Energy Conservation Bill [H.L.] (Hansard, 10 February 1981)

The Earl of Gowrie
My Lords, I beg to move that this Bill be now read a third time.

The Earl of Halsbury
My Lords, my noble friend Lord Strathcona and I withdrew our amendment at Report stage, against an undertaking by the noble Earl to take its subject matter under his wing and review it—Hansard, col. 1298 of 5th February. The amendment which he now puts forward is his implementation of that undertaking, and we have received it too recently to be able to give it more than a guarded welcome in the form it now takes.
Naturally I do not want to look a gift horse in the mouth or to be ungracious about the efforts of the noble Earl and his advisers to do their best to implement the undertakings which the noble Earl gave. However, I feel that at present I must to some extent reserve our position for the day when the matter comes up again in the other place. I do not want it ever to be supposed that we necessarily accept the noble Earl's solution as satisfactory because today it is too late to propose an alternative at short notice.
At first scrutiny of the amendment, two mischiefs emerge in it. First, it deprives water power users of the opportunity to assert that the type of use which they contemplate is not an abstraction under the Water Resources Act 1963, the definition being: In this Act"— that means the 1963 Act— except in so far as the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say: "abstraction", in relation to water contained in any source means the doing of anything whereby any of that water is removed from that source of supply and either (a) ceases (either permanently or temporarily) to be comprised in the water resources of that area,"— that means it is diverted out of the area— or (b) is transferred to another source of supply in that area, and 'abstract' shall be construed accordingly". To take water out of a river and to return it to the same river is not putting it to another use in that area, nor does it remove it from the area. So anybody who is accused of wrongfully taking water and abstracting it in those circumstances has the defence that it is not an abstraction under the 1963 Act. At first scrutiny, the amendment removes that defence.
Secondly, the amendment gives no assurance of the user not being charged on a volume-related basis. That comes under Section 58(2) of the 1963 Act, which states that A charging scheme shall provide that the charges to be levied under the scheme in the case of any licence shall be calculated by reference to the quantity of water authorised to be abstracted from time to time in pursuance of the licence". The wording of Section 58(2) of the 1963 Act is in direct contradiction of the opinion expressed by the noble Earl at the Report stage when he said that the Government believe that a defensible case can be made for making only a minimal charge for abstraction for hydro-power instead of charging on a volume-related basis. But charging on a volume-related basis at first 139 scrutiny appears to be mandatory under the 1963 Act.
There is a bit of misunderstanding as to the situation which will arise. Administrators and self-employed persons are quite different sorts of animal. Administrators never cost their own time on a job. It is a sort of miracle that their maintenance and supplies reach them out of the benevolence of the taxpayer, ratepayer or whoever it may be. But a farmer who is busy and whose time is money costs his time on a job. If some scheme to cheapen his electricity supply by diverting water from a level above his house to a level below it and running it through a turbine is to be made subject to endless directions from water authorities, to correspondence, and so on, he just will not do it, or he will be less likely to do it than if it were a straight-forward matter of no locus standi for the water authority, as is the case in Scotland.
For that reason, I feel that it would be the wish of my noble friend, if he were here, and it is certainly my wish on behalf of both of us, to say that at first scrutiny we do not feel that the amendment proposed by the Government is in satisfaction of what we wanted to accomplish by the amendments which we withdrew. We must therefore reserve our position under that heading for another day in another place. I shall not raise my voice against the amendment, but I felt that I must state what I feel about it at first scrutiny.

§ Lord Strabolgi
My Lords, we are grateful to the noble Earl, Lord Gowrie, for going into this and for putting an amendment before the House. However, like the noble Earl, Lord Halsbury, I also have some reservations about it. I hope that it is going to be something more than just a pious hope. As the noble Earl, Lord Halsbury, has said, the trouble has been the Water Resources Act 1963, the general effect of which was to nationalise without compensation the ancient water rights of millers, who had either to shut down or to obtain a licence and pay water rates. The various water authorities have been using quite different yardsticks for calculating these rates. The problem is not that the charges generally have been exorbitant—in fact, the noble Earl said at an earlier stage that three out of the water authorities in England and Wales do not charge for abstraction—but they are there, and they could become so at any time. One region, as I said at an earlier stage, had to pay a very large amount. This was increased from, I think, £50 to £30,000 overnight.
I hope that this amendment will be some protection and that the Secretary of State, particularly on appeal, will take into account this new subsection. As the noble Earl, Lord Halsbury, said, it is something, though it does not go as far as we would wish. On the other hand, we have made a small breach in the Government's defences and I hope that this will be enlarged somewhat when the Bill goes to another place.

The Earl of Gowrie
My Lords, obviously I should have liked a little less modification of the rapture with which the Government's amendment has been received, but I suppose that in these difficult days one must be 140 grateful for any rapture at all. Far from talking about breaches in our defences, it seems to me that our aims are identical to those expressed by my noble friend Lord Strathcona and Mount Royal, by the noble Lord, Lord Strabolgi, and indeed by the noble Earl, Lord Halsbury, from the Cross-Benches this afternoon. We do not wish to see anything but encouragement given to those who would use water to generate electricity or hydro-power, whether on a small or a large scale.
My noble friend's original amendment for which, principally for technical reasons, I wish to substitute the Government's amendment which we are now discussing did not seek to abolish all charges in all circumstances. At the Report stage I gave as an example that researches had revealed that the Central Electricity Generating Board was paying over £140,000 in the current year to the Welsh Water Authority for hydro-power abstraction. Therefore what pertains to very large bodies, from which we have not had a complaint, at any rate up to this stage, about such charges may be very different from the issues discouraging the smaller hydro-power user.
I appreciate that they wish to reserve their position, but if the noble Earl, Lord Halsbury, and the noble Lord, Lord Strabolgi, will look carefully at the amendment to the Water Resources Act 1963 which I have put down in my name and check that amendment with the original provisions of the 1963 Act, they will see that two things are absolutely clear. The first is that charges should not inhibit the use of water to generate electricity. Any charge which did so inhibit the use of water would be unlawful. The second is that if there were a disagreement between the water authority and the person or organisation seeking to use water for electricity generation, the latter would have the power of appeal to the Secretary of State.
The Secretary of State in this and, indeed, in other legislation is required to take energy conservation into account. So, one way or another, while one is legislating for hypothetical situations, which means that the language may be able to be slightly less robust or slightlymore non-commital than noble Lords would like, the intentions of the legislation are quite clear, and so are the provisions which allow for appeal as to its working. As I said earlier, I appreciate that noble Lords need a little longer to look at this amendment, but I hope that they will look at it in the spirit in which I have tabled it, which is to encourage this kind of conservation and this kind of activity rather than to discourage it. I beg to move.