  Baroness Byford: I support the amendments to which the noble Lord, Lord Sutherland, has spoken. I declare an interest. I do not have a financial interest but I live opposite what I believe is the biggest granite quarry in Europe. It used to be owned by Mount Sorrel Granite, then by Redlands and it is now owned by La Farge. It is a huge quarry. Interestingly—as I am sure is the case with many quarries—it forms part of an SSSI. I hope that eventually it will be returned to nature. I place on record my thanks to those who manage the quarry—I do not always bless them when they are blasting away—for trying to preserve the environment for those who live in the vicinity. It has been a nightmare situation. Locals and the quarry company have investigated ways of giving local people a better insight into the working of the quarry. I am digressing somewhat from the amendments but it is important to place that on record.
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  Water is, of course, hugely important to the quarry. Unlike the noble Lord, Lord Sutherland, I shall not discuss the matter in detail. He explained the matter very clearly. But it is impossible to work limestone and sandstone quarries without dewatering through pumping. It would be virtually impossible to blast the rock under water and it would, in any case, be impossible to retrieve the rock from the water after the blast. Like all other abstractors the quarrying industry does not consume the abstracted water in the accepted sense of the word, as the noble Lord, Lord explained, but simply returns it almost immediately to the acquifer in virtually the same volume and condition. It is important that Members of the Committee appreciate that as it is not commonly known. Some people just think that the water is wasted and not reused.
  The noble Lord, Lord Sutherland, rightly appealed to the Government that the planning permission and the abstraction licence should run concurrently. I am sure the Committee understands that. The licence life should be tailored to the life of planning permissions, which often in the case of rock quarries are 25 years or more. In the quarry near to where I live there is still in existence a licence going back to 1948. If that had not been activated, 50 years on the licence would have expired. No doubt many local people would think that a 50-year period is far too long but that is another matter. As was said earlier, one has to consider the practicalities and the costs of running quarries. We need the commodities that come from quarries irrespective of the wishes of those who live close to them.
  I am surprised that the noble Lord, Lord Sutherland, did not mention a right of appeal. He mentioned compensation. I do not know whether he intended to mention a right of appeal but omitted to do so in error. I am not sure what kind of appeal system may already exist. The Minister may tell me that there is one already. I should be glad to hear that.
  I have been contacted by the Quarry Products Association which informed me that it had pressed its case—which it considers a special case—with both DEFRA and the Environment Agency over the past three to four years. Sadly, there has been no apparent recognition of the unique case with regard to quarry dewatering. If that is true, it is disturbing. Quarrying is a big industry, which we need. I should like the Minister or perhaps the noble Baroness, Lady Young, to tell us why nothing has come of that situation.
  7 p.m.
  Baroness Farrington of Ribbleton: I understand that where a Member of the Committee is a member of another body or chairs another body, they may not comment on that body's policy in this House. Only the Minister can reply to the point.
  Baroness Byford: I am grateful for that clarification. I hope that the Minister will reply to the point. I believe that this is a critical issue. If it is not addressed properly, it puts the future of the industry at serious

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  risk. As I said earlier, the industry is of national importance. It is extremely important that this strategic aggregate supply is not put at risk.
  As was suggested, the proposed legislation will require that, for the first time, previously exempted quarrying dewatering abstraction will be covered by the transfer licence system. Indeed, as has been said, although no time limit is laid down, it is suggested that a 12-year cycle would be involved. That is not ideal. The Quarry Products Association holds the view that any legislation, subordinate legislation or policy guidance should provide for quarry dewatering abstraction transfer licences to be limited to the life of planning permissions. I am happy to support the noble Lord's amendments.
  Lord Livsey of Talgarth: I, too, support the amendments. Quarrying is a controversial matter in some areas but where planning permission has been given it often provides excellent employment opportunities in areas which often do not have alternative employment. I refer to certain remote areas. It makes sense to have the planning permission contiguous with the abstraction licence. That seems eminently sensible. I support the amendment.
  Baroness Young of Old Scone: I speak briefly to the amendment which has parallels with Amendments Nos. 5 and 55 where we discussed linking licences to the life of an asset. The argument against the amendment we are discussing is the same as that against those other amendments. In the case of quarries, planning permissions are often lengthy and sometimes not time limited at all. Indeed, some quarries operate under mineral permissions that are so aged that everyone has forgotten their origins.
  Many of the environmental challenges posed by the dewatering of quarries are due to the lengthy timescales involved. For example, hard rock quarries generally work down to deeper phases and it is difficult initially to assess what the impact will be, particularly in fissured limestone. In the case of gravel quarries, it is also difficult to predict what will happen if the quarry is extended. There is a need to bring the dewatering permissions within the control system. if they have little impact on the environment, quarry operators have nothing to worry about. I query with the Minister whether the Water Framework Directive requires these kind of abstractions to be covered by the licensing system. Therefore, we would need to implement that if that is not the case.
  Baroness Farrington of Ribbleton: I begin by saying to the noble Baroness, Lady Byford, that if a specific problem has arisen, we should be delighted to receive a letter setting out the details of what approvals have been sought. We could investigate such a case.
  As the noble Lord, Lord Sutherland, said, the amendments seek to introduce specific measures that would apply to this particular group of abstractors. The intention to remove the current exemption for abstracting water for dewatering purposes will affect the mining, quarrying and engineering construction industries. The current regime applies generally to all
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  abstractors within its scope and it is right that there is equity of treatment for all. Special provisions for one group would be divisive. However, we recognise that that dewatering is not the same as other abstractions. That point was mentioned by the noble Baroness, Lady Byford.
  Amendment No. 15 would, in effect, completely remove from the 'Environment Agency the responsibility for determining the time limit to apply to all licences granted for these activities.
  The position of mining and quarrying companies will be no different from that of any other industrial abstractor: the time limit on the licence is not linked to any end date for the operation concerned. We are not persuaded that there is justification to adopt a different approach simply on the grounds that it is subject to some other time-related restriction.
  However, I can reassure the noble Lord that quarry and mine operators will have the same opportunities as all other abstractors to submit to the Environment Agency a business case in support of their applications. This can address issues relating to the proposed life of the licence to be granted. The time restriction on the operation would form part of such a submission, and the agency will have proper regard to it.
  Mineral planning permissions can be very long. They are distinctive, even planning terms, and we believe that to peg an abstraction licence to such a permission could limit the agency's powers to protect water, the very point of time limiting. However, we recognise the importance of there being—this was a specific question that was put—a right of appeal against refusal or conditional grant of an abstraction licence. There is a presumption of renewal on consideration of the time-limited licence.
  Licences for quarry operations should be subject to the same opportunities for review within the catchment abstraction management strategy process, as any other time limited licence in the catchment, particularly as they will have variable effects over time, as the workings develop, move, change depth and those need to be able to be reviewed.
  We recognise the concerns that have given rise to Amendment No. 31 and in light of that we believe that this amendment is unnecessary. We propose to make, and Clause 95 provides for, transitional measures to ensure that compensation would be available in the circumstances described in the amendment. That is where a mine, quarry or engineering works operator is refused a licence or granted a conditional licence and as a result cannot take full advantage of any planning permission granted for the operation. This is already publicly stated government policy—in Taking Water Responsibly—paragraph 3.17, and there is an availability of appeal to the Secretary of State.
  We also think the special treatment in respect of variation of licence conditions provided by Amendment No. 61 is not appropriate. The existence of planning permission has no relevance in the context of the limited extension of a licence, neither does it have any bearing on the environmental effects of

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  abstraction or water resources. I hope that with those wide-ranging reassurances, the noble Lord will not press the amendment.
  Lord Sutherland of Houndwood: I thank the noble Baroness for the reassurance she has given, particularly of right of appeal and on the presumption of renewal and on compensation under transitional measures. I shall read Hansard carefully tomorrow. I thank the noble Baroness, Lady Byford, and the noble Lord, Lord Livsey, for their support on the matters. As they said, this is an important sector and it is absolutely critical to the economy that it functions efficiently and well.
  I note the point made about fairness of treatment across different industries. I simply underline the point that if the Bill is intended to protect quantity of water at a certain level of quality, that should not really be an issue because of the processes used in the mining business as the water is returned at equivalent quality. Therefore, the need to protect volume does not arise. That being said, I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  7.15 p.m.
  Clause 6 [Rights to abstract small quantities]:
  Baroness Byford Baroness Byford moved Amendment No. 16:
  Page 7. line 39, leave out first "the"
  The noble Baroness said: The four amendments in this group raise an important point, especially as the Government are encouraging ever greater diversification on farms. It is possible that the holding might have the occupier's house and household on it, but in addition there could be one or more tied cottages. Assuming that gardening, for example, is a domestic purpose, the water abstracted could well be used by more than just the occupier's household.
  Looking at the Bill, subsection (3)(a) specifies that the abstraction is for use on contiguous and other land held by the same person. My question to the Minister is: what is the point in confining its use to the occupier? I beg to move.
  Lord Dixon-Smith: I support the amendment. The practice is normal in more remote rural areas. Essex is not rural but when I was a boy it was certainly more remote than it is today. We used to supply water from our well and we pumped it up into a header tank. It supplied our house and all the stock on the farm. It also supplied a number of cottages. Therefore, the restriction in the clause is too narrow because it specifies "the occupier's household". In areas where there is not easy access to the mains and so forth, where there is a reasonable water supply it would be normal for one well or one borehole to supply a number of households. It might be three, four or five, one does not know.
  My noble friend raised the diversification point. As drafted, the Bill is too narrow. One can accept the quantum of water hut to tie it to the occupier's
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  household is too narrow. Using the water for domestic purposes is practical and if the domestic purposes happen to include a herd of cows, I do not see that as a problem. If one lives in a remote area where that is the situation, provided you are in the quantum of water, why worry about it?
  Lord Whitty: There is a certain amount of misunderstanding. There is the issue of exemption and the issue of protected rights. The protected rights relate back to the Water Resources Act and the rights which existed prior to the 1963 Act. Those had to be taken into account in every future licence and no such licences are allowed to derogate from those protected rights. That deals with the historic issue.
  However, Clause 6 extends the exemption for small abstractions so that small abstractions can be made for any purpose, not just those which are agricultural or domestic. Therefore, Clauses 6 and 17 limit protected rights under the new regime to those that existed under the old regime—pre-1963 rights.
  The effect of the amendments—the concern behind me is slightly different from that expressed by both noble Lords who have spoken—would not extend the exemption. They attempt to deal with the historic situation. The extension of the exemption is already achieved by Clause 6 because any abstraction of up to 20 cubic metres per day for domestic purposes, regardless of whether the occupier uses the water, will be exempt.
  The amendments deal with the protected rights situation. They would extend what was trying to protect grandfather rights to the new situation. I do not believe that it was the intention of Members of the Committee to make that extension and we do not want any proliferation of rights which dealt with an historic situation.
  There is a little confusion and it might be helpful if I write to the noble Baroness about the matter. If certain aspects are not dealt with, and if that lies behind their concern, they will not be dealt with by these amendments. On the other hand, there may be ways of dealing with them.
  Baroness Byford: I am grateful to the Minister. I suspect that he did not expect us to say what we said in moving our amendment and I can only apologise.
  Lord Whitty: I thought that the noble Baroness was going to talk about caravan parks and related matters. There we go.
  Baroness Byford: I shall do that in a moment. Our concern related to cases in which the borehole supplies other buildings. I shall read Hansard carefully and perhaps we can talk about the matter before proceeding much further. If there is a misunderstanding or a loophole, I shall be happy to come back to the Minister. I am grateful for his help and beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendments Nos. 17 to 19 not moved.]
  Baroness Byford Baroness Byford moved Amendment No. 20:
  Page 8, line 10, at end insert "provided that such well or borehole does not impinge upon pre-existing licensed abstraction producing potable water"
  The noble Baroness said: Amendment No. 20 deals with the question of one borehole impinging on a preexisting licensed abstraction. It has been brought to my attention in particular by the British Soft Drinks Association. It is most concerned that Clause 6 sets out provision for exempting small abstractions from licensing requirements. Its water bottling members do not oppose licensing exemptions for small abstractions, but have concerns that exemptions can be made purely on the grounds of size without recourse to any notification or environmental impact assessment. Even small abstractions from the ground water require boreholes to be drilled and that activity could damage both rock strata and the supply and quality in the related aquifers. A BSDA member is currently confronted with just such an activity and has serious concerns for the future of his business if his water supply is affected. That is the reason for moving the amendment. I beg to move.
  Lord Whitty: Once again, the explanation of the motivation behind the amendment is not what I anticipated. The effect of the amendment is that if a person puts down a borehole to take advantage of the exemption provided by the clause, he can find himself in breach of the exemption if the construction impinges on another extraction producing potable water.
  It is not the borehole but the extraction that would be the issue. If the intention of the amendment is to provide protection to other bottling suppliers, the issue is whether the level of deregulation is appropriate in the circumstances; in other words, whether the small exemption could cause a problem for the soft drinks industry or the mineral water bottling industry.
  It is inconsistent with the general objective of deregulating small abstracters if in this case we provide for the protection of other rights against that small exemption. The new regulatory scheme will have the flexibility for raising, or lowering, by order the threshold in local areas. It will therefore be for the Environment Agency when applying for such an order, and the Secretary of State in deciding whether to grant it, to consider whether any local threshold could vary from the general threshold in order to avoid interference with another abstraction. Clearly, that could arise in the circumstances which the noble Baroness, Lady Byford, suggests.
  If we were to have a complete exclusion and to base it on the borehole rather than the abstraction, we would, first, roll back a degree of deregulation and, secondly, fail to deal with the specific problem. I will need to consider the issue raised by the water bottlers because in certain circumstances they have a specific concern. We may be able to deal with that in a different way. Certainly as written it would undermine the intention of deregulation in this area.
  Baroness Byford: I am grateful to the Minister. This is a technical area and he will have gathered that I am not expert in it. Nor do I have any financial or other tie with the British Soft Drinks Association. Quality bottled water has become a large industry. I would like to see it grow. I would rather we all bought UK water than water from abroad. I would also like it if we all drank more milk, hut that is another matter. My noble friend says that it is not as good for me.
  The bottled water industry is a growing one and it is dependent on having a good, ready supply of water. If the industry is opened up and the supplies are affected, that will have a hearing on the industry. I am grateful to the Minister for what he has said. I hope that before Report stage we can arrive at a solution. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer moved Amendment No. 21:
  Page 8, line 27, at end insert—
  "( ) Any such intention on the part of the Secretary of State shall be advertised in the appropriate places and he made no sooner than six months after the placing of such an advertisement."
  The noble Baroness said: In moving Amendment No. 21, I shall speak also to Amendment No. 21A. Amendment No. 21 seeks to address the situation in which the Secretary of State has decided to make an order to vary the small quantity threshold. There may be good reasons for that—there should be if he is to vary the order. He can do so for a small geographical area or for a class of water and so on. It may produce a confusing situation to small abstractors. They may not be aware of the variations and so be in breach of them. So Amendment No. 21 seeks to ensure that the Secretary of State's intention is well publicised.
  Amendment No. 21A deals with small abstractions that could significantly damage the environment, not by themselves, but in a combination. The intention of subsections (c) and (d) is to ask the Minister what provisions have been made for small abstractors. In one area of the country they may not have a particularly great effect, but in another they may. In particular subsection (d) addresses that situation. I do not understand how the agency is required to construct a register of small abstractors. When the Secretary of State considers making an order, on what information would he make it? The purpose of the amendment is to find out how that information will be gathered so that the Secretary of State can make an order based on real information. I beg to move.
  7.30 p.m.
  Baroness Farrington of Ribbleton: We understand that Amendment No. 21 is intended to increase the period of notice that abstractors will have of any change to the local threshold for licence control. I reassure the noble Baroness that that is unnecessary.
  Any order amending the threshold for abstraction licence control will be subject to the Schedule 6 procedure. That already requires notice of the draft order to be published and provides the opportunity for

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  representations or objections to be made. If necessary, the Secretary of State may hold a local inquiry into those objections. If approved, the order itself must then also be advertised. That process could take a substantial time—rightly so, given the potential complexities and complications. Any such order could also take effect from a date that would recognise any further period of notice deemed necessary for the change of threshold to come into force.
  We therefore believe that abstractors will be given sufficient notice of any changes that may affect them and the opportunity to participate fully in the adoption of any such order. Having put that on record, I hope that the noble Baroness will feel satisfied that we have met her concerns.
  Turning to Amendment No. 21A. we recognise the intention behind the amendment. The first paragraph, would enable the agency, in setting a new threshold for small abstractions which would be exempt from licensing, to make different provisions for different areas, water or underground strata if cumulative small abstractions were giving rise to significant environmental damage. The agency would already have power to make such provision. The purpose of the provision includes the ability to anticipate precisely the circumstances covered by the amendment. I can therefore reassure the noble
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  Baroness that in just such circumstances, the agency would act. The Bill already permits it to do so. I hope that I have reassured the noble Baroness.
  As for the register, we are more wary. I reassure the noble Baroness that the agency will know the conditions of water resources in any area, as its duty is to monitor carefully and frequently. A function of the small quantity threshold is to reduce bureaucracy; we think it unnecessary for the agency to establish such a register. I hope that that reassures the noble Baroness. If not, I am sure that she will respond on the issue.
  Baroness Miller of Chilthorne Domer: I thank the Minister for her reply. Having said what I said earlier, I certainly would not want to be seen to be trying to increase bureaucracy, so I shall rest on her assurance that all those matters will be taken into account. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 21A not moved.]
  Clause 6 agreed to.
  Baroness Farrington of Ribbleton: This may be a convenient moment for the Committee to adjourn until Tuesday 1st April at 3.30 p.m.
  The Deputy Chairman of Committees (Lord Murton of Lindisfarne): The Committee stands adjourned until Tuesday next.
  The Committee adjourned at twenty-seven minutes before eight o'clock.