Water Bill

HL Deb 12 April 1983 vol 441 cc132-72

Consideration on Report continued.

Lord Bellwin moved Amendment No. 2:

Page 2, leave out lines 11 to 13 and insert— ("(5) In the case of the regional water authorities, the members appointed by the Secretary of State shall").

The noble Lord said: My Lords, in moving this amendment I would like also to deal with Amendments Nos. 3 and 4. The purpose of Amendments Nos. 2 and 3 is to provide that the Secretary of State will appoint at least two land drainage and fishery members to the Welsh authority.

These amendments follow from the commitment I gave in Committee on 24th February to examine again the wording of new Section 3(5)(b) which specifies the criteria for appointments by the Secretary of State of members of the Welsh Water Authority. In the debate on that occasion my noble friend Lord Stanley of Alderley put it to us that as the clause stands, because of the use of the word "or" at page 2, line 21, there would be no requirement for the Secretary of State to appoint any member with experience in land drainage or fisheries to the Welsh Authority; in my noble friend's view, he could, if he chose, appoint a board consisting entirely of cockleshell collectors if indeed we felt that cockleshell collecting was: some other matter relevant to the functions of water authorities". Of course, there is no danger of that, and no danger that land drainage and fisheries will not be represented. However, having considered the point, we believe that it would be helpful to make it quite clear that there is an obligation in respect of land drainage and fisheries, and that is the purpose of the amendments.

I now turn to Amendment No. 4. In the debate on 24th February my noble friend also raised the question of the omission of the word "agriculture" from the criteria for appointments in Wales. As he pointed out, the term "agriculture" does appear in new Section 3(4) which relates to appointments by the Minister of Agriculture, Fisheries and Food to the English authorities. On the face of it this perhaps appears inconsistent. However, having looked again at the matter very carefully, we do not believe it to be so and do not consider that it would be appropriate to refer to agriculture at this point in the Bill.

In the case of the English water authorities there is necessarily a restriction on flexibility because of the specific statutory responsibilities of the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food. Without a reference to "agriculture" in new Section 3(3) the Minister would be unable to appoint a member from people experienced in agriculture unless they also had experience in land drainage or fisheries. Even so, within these limitations the Bill aims at the maximum flexibility by the use of the word "or" at page 2, line 10, and by the general form of words at page 2 lines 14–17.

New Section 3(5A) as amended similarly aims at achieving flexibility for the Welsh Water Authority. However, in this case since only one Minister is making the appointments, the separation of agriculture, land drainage and fisheries on the one hand, and other matters relevant to the functions of water authorities on the other hand, is not necessary. The Secretary of State for Wales is the Minister of Agriculture in Wales. The Secretary of State for Wales will be free to appoint any number of people with different relevant backgrounds, including of course agriculture, within the limits of 9 to 15. Indeed, three of the current members of the Welsh Water Authority are farmers. Therefore, so far as the responsibilities of the Secretary of State are concerned, there is no need to specify any activities separately. This is why it would be superfluous to specify "agriculture" or indeed experience relevant to any other group of consumers.

However, the Bill makes provision for the fact that, in common with the English water authorities, the Welsh Water Authority has specific statutory responsibilities for land drainage and fisheries in addition to what are commonly called their "DOE" functions. I beg to move Amendment No. 2 and I hope that my noble friend will withdraw Amendment No. 4 at the appropriate time.

On Question, amendment agreed to

Lord Bellwin moved Amendment No. 3:

Page 2, line 17 leave out from ("authorities") to ("some") in line 21 and insert— ("(5A) In the case of the Welsh authority—

1. (a) at least two members shall be persons who appear to the Secretary of State to have had experience of, and shown capacity in, land drainage or fisheries; and
2. (b) the remaining members shall be persons who appear to him to have had experience of, and shown capacity in,").

Lord Stanley of Alderley had given notice of his intention to move, as an amendment to Amendment No. 3, Amendment No. 4: Paragraph (a), line 3, after ("in") insert ("agriculture,").

The noble Lord said: My Lords, I have listened very carefully to what my noble friend has said and I therefore shall not press this particular amendment. However, I have to tell him that he has not really convinced me that the omission of the word "agriculture" makes sense. Although I suspect that your Lordships will not believe me, the word "agriculture" in this instance has nothing to do with pressing the farmers' case; it is, in my opinion, only trying to put the matter in line with the English boards.

I would say at this stage that the noble Baroness, Lady Fisher, when speaking or trespassing on this amendment and the last one, got the wrong end of the stick. We are not promoting individual cases here. It is a job that has to be done as my noble friend on the Front Bench just mentioned. We have to have someone in charge of the land drainage committees and, indeed, the fisheries committees, and it only seems sensible to have someone who knows something about it.

The argument that the Secretary of State for Wales is the Minister of Agriculture in Wales and therefore he does not need the word "agriculture" is one that I cannot follow. Even the Minister of Agriculture in England has the word "agriculture" in his title and I should have thought that it was just as important for the Secretary of State for Wales to have a similar reminder. However, as I said, I shall not press the matter. I do not think that it would make much difference, anyhow. I am sorry that my noble friend cannot accept what a weak case he has here and what a strong case I have as far as logic is concerned. But although I shall in future no doubt disagree with him—as I have on occasions previously—I would like to thank him very sincerely for listening to my argument in Committee, which he always does, and for having taken the matter away, discussing it with his colleagues and coming back and tabling this amendment. Therefore, I do not propose to move this amendment and I thank him for tabling his two amendments.

[Amendment No. 4 not moved.]

On Question, Amendment No. 3 agreed to.

5.20 p.m.

The Earl of Onslow moved Amendment No. 5: Page 2, line 28, at end insert ("and regard shall be had to the desirability of one or more of the persons having knowledge or experience of wildlife and landscape conservation, or recreation.")

The noble Earl said: My Lords, we went through this matter in very considerable detail at Committee stage. I should not like to detain your Lordships more than I think is absolutely necessary. The whole issue of water conservation in its broadest sense and the conservation of wildlife habitats along the edges of rivers and on estuarial plains is now a matter of which we are becoming even more aware than we were five years ago. It is of very great importance indeed. I concede that the water authorities are more sensitive to this than they were five years ago. There is also the enormous and growing need for recreation—be it sailing or fishing—which has to be tied into general water space use or water use, call it what you will.

There is a precedent for the wording of this particular amendment in the National Heritage Bill. However, I at least will be happier if I can receive an undertaking from my noble friend that when it comes to appointing members of the new boards, they will use their best endeavours to get people on the boards who have knowledge of this sort as well as having people who have important knowledge of other matters. The phrase "best endeavours" is quite a good one to use; after all, the noble Baroness, Lady Birk, argued about "best endeavours" throughout the Agriculture (Miscellaneous Provisions) Bill in 1976. I do not think that I need detain your Lordships any longer. I beg to move.

Lord Donaldson of Kingsbridge

My Lords, I am very sorry that the noble Earl has watered down his amendment. I believe that the amendment is an essential one, and that it is essential that in the Bill, when it becomes an Act, there should be some specific mention of the kind that this amendment provides. There has been constant bickering and trouble over all the waterways of this country—whether rivers or canals—on exactly this type of point, and I believe that it is extremely important that this should be in the Bill in some form or other.

I also think that to tell a Minister to use his "best endeavours" is a meaningless phrase. What else will he use—his "worst" or his "moderate" endeavours? It is not the kind of wording that could possibly go into an Act. Therefore, I support the amendment and very much hope that the noble Earl will recede from receding on it.

Lord Stanley of Alderley

My Lords, I believe this amendment to be divisive. To me it once again draws attention, I believe destructively, to the divisions that sadly exist in the countryside. In this case the division is not between farmer and conservationist, but between recreationist, and wildlife and conservationist. As the amendment is written, your Lordships will appreciate the relevance of the word "or", which in practice will mean that the recreationist—and by that I mean the sailor or the fisherman—could never get a place on the authority.

As I see it, the only merit of this amendment is to draw your Lordships' attention to the fact that many interests are asking for attention to be paid to their needs in the countryside, and not just the conservationist and the farmer. We have certainly not resolved this problem of trying to satisfy all these different interests, and it will not be easy to do so. But certainly this amendment will only aggravate the problem. The sooner we, like the extremists and the aggravations that exist in the countryside, fall quiet and listen quietly, perhaps the sooner we shall resolve our differences.

Baroness White

My Lords, in general terms I would wish to support this amendment. I very much appreciate the point made by the noble Lord, Lord Stanley of Alderley; he is making a perfectly fair comment. The boards which are now to run the water authorities are very much smaller in number than they were previously. That is something which I, personally, support; I believe we need a managerial board. However, when one limits the numbers in the way in which they have been limited, and when one takes account of the need to have, for example, local authority representation in one form or another and managerial representation, which is one of the reasons why the form of administration is being changed, it is very easy to overlook the other interests.

What I think is being emphasised in this amendment is that there are other very significant interests in this whole field of water management, and that someone who has managerial experience in the narrower sense may or may not be knowledgeable in such areas. Many of us are apprehensive that, unless there is at least one person on the actual board who has some real understanding of these problems, they will not receive the kind of attention which is due to them. The fact that there may be subsidiary advisory committees, which were discussed during the Committee stage of this Bill, is not significant in itself unless one has a voice in the higher echelons of management.

Therefore, I think that it is perfectly proper to table an amendment of this kind, otherwise such considerations are apt to be overlooked, particularly if it is considered that one could have a board—nine is the minimum, is it not?—of only nine. A small authority might have only nine, but the conservation and landscape considerations can be just as acute, even if not as numerous, in a small water authority as in a large one. The size of the authority is no necessary concomitant of the acuteness of such problems, and it seems to me that in some instances nine is too small a number to comprehend the interests which I think should properly be represented on a water authority.

Lord Somers

My Lords, I believe that this is a very desirable amendment and I hope that the noble Earl will not withdraw it. Although the present situation may be quite favourable towards wildlife and conservation, this Bill is to apply to many further generations, or at least we hope so, and they may not be so favourably disposed towards it. Therefore, it is important that this provision should be written into the Bill.

The Earl of Cranbrook

My Lords, I should like to stress the point of view, which I think is becoming increasingly prevalent—and I undoubtedly hope that the success of the United Kingdom's contribution to the world conservation strategy, in any measurable form, will be stressed—that conservation is not one sectoral issue to be considered. To that extent, this amendment is not—and I say this with respect to my noble friend Lord Stanley—a divisive issue. It is very important indeed, considering the statutory obligations that by successive legislation, including recent legislation, have been laid upon the water authorities, that there should be a total perspective of conservation on the authorities. It is only if there is awareness of conservation issues at the highest policy-making level that the water boards will be able to exercise their statutory obligations. Unless there is this awareness, when critical issues arise it is only too likely that the conservation viewpoint will be neglected.

To that extent I think that the amendment, which seems to propose conservation as an alternative to recreation, is deficient. I should very much like to see my noble friend the Minister give a firm assurance that conservation in this sense will be seen, and will be considered, as a paramount issue by the Secretary of State when he makes his appointments.

I should like to ask my noble friend, if it is appropriate to do so, to confirm that in fact in the past some appointments which have been made by the Secretary of State to existing boards, including some of the larger boards, such as Thames Water, have been made by persons with experience in conservation, including persons who are members of the Nature Conservancy Council. Is it not in fact the case that the number of appointees by the Secretary of State under the proposed system in this Bill will, in fact, be greater than the number which he has had the opportunity to appoint in the past? We are not talking about numbers of persons any longer, nor, I hope, about precise nominations, but talking about the means to instil into all the activities of the water authorities a perspective which respects conservation issues as an all-encompassing approach and not as a separate sector or item that has to be added up among other considerations.

5.31 p.m.

Lord Melchett

My Lords, I put my name to this amendment because, as the noble Earl, Lord Onslow, said, we had a debate and indeed a Division on a much more precise and stronger amendment at Committee stage. There seemed to be considerable support, both in your Lordships' Committee then and more generally, for the view that when appointments are made to new water authorities there should be at least some consideration by Ministers of the importance of conservation of both wildlife and landscape, and of recreation interests, when those appointments were made. That is what this amendment would do.

May I answer the noble Lord, Lord Stanley, and indeed the noble Earl, Lord Cranbrook, when they direct our attention to the word "or" between "wildlife and landscape conservation" and "recreation"? The word "or" is there simply to ensure that Ministers retain maximum flexibility. As I think the noble Earl, Lord Onslow, said, the wording follows that used in the National Heritage Bill. The intention is that when Ministers are making appointments they are not constrained to appoint one person, or two, or any other number; nor to have to include somebody with wildlife or landscape conservation interests; nor, on the other hand, to have to appoint somebody with recreation interests. I assume that parliamentary draftsmen got it right in the National Heritage Bill, and the wording is in that form so that it is completely open and Ministers simply take these factors into account. They are not bound by any of the words in the amendment. It is the desirability of it to which they give consideration.

I would say to the noble Lord, Lord Stanley, that his enthusiasm and determination to make sure that there are land drainage and fisheries experts on every water authority, including those in Wales, seem to be matched almost exactly by his determination to ensure that there is no mention in the Bill of consideration of recreation or conservation interests by Ministers when they come to make appointments.

Now as to the words in the amendment, and the justification for something being in the Bill at all. Agriculture is the only other interest—and I am using that to include land drainage and fisheries, which is explicitly mentioned—and the Government have made a great deal of this. A great deal of the justification is that water authorities have a statutory remit to appoint land drainage and fisheries committees. As the noble Lord, Lord Stanley, said a few minutes ago, it makes good sense that there should be somebody with that expertise on the water authority. As I understand it, that is the reason why the Government have included those two people in the provision in the statute and why they are fiercely resisting any attempt to have anybody else specified on the face of the Bill.

The answer to that is to look at what other committees, at a regional level, the water authority is going to be obliged to set up. There is nothing in the Bill about this, but we know that when we come to debate Clause 7 tomorrow there will be a long discussion about, among other things, the regional committee, or committees, which the guidelines will say that all water authorities have to set up. So that that is going to be just as much a fact of life as the land drainage or fisheries committee, although, I acknowledge, not a statutory fact of life. That committee will be set up to cover recreation, wildlife and landscape conservation under the guidelines.

That also makes a particular point of those interests at regional level. It would, therefore, not be asking too much for Ministers, when making appointments to regional water authorities, to consider the desirability of having somebody on the water authorities who also has those interests; that is, of the committee, or committees, which will be set up under the guidelines. That is a strong argument for saying that there is a case for this amendment on the basis of the Government's own argument for specifying land drainage and fisheries.

Then I turn to the actual form of the amendment, and should like to quote from Standing Committee F on the National Heritage Bill. The Minister for the Arts was talking, at column 108, about this particular form of words used in that Bill on a number of occasions. He acknowledged that this was a difficult matter, and it was difficult to put into a Bill words which will ensure that the Prime Minister takes various things into account when nominating trustees. Having quoted the form of words which this amendment uses in this Bill, the Minister said; This is probably the best way of proceeding in what I readily admit is an extremely difficult area. I hope that that means that the Government will concede that this difficult problem, which has exercised a number of people and to which a great many people have given some support, has been dealt with in this amendment in this form of words, and that they will be able to accept it.

Lord Nugent of Guildford

My Lords, I should like to make one point to my noble friend. Although I was not able to support him on this matter on Committee stage I shall support him because he won the vote the last time. The position follows, from what the noble Lord, Lord Melchett, was saying, that agriculture and fisheries, and the Minister of Agriculture and Fisheries, have the constitutional position of appointing two members who are knowledgeable in farming or land drainage, as is specified, and in fisheries matters. This follows the construction of the 1973 Water Act. That particular provision was put into the Bill then, I may say, against the opinion of the DoE of the day. They were taking their traditional position of being against anything that they had not put down themselves. My noble friend is carrying forward that tradition in the best possible style. Joking aside, this amendment was then made because the strength of the agricultural lobby in the Commons was sufficient to win the day and oblige the Government, against their wishes, to put in this provision for agriculture and fisheries. Thus it was that two Ministers appoint in this particular way.

In these past 10 years there have been major developments in this world, and particularly in the world of conservation, wildlife and water recreation. Therefore, the Bill is now out of balance in terms of the day. We are all aware of this tremendous national debate, which particularly took place in this House on the wildlife Act, between the agricultural interests on the one hand, and the conservation and recreation and wildlife interests on the other. Some sort of reconciliation was hammered out in that Act. It would be only reflecting the general public feeling today if this little Bill we are putting through now made some sort of bow, at any rate, to the strong feeling there is throughout the country on these particular matters, which the noble Lord put into his amendment and which my noble friend Lord Onslow has so eloquently supported.

I wonder whether my noble friend would take this particular point, which has not been made before: that the structure of this Bill follows the 1973 Act of 10 years ago and really is out of balance, in terms of the feelings of the day, in regard to these two particular major interests of agriculture and fisheries on the one hand, and conservation of the environment generally, wildlife, and recreation on the other. It is a thought that perhaps something should go in the Bill on the lines that my noble friend Lord Onslow has put forward which would bring it back into balance.

I stress again what I said in Committee, that the disappearance of the Watersport Amenity Commission will be a serious weakness to the water industry. That admirable body gave great leadership and stimulus to all the water authorities, some of which were not as forthcoming as all that in what they were doing to provide facilities in this field of activity; they had not quite got the message that it was their public face to most of the people and that if they took trouble in terms of water recreation, game and coarse fishing, and so on, that would enhance their relationship with the public, their consumers, and be generally good for the water industry. I hope my noble friend will take back to his reluctant right honourable friend at the DoE that this structure is 10 years old, that times have changed and that it might be desirable to give further thought to the matter.

Lord Howie of Troon

My Lords, I hope that the noble Earl, Lord Onslow, will be relieved of the dilemma into which he has got himself—that is, in deciding whether to press the amendment—by the Government agreeing to accept his proposal. My noble friend Lord Melchett was correct to draw attention to the parallel between the amendment and the characteristics underlying Amendment No. 3, which we were discussing not long ago and which dealt with land drainage. There are similarities between the two which should commend the amendment to the Minister.

There are, however, differences. In Amendment No. 3, something specific was being required of the Government, and they wanted it. In this case something less specific is being required. The Government are simply being asked to bear in mind the desirability of having certain characteristics or properties among the members of the authorities when their appointments are being considered, a principle which is already embodied in the Bill. The Government are not being asked to agree to anything terribly great by the amendment. They are simply being asked that certain characteristics should be taken into account when appointments are being made. It should be possible to find people with knowledge of land drainage who also have knowledge of this field. This is a sensible amendment which should be adopted.

5.43 p.m.

Lord Bellwin

My Lords, those who have spoken for the amendment obviously speak with great conviction, and there is merit in much of what they have said. I must say at once, however, that I cannot accept the amendment, although I am not unimpressed by what has been said. The basic difficulty is that which we have had all along in dealing with the question of appointing people to represent specific interests to (as the noble Baroness, Lady White, reminded us) these small boards which have basically a management function.

As I said earlier, one of the main purposes of Clause 1 is to provide Ministers with a wide discretion on the appointment of members. The overriding qualification for membership embodies the ability to make a real contribution to the management of the authority. Having said that, I fully accept that experience in recreation matters, landscape, wildlife conservation, and so on, is relevant to the functions of water authorities; and when making our appointments, the degree of experience in those fields will, of course, be taken into account. I have no hesitation in saying that.

However, that is not the same as saying that it would be right to highlight the one area as proposed by the amendment. More generally, I assure your Lordships that the Government accept the importance of the role of the water authorities in recreation and conservation matters. There are obligations on the authorities in those areas and they will continue to carry them out. In doing so, they must ensure that they are properly informed and briefed, and we will help where we can with appointments. In addition, there will be continuing arrangements to bring together conservation interests and the water authorities, and we shall be discussing that later in the context of Amendment No. 16A.

The analogy drawn by the noble Lord, Lord Melchett, with the National Heritage Bill about the appointment of members to the Commission for Ancient Monuments and Historic Buildings, if I understood him aright, is not exact because that organisation has a substantially different remit from water authorities, which are major public utilities to be run on commercial lines. I also point out what I am sure he knows—he knows that measure so well—in relation to the appointment of members to that commission: Schedule 3 of the National Heritage Bill specifies not merely the conservation of monuments and buildings, but a wide range of other areas of expertise.

The noble Baroness, Lady White, was right to say that it is easy to overlook other interests when considering the composition of boards. I assure her and all noble Lords who have spoken to the amendment that it is a matter for concern. My noble friend Lord Nugent, as always, put the point in a practical way. While I cannot accept the amendment, I hope the House will glean from what I am saying—and, to quote my noble friend Lord Onslow, the way in which I am saying it—that there is some merit in our thinking about it once more, I appreciate that we are at a late stage of the Bill—possibly too late a stage, I readily concede—for that.

The point made by Lord Nugent about balance is valid. I think he will concede that there have been changes since 1973, not least as a result of the Wildlife Act, as it now is. That has strengthened the statutory conservation duties. The amendment is really concerned with the membership of authorities and is not quite the same as that. Nevertheless, while I should have to resist the amendment if there were a Division, which I hope there will not be, I shall want to talk about it again, and perhaps noble Lords who may feel inclined to press the matter to a Division will feel able to reserve their position to another stage.

In saying that, I must add that I should not want to get into the position we were in when discussing matters earlier in the day, when it was implied that because of my tone, I was merely suggesting putting off the date. That is not my intention. If division there must be, let it be. Nevertheless, I speak, as I hope the House will accept, with genuine concern for what has been said; but the decision must remain with those who are promoting the amendment, which, for the reasons I have given, I am not able to accept.

Lord Winstanley

My Lords, I understand the Minister to say there were obligations on water authorities to have regard to conservation, wildlife, the landscape and recreation. As those obligations are not contained in the Bill, may I ask him to say in which statutes they rest?

Lord Bellwin

My Lords, that takes us back to some earlier debates that we had. When I said there were obligations, I was referring to obligations in a practical and moral sense—of wanting to see there was that type of information—and that kind of obligation exists. Additionally there are others. I would refer to Section 22(1) of the Water Act 1973, as amended. I am sure the noble Lord knows that well. He will know it better than I.

The Earl of Onslow

My Lords, I am not quite sure whether my noble friend Lord Bellwin will be able to answer the next question. I am pre-disposed not to press this to a Division. I think that some of the points that he made were very valid ones and one reserves one's position at Third Reading. I should like to answer one point. This amendment is not asking that conservationists should be represented on the board. There is the difficulty of dual loyalty. One is saying that the man who is going to be on the board, or one of the men, should have "knowledge of"—which is a great difference. The amendment means that his experience should entail rather than that he should be a mouthpiece of. My noble friend also said that the boards will take into account these very important points.

If he can go away again, as he said that he would, and discuss with his colleagues, then if we put down at Third Reading almost a feeder amendment he can say that he has discussed it with his colleagues and that they will do their best to make sure that there is somebody who has knowledge—and I underline the word "knowledge"—rather than is actually going to represent. Then I certainly will be satisfied. One point I should like to make in reply to the noble Baroness, Lady White, is that sometimes the smaller areas had much more potential for being damaged than perhaps the Thames area, which is a big area. One cannot do much damage to Slough where there are large uninhabited areas where the natural and wild life sides may be predominant. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.54 p.m.

Clause 2 [Limits on borrowing of water authorities]:

Lord Skelmersdale moved Amendment No. 6:

Page 2, line 41, at beginning insert— ("( ) In paragraph 34(3)(b) of Schedule 3 to the principal Act (water authorities to borrow from persons other than the Secretary of State, otherwise than by way of temporary loan, only in a currency other than sterling) after the word "Treasury", there are inserted the words "either in sterling or".")

The noble Lord said: My Lords, this is a small amendment but a useful one. The present position on water authority borrowing is that they may borrow on a temporary basis either in sterling from the Secretary of State or, with the consent of the Secretary of State and the approval of the Treasury, in sterling or a non-sterling currency from some other source. However, their long-term borrowing is not so flexible. They may borrow long-term in sterling from the Secretary of State or, with his consent and Treasury approval, in a non-sterling currency from some other source.

It has been put to us on several occasions by the water authorities that their inability to borrow on the United Kingdom money market is an unreasonable restriction. We do not think that, in practice, they would find borrowing from private sources more advantageous than from the Secretary of State, as regards interest rates or other terms and conditions; and we have no immediate plans to authorise such borrowing. Nevertheless, we do not think that the restriction in legislation that would prevent it is justifiable and the purpose of this amendment is to remove the restriction.

On Question, amendment agreed to.

Lord Melchett moved Amendment No. 6A: Before Clause 5, insert the following new clause:

("Duties of water authorities etc. with regard to nature conservation and the countryside

. Section 22 of the Water Act 1973 as amended by section 48 of the Wildlife and Countryside Act 1981, is amended as follows:

At the end of subsection 4 there are inserted the following words: In the case of a proposed land drainage improvement scheme, the authority shall provide the Council, on request, with the detailed cost-benefit appraisal for that scheme.".")

The noble Lord said: My Lords, I beg to move Amendment No. 6A and, with it, to speak to Amendment No. 6B. I should like to apologise for the fact that I have tabled manuscript amendments this morning. I hope that all of your Lordships have managed to obtain copies which are available in the Printed Paper Office and which are the same as the amendments I tabled at Committee stage. If noble Lords would like me to do so, I should be quite happy to read out both amendments. I can see a number of noble Lords nodding, but the amendments are fairly long and I do not intend to press them. I shall be happy to explain the import of the amendments if that would satisfy the House. However, if any noble Lord would like to interrupt and ask me to read them out I shall give way. It would be quicker if we proceed on that basis.

Amendment No. 6A is about cost-benefit analysis. Those noble Lords present at Committee stage will remember that we had quite a long debate about the proposal in the amendment that cost-benefit proposals should be made available to the Nature Conservancy Council. Amendment No. 6B deals with the power of the Secretary of State for the Environment to call a public inquiry (for the purposes of the Land Drainage Act) into a land drainage scheme. The amendment proposes to extend that power to the Secretary of State for the Environment as well as to the Minister of Agriculture who at present may call an inquiry.

The purpose of my tabling these two amendments which stood in my name and in that of the noble Earl, Lord Onslow, I think, is that both were withdrawn at Committee. Both were withdrawn because the Government said that these matters were being considered by an interdepartmental committee on land drainage and coast protection; that these matters would then be considered by the interdepartmental committee and in all likelihood would be covered by the consultative document which would flow from that committee's working. It was not until late last night that I heard from the Government that this was not the case, that the committee had completed its work and had not considered these two issues.

Having given that explanation for tabling the amendments, I hope that I can leave it at that without making too much of a meal of it or going in for a lot of criticism or recrimination. I very much hope that the Government can now put the matter right and say that these two points will be considered by the interdepartmental committee and covered by the consultative document. With that assurance, I should be happy to withdraw the amendment. I beg to move Amendment No. 6A.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)

My Lords, I totally understand the reason why the noble Lord, Lord Melchett, has put down his manuscript amendments. I should like to apologise to him for the fact that he did not get the information earlier than he did. I realise that this was a particularly short time and I apologise to him and to the House for that. The noble Lord put down his amendment because, as he has explained, my noble friend Lord Skelmersdale gave assurances at Committee stage, which were given in complete good faith, that these points would be looked at by the interdepartmental committee. The interdepartmental committee consisted of representatives of the Department of the Environment, the Ministry of Agriculture, Fisheries and Food, the Welsh Office and the Treasury. My noble friend said that he would make sure that this committee also looked at the cost-benefit appraisals.

In fact it was not possible for this to be done because the committee was then concluding its deliberations, and the purpose of the committee's sitting was to discuss the administration and the financing of land drainage and coast protection. It had not been the intention that the committee should be examining the problems of cost benefit appraisals. Therefore, in so far as my noble friend gave your Lordships the impression that this would be considered in the undertaking which he gave, totally in good faith, it is only right to point out that this will not be done.

However, because of the concern which was expressed at Committee stage and as a result of Lord Melchett's amendment, which he was courteous enough to withdraw on my noble friend's assurances, we have made arrangements for these matters to be considered by the same departments which were represented on the committee. As my noble friend Lord Skelmersdale has said, and I confirm, these matters will be included in the consultative document which will be available for public comment.

I hope that the noble Lord, Lord Melchett, will agree that the action we have taken is fair and honourable, and the substance of his disquiet, which he hoped to have considered by the departmental committee, will nevertheless be met by being considered by the departments concerned. Those same matters will be included in the consultative document which will be available for public comment. In that regard I hope that the noble Lord will feel that the anxieties he expressed during the Committee stage will have been met by the Government in the best possible manner.

With regard to his second amendment which is suggesting that The Secretary of State for the Environment or the Minister may cause to be held such inquiries as they consider necessary or desirable for the purposes of this Act", I think this really is a misdirection of effort. I am sure that the noble Lord knows that these deeply sensitive issues over drainage and conservation are considered both by my right honourable friend the Minister of Agriculture and the Secretary of State for the Environment, and that they work in close harmony together. A decision to hold a public inquiry, whoever takes it, is made on behalf of the Government and therefore it is really unnecessary to identify one Minister or the other as being the appropriate one to hold such an inquiry.

Lord Beaumont of Whitley

My Lords, I should just like to say that we ought to be grateful that the Government are taking this on board, whatever machinery has broken down in the past. I have been looking at this particular matter over the past few weeks and, as your Lordships know, it will come before this House in a minor form tomorrow afternoon. The more I look at the problem of cost-benefit analysis for this kind of work, the more it seems to me essential that the workings and the assumptions be laid open to the public and to everyone who has a right to make a judgment as to whether they should be proceeded with or not. It is very important that this should happen and I think we should be extremely grateful to the noble Lord, Lord Melchett, for putting this forward and to the Government for seeing that the matter will be looked at really properly. I believe the first amendment of the noble Lord, Lord Melchett, is thoroughly desirable, but presumably the undertaking given by the Government meets his point.

Lord Howie of Troon

My Lords, I have no wish to dissent from my noble friend Lord Melchett; I would merely query whether a cost-benefit appraisal was really what was wanted in this sort of situation. Cost-benefit is a very useful tool and has been used for many years in dealing with projects of many kinds; but is it not quite likely that in circumstances such as he has in mind it would be at least as, and probably more, useful to adopt the technique of environmental impact assessment rather than cost-benefit appraisal?

Baroness White

My Lords, I was disquieted to hear the noble Earl say there was no real significance in the second of the two amendments. I thought he was putting over a very smooth case indeed when he said that of course the two Ministers, the Secretary of State for the Environment and the Minister of Agriculture, were always in the closest consultation. The fact remains that, as I understand it, it is only the Minister of Agriculture who has the statutory power in these land drainage affairs to require an inquiry.

It is a very long-standing adage that justice should not only be done but should be seen to be done, and the impression undoubtedly in certain circles is that this matter is to some degree weighted in favour of the agricultural interests—who are, after all, the major interest in initiating land drainage propositions—and we know very well that some of the most acute differences of view and differences of interest in recent years have arisen precisely in these areas. Surely if there is such close collaboration there would be no harm in allowing the Secretary of State for the Environment or, in appropriate cases, the Secretary of State for Wales to take up these matters on environmental grounds and not leave them exclusively in the hands of the Minister for Agriculture, who has all the appearance, at any rate, of being likely to favour farming interests in any such situations.

I am suggesting that that is not good for public confidence and that public confidence would be considerably strengthened if, in these situations where there is diversity of interest, it would be open to either Minister to initiate an inquiry where this seems to be necessary or desirable. I do not think it is good enough to say simply that the two Ministers are always buddies and that the two departments talk very happily together. Sometimes they do; but we all know perfectly well that sometimes they do not; and I repeat that it would strengthen public confidence very greatly if the Minister could appreciate that there is strong feeling on this matter in environmental circles. It would be very much better if he would look at the second amendment rather more seriously than it appears to me he may have done.

Lord Melchett

My Lords, might I suggest that we dispose of Amendment No. 6A? I only suggested putting the two together because I thought the noble Earl was going to give me exactly the same reply to both amendments, for reasons which I will come to when I introduce Amendment No. 6B, which I am afraid I shall now have to do. Perhaps at that stage the noble Earl could reply to the points made by my noble friend which concern themselves exclusively with Amendment No. 6B. I am happy to give way to the noble Earl if he wishes, but otherwise I am planning to withdraw Amendment No. 6A.

Earl Ferrers

My Lords, I am grateful to the noble Lord, Lord Melchett, and I wonder whether, with the leave of the House, I might just reply to the points made by the noble Lord, Lord Beaumont, about cost-benefit analysis, because I know there is a point of anxiety here. I should like to try to make the procedure quite clear. When an authority or an internal drainage board wishes to carry out some improvements which require grant aid, it applies to the Minister of Agriculture for approval and my department considers the whole nature of the application. The first thing to be done is to satisfy itself that where there is any environmental sensitivity the appropriate conservation authorities, such as the NCC, have been consulted. Thereafter it has to be satisfied that any scheme has passed three basic criteria. First, it must be sound technically—in other words it is going to do the job it is intended to do—and that means that the walls of the weirs or whatever it may be should be structurally and technically adequate. Secondly, the cost must be reasonable; and, thirdly, the whole exercise must be economically worthwhile. That is a statistical calculation which is carried out, and I am bound to say it is a very complicated one, not designed to determine whether a proposed improvement is suitable. It is in fact a prudent in-house financial check, which many businesses may carry out, in order to ensure that the expenditure of funds is not wasted. That is only one hurdle which any scheme has to get through. Thereafter, if there is any area of conservation sensitivity then the whole matter is referred to Ministers.

Lord Melchett

My Lords, I think that to keep myself in order the noble Earl's explanation must be regarded as a lengthy intervention. That will enable me to continue my speech, withdraw the amendment and allow your Lordships to make some progress. I am very grateful to the noble Earl for the assurance which he has given on cost-benefit appraisal. I appreciate that it must involve a number of people in some extra work to take this on at a late stage of the deliberations, and I am particularly grateful for that.

I would just say to my noble friend about the importance of cost-benefit appraisal, and, indeed, to some extent to reply to what the noble Earl has just said, that while there are certainly better ways of assessing the impact of schemes—maybe that is something that will emerge as a result of the consultative document; and I am sure that the economic impact assessment will be one of those—the fact of the matter is that, at the moment, to quote the noble Lord, Lord Skelmersdale, at col. 135 of the Official Report for 8th March at Committee stage, cost-benefit assessment is a basic test of economic viability which every scheme must pass. So it is a very important factor at the moment. Maybe it should not be, or maybe it could be done much better. That is something which will emerge from the consultative document and the comments on it.

As I said, I am very grateful to the Government on Amendment No. 6A, and I certainly accept entirely—and I think I should put it on record—that there was no bad faith or anything of that kind on the part of the noble Lord, Lord Skelmersdale, in giving me the assurance that he did during the Committee stage. Now that this is to be given extra consideration by the departments involved, we may have got more out of it than if the noble Lord been right in the first place. My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.11 p.m.

Lord Melchett moved Amendment No. 6B: Before Clause 5, insert the following new clause:

("Power to hold enquiries under Land Drainage Act 1976

. The Land Drainage Act 1976 is amended in section 96 by the deletion of subsection (1) and by the substitution of a new subsection as follows:

"(1) The Secretary of State for the Environment or the Minister may cause to be held such inquiries as they consider necessary or desirable for the purposes of this Act.".").

The noble Lord said: My Lords, I shall be very brief on this amendment. I said that I expected the noble Earl to give me the same reply on this amendment as he did on Amendment No. 6A. I did so because the letter that I received this morning from the noble Lord, Lord Skelmersdale, linked the two points together. If I may quote from the letter, the noble Lord stated that he had told me during the Committee stage that the Interdepartmental Committee on Land Drainage and Coast Protection would be considering the cost benefit appraisals and their disclosure, as well as Ministerial responsibilities for calling public enquiries into land drainage schemes". The letter then went on to say that this was unfortunately mistaken. I quote again: However, as a result of your amendment, arrangements are being made for these matters"— and I emphasise "these matters"— to be considered between the Departments who are represented on the Committee (which include the Treasury) and to be included in the consultative document".

In other words, the letter from the noble Lord said quite explicitly that both these matters—the matters covered by Amendments Nos. 6A and 6B—would be subject to the procedure which the noble Earl mentioned on Amendment No. 6A. I hope that the letter is right and that the noble Earl can adopt that view, particularly in the light of the very forceful arguments which my noble friend Lady White put forward a few minutes ago about the importance of including the Secretary of State among those who have the power to hold a public inquiry. Given that this is quite clearly set out in the letter, I hope that the Government will be able to stick with that. My Lords, I beg to move.

Earl Ferrers

My Lords, if I may answer the noble Baroness, Lady White, to start with, even though she has not spoken on this amendment—she pre-empted it by speaking on the previous one, because we were discussing them both together—she said that anyone must appreciate that there is very strong feeling in the conservation lobby about grants for drainage, and so on. She felt that they were weighted in favour of land drainage, as opposed to conservation. May I tell her that everyone in the Ministry of Agriculture, at the moment, is deeply appreciative of the strong feeling—and, indeed, nobody in the farming community is not appreciative of the very strong feeling—about conservation. I can only assure her.

I will give her one example to which the noble Lord, Lord Melchett, referred at Committee stage: that of Halvergate. There is a problem of great sensitivity between conservation and agriculture. We took the view—and there were many who called for a public inquiry—that Parliament had set up various bodies in order to resolve these problems on the ground, and that it was right that those bodies should resolve the problem. All the facts were known. It was really the question of how the facts were to be resolved that was a cause of dispute.

Both my right honourable friend Mr. King, as he now is, and myself, who had responsibility at the Ministry of Agriculture, worked closely over this. You cannot do anything other than that. The Minister of Agriculture could not take a decision so intimately sensitive as that without consulting his colleagues in the Department of the Environment. The decision—although in theory, and legally, a decision of the Minister of Agriculture—was taken in consultation with the Secretary of State for the Environment. That is how it should be, and that is how I anticipate it will always be, because there is no question of the Ministry of Agriculture railroading itself over the Department of the Environment—far from it. I hope that the noble Baroness will realise that that is the case; but, obviously, all these matters which have been considered and suggested today will be given further consideration.

Lord Melchett

My Lords, before the noble Earl sits down, may I press him to say whether what he said in the previous debate, and what the noble Lord, Lord Skelmersdale, said in the letter to me this morning, is the right version so far as the Government are concerned? Is this something which will be treated in the way that the cost-benefit appraisal will be treated, or not? I think that the noble Earl ought to clear up that matter.

Earl Ferrers

My Lords, I quite see that. I think that the two issues—what the cost-benefit appraisal does and how it is to be effected—are slightly different. That will be considered by the departments concerned and this discussion will be considered by them as well. But I am bound to give the House the view which obtains at the moment, which is that when a Minister gives a decision on matters of this nature it is done in consultation with his counterpart.

Lord Melchett

My Lords, I am grateful for that. I take it from what I heard the noble Earl say—I shall have to check Hansard carefully tomorrow and reserve my right to return to this, if the position is not entirely clear—that the letter from the noble Lord, Lord Skelmersdale, was accurate in this respect. If that is the case, I am very grateful again, just as I was on cost-benefit appraisal, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.17 p.m.

Lord Melchett moved Amendment No. 6C: Before clause 5, insert the following new clause:

("Wildlife and landscape representatives on regional land drainage committees.

. Section 2 of the Land Drainage Act 1976 is amended as follows:

After subsection (1)(c) insert: (d) 2 members appointed by the Secretary of State being persons with a special knowledge of wildlife or landscape conservation.".").

The noble Lord said: My Lords, the same points apply to this amendment as to the previous amendment. This amendment concerns the appointing of people to land drainage committees and suggests that two people should be appointed with special knowledge of wildlife or landscape conservation. In this case, the amendment which I moved at Committee stage—which is exactly the same as this one—was considered and withdrawn, partly on the basis that it would be considered by the interdepartmental committee and partly on the understanding that the noble Lord, Lord Skelmersdale, would look at the matter himself again. He very kindly did that and he wrote me an undated letter which I received quite soon after the Committee stage, in which he went into this point in some detail. I did not agree with what he said in the letter, but that is not really the point that I want to raise now.

At col. 146 of the Official Report for 8th March, the noble Lord said: this is also something which would come within the remit of the interdepartmental committee on land drainage.

This point was not covered in the letter which I received this morning, although it must clearly be affected by exactly the same factors. I was told at the Committee stage that it would come within the remit of the interdepartmental committee, but that committee has finished its work. So as I understand it, that assurance was wrong. I hope that the same factors will apply here as apply to the two previous amendments and that arrangements will be made for the matter to be covered. That amendment received a great deal of support from a number of your Lordships. It was withdrawn on the basis that all these land drainage matters were currently being considered by the interdepartmental committee. I said at the Committee stage that interdepartmental committees producing documents are fairly vague creatures. I had not appreciated at the time quite how vague this one was. If the noble Earl is to deal with this point, I hope he will accept that exactly the same considerations apply here as apply to the two previous amendments and that it ought to be treated by officials from the various departments in the same way. I beg to move.

Earl Ferrers

My Lords, I long to be as helpful as I can to the noble Lord, Lord Melchett, but I think there is a difference between the first two amendments and this amendment. The letter that my noble friend sent to the noble Lord, Lord Melchett, and which he received this morning referred to the cost-benefit appraisals, and so forth, which my noble friend had undertaken would be considered by the interdepartmental committee—which, as I explained, has now ceased. What my noble friend also undertook to do at the Committee stage was to consider the points which the Committee had been discussing: the matters to which the noble Lord refers under Amendment No. 6C.

My noble friend wrote to the noble Lord, Lord Melchett, giving the Government's considered views. The noble Lord, Lord Melchett, will recall from the letter he received that my noble friend said: You will gather from this that after further consideration I remain of the opinion I held at the Committee stage; namely, that in view of the statutory duty imposed by Section 22 of the Water Act 1973, as amended by Section 48 of the Wildlife and Countryside Act, there is no need for the proposal". That remains the Government's view. Under Sections 2 and 3 of the Land Drainage Act, each regional land drainage committee may have a maximum of 17 members. The chairman must be one of the Minister's appointees to the authority itself. The remaining members include some appointed by the Minister, two by the water authority and a number by or on behalf of the constituent councils.

Before the passing of the Wildlife and Countryside Act the Minister of Agriculture had the responsibility to have regard to the interests of conservation, but under that Act the obligations have now been very considerably strengthened, in so far as the Minister now has a specific duty to further the interests of conservation. That obligation on the Minister is also an obligation which falls upon the authorities and the drainage boards. It is the duty of the authorities in carrying out their work to further the interests of conservation. I do not think that it would be suitable to incorporate two people on to land drainage committees whose only credential for being so appointed is that they will be interested in wildlife or conservation, because it is the duty of the Minister and of the authorities to cover precisely the points which those two people would be appointed, under the noble Lord's amendment, to cover. Therefore the view of the Government is the same as it was before: that it would not be right to appoint two people specifically for that purpose.

Lord Melchett

My Lords, I am not at all happy about the noble Earl's answer. To say that I am extremely unhappy would be putting it mildly. I was quite happy with the procedure which the Government adopted for putting right what was a serious mistake at the Committee stage: that the first two matters covered by the four amendments which I put down would be reconsidered by the officials involved and looked at and covered by the consultative document. The fourth amendment is on a very narrow and relatively minor point. It is not a matter of public policy and it comes outside the considerations which apply to the first three amendments. But I do not think it is right for the Government to say quite clearly and unambiguously at col. 146 of the Committee stage of the Bill on 8th March that something comes within the remit of the interdepartmental committee on land drainage. Indeed, there was a proposal from the Government, which was circulated to a number of noble Lords interested in the Bill, that all four amendments should be taken together at the Committee stage, on the basis that all of them would be covered by the interdepartmental committee and that the response to all four amendments from the Government would be, "This is under consideration; we are not going to do anything at the moment"—a fairly standard reply.

It is one thing to make as serious a mistake as that and to get the Committee to withdraw all four amendments, as we did. This third amendment was the one where the Government were pressed most strongly. Therefore they undertook to look at the point to see if anything could be done in advance of the interdepartmental committee publishing a consultative document. I received a letter from the noble Lord saying, in effect, that nothing could be done. That letter did not mention that the interdepartmental committee no longer existed and had not considered this point.

Then this morning I received a letter—which I heard about over the telephone last night—which said that the interdepartmental committee had not been able to consider two of these points but that arrangements would be made for the officials to do so and that they would be covered in the consultative document. I am very happy about that—although there was a hiccup over the second, as to whether it did or did not apply. But we have resolved that matter satisfactorily. However, the letter which I received this morning made no mention of the fact that the Committee of your Lordships' House had been misled as to the true state of affairs. The noble Earl is now saying that the Government wish to stick with the view they originally expressed, with very little by way of an apology for the fact that the Committee was misled and has not yet been put right on the matter. With great respect, I do not believe that this is the way for any Government to treat your Lordships' House and its deliberations. It makes it quite impossible for us sensibly to consider amendments. And even at the very late stage of receiving a letter this morning, apparently I had not been given the correct information about the Government's intentions.

It would be foolish to press an amendment which has been circulated in manuscript very late in the day, particularly as I had assumed that the answer was going to be that all these matters would be considered, but I shall certainly come back at the next stage of the Bill with an amendment. In the circumstances I think I shall be justified in doing so. In the meantime, however, I hope that the noble Earl will reconsider the point.

Earl Ferrers

My Lords, I wonder whether I may have the leave of the House once again—I do not wish to abuse the leave of the House—to reply to the noble Lord, Lord Melchett. He has been peculiarly hard over this. I did apologise at the beginning for the fact that the noble Lord received this letter late. That was a great misfortune and I realise that it was extremely inconvenient. I apologised, and I do so again unreservedly. But the noble Lord is being unfair. He said that the letter which he received this morning did not refer to this amendment, or to the other one. The noble Lord is quite right; it did not. This was because my noble friend Lord Skelmersdale said in col. 149: I shall take every opportunity to reconsider both what I have said and what the noble Lord, Lord Melchett, and others have said during the course of this short debate on an amendment which was similar to the one which we are now discussing.

He continued: I shall certainly take it away and look at the whole thing, but I must in all fairness and honesty say that, as far as I can see at the moment, the prognosis is not particularly good". So my noble friend took away the amendment. He thought about it and he wrote to the noble Lord, Lord Melchett, on 30th March explaining what the Government's conclusions then were. I do not think it is fair of the noble Lord, Lord Melchett, to say that he has not been treated fairly over this. The letter which the noble Lord received this morning referred to the first two amendments. As to the second two amendments, my noble friend considered these and replied on 30th March, giving the Government's view then. If I might say so to the noble Lord, Lord Melchett, he had that letter on 30th March and if he was dissatisfied with the letter, he could have put down an amendment on the Marshalled List as opposed to an amendment in manuscript form.

Lord Melchett

My Lords, I gave way to the noble Earl to allow him to make that intervention, but I had no indication until this morning, or last night, that the interdepartmental committee on land drainage was not looking at all these points. It is on the record in Hansard from the Committee stage that in the case of this point, the membership of land drainage committees would come within the remit of the interdepartmental committee. My complaint to the noble Earl, which he really forced me to make by not doing what I suggested in order to resolve this matter, is that I have not been told yet that, so far as the membership of land draining drainage committees is concerned, this is not being considered by the interdepartmental committee. There is in Hansard a clear commitment by the Government to your Lordships, which says: this is also something which would come within the remit of the interdepartmental committee on land drainage". That appears in Hansard for 8th March (col. 146). That is a clear commitment by the Government to consider something. The Government have not withdrawn it. It was not withdrawn in the letter I received this morning and was not withdrawn in the undated letter which the noble Earl says I received on 30th March, and which I am quite happy to accept that I did. That letter, as I understood it, dealt with another point; whether the Government would take action on this matter in advance of the interdepartmental committee issuing its report and its consultative document.

It was in that context that, at the end of the debate, the noble Lord, Lord Skelmersdale, made the remarks which the noble Earl has just quoted from col. 149 of Hansard for 8th March. I do not feel that I am being unfair on the Government. I think that the noble Earl is treating me a little shabbily, if I may say so. It is perfectly clear in Hansard for the Committee stage that this matter was to be considered by the interdepartmental committee. That assurance, given to your Lordships and appearing in Hansard, has not yet been withdrawn—although I have learnt that, on two other matters, the interdepartmental committee has ceased to exist. It is on that basis that I make my complaint, I believe fairly, and it is on that basis that I believe it would be sensible to return to this point at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Melchett moved Amendment No. 6D: Before Clause 5, insert the following new clause:

("Exemptions from drainage rates levied under Land Drainage Act 1976.

. After subsection (9) of section 68 of the Land Drainage Act 1976 (Differential drainage rates and exemptions: power to make orders), there shall be added the following subsections— (10) Where any hereditament comprises land which is the subject of a notification under subsection (3) of section 22 of the Water Act 1973 (duties with respect to nature conservation and amenity) and is managed as a nature reserve by the Nature Conservancy Council or other approved body, an internal drainage board shall not levy any owners' drainage rates in respect of that land. (11) In subsection (10) "approved body" means any local authority under the meaning of section 270(1) of the Local Government Act 1972 or any body registered under the Charities Act 1960 which has as one of its principal objects the management of land for nature conservation purposes.".").

The noble Lord said: My Lords, as I said earlier, Amendment No. 6D covers a much more minor point. On this occasion, it was fully covered by the letter which the noble Lord, Lord Skelmersdale, sent to me—and I am very grateful to the noble Lord for taking the trouble to do so. As I assume that this matter also will not be covered by the interdepartmental committee, and indeed is probably too minor a point to warrant that, I merely want to put on record what has been said on this matter about reduced drainage rates for land that is managed as a nature reserve.

The noble Lord, Lord Skelmersdale, said in his letter that reduced rates might be paid in respect of nature reserves under the provisions of Section 67 of the Land Drainage Act 1976, which provides the opportunity for IDBs (internal drainage boards) to take account of changes in the use of the land in their district and to amend the annual values, and thus redistribute the burden of rates accordingly. The noble Lord went on to state in his letter: Thus if land which was previously solely in agricultural use is now used solely for conservation purposes, as a nature reserve, it would be possible for the IDB to take account of this change and reduce the annual values accordingly". That was a very helpful comment from the noble Lord, Lord Skelmersdale, for which I unreservedly express my gratitude, and I hope that we can now return to discussing matters on that basis.

I simply want to ask the Government whether they will encourage IDBs to take this action where there is a voluntary body with a substantial nature reserve in the IDB's area for which substantial drainage rates are having to be paid because of the land values on which the rates were levied. If this can be drawn to the attention of IDBs in some way by the Government, it would be very helpful. I beg to move.

Lord Lloyd of Kilgerran

My Lords, I hesitate to intervene but there is here a technical point of considerable consequence in relation to the definition of an approved body. I believe that I did mention this to the noble Lord, Lord Melchett, some time before the Recess. If the subject of Amendment No. 6D is to be considered by the Government, I should like to raise a point concerning the definition of an approved body. Subsection (11) of the proposed amendment makes reference to the local authority and to the Local Government Act 1972, and goes on to state: or any body registered under the Charities Act 1960 which has as one of its principal objects the management of land for nature conservation purposes". I must declare an interest in that I am the chairman of a body that is recognised as having charitable status which was created in 1919, but which is not a registered charity—but has as one of its principal objects the maintenance of an estate in the Lake District which was the home of John Ruskin. A very considerable part of that maintenance, I am assured by my manager there, is concerned with looking after that land for nature conservation purposes. Therefore, there is to my knowledge a body with charitable status—and I am sure there must be many others—which is not registered under the Charities Act 1960, but which in my view should come within the ambit of the definition of an approved body.

Then there is a second class of body, which in my view comes within the definition but which would be excluded by this proposed subsection. This class is those charities formed before the Charities Act 1960 and which are therefore exempted from registration. If I may declare another interest, I am also chairman of a small charity created before 1960. I have been advised by lawyers that it is not necessary to go to the expense and trouble of having it registered under the Charities Act 1960 because it was formed as a charity before that date.

I raise this matter because in my own experience the definition of an approved body could properly be extended to cover the two types of bodies to which I have referred; namely, those which have charitable status but which are not registered charities, and those which are charities, and which are recognised as such by the charity commissioners, but which are not registered under the Charities Act 1960.

Earl Ferrers

My Lords, with regard to the last point made by the noble Lord, Lord Lloyd of Kilgerran, I believe it would be best addressed to the noble Lord, Lord Melchett, whose amendment this is. I am bound to tell the noble Lord that I myself cannot give him an answer immediately, but I will certainly try to find one; I say that on the assumption that the noble Lord, Lord Melchett, will not be able to provide an answer; I shall certainly do my best to find an answer and write to the noble Lord, Lord Lloyd of Kilgerran.

In reply to the noble Lord, Lord Melchett—and I was delighted to see that his thermometer had dropped somewhat since the last amendment—I think it will be best if I just quote Section 67(1) of the Land Drainage Act 1976. It says—and this is important: If a drainage board are of the opinion that the amount of the annual value of any relevant land in their district should … be increased or reduced having regard to changes in the circumstances … the board may make a determination of annual values under this section". Then, in subsection (2) the Act states—and this may be helpful to the noble Lord, Lord Lloyd of Kilgerran: If the owner or occupier of any relevant land in a drainage district is of the opinion that … the amount of the annual value of the land should be altered for the purpose there mentioned, he may request the drainage board in writing to make a determination under this section in respect of that land". That gives the right to an owner who feels aggrieved or who feels that the circumstances have changed to write to the drainage board requesting it. So there is the opportunity for drainage boards to lower their rates, either at their own discretion or at the request of an owner. Of course it is not in the power of the Minister to direct them so to do, but I have no doubt that drainage boards will take note of what the noble Lord, Lord Melchett, has said.

Lord Melchett

My Lords, I would not presume to give an answer to the detailed questions which have been raised. I think it would be much safer for the noble Lord, Lord Lloyd of Kilgerran, to await any advice which the noble Earl is able to dig out rather than relying on anything that I might say. I am grateful to the noble Earl for the remarks at the end about the possibility of owners of land raising this matter and for saying that he is sure that the internal drainage boards themselves will bear it in mind. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 [Overseas activities of water authorities and statutory water companies.]

6.41 p.m.

Lord Skelmersdale moved Amendment No. 7: Page, 4, line 30, leave out ("Water Act 1973") and insert ("principal Act").

The noble Lord said: My Lords, this amendment corrects a minor error of drafting. The reference to the Water Act 1973 should be to "the principal Act" as it is described elsewhere in the Bill. I beg to move.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 8:

Page 5, line 6, at end insert— ("(5) The Secretary of State shall, from time to time, issue guidance as to the criteria by reference to which he will determine any request for consent under this section.")

The noble Lord said: My Lords, with the leave of the House, I should like to speak also to Amendments Nos. 9, 10 and 25. The purpose of the Government Amendment No. 8 is to write into the Bill a specific reference to the guidance which the Secretary of State will issue on the factors he will take into consideration in granting consents in respect of the overseas activities of water authorities and statutory water companies. The amendment follows from the commitment which I gave when the matter was debated in the Committee of your Lordships' House on 8th March to consider further representations on the proposed guidelines which were published on 24th February.

Our aim throughout has been to produce agreed guidance which will protect the interests of the water authorities' customers and will safeguard the private sector from undesirable competition. The guidance is designed to enable the private sector, in collaboration with the public sector, to take greater advantage of the growing opportunities for British exports in overseas markets.

My Lords, in the debate on 8th March on Amendment No. 24 moved by the noble Lord, Lord Lloyd of Kilgerran, several noble Lords spoke of the concern of private sector consultants that the guidance given should be written into the Bill. It was put to us that a future Secretary of State might not feel bound by non-statutory guidance and that a specific reference to the guidance in the legislation would provide an important additional assurance for private sector exporters. Since that debate, we have had two meetings, the first with representatives of the private sector consultants, including the noble Lord, Lord Lloyd, himself, and the second with the consultants and with the water authorities. We have been able to explore their concerns in much greater detail, and I am pleased to report to the House that we have now reached agreement on changes to be made to the guidance. Your Lordships will notice that I refer to guidance—the word used in the Government amendment on this point—and not guidelines. I hope that this helps to clear up the confusion which crept in about the different guidelines when we last discussed this Bill.

In the course of our discussions—and indeed at the Committee stage debate—the view was expressed that the guidance should be written into the text of the Bill itself. That indeed is the purpose of Amendments Nos. 10 and 25. In our view, this is not the right course. To write into the Bill the details of the way in which the Secretary of State should exercise his consent powers would be an inflexible and over-restrictive approach. To keep the guidance separate from the legislation would keep it free of unnecessary restrictions which might very well prevent water authorities from offering help which consultants would like them to offer. It would enable changes to be made to the guidance if at any time that should prove necessary, without recourse to primary legislation, which, despite what was said at Committee stage, is a cumbersome process and one which would be subject to the very severe constraints operating on the parliamentary timetable. In our view, the primary safeguard for the private sector must be the development of close co-operation and understanding between public and private sectors. This necessarily requires flexibility and adaptability, and I am confident that the approach we are following is more likely to bring this about than a code of statutory rules and regulations.

At the same time, however, we must have regard to the serious concern of the consulting engineers that there is as yet no reference to the guidance at all in the legislation. Since the guidance is designed, among other things, to provide protection for the private sector, we agree that a reference to the existence of the guidance should be included in the statute. The effect of our own Amendment, No. 8, is to require that guidance be issued setting out the basis on which the consent powers will be exercised. It will not be possible for a Secretary of State, for instance, to ignore his own guidance and arrive at a totally inconsistent decision. This is an important provision.

Similarly, I should like to emphasise that we do not intend to have frequent revisions of the guidance. Although I earlier stressed the flexibility of our approach, so as to allow for amendment, we envisage this process only when the clearest justification exists. I should like in this content to offer two assurances. The first is that any proposed changes in the guidance would, as a matter of course, be preceded by full consultation with the interests concerned and in particular with the water authorities and the consulting engineers. The second is that we are prepared to make a small amendment to our own amendment to make it clear that changes to the guidance will not flow as a matter of routine. It has been put to us that the words "from time to time" imply a frequent process. I am advised that without those words it would nevertheless be possible to make changes to the guidance, and in view of the concern which has been understandably expressed on this point, the Government will make an amendment at Third Reading to remove the words "from time to time". In our view, this is a preferable approach to that adopted in Amendment No. 9, which states what we are all agreed is the objective, but which nevertheless runs into problems over definition—for instance, what is the British water industry? My Lords, I hope that with those words and in the light of these assurances I may beg leave to move the amendment.

The Deputy Speaker (Baroness Wootton of Abinger)

My Lords, Amendment No. 8 has been moved, and there is an amendment to this amendment to which we must now proceed.

6.48 p.m.

Lord Lloyd of Kilgerran had given notice of his intention to move, as an amendment to Amendment No. 8, Amendment No. 9: Line 1, leave out ("from time to time") and insert ("at any time so as to improve the total capability of the overseas activities of the British Water Industry").

The noble Lord said: My Lords, I wanted to express my gratitude to the Minister for introducing Amendment No. 8, subject to one small modification which I was going to put forward in this amendment, because it constitutes a very significant step by the Government towards safeguarding the present very large international business and high reputation of the British water industry. I should also like particularly to thank the noble Lord, Lord Skelmersdale, personally for the assistance he gave after the Committee debate on my amendment to which he has referred. I would also thank his advisers at the Department of the Environment for arranging meetings, before the Recess and during the Recess, in order to discuss this extremely important matter. As the noble Lord the Minister has indicated, I had the privilege of attending one of those meetings arranged by the representatives of the Department of the Environment with representatives of British water consultants from the public authorities and from the private sector. This meeting, if I may say so, was very ably and sympathetically chaired by the Parliamentary Under-Secretary of State, Mr. Giles Shaw.

In view of the assurances given by the noble Lord, Lord Melchett, in regard to the deletion of the words "from time to time" in the amendment that he has moved, as that was the main object of my Amendment No. 9, and relying upon the assurances given by the Minister, with the leave of the House, I shall not move Amendment No. 9.

[Amendment No. 9 not moved.]

Lord Nugent of Guildford

My Lords, could I just add one word to the debate which has just concluded with the noble Lord not moving his amendment? It is this. I should like to congratulate my noble friend Lord Skelmersdale and the Department of the Environment on making this arrangement. Of course, the noble Lord, Lord Lloyd of Kilgerran, is right that the impact of our consultants in overseas markets is enormous. They earn huge sums of money for the benefit of this country and do our country good in every way. Quite rightly they are jealous that they should not suffer from unfair competition from a public body financed by public funds.

But the practical position on the ground—especially in the third world with developing countries—is that often it is a state corporation which is placing the contract for some major development and they are very accustomed to dealing with governmental bodies. If they want a package, as they very often do, for water services in an undeveloped country, there is a part for a water authority to play—in the past the National Water Council—as a co-ordinating agent to put together the package with the consultants who will then carry out the work. That could have been a catalyst which would have brought more business to the consultants rather than taking it away from them. The criteria which my noble friend and the Secretary of State will provide in the Department of the Environment which will guide the activities of water authorities in this sphere will ensure that they do not encroach on the consultants' world but that they act in this supplementary fashion which will, I think, be entirely beneficial to all parties.

I thought that it was just worth adding that point, because I well understand the apprehensions of the consultants and I salute their achievements and enterprise all over the world just as warmly as the noble Lord, Lord Lloyd of Kilgerran. I am so very glad to hear that a happy solution has been found to this provision. I am sure that it will benefit them.

Lord Sandford

My Lords, before we leave Amendment No. 8, this might be a convenient moment for me to raise a rather different point about the activities of the British water industry overseas of which I have given notice to the House and to my noble friend at two earlier stages of the Bill. It is to seek assurances—and perhaps a blessing from my noble friend, if that is not asking a bit much after the contretemps with which we began the proceedings—for Water Aid and, incidentally, to take this opportunity to tell your Lordships about Water Aid, a new and rather novel British charity.

Water Aid is the charitable response of the United Kingdom water industry to the United Nations decade for better water supply and better sanitation for the third world. It began in 1971. Water Aid has been nurtured by the National Water Council and sponsored by the regional water authorities, the water companies and other parts of the United Kingdom water industry. I am one of its trustees. Water Aid, rather like Heineken beer, aims to reach those parts of the third world that are not reached by multi-million pound Government sponsored schemes, of which my noble friend Lord Nugent of Guildford was speaking, or funded by internationally financed contracts for water conservation, water supply and sewage disposal.

Water Aid works in close concert with and in a similar small-scale style to the Save the Children Fund, Oxfam, Christian Aid and VSO. In fact Mr. David Collett, the director of Water Aid, was previously director of VSO. It draws its funds and its support from charitable donations and voluntary offers of overseas service from individuals and small groups of individuals in the United Kingdom water industry. Water Aid will increasingly be engaged in spreading information in this country beyond the water industry about the progress of the water decade in the third world. I could say much more, but I think that that is enough by way of an intervention in the Report stage of a Bill.

All that I specifically ask for that arises from the Bill is an assurance from my noble friend that Her Majesty's Government will take care, when it comes to applying the guidelines associated with Clause 5, not to inhibit in any way the unofficial and uncommercial charitable activities of Water Aid in its charitable work in the third world. If my noble friend can publicly indicate his blessing for these activities that will be a great encouragement to those working for Water Aid—working away in places like Sierra Leone, Uganda and elsewhere under the auspices of this charity. It will also be an encouragement to those of us who are engaged in putting Water Aid on the wide map of United Kingdom charitable ventures.

Lord Skelmersdale

My Lords, this is slightly dangerous territory. First, the noble Lord, Lord Lloyd of Kilgerran, thanks me personally and my advisers for meeting him, although in fact I did not meet him and his advisers on that occasion. Then my noble friend Lord Nugent of Guildford, who is not now in the Chamber, praised me. I must be most careful not to make myself unworthy of those two accolades, especially after recent debates. I, in turn, am extremely grateful to the noble Lord, Lord Lloyd of Kilgerran, for the most constructive attitude that he has taken over this matter and for the way that he has very generously not moved his amendment to the Government amendment. I fully appreciate what he has done and also, I hope, his reasons for it.

If I may just comment on what my noble friend Lord Nugent said—although he is not in his place—he spoke of the immense value of the private sector overseas, a fact which was brought across very clearly in our debates in the Committee stage. But he also presented the other side of the coin—that we should not forget the equally valuable contribution of the public sector in so often setting up the deals which the private sector subsequently complete. How I agree with him!

I must thank my noble friend Lord Sandford, in turn, for giving notice of a tender plant. I must say that after yesterday perhaps the word "charity" is a little more tender in my mind than it might otherwise be. However, so be it. He asked specifically about Water Aid. The Government have always attached great importance to water supply projects in their overseas aid programme. Clean drinking water and sanitation have always been high on the list of priorities. We have also given high priority to projects initiated by the agencies of the United Nations and a very large proportion of our aid funds are allocated for this purpose.

The inception of the United Nations international drinking water supply and sanitation decade, which we very warmly support, has of course put additional focus on these activities. As an additional contribution to the United Nations decade, the Overseas Development Administration has been able to allocate an extra £4.4 million in technical co-operation to assist in strengthening organisations in developing countries which are responsible for water supply and sanitation. Water Aid has played an important role in mobilising professional, practical, and financial support from both the public and the private sectors of the water industry for water development overseas. It has made a particularly valuable contribution in publicising the needs and aims of the United Nations decade.

Like my noble friend, the Government have a high opinion of Water Aid and have encouraged its involvement in many projects, supported under the pound-for-pound scheme. My noble friend said that Water Aid is a registered charity, the aims of which are endorsed by Government, who would not seek to put any obstacle in its way. I understand that the water authority chairmen have confirmed their positive support for Water Aid, and have indicted that their headquarters will be able to offer accommodation and other facilities. The purpose of the consent procedures under Clause 5 is to protect the interests of water authorities, statutory water companies, and consumers, and to prevent undesirable competition. It is certainly not the intention that it should in any way interfere with the activities of a registered charity, such as Water Aid. I hope that I have answered all the points made in this brief debate. I commend Amendment No. 8.

On Question, amendment agreed to.

7.3 p.m.

Lord Lloyd of Kilgerran moved Amendment No. 10:

Page 5, line 6, at end insert— ("(6) The said criteria shall be modified by the Secretary of State in the light of the aim of the Secretary of State as set out in Schedule (Guidelines relating to overseas activities), to engender close co-operation between the private and public sectors as defined in the said Schedule (Guidelines relating to overseas activities) so as to improve the total capability of the British Water Industry to carry out work overseas.").

The noble Lord said: My Lords, I beg to move Amendment No. 10. I see that the noble Lord, Lord Nugent of Guildford, is not in his place, but, judging from the speech that he was good enough to make on the Government amendment, Amendment No. 8, I am sure that he will support Amendment No. 10. With the leave of the House, I should like to speak also to Amendment No. 25, which is in my name and the name of the noble Viscount, Lord Montgomery of Alamein.

The object of the amendment is to set out how the criteria in the documents entitled "Guidance Notices" should be dealt with in general terms by the Secretary of State. I wish to point out that there is a mistake in the amendment as printed, because it refers to a schedule entitled, "Guidelines relating to overseas activities". In formulating Amendment No. 25 I did not use the word "guidelines," though the words "Guidelines relating to overseas activities" have now been included. In Amendment No. 25 I have at all times referred to the heading as "Criteria Relating to Overseas Activities"—not "Guidelines".

As the noble Lord, Lord Nugent, said, there are instances where there are government-to-government approaches in regard to feasibility studies for water works, sewerage schemes and drainage schemes all over the world. That government-to-government approach acts as a catalyst, but my instructions are that such approaches are not taking place very frequently, though in the future the public and private sectors will possibly work more closely together than they have done in the past.

It is necessary for the following reason for me to speak to Amendment No. 25 in some detail. As printed in the Marshalled List, the amendment is substantially in the form that was agreed between the water authority representatives from the public and the private sectors and the representatives of the Department of the Environment during the Easter Recess. In Amendment No. 25 the first three paragraphs are headed, "Criteria relating to overseas activities"—not "Guidelines", as at present printed. The words of the first three paragraphs are not identical to those of the "Guidance Notices" as agreed with the Department of the Environment. They have been amended, but in no way has the main direction of the paragraphs been altered. For instance, the first paragraph states that, Overseas work may be undertaken by a water authority or a statutory water company or any body which may comprise a successor to the International Advisory Service of the National Water Council hereinafter called 'the bodies'".

Paragraph 2 sets out the aim of the Secretary of State, as agreed with the representatives at the meetings recently held. As the noble Lord the Minister has indicated, the aim is, to engender close co-operation between the bodies and Consulting Engineers, Contractors and Suppliers in the private sector (hereinafter called 'the private sector') who it is expected will spearhead the British Water Industry's export activities, so as to improve the total capability of the British Water Industry to carry out work overseas. The phrase referring to the private sector as spearheading the British water industry's export activities is taken from the agreed guidance, and the phrase stating that the aim is, to improve the total capability of the British Water Industry to carry out work overseas". is taken from the speech of the Minister in the other place.

Paragraph 3 recognises what has been emphasised in the other place and before your Lordships: that the bodies—that is to say, the members of the public sector— have wide experience in the United Kingdom, particularly in operation, management and training, which expertise largely complements that of the private sector".

Now we come to paragraphs 4 to 14 inclusive, the words of which are identical to those of the guidance notice that was agreed with the representatives of the Department of the Environment, and I can go through them quite quickly. Paragraphs 4, 5, and 6 refer to reporting to the Secretary of State which the bodies—that is to say, representatives of the public sector—must carry out when they apply for consent to do any overseas business. Paragraph 6 is of considerable importance. Because they are financed from public funds, the public sector bodies must, if a loss appears in a contract, report it at once to the Secretary of State, and indicate how they intend to minimise it.

Next we come to paragraph 7, which is headed "Financial", and which deals with questions relating to keeping accounts. Paragraph 7(b) states that the bodies—the public authorities and the public water companies—must, so discharge their overseas business that, taking one year with another, revenue received is not less than sufficient to meet outgoings". Paragraph 7(c) contains a very important provision, which has been agreed; namely, that these public bodies shall, seek to earn a proper commercial rate of return on any money which is invested in their overseas activities".

Next, under the heading, "Limiting of Liabilities", there are three paragraphs which I need not read in detail. Here the aim is to ensure that when they enter into contracts abroad, public bodies shall enter into insurances in regard to possible losses or difficulties arising in the course of the work. When dealing with contracts involving hundreds of millions of pounds the private sector has to give bonds to ensure that if, by any chance, anything goes wrong in the course of a contract, the contracting firms can stand any losses and pay certain sums to the persons who have been injured.

Paragraph 11 deals with general consents which the Secretary of State will consider on any application by public bodies that deals with overseas matters. The last three lines are of significance, setting out that these general consents, will also be subject to limits on the size of individual contracts and on the total current commitments for work in progress of each individual body".

The last paragraph to which I need refer is paragraph 13(e), which says that specific consent will also be required for a public body for, contracts which include any significant involvement in the preparation of detailed design, specifications, working drawings or supervision of construction, or the subletting or contracting to others of such work".

Lastly, paragraph 14 states: When considering an application for specific consent, the Secretary of State will have regard to the effect of doing so upon the private sector and to the possibility of undesirable competition arising".

It seems to me, as the noble Lord, Lord Nugent, indicated, that a spirit of co-operation is now being built up between the public authorities and the private sector which cannot but do good to the economy. I may remind your Lordships that the public authorities are at present only concerned with small projects overseas. As indicated in the other place, these projects are of the order of tens of thousands of pounds. The private sector, on the other hand, is involved in projects of tens of millions, and sometimes hundreds of millions, of pounds. The fees and the revenue to the British economy are considerable. I do not propose to apologise for the length of my speech having regard to the importance of the matter, as the noble Lord, Lord Skelmersdale, has indicated. I beg to move.

7.12 p.m.

Viscount Montgomery of Alamein

My Lords, I should like to support the noble Lord, Lord Lloyd of Kilgerran, in the amendment he has moved in his name and to which mine is joined. I should also like to thank the noble Lord, Lord Skelmersdale, for his help in this matter. I hope that it will not embarrass him unduly if I add my thanks to those already expressed for the most helpful co-operation that has been experienced by the bodies. So far as the consulting engineering industry is concerned, these have been principally the Association of Consulting Engineers and the British Consulting Bureau, both of which have been involved in discussions with his department. These have been extremely helpful.

It is the essence of the amendment moved by Lord Lloyd of Kilgerran that this spirit of co-operation should exist not only in the important overseas activities that are the main thrust of the amendment but also in bringing this matter into the legislation so that there can be no misunderstanding in the future. I agree entirely with the noble Lord, Lord Lloyd of Kilgerran, that the inclusion of the schedule that spells out the criteria which, as already pointed out, have been agreed between the department, the public sector bodies and the private sector bodies, seems a valuable contribution to the process of legislation and to the clarity of the interpretation that will be required. I should like to support Lord Lloyd's endeavour and to hope that the noble Lord, Lord Skelmersdale, who has already been so co-operative, will continue that co-operation in regard to the amendment.

Lord Howie of Troon

My Lords, I should like to join the noble Viscount, Lord Montgomery of Alamein, in supporting the amendment moved by Lord Lloyd of Kilgerran. I thank the Government for their attitude in general on this matter. There is no need for me to add to the various comments made about the overseas successes of British consulting engineers. They are widely known. They have been mentioned in the House on numerous occasions and will no doubt be mentioned again.

It is important that an arrangement has been reached in the guidelines or criteria (whatever they are to be called) so that the fears of the consulting engineers that public sector engineers might be able to compete with them for overseas contracts in an unfair manner have been resolved. I have stated before, and still believe, that these fears were greatly exaggerated. In any case the civil engineering resource embodied in these public bodies is too enormous not to be used to the utmost, whether at home or in pursuit of our export achievements.

I am sad that the Government do not think that the criteria should be included as a schedule to the Bill in the terms of Amendment No. 25. I recall that earlier in the day, when he was discussing Amendment No. 8, the noble Lord, Lord Skelmersdale, said that the schedule would be too inflexible and that it would not permit changes to be made in the future. I am not sure about that. We spoke about this matter the last time the subject was discussed in Committee. I am not convinced that time cannot be found to change legislation if the will to change it and the need to change it exist.

I have noticed with interest that, despite the Minister's misgivings, there is another schedule on the Marshalled List which appears as Amendment No. 26, immediately after Lord Lloyd's amendment, in the name of Lord Bellwin. This is a schedule of arrangements for carrying out sewerage functions by a different set of people. What I find odd is this. How does it come about that it is appropriate and flexible to put in a schedule to deal with sewerage matters but inappropriate and inflexible to put in the schedule that has been proposed by the noble Lord, Lord Lloyd? It seems to me that a schedule is flexible and desirable and should be put in the Bill when the Government have a fancy for it, but a schedule is inflexible and should not be included in the Bill when the Government do not care for it. I am sure that there are stronger reasons. I see that someone is going to find them. There is, however, a slight dichotomy in the Government view.

The fears of the consulting engineers, even though they might have been exaggerated, would have been much eased if the arrangements had gone into the Bill as a schedule. It would not have been very difficult for the Government to do that because they had reached agreement on the matter, anyway. Nothing was being forced on anyone. I am rather in favour of having legislation that people agree upon, rather than legislation that people do not agree upon. I hope that the message that has come to the Front Bench is that the Government should accede to Lord Lloyd's plea and that they will accept the schedule and put it into the Bill, as they propose themselves later to do with another schedule.

Lord Skelmersdale

My Lords, my scribbling is not quite keeping up with my thoughts. I apologise to noble Lords. The noble Lord, Lord Lloyd of Kilgerran, my noble friend Lord Montgomery of Alamein and the noble Lord, Lord Howie of Troon, have all supported this amendment. With respect, I think that they have supported it on a slightly false premise. I can confirm that the Government's Amendment No. 8, establishes for the water authorities and for the benefit of both them and the private sector so far as exports go, guidance which has statutory force. Once "guidance", "guidelines" or whatever it may be, is put into an Act of Parliament it has all the force that all our Acts of Parliament have.

What I said when I was speaking to Amendment No. 8 still stands. We cannot agree to putting the text of guidelines into legislation. Incidentally, even if we did so, this schedule is very far removed from legislative drafting in any event; in other words, it would have to be substantially redrafted. I also confirm that the cockshy, if you like, of the new revised guidelines of the noble Lord, Lord Lloyd, is pretty well correct and of course we continue to support the text of guidance agreed at the meetings before Easter. But we are not happy, for the reasons that I have already enumerated, about putting it into the Bill.

The noble Lord, Lord Howie of Troon, made an interesting charge. He asked: what is the difference between this and our Amendment No. 26? The answer is that this amendment might very well have to be changed—I cannot say how and I cannot say when. However, our Amendment No. 26 is an update of Section 15 of the Water Act 1973. In other words, we are using a legislative opportunity to update that particular Act of Parliament. Assuming the House agrees to Amendment No. 26—and I have no reason at this moment to suppose that your Lordships will disagree with it—I have heard no murmurs that there will be any need to change this. Therefore, I hope that the noble Lord will accept that the situations are slightly different. The noble Lord reiterated his point on the legislative timetable which he made very forcibly and with great effect in Committee. But having read and reread very carefully what he said, I regret to say that I really have no further views than those which I reported at that time.

Lord Lloyd of Kilgerran

My Lords, I again thank the noble Lord, Lord Skelmersdale, for dealing with these three or four amendments, including Amendment No. 25. I am grateful for the support that has been given by other Members of the House to my amendment. But the way in which the debate has progressed has shown that there is something to be said for an amendment of the procedures of this House. Having heard the noble Lord, Lord Skelmersdale, speaking to Amendment No. 10—the one which I have just moved—and also to Amendment No. 25, to which I also spoke at very great length, the common sense and practical way to proceed would be to allow me, under the rules of the House, to move Amendment No. 25. The speeches of the noble Lord, Lord Howie, the noble Lord, Lord Skelmersdale, and indeed the noble Viscount, Lord Montgomery, have been concerned with the substance of Amendment No. 25.

Having this point in mind and wishing to save the time of the House, I telephoned the Minister's office and I was informed that there was no way in which I could now, as I should like to do, move Amendment No. 25. So I shall sit here with great patience and listen to the House ploughing through all the amendments before Amendment No. 25 is called formally some time tonight, I hope. However, I can console the House that the speech that I shall make in moving that the long Amendment No. 25 should be included in the Bill, will be brief. I shall very briefly—and I hope cogently—deal with the comments of the noble Lord, Lord Skelmersdale, in saying in advance that he is unable to accept that amendment. But I hope that, in view of the gratitude that has fallen upon the shoulders of the noble Lord, Lord Skelmersdale, he may, after dinner, be more flexible on the matter than he is at present. I see that he wants to interrupt me and so I shall give way.

Lord Skelmersdale

My Lords, with the leave of the House, I should like to correct a slight impression that I certainly received and I do not know whether other noble Lords received. When two amendments hang together—that is to say, a schedule amendment and a substantive amendment as in this case—the noble Lord either has to move Amendment No. 10, in which case they would naturally go together, or I am afraid he is not allowed to move Amendment No. 25 after dinner.

Lord Lloyd of Kilgerran

My Lords, I am very grateful for that intervention because it is quite contrary to the advice that I obtained from the Minister's office this afternoon. Having regard to the note as to the grouping of the amendments to the Water Bill at the Report stage—that is, Amendments Nos. 8, 9, 10 and 25—I accordingly telephoned the Minister's office, because we were invited to ring him up if there were any questions. I rang up Mr. Gareth Davies and I said that I should like to move Amendment No. 10—which I have done—and that I also should like to move Amendment No. 25 immediately afterwards, because those two amendments had been grouped together. I was assured that that could not be done. Therefore, as advised, I shall have to wait until Amendment No. 25 is called and then make my little speech—and I assure noble Lords that it will be quite a brief speech—thereafter.

Lord Howie of Troon

My Lords, before the noble Lord sits down, is it not the case that if Amendment No. 10 falls, as it seems likely to do, Amendment No. 25 falls with it?

Lord Skelmersdale

My Lords, with the leave of the House, I am extremely grateful to the noble Lord, Lord Howie. That was exactly the position that I was attempting to explain, which means that the noble Lord will not be able to move his Amendment No. 25 either immediately or after dinner.

Viscount Montgomery of Alamein

My Lords, is not the noble Lord, Lord Lloyd, asking that Amendment No. 25 is moved now, jointly with Amendment No. 10?

Lord Skelmersdale

My Lords, again with the leave of the House, that cannot be done. The point is that the noble Lord has moved Amendment No. 10 and has spoken also to Amendment No. 25, to which I spoke. He then has to decide what course he is going to pursue with regard to Amendment No. 10, and the balance as regards Amendment No. 25 hangs on the course he chooses to pursue. That is within Standing Orders.

Lord Lloyd of Kilgerran

My Lords, I am very grateful again to the noble Lord, Lord Skelmersdale. So what he is encouraging me to do is to withdraw Amendment No. 10 at this stage? I am only asking for clarification about this matter because this advice is totally contrary to what I received this afternoon from the Minister's office. He is inviting me to withdraw Amendment No. 10 so that I can speak on Amendment No. 25 after dinner?

Lord Skelmersdale

No, my Lords, with the leave of the House, that was not what I was saying. I was saying that the noble Lord has two possible courses of action. He can either not withdraw Amendment No. 10, in which case we will discover what happens to it, or he can withdraw Amendment No. 10. If he withdraws Amendment No. 10, he will be unable to speak further to Amendment No. 25.

Lord Howie of Troon

My Lords, I think that the only way in which the noble Lord, Lord Lloyd, can move Amendment No. 25 is actually to move Amendment No. 10 and carry it. If he carries it, he can then move Amendment No. 25. If he does not, he cannot.

Lord Lloyd of Kilgerran

My Lords, I beg to move Amendment No. 10.

On Question, amendment negatived.

Clause 6 [Arrangements for carrying out sewerage functions]:

7.31 p.m.

Lord Bellwin moved Amendment No. 11: Leave out Clause 6 and insert the following new clause— ("6.—(1) The following section is substituted for section 15 of the principal Act—

Arrangements for carrying out sewerage functions.

"Arrangements for carrying out sewerage functions. 15.—(1) It shall be the duty of every water authority and of every relevant authority whose area is wholly or partly in the area of the water authority to endeavour to make arrangements for the relevant authority to discharge, as respects their area, the sewage functions of the water authority. (2) Schedule 4A to this Act shall have effect for the purpose of supplementing this section. (2) After Schedule 4 to the principal Act there are inserted, as Schedule 4A, the provisions set out in Schedule (Arrangements for carrying out sewerage functions) to this Act.")

The noble Lord said: My Lords, I beg to move Amendment No. 11 and at the same time to speak to the associated Amendments Nos. 17, 18, 26, 29 and 30. Before I go further, I should just like to mention that there is a small printing error in Amendment No. 26 as printed on the Marshalled List: in paragraph 1 of Schedule 4A the word "whatever" should read "whenever".

When we discussed the question of sewerage "agency" arrangements in Committee, I said that the Government wished to consider it further and that we would return to it at Report stage. These amendments, which are significantly different from the ones we had talbled for Committee, are the fruits of our further thought.

As I said in Committee, the Government's guiding principle is that the sewerage functions required by the Public Health Acts should be carried out as effectively and efficiently as possible. We expect water authorites and, to use the terminology of the section, "relevant authorites" to share this principle. We have studied carefully the recommendations of the Monopolies and Mergers Commission and of your Lordships' Select committee on Science and Technology; the many reponses we received to the proposals for amendments which we put forward last autumn; and, last but not least, the points made in our brief debate in Committee.

Our main conclusion is that agency arrangements should continue unless there are good reasons in specific cases why they should end. But both the MMC and the Select Committee found that the present terms of the arrangements stood in the way of efficiency; and that, to remedy this, clear powers of control should rest with the water authorities with whom overall responsibiltiy for sewerage lies. Our amendments are therefore designed to ensure that agency arrangements continue, or are set up, wherever this would be cost-effective, while providing for a proper degree of control for water authorities.

Accordingly, our revised amendments retain the duty on water authorities and relevant authorities to endeavour to make arrangements. They provide for the Secretary of State to make regulations laying down requirements for arrangements. They make changes to the ways in which arrangements can be ended or varied, in particular providing a right of appeal by relevant authorities to the Secretary of State against decisions by a water authority. They also provide for transfer and compensation of officers affected by changes to the arrangements.

Of course, the duty is not an absolute one. It is to endeavour to make arrangements. There are already a number of cases where agency arrangements were never set up or have been ended by agreement. The amendments retain the existing provisions for the parties to agree not to have arrangements, or to have only partial ones covering, for instance, revenue works but not capital. They also deal with the question on new arrangements raised by my noble friend Lord Sandford. Subject to some limitations, there is a right of appeal to the Secretary of State for a relevant authority where a water authority turns down a request to set up new arrangements.

Turning to the regulation-making power, I should stress that it is designed to lay down the main requirements for arrangements, not to settle their terms in detail. We have it in mind to follow the recommendations of the MMC; for instance, that there should be clear powers for water authorities to ensure compliance with their regional strategies and priorities. But I am happy to give an undertaking that the Government will fully consult both local authorities and water authorities before any regulations are made.

As for ending and varying arrangements, the amendments retain the provision for this to happen by agreement and the Government expect the authorities, as responsible public bodies, to make every effort to reach agreement. If, in default of such agreement, an appeal is made to the Secretary of State, he would expect to favour the course which, subject to the circumstances of the individual case, appeared likely to be the most cost-effective, taking account of the position for both parties.

We have made significant changes to the amendments I tabled earlier. Our aim is to reflect more clearly the Government's view that agency arrangements should normally continue, but with terms designed to improve efficiency. More broadly, our intention is to harness together the local involvement and knowledge of the relevant authorities with the wider regional perspective and resources which the water authorities can bring to bear in the interests of the customers, who at the end of the day must pay for this service. I commend the amendments to your Lordships' House.

Baroness Fisher of Rednal

My Lords, I should like to thank the noble Lord the Minister for going to such a great deal of trouble over the arrangements for the sewerage functions. I should like to thank him not only as regards this clause but as regards other clauses as well. I know that this was the subject of quite a long discussion in the Committee stage. I accept that it is a complicated procedure. But the Minister has gone to a lot of trouble and he has made it much more realistic than it was in the past and, perhaps I could also say, fairer—fair to both sides, if I can use that phrase: the local authorities and the water authorities. On many occasions I criticise the Minister. This time I am saying, "Thank you for giving practically everything for which we asked".

Lord Sandford

My Lords, I should also like to thank my noble friend for introducing this amendment. I like to think that with this he and I can say that we have patched up our quarrel of four o'clock or so. In introducing this range of amendments, he has done everything for which the local authorities were asking—if I may speak for the metropolitan authorities as well as for the district councils—and rather more. We are most grateful to him for it. If he were to meet me in the bar when we adjourn, I should like to offer him a drink on the strength of it.

Lord Sherfield

My Lords, as noble Lords are aware, my interest in this amendment derives from my chairmanship of the sub-committee of the Select Committee on Science and Technology, which produced a report on research and development in the water industry. The interest of the committee and the reasons for it were fully and very ably explained by the noble Baroness, Lady White, in moving an amendment at the Committee stage which stood in her name and in mine. I need not therefore take up the time of this House in recapitulating her remarks. Suffice it to say that the committee's interest was to improve the efficiency of the industry; that this needs the application of up-to-date technology; and that the existing agency arrangements, in some cases at least, turned out to be a hindrance in this respect.

The committee found that the water authorities were at a disadvantage owing to the inflexibility of the existing arrangements under which it was very hard for the water authorities to vary them. The committee was, of course, aware of the recommendations of the Monopolies and Mergers Commission report about agency arrangements in the North-West and Anglian Water Authority areas, and the committee recognised that in many cases the agencies are in a position to carry out sewerage functions efficiently.

Now the Government, as they said they would, have brought forward this amendment to deal with this situation, and although I found the drafting perhaps a little obscure, it seems to meet the Select Committee's main point, and I therefore welcome it. However, I should like an assurance from the Minister on two points. First, that this amendment creates a true agency relationship between the water authorities and the district councils. Paragraphs 2 and 4 of the Schedule appear to establish this, and to make the main criterion the efficiency of the industry, to which your Select Committee attach such importance.

However, the wording of paragraph 2 of the Schedule is very general. Arrangements … shall be made with a view to ensuring that their sewerage functions, taken as a whole, are carried out efficiently". I am not quite clear about the significance or the interpretation of the words "taken as a whole". Finally, I hope that this compromise text will not remain in the dead letter office but will, in the intention of the Government, lead to change where change is needed.

Lord Bellwin

My Lords, by leave of the House, may I just say that I really did omit to mention the role that the noble Lord, Lord Sherfield, and the noble Baroness, Lady White, had played in bringing this matter forward in the first instance. I recall so well the Second Reading debate when we were very much on the receiving end of much criticism, and in consequent discussions with the noble Lord, Lord Sherfield, in particular. I think that the House would have to concede to him a great part in influencing our thinking, as well as to the noble Baroness, Lady Fisher, my noble friend Lord Sandford, and others. In particular, I feel that I ought to have said that before.

As to the assurance that the noble Lord asks of me, I will say that his interpretation is, to the best of my knowledge, correct and that I think there is no difficulty about this. I take his point about the wording, but I am assured that it is as we have said and as he wishes it to be.

On Question, amendment agreed to.

The Deputy Speaker (Earl Cathcart)

My Lords, as your Lordships will be aware, Clause 7 has been recommitted to a Committee of the whole House. Therefore, I cannot call Amendments Nos. 12 to 16A at this stage.

Clause 11 [Short title and commencement, etc.]:

Lord Bellwin moved Amendment No. 17: Page 8, line 15, leave out ("5") and insert ("6").

The noble Lord said: My Lords, I have already spoken to this amendment, and beg leave to move.

On Question, amendment agreed to.

Lord Bellwin moved Amendment No. 18:

Page 8, line 18, at end insert— ("(dd) Schedule ("Arrangements for carrying out sewerage functions);").

The noble Lord said: My Lords, I have already spoken to this amendment, and beg also leave to move.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendments Nos. 19 and 20:

Page 8, line 19, leave out ("paragraph 8") and insert ("paragraphs 8 and 10")

Page 8, line 20, leave out ("that paragraph") and insert ("those paragraphs").

The noble Lord said: My Lords, I should like also to move Amendment No. 20. These are technical amendments to ensure that the Treasury will have available, immediately on Royal Assent, their powers to issue fresh guarantees to any borrowings of the National Water Council which are transferred to one or more of the water authorities. The borrowings in question are all from the European Investment Bank and were borrowed by the National Water Council to be on-loaned to the water authorities. Negotiations are in process to transfer these borrowings to the relevant water authorities. I beg to move.

On Question, amendments agreed to.

Schedule 2 [Provisions relating to dissolution of National Water Council and Water Space Amenity Commission.]

Lord Skelmersdale moved Amendment No. 21: Page 11, line 38, leave out second ("and") and insert ("to").

The noble Lord said: My Lords, this is a technical amendment to correct a small error in the Bill. I beg to move.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 22: Page 12, line 41, leave out ("(2)") and insert ("(3)").

The noble Lord said: My Lords, this is again a technical amendment to ensure that the correct sub-paragraph is referred to in line 41. I beg to move.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 23: Page 12, line 42, after ("employment") insert ("or an agreement under section 26(2) of the principal Act").

The noble Lord said: My Lords, this is not a technical amendment but is necessary to ensure that the Secretary of State does not, as a result of paragraph 4, become a party to negotiating agreements and the line under Section 26(2) of the Water Act 1973. As your Lordships may recall, when the national Water Council's functions cease, the agreements to establish negotiating machinery under Section 26(2) will cease and so will the negotiating machinery established under those agreements. It is for the water authorities and the employees to establish fresh arrangements. This amendment is needed to put beyond all doubt that the agreements I have referred to are not ones where the Bill substitutes the Secretary of State for the National Water Council. To that extent it is a technical amendment. I beg to move.

On Question, amendment agreed to.

Lord Skelmersdale moved Amendment No. 24: Page 14, line 5, leave out sub-paragraph (5).

The noble Lord said: My Lords, sub-paragraph (5) of paragraph 6 is unnecessary. Your Lordships will notice that in the similar paragraph, paragraph 8, dealing with compensation there is no equivalent of sub-paragraph (5). The sub-paragraph was intended to empower the pension authority—which I understand will be the Severn-Trent Water Authority—to arrange for its functions to be discharged in whatever way was most convenient to it—for example, by a committee. However, I am advised that water authorities already possess this power, and to refer to it explicitly is therefore otiose. I beg to move.

On Question, amendment agreed to,

[Amendment No. 25 not moved.]

Lord Skelmersdale moved Amendment No. 26:

After Schedule 2, insert the following new Schedule—