HL Deb 14 February 1963 vol 246 cc1065-71

3.20 p.m.

Further considered on Report (according to Order).

Clause 55 [Licence fees]

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD)

My Lords, Amendments Nos. 55 and 56 are related. The first is a paving Amendment for the other, and it would be, I think, for the convenience of the House to take them together. The Amendments are put down following an undertaking I gave at Committee stage on an Amendment in the names of the noble Lords, Lord Champion and Lord Wise. The Amendments provide for a reduced licence fee to be payable in respect of a licence which authorises the abstraction of water from underground for agricultural purposes, other than spray irrigation, and for no other purpose.

Noble Lords will recall that the abstraction of water from underground by or on behalf of an individual for the domestic purposes of his household is not restricted by the Bill, and he who abstracts from an inland water for agricultural purposes, other than spray irrigation, requires no licence, and therefore is liable to pay neither licence fee nor charge. The abstraction of water for agricultural purposes from underground strata needs to be licensed, however, even if the water is not to be used for spray irrigation, because while the individual quantities involved may not be large they are still large enough to affect other abstracters in certain circumstances

The Bill already provides, in Clause 58 (4), that there will be no charges in respect of water abstracted from underground strata in so far as the water is for use for agricultural purposes other than spray irrigation. This Amendment will reduce the abstracter's liability for licence fee to one-fifth of the standard fee. This will mean that he pays £1 where abstracters licensed for other purposes pay £5. Whatever variation may be introduced in the general licence fee, the reduced fee prescribed in this Amendment will vary proportionately. It will remain at one-fifth of the standard fee. I hope that this alteration may meet the desire of the two noble Lords who moved the original Amendment. I beg to move.

Amendment moved— Page 46, line 24, after second ("of") insert ("which the amount (subject to subsection (4) of this section) shall be").—(Lord St. Oswald.)

LORD WISE

My Lords, may I, in one sentence, thank the noble Lord for meeting the point which we raised at an earlier stage?

LORD REA

My Lords, may I ask the noble Lord, to refresh our memory, whether he is still dealing in abstractions or drawings?

LORD ST. OSWALD

Abstractions or drawings, whichever the noble Lord prefers.

LORD DE RAMSEY

My Lords, the noble Lord, Lord Champion, had he been able to be here, would also have wished to thank the noble Lord for meeting the point in question.

On Question, Amendment agreed to,

LORD ST. OSWALD

My Lords, I beg to move this Amendment.

Amendment moved—

Page 46, line 36, at end insert— ("(4) In respect of any licence under this Act which relates only to the abstraction of water from underground strata for agricultural purposes other than spray irrigation, the amount of any fee payable under subsection (1) of this section shall be one-fifth of the amount which would be payable apart from this subsection.").—(Lord St. Oswald.)

On Question, Amendment agreed to.

Clause 56:

Charging schemes

56.— (4) For the purposes of the last preceding subsection the following shall be taken to be relevant circumstances, that is to say—

VISCOUNT COLVILLE OF CULROSS moved to add to subsection (4): (e) abstraction or impounding of water under a licence of right".

The noble Viscount said: My Lords, your Lordships will be glad to hear that this is the last Amendment I have down on this Bill, and so it is perhaps pleasant that I can end up on what I hope will be a helpful note to my noble friends on the Front Bench. The purpose of this Amendment is to assist them when they are considering, as my noble friend Lord Jellicoe said the other day he would, the question of licences of right, under Clauses 34 and 35 of this Bill, because it is really a cognate point.

As the charging scheme stands at the moment, the Bill gives it only a mere embryo form but it is not impossible to see what the sum effect of charges will be on any one particular drawer or abstracter of water. The only thing that has really been said in this respect was said by my noble friend Lord Jellicoe in what I think he meant to be a pacifying sentence on Second Reading, when he said that the sum was likely to be a very few pennies per thousand gallons. This is literally a case in which the penny has taken a long time to drop. The industrialists have been working out what he said and it has occurred to them since that even one penny per thousand gallons might add up to a great many thousands of pounds per year to be paid out under the charging scheme. They feel—and I have no doubt the same thing applies to statutory undertakers and other abstracters or drawers—that where there is an existing licence of right and where sources of water have been tapped in the past, very often at considerable expense, it might be right that these existing sources should pay at a lesser rate than new ones under the charging scheme. At any rate, it is something on the lines on which my noble friend was working on Clauses 34 and 35.

What I have done in moving this Amendment is to suggest that, when it comes to considering charges under Clauses 56 (2), there should be taken into account, as one of the relevant circumstances, the fact that the particular person or series of persons in the river authorities area upon whom the charge is to be made may be considered on their own if they are abstracters or drawers under licence of right, or, indeed, if they have been impounding water under licence of right. This might end up by making a fairer distribution of the charge, whereby these people who have in the past spent money on improving or supplying themselves with sources of water will have to pay rather less in the end under the charging schemes. I do not know whether this suggestion appeals to my noble friends, but I put it forward in the hope that it may be of some assistance to them. I wonder whether whoever replies may be able to say a little more about these very few pennies, if anything further has been done by way of research on that subject. I know it would allay a little anxiety if people involved could be told.

Amendment moved— Page 47, line 26, at end insert the said paragraph.—(Viscount Colville of Culross.)

LORD MERRIVALE

My Lords, I should like to say a few words in support of this Amendment, for I believe that under a licence of right there can be many "relevant circumstances" under which a different rate may be charged for abstracting or impounding water. In fact, in the Government White Paper (Cmd. 1693), paragraph 44, it is said, for instance: Where an abstracter has himself carried out conservation works there will be a case for a lower rate of charge and perhaps for no charge at all. As I mentioned to your Lordships last Tuesday, the availability of water for a new factory site was reflected in the price of the land, and therefore the right to abstract water has already been paid for and the industrialist may well have incurred important additional expenditure with regard to pumping of water and so on.

As I said, there may be many "relevant circumstances" under a licence of right. For instance, such industries as light engineering and assembly work, or brick making, need a comparatively small amount of water in relation to their output, while other industries are very large users of water. I will not quote again the words used by my noble friend Lord Jellicoe on Second Reading: they have been mentioned by my noble friend Lord Colville of Culross, and they are in column 1094 of the OFFICIAL REPORT for that day. But as has been said by my noble friend Lord Colville of Culross, those words of the noble Earl, Lord Jellicoe, have caused much disquiet in such industries as chemical manufacture, oil refining, pulp, paper and board manufacture, textile manufacturing and finishing, food processing and preservation and iron and steel. Such industries are perturbed on account of possible increased costs of production.

If I may, I should like to stress my point by quoting an example. According to the 1958 Report of the United Nations Committee on Water for Industrial Use, the amount of water required per unit of production in America is 600,000 gallons per ton of finished steel. At a charge of 1d. per thousand gallons, it will be seen that that represents a production cost item of £2 10s. per ton of steel. In the circumstances, I sincerely hope that my noble friend will agree that there may be many "relevant circumstances" in regard to the question of charges under a licence of right. May I end by quoting the words of Mr. H. E. Hopthrow, who was a member of the Proudman Committee? He said: The price and cost that industry can tolerate varies from product to product, depending on qualities and quantities involved".

3.32 p.m.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS)

My Lords, I am grateful to my noble friend Lord Colville of Culross, for explaining so clearly the purpose of this Amendment, because I must say that I was not too certain what precisely lay behind it. There is just one small point that I should like to refer to before dealing with the main argument. It is that licences of right do not, of course, apply to impounding works, but only to abstractions. There is nothing payable in respect of impounding, apart from the licence fee: there are no charges related to impounding works, only to abstractions. That of course is just a minor detail of drafting.

The noble Viscount has said quite frankly that he is trying to introduce a new factor which would secure some preferential treatment in respect of charges levied on holders of licences of right, and I must say straight away that the Government feel that there is no justification for singling out existing abstracters in this way. In the first place, the special position of a holder of a licence of right is recognised by the provision in Clause 59 that he shall pay no interim charges before the charging scheme comes into operation; and by reason of this provision, of course, the present abstracter will have several years of warning before he is required to pay any charges for his water. But while this seems to us justifiable, as a way of cushioning the effect of the Bill at the outset, a permanent concessionary rate is quite another thing; and we do not think that is desirable or justifiable, because it is a basic principle of the Bill that everybody must contribute towards conservation work, otherwise the national scheme cannot function properly.

I would ask noble Lords to consider for a moment what this Amendment might mean—and I think I am bound to point to Amendment No. 60, which is to be moved presently by Lord Lindgren, which goes a little further and repeats a request he made on Committee stage, that statutory water undertakers should not pay any charge for their licence of right either now or in the future. On that occasion my noble friend Lord Colville of Culross supported the Government's attitude and spoke strongly against that. I am therefore a little surprised that he should now seem to be contradicting himself and supporting an Amendment which I think comes from the point of view of industry, that there should be a substantially reduced charge for a licence of right.

It is quite clear that the bulk of charges, when the charging schemes come into effect, will be based upon what will at that time be licences of right—in other words, the bulk of abstraction of water is something that is with us now, a matter of the present and the past. But future abstractions will not amount to the present abstractions, one would imagine, for a long time to come. Therefore, if we are going to spread charges over the whole of the abstracters, in order to pay for the national conservation work which is deemed to be necessary, those charges would fall, if this Amendment were accepted, largely on new abstractions. And those new abstractions would probably be made by industry and statutory water undertakers and spray irrigators. If the present abstractions were either to be given at much-reduced rates, or exempted altogether, then, by and large, the same people would as a result be paying more for their new abstractions, and they would lose on the swings what they gain on the roundabouts. I think that is broadly the correct picture. We feel that it is much better to bring everybody in when these charging schemes are made, and to apportion the overheads for new conservation work throughout the whole field.

I hope that my noble friend who moved this Amendment will see the strength of my argument, and will feel that he should not press this Amendment; and I hope perhaps, when we come to Amendment No. 60, that he will not change the views he expressed on a previous occasion. In regard of the remarks made by my noble friend Lord Merrivale, and also a request by the noble Viscount, Lord Colville of Culross, I do not think I can possibly at this stage go into the details of costs of water for industry, or any other user of water. But I can give an assurance that the matter has been, and is, being studied by the Ministry of Housing and Local Government. There has been much consultation on this problem, and we shall hope on Third Reading to say something about it which we believe will allay the anxieties that have been expressed to-day.