HL Deb 08 March 1983 vol 440 cc90-153

3.14 p.m.

The Minister of State, Department of the Environment (Lord Bellwin)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 2 agreed to.

Clause 3 [Dissolution of National Water Council and Water Space Amenity Commission]:

Lord Nugent of Guildford moved Amendment No. 13: Page 3, line 26, at beginning insert ("Except as provided by section (Pension schemes) below").

The noble Lord said: I beg to move Amendment No. 13. With permission, I shall speak also to Amendments Nos. 14 and 51 in the Long Title. My amendments are designed to ensure that the new structure for managing the pension fund is constituted on a national basis which is satisfactory to all 10 regional water authorities and to their employees, and to ensure that this large fund—the fund is worth about £800 million—continues to be satisfactorily managed with regard to investment and continues to be sound and satisfactory. I should mention that this not inconsiderable item has so far received no mention at all in the proceedings in the Commons, nor in the Government's original consultation paper. Therefore, I am sure that noble Lords will agree that it deserves at least to be mentioned here to ensure that this pension fund has a satisfactory future.

I shall be able to be very brief because in the interval I have spoken with my noble friend and heard that Ministers are now aware that the management of this fund requires catering for as well as the administrative machinery for the payment of pensions. I have heard that they have an arrangement in mind which, by a somewhat circuitous route, will achieve roughly what I have proposed in my Amendment No. 14, which would be a board of trustees set up by the Secretary of State and representatives of both the employers and the employees in the regional authorities. So I move my amendment and speak to the other two to give my noble friend the opportunity to inform the Committee of this new arrangement, which I gather will achieve the end which I require. I beg to move.

Lord Skelmersdale

My noble friend Lord Nugent spoke also to Amendments Nos. 14 and 51. With permission, I should like to do the same. As the first chairman of the National Water Council, there is no one in this Committee who speaks more knowledgeably than my noble friend on matters relating to the water industry pension fund, which is at present a responsibility of the council.

There are two main points I would like to make in response to what my noble friend has said. The first is that the water industry pension fund is one of the funds established under local government superannuation regulations made under the Superannuation Act 1972. It is, in effect, a branch of the local government scheme. The regulations control in some detail the contributions which must be paid by members of the scheme and by the employers, and the benefits which in their turn are payable. However, I must remind him that no scheme has ever been established under Section 27 of the Water Act 1973, although that section does indeed empower the water authorities to establish and administer pension schemes and funds.

The second point I should like to make is to confirm that this very large pension fund, standing at present at over £800 million, is a vital matter for over 60,000 employees in the water industry and many thousands of pensioners. Proper arrangements must be made for the management of the fund and, as my noble friend has mentioned, for the collection of contributions and the payment of benefits once the National Water Council ceases to exist.

The Government have, of course, had this very much in mind from the moment the decision was taken to abolish the council. In the consultation paper that we published on 7th July last we suggested that the appropriate arrangement would be to continue with the fund which was part of the local government scheme. We suggested the designation of one of the water authorities to administer the fund on behalf of the whole industry.

The chairmen of the water authorities have considered this suggestion and I am pleased to inform the Committee that they are agreed that one of the water authorities will be asked to take on the role of administering body. Fresh regulations will be made under the 1972 Act transferring the existing fund to the designated authority, together with all the responsibilities for administering the scheme.

It may be asked why it is necessary to choose a water authority. The answer quite simply is that the chosen body must be a statutory body—that is, one which cannot go out of existence without legislation. In view of the massive responsibilities attaching to this position, I am sure your Lordships would agree that that is a prudent course. It is, of course, well precedented that one body should act on behalf of others in this way (for example, a county council is normally responsible for the superannuation not only of its own employees but also of those of the district councils within its area).

The chairmen are, however, concerned to ensure that there is proper involvement of all the water authorities in the administration of this fund and of the scheme. I understand that arrangements will be made with the designated water authority to ensure that a committee representing all the authorities—perhaps the water authorities' association or a committee of it—will have delegated to it the main pension functions. The ultimate responsibility will rest with the designated water authority, just as at present it rests with the council. But the other water authorities will all be closely involved, as I have indicated.

In the longer term, we understand that the water industry is likely to move towards an independent scheme, established under Section 27 of the 1973 Act. If they do so, paragraph 7 of Schedule 2 to the Bill provides that they must first obtain the consent in writing of the Secretary of State. I should like to offer the Committee the assurance that, before granting such consent, the Secretary of State would need to be assured that proper arrangements had been made for protecting the interests of all concerned—and that, as he has explained, is the purpose of my noble friend's amendment. I hope that my noble friend will agree with me that the Government are proceeding along the right lines in this matter, and will not have to pursue this particular set of amendments.

Lord Nugent of Guildford

I thank my noble friend for his answer. I recognise that the somewhat complicated machinery that my noble friend has contemplated and described to us will indeed provide what is required. It has to be done in this curious way because the noble Lord is abolishing the National Water Council, and therefore he has to find some other statutory body to take its place. It does do it. It brings in all the other water authorities. It will bring in the trade unions as well, and therefore it will provide a similar structure to what we have now. For myself, I am perfectly satisfied. Does the noble Baroness wish to speak?

Baroness Fisher of Rednal

I was supporting the noble Lord, Lord Nugent of Guildford, and I should like to clarify one of the things which the noble Minister said in reply to the amendment. Is it the Yorkshire or the South Yorkshire Water Authority—I have forgottin which—that may be the authority that takes over the trusteeship of the fund? I thought when the noble Lord replied that he said that the representatives on the new body which will be looking after the pension fund would be representatives from other water authorities, so they would be members of a water authority.

If that is the case, how will employee representation be safeguarded as the noble Lord, Lord Nugent, wanted in his amendment? I understand that there are four employee representatives on the body as it is now established under the National Water Council. I know that the noble Lord had three in his amendment. However, I think it is on the record that, after the eight and a half years which the noble Lord, Lord Nugent, took us back when he was the first chairman, there is a skill and expertise that has been set up with that organisation, and there has been nothing untoward with the employee representation on that body.

I should like to clarify the position. Is it what the Minister has said? Will the representatives be only from water authorities? As there was no specific number that the Minister would accept as employee representatives when I moved the amendment on the first day of Committee, will he tell me whether that point will be covered?

Lord Skelmersdale

When I replied to the opening speech of my noble friend Lord Nugent I was careful not to say which particular water authority would carry out the functions, because that is still a matter for discussion. The noble Baroness is quite right when she says that the Yorkshire Water Authority would be appropriate, but that has not been decided. The reason that it is appropriate is that most of the pension staff are employed in Sheffield, which is within the area of the Yorkshire Water Authority.

So far as representatives of the employees being on the pension administering body, whoever that may finally end up to be, there is, as I understand it, absolutely no reason why they should not be involved in whatever the new arrangement is in exactly the same way as they are now. There are two sides to a pension fund. One is the administration, or trusteeship, if you like, of the capital sum. The other is the actual paying out and receiving of personal contributions at, as it were, the other end. One of the things that my noble friend Lord Nugent was particularly worried about was the trustee arrangement which, as I say, will be done collectively by all the national water authority chairmen.

Lord Nugent of Guildford

I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

[Amendment No. 14 not moved.]

3.27 p.m.

Lord Nugent of Guildford moved Amendment No. 15: After Clause 3, insert the following new clause:

("Water Industry Arbitration Board.

.—(1) The Secretary of State shall appoint a Water Industry Arbitration Board (hereinafter referred to as "the Board").

(2) Any dispute concerning any matter relating to the remuneration or other terms or conditions of employment of persons employed by the Water Authorities shall be referred to the Board.

(3) It shall be the duty of the Board—

  1. (a) to consider representations from the parties to any dispute referred to them under subsection (2) above;
  2. (b) to consult with any individual or organisation appearing to them to be appropriate; and
  3. (c) to adjudicate on the dispute.

(4) Any adjudication by the Board under subsection (3) above shall form part of the contract of employment of employees of the Water Authorities and be enforceable accordingly.").

The noble Lord said: I beg to move Amendment No. 15, and I understand that it will be for the convenience of the Committee to debate Amendments Nos. 16 and 50 at the same time. In my Second Reading speech I indicated that the experience of the water strike showed that the present industrial relations structure was not satisfactory. Clause 3, by abolishing the National Water Council, also abolishes the existing NJIC and NJC structures and the agreements. Therefore, a new structure has to be created in its place. I am informed that current thinking by the DoE and the RWAs is a new structure of NJIC and NJC and agreements similar to the existing National Water Council structure, with the Association of Regional Water Authorities replacing the National Water Council.

In my opinion, this would not be adequate. The strike was an experience which has left a lasting mark. It lasted nearly five weeks. Over 90,000 households, some quarter of a million people, were during that period cut off from a piped water supply. That means that they had to get all their water supplies from a local standpipe, and that in the house where they lived there was no water-operated appliance working. This, in mid-winter, is a considerable hardship. You can imagine—I am sure some of your Lordships will have visited streets where the water supply had been cut off—just what it means.

Take a young household where the only hot water is the kettle which the housewife boils, and getting the children ready to go to school. What absolute hell it must have been for her struggling with all those problems without a normal hot water supply or, for that matter, a normal cold water supply except for what came out of a bucket which her husband had probably fetched the night before. No washing machines working. All the water appliances that most of us live by nowadays cut off. For old people probably depending on a hot water radiator system to heat the house, there would be a stone cold house and no hot baths. That is hardship. I reckon that a plentiful supply of pure water piped to the house is one of the basic necessities of life, and to have it cut off is barbarous and not acceptable in a civilised country. To make the domestic household the battleground for an industrial dispute is something we should obviate completely for ever.

That is my justification for seeking more robust machinery for settling disputes in the water industry. The existing machinery is set out in the Green Book, which some of your Lordships may have, which is the manual of the water industry which I negotiated when the new water industry came into being in 1973–74. It provides an arbitration clause, in Clause 12 of the agreement, but this arbitration system works only if both sides are willing to work it. I would add—because it is a major factor—that there is no sanction if there is a breach of the clause.

Amendment No. 16 virtually reproduces the clause in the existing agreement to which I referred. It is effective, because it was negotiated and agreed between employers and employees 10 years ago. It looked as if it would work all right, but in the recent dispute it simply did not protect people from the hardships I have indicated because it fails when either side is not willing either to go to arbitration or to accept an award when an award is made, as happened in this case. The first arbitration, the Buchanan arbitration, made an award but the trade union leaders announced they could not accept it, and went into strike action.

My amendment does not pretend to be perfection in drafting or in a legal fashion, but it is a peg on which to hang this debate, which I suggest is a proper debate for Parliament to have, giving us a chance to consider whether we can find a better way of settling a dispute in this vital field. My concept is a statutory arbitration board with a specific duty to adjudicate on disputes in the water industry. My thought is that the chairman might be someone above the political battle, such as a High Court judge or Law Lord, assisted by two other members experienced in industrial relations, one from the employers' side and one from the employees. Their terms of reference would be broadly to examine the submissions of both sides in terms of the intrinsic needs of the industry and against the background of current conditions in the national economy.

The award of the tribunal would have force—as subsection (4) of my amendment says—as "part of the contract of employment", which means it would be legally enforceable. Support for that legal enforcement is to be found in the Employment Act 1982, where there are substantial penalties for a breach. The 1982 Act appears to my lay mind to indicate that it is the employer who would have the right of action, but I feel it would be desirable that the injured party should have the right of action; that is, the consumer, the housewife, who has been cut off. Therefore, I should like to see the law extended in that fashion so that those who had suffered could go to court and get their case heard and get the damages that were fitting. That is no more than common justice, in my opinion.

In case doubt be cast on the effectiveness of such a civil penalty, I recall the strength of discipline in the trade union movement in the winter of 1977–78, when we ran into certain difficulties, and I was in the chair of the Water Council. The union leaders had come to agreement with me on what the award should be, which was acceptable to the Government of the day, and some of the union members in the North-West had refused to accept it. But the union leaders, very courageously, visited those dissidents and had quite a rough meeting. They stood up to them and they made it stick. I have no doubt, therefore, that if the union leaders want to make it stick, they will. And if there are substantial damages which they might run into in the event of a breach, I feel sure that the union leadership would be well able to make such a situation effective.

I should have mentioned that I am not suggesting that we should go back to the 1875 Act, a measure which I suppose one must consider in this context. The Committee may recall that that was repealed some 12 years ago. The effect of that Act was to make a strike in the water service a criminal offence, automatically and without reference to any tribunal, but I am sure that noble Lords in all parts of the Committee would agree that that would be too one-sided and therefore not acceptable.

I recognise, of course, that a statutory arbitration board carries major political implications. For' my noble friend and the Government, it means conceding an area of wage negotiations to be outside Government influence. Experience indicates the danger sometimes of inflationary awards, which are therefore objectionable and a major concession in regard to Government policy. I also recognise that noble Lords opposite, and trade union supporters generally, would have serious objection to any section of the trade union movement giving up the right to strike for this body of employees; it would be a major policy concession. However, it is relevant to observe that in this particular case the workforce did not gain very much by their strike. The difference between the Buchanan award, the first one, which they rejected, and the Johnston award, which they accepted, was only £3 a week, from £10 to £13, so it will obviously take two or three years for them to make up what they lost in wages during the weeks of the strike. Therefore, the amount at stake in this case was not large.

I have set out the case and the objections which are likely to come from both Front Benches. It may be they will both unite against me. On the other hand, it might be that some political sacrifice from each side is the path to consensus, and this is a field where we badly need consensus. It might, then, dispose both sides to recognise that our people deserve something better than their domestic lives being made the battle-ground for an industrial dispute. I therefore hope that my amendment will be considered to deserve further consideration.

Lord Irving of Dartford

I should first declare an interest, having an association with NALGO. I wish to speak in support of Amendment No. 16 which, stripped of all legal verbiage, requires the authorities to seek consultation in respect of the establishment and maintenance for the settling by negotiation of terms and conditions of employment, with the provision for reference to arbitration in default. In other words, the amendment is designed to reinstate Section 26(2), (3) and (4) of the Water Act 1973, as the noble Lord, Lord Nugent, inferred. Like him, I too deplore the inconvenience which was caused to many people by the strike. The difference between the noble Lord, Lord Nugent, and myself, is that I do not believe that his solution would provide a better state of affairs, and it might lead to a worsening of the conditions, not only in that industry, but in other industries, too.

It is very attractive indeed to believe that one can regulate everything, including industrial relations, by law. But the fact is that the law does not provide good industrial relations; they have to be worked for. The noble Lord, Lord Nugent, has said that the structure, as he called it—the arrangements—had not worked. I do not think that NALGO would believe that, certainly not in regard to the white collar workers; they have worked very well.

During the strike to which the noble Lord referred, the newspapers spoke about the industry having a long history of industrial peace. The manual workers claimed that they refused to go to arbitration because the intervention of the Government and the Secretary of State had made impossible free negotiations, as provided in the Act. Noble Lords may argue as to whether or not there was an intervention, but the fact is that the unions believed passionately that that was so, and unlike the noble Lord, Lord Nugent, they would consider that they gained more from the action that they took, however deplored it might have been, than they would have secured through free negotiation. But it is not our purpose to argue that point this afternoon. The whole business was aggravated by the mistakes of the management, and their exaggerations and miscalculations, which I believe must have puzzled many private employers.

What the strike proved was that in a vital industry, such as the water industry, men or women cannot be coerced into falling in line if they have a strong sense of grievance; and that is true also of the legal sanction. The unhappy fact of the matter was that of themselves the Government were quite powerless to bring the strike to an end by sitting it out, as they did in the case of the National Health Service workers, or in any other way; and no compulsory arbitration board could change that fact. In the end there had to be a voluntary coming together. The tragedy was that it took so long.

Now the noble Lord wishes to abolish the arbitration procedure and introduce an arbitration board which, in a simple, easy, clean way, would virtually hand down decisions from above. Why should the workers in key industries accept, any more than they would accept it under the other arrangements, something that they find utterly unacceptable? The truth is that there are no substitutes for good will and good industrial relations, which, as many employers know only too well, have to be earned. It may be that in some industries Mr. Tebbit can use the law, or a large Conservative majority to get workers into line. But after the recession he will not be able to do without the willing co-operation of unions and workers, not just in the water industry, but in all industries, if we are to produce at the quality, the pace, and the price which will match those of our competitors.

It is also true that it is very difficult for trade unions not to be suspicious of a board of this kind, particularly following the Government's action in suspending the Civil Service Pay Unit and Schedule 11 to the Employment Protection Act 1975. If the decisions being handed down by the arbitration board are unacceptable, why should the Government not do exactly what they did in those two cases? As I have said, there are no substitutes for good industrial relations. They have to be earned through effective consultation and negotiations, with arbitration as a fallback, and certainly with a strike as the weapon of last resort. I hope that the Minister will not take the retrograde step of leaving out of the Bill provision for proper procedures, including arbitration.

These amendments were moved during the Report stage in another place. The Minister, Mr. Shaw, stated that Ministers considered it "unnecessary" for there to be statutory requirements for the arrangements to be made for the negotiation and agreement on pay and other terms and conditions of service. As reported at column 263 of the Official Report, he added that it is up to— the chairmen of the regional water authorities, as now formed into the association, in negotiation … with the trade unions to determine what form of central or regional bargaining structure they wish to have". As Mr. Howell pointed out, that leaves it up to any regional water authority, if it so wishes, to attempt to establish its own wage negotiating machinery outside the scope of any national agreement—a move which would be strongly opposed by the TUC-affiliated unions concerned with the water industry. The TUC supports national determination of pay and conditions of service in the water industry and deplores the Government's failure to make a clear statement on the need for some form of agreed national bargaining machinery. Not only NALGO, but also all other unions with members in the water industry, attach great importance to the maintenance of national joint negotiating machinery in the industry. Therefore, I hope that the Minister will reject Amendments Nos. 15 and 50, and accept Amendment No. 16.

3.47 p.m.

Lord Campbell of Alloway

I should like to say a few words in opposition, in particular to Amendment No. 15. But before doing so, like other noble Lords, I should like to pay tribute to the expertise of my noble friend Lord Nugent of Guildford, to whom I of course defer. I am sure that all of your Lordships, on whatever side of the Committee you sit, are grateful to him for giving us the opportunity of a valuable peg on which to hang a constructive debate on a question which transcends the particular problems of the water industry—the subject matter of the Bill.

Before dealing with the reasons that I have in mind, so as not to exacerbate the situation, I should like to say, with respect, that I do not agree with the analysis of the noble Lord, Lord Irving of Dartford. It is true that there were mistakes of management—perhaps there always are—but there was an element of union policy dedicated to show a degree of muscle against the present administration which has manifested itself over the last two years. During the last two years there have, I think, been only two months when there has not been some dispute in the public sector, and that is why the public has been trapped, like a pawn, in the power struggle.

I agree with my noble friend Lord Nugent that the present structure of the water industry is not satisfactory. I agree with the noble Lord that something must be done to seek to avoid stoppages not only in this essential service, but, I would suggest, in essential services in general. Some of your Lordships may remember my Amendment No. 54 at the Report stage of the Employment Bill (when I was supported by my noble friend Lord Renton), which reflected this anxiety during the hospital workers' dispute Curiously enough, that amendment was opposed by my noble and learned friend the Lord Advocate on the ground that Section 5 of the Act of 1975 remained on the statute book and that that rendered it a criminal offence to break a contract of employment, inter alia, to endanger human life, or to cause serious bodily injury—

Lord Renton

If there is a conspiracy.

Lord Campbell of Alloway

Of course, if there is a conspiracy to do so. In the context of labour law as it has developed in those circumstances—I am grateful to my noble friend—there is the conspiratorial element in the organisation of the industrial action. But I agree unreservedly with my noble friend Lord Nugent that it is nonsense to seek to have resort to the criminal law and, with the utmost respect, I wholly disagree with the view advanced by my noble and learned friend the Lord Advocate. It is high time we had no criminal sanctions against workmen in connection with industrial relations. Some other means must be devised. The civil courts will never, should never, must never, order a man to work. That is slavery. The criminal law is inappropriate. Some other means must be found; and they must carry with them a requisite degree of acceptance.

All noble Lords appreciate that there is no fail-safe mechanism, that there is no universal panacea. It is apparent that this subject is under active consideration by my right honourable friend the Secretary of State at this moment; and, indeed, was so long before paragraphs Nos. 59 to 60 of the Green Paper appeared, and was so in the light of the recent events to which the noble Lord, Lord Nugent, referred. But the question is this. What is to be done? Perhaps a cooling-off period. That involves a temporary withdrawal of the right to strike. Perhaps statutory, arbitral machinery, such as is proposed by Amendment No. 125 in particular. That is a permanent withdrawal of the right to strike. Perhaps other means.

I would urge your Lordships to reject this amendment for five reasons. First of all, it pre-empts the options available to my right honourable friend the Secretary of State at the present time, and it is apparent from the interview that he gave on television last night that he has not yet made up his mind which option he is going to take. Secondly, it affects a single-service industry, the water industry, whereas we must come to grips with the problem in all service industries generally. Thirdly, as it stands, and as has been recognised by my noble friend, it affords no right of action to the consumer because Sections 15 and 16 of the 1982 Act probably do not afford any locus standi to the consumer to pursue. Fourthly, which is very important, it forecloses on due consultation with the unions, which must be had before any massive change of direction is to be made in industrial relations law—another point fully acknowledged by my noble friend Lord Nugent.

Lastly, and perhaps least, it could be that this option, the mandatory statutory machinery, the arbitral machinery proposed by this amendment, would not be acceptable because of its inflationary aspect, which adds an inflationary bonus above the ordinary cut and thrust of negotiation between employers and workers. But for all these reasons at this stage I would respectfully suggest that it would be premature to carry such an amendment, and that this Bill at this time is not an appropriate vehicle in which it should be carried.

Lord Shinwell

It occurs to me (but I may be proved to be wrong when I so surmise) that we are engaged in a debate which extends far beyond the management and administration of the water industry. It seems to me that we are debating two principles which either, on the one hand, have been accepted and partly rejected, or, on the other hand, have been rejected in their entirety—depending very largely on what may be described as a political point of view. We are debating to some extent what kind of society we would regard as civilised; one that satisfies perhaps a modest percentage of the population but might have the effect of improving industrial relations.

My noble friend spoke of the possibility of dealing with this subject in the context of views on industrial relations. If one recalls what happened at the outset of the water dispute, it will be within the recollection of most noble Lords who read the newspapers on the subject and who gave it some concern that those who were threatening a strike or were about to embark on an industrial dispute seemed to be hesitant about it, seemed not quite certain whether they should take a drastic course of action or to wait for a decision by Her Majesty's Government or even by those who were responsible for the management and administration of the water industry.

This was largely because of the attitude—I regret to have to say this, but I think I am justified in making reference to it—of the press. It seemed to me at the time that the press were looking forward to a dispute which might have an effect on our political situation in readiness for what may happen in the course of the several months that would pass before June or October, or what-have-you, was reached. It was a pity that the press did not give it the consideration that it deserved instead of seeming to provoke the waterworkers to undertake all that is associated with an industrial dispute, thereby imposing severe hardships, as undoubtedly it did, on a very large section of the community. No one can deny that. I would say that every Member of your Lordships' Committee regrets that that should have happened.

I mentioned two principles. One of them is that those engaged in labour have a perfect right within the law to withdraw their labour as and when they think it necessary. That cannot be denied. It is embodied in our legislation. Almost from the beginning of this century a number of people associated together in what was then described as the Labour Movement to oppose anti-trade union legislation. As the result of various incidents—the Taff Vale dispute, the Osborne judgment and a number of other matters which I recall—the Labour Party was formed. The Labour Party was in fact formed out of the anti-trade union legislation, as they understood it.

That has been going on throughout the years with amendments to legislation, new legislation, advanced legislation, new ideas, new concepts and the like. Now we have reached the stage where this dispute has come to an end and we are considering what is best in the circumstances in order to avoid a similar dispute. We must endeavour to prevent any hardships being imposed on the population of our country, our industries, our general body of consumers. That is why I ask: what can be done?

It has just occurred to me that the subject we are discussing extends far beyond the administration and management of the water industry. This is a matter for discussion between the Government of the day—either the present Government or some future Government, of whatever political opinion—and those responsible in the trade union movement; that is, to a large extent (probably 80 per cent.; it may be more, it may be less) those associated with the Trades Union Congress. Why should there not be discussions among those associated with the General Council of the Trades Union Congress, members of the Government and perhaps a number of industrialists associated with water supply? Why should that not happen and develop in some form a more satisfactory concept than that which now operates? Why is that not done?

The other principle, of course, apart from the one I have mentioned of the rights of those engaged in labour to withdraw their labour as and when they think necessary, concerns those who believe, whether rightly or wrongly, that what is regarded as essential in the interests of the general body of consumers and the industry should not lead to an industrial dispute. Indeed, that was developed in the course of the recent trouble in the press, in your Lordships' House, in the other place and elsewhere. What should be regarded as essential is something that the noble Lord opposite referred to in relation to the trouble that occurred over the health service. He referred to the trouble that occurred over the health service and that some people regarded the withdrawal of labour by those associated with the National Health Service as interfering with something that was regarded as existing essentially in the interests of those who required the service. What is essential? What is not essential? Who is to say what is right and what is wrong in either case? It is very difficult to find a solution to that aspect of the problem.

Therefore, what occurs to me—if I may venture to offer a proposal to your Lordships—is that whatever may happen in the course of this debate (whether we accept the amendment or oppose it, or whether we oppose what the noble Lord, Lord Nugent of Guildford, has proposed and what has been said by my noble friend on this side of the Committee) I propose setting that aside or coming to some conclusion of a temporary character until those bodies who have a status in the country can discuss the matter: first of all, Her Majesty's Government, of whatever political complexion, and also the trade union movement, which, whether some people like it or not, also has a status in the country as one of our national institutions.

Lord Renton

The noble Lord, Lord Shinwell, speaking from the depth of his great experience, has very clearly indicated the dilemma which faces the community and faces Parliament in considering two conflicting principles, both of which are well established. One is the right to strike, the other is the right of the community to continue to receive essential services for which it pays. In the case of the police of course we do not acknowledge the right to strike.

These two principles surely should not be beyond the wit of Parliament and of the trade unions somehow to resolve. It was quite intolerable that a whole civilised nation like ours, nearly 60 million people, should have been held to inconvenience, hardship and, it could be said, to ransom, by a small body of essential workers numbering fewer than 30,000, because we had not devised adequate means to deal with such a situation.

On the amendment of my noble friend Lord Nugent of Guildford and the alternative amendment of the noble Lord, Lord Irving of Dartford—to whom I always listen with sympathy for I was born at Dartford—we now have the opportunity of considering this matter, but in relation to the water supply industry only, whereas it is a much bigger question than that, as my noble friend Lord Campbell of Alloway has pointed out. My noble friend Lord Nugent has an amendment which indirectly might be thought to solve the problem. If he has it in mind that making the adjudication part of the contract of service and the breach of the contract leading to civil action against those people who individually or collectively break the contract, then it could be said that a sanction is being introduced which overcomes the difficulty about interfering with the right to strike. It provides a sanction. But having listened to my noble friend Lord Campbell of Alloway and the five reasons which he gave, I must confess that though I felt great sympathy with my noble friend Lord Nugent, I think that my noble friend Lord Campbell was right to point out, for the reasons that he gave, that we cannot deal with this matter in this way on this Bill.

I wonder whether I may make just two further comments. One arises from the speech of the noble Lord, Lord Irving, and also the speech of the noble Lord, Lord Shinwell. The noble Lord, Lord Irving, expressed the point by saying that there is no substitute for good industrial relations. I regard that as a counsel of perfection. Alas, it is almost a counsel of despair because although good industrial relations are, fortunately, the more general rule, experience has shown that there are things which enter into good industrial relations which sour them, which prevent them from providing the answer for the community. One has only to consider politically motivated people, especially I am sorry to say when there is a Conservative Government in power. One has only to consider the way in which the endeavours of honest, good, moderate trade union leaders are impeded by the action of militants. We have had to put up with that sometimes in essential services also. So we must not—we dare not—rely simply upon that counsel of perfection.

My other comment is this: that, alas, the system of industrial negotiation that we have, even when it is accompanied by compulsory arbitration, provides a built-in guarantee of more or less inflation, as my noble friend Lord Campbell of Alloway pointed out in regard to his fifth point. When my noble friend Lord Nugent suggested that there should be an adjudication board consisting of an independent chairman, perhaps of our profession (a lawyer or, more eminently, a judge), one representative of the trade unions and one of the employers, I thought: "Oh, there is going to be the usual horse-trading, the usual compromise and the usual contribution towards inflation."

If I may make a general point in conclusion, I hope that if we are going to rely upon compulsory arbitration or adjudication on any occasion in future, we should always have five people, not three. We need an independent chairman and representatives of both sides of industry and we need to have represented the consumers and the national economic interest. I therefore think there should always be a representative of the Treasury or the Department of Trade on any such tribunal; and then we may get solutions which will not be a guaranteed contribution to inflation. I think we owe a great debt to my noble friend Lord Nugent for raising this matter. I have not widened the debate too much: I have only followed what others have said. But, valuable though this debate may be, I doubt whether it can result in a Division which would provide a solution.

4.12 p.m.

Lord Rochester

I very much welcome the constructive nature of the debate that has taken place so far. I am sorry that, like the noble Lord, Lord Campbell of Alloway, in particular—with whom, not for the first time, I found myself very much in agreement—I cannot support the amendment moved by the noble Lord, Lord Nugent of Guildford. I simply do not think that it is practicable, without a greater degree of consent than is at present apparent, to invoke the law to prevent people directly involved in disputes, even where they may endanger life or limb, from withdrawing their labour if they are determined so to do. I do hope that in saying that I shall not be accused of caring more about the right to strike than about the right to live, because that is not true.

The great majority of ordinary British working people, in my view, do not want to strike and will normally do so only if they feel they are being exploited or treated unfairly. What is necessary, as the noble Lord, Lord Campbell of Alloway, said so aptly, is to find some means whereby the pay and employment conditions of people engaged in these essential services can be so determined that they no longer perceive the need to take industrial action and are willing instead to behave with sufficient responsibility to ensure that the community does not have to suffer continuing disruption. I doubt very much whether that means is to be found by imposing immediate statutory arbitration in the water industry alone.

In the debate on the gracious Speech last November, I suggested in some detail a possible way in which pay determination arrangements for people employed in key occupations might be introduced with general agreement. I will not elaborate on that suggestion now, except to say that in my view any such arrangements need to cover many more people than those engaged in the water industry. A great deal more consultation will be necessary—and here I agree very much with what the noble Lord, Lord Shinwell, had to say- before any such arrangements can be implemented. I repeat that a great deal more consultation is required.

The noble Lord, Lord Nugent, said—and I thought it was typical of him so to do—that he would like to see a consensus in this matter. So would I; and since I do not feel able to vote for his amendment as it stands I can only hope that he will not place me in the position of having to vote against it. Somehow it is in the nature of the discussion that has taken place so far that I do not think I shall be put to that test.

I am glad to support, so far as it goes, the amendment which was moved by the noble Lord, Lord Irving of Dartford. In my view, it is highly desirable that there should be consultation with the relevant unions with a view to establishing, after the reorganisation of the water industry, an agreed negotiating procedure under which unresolved disputes should ultimately be referred to arbitration. But I feel that a lot more education is needed before negotiators are sufficiently convinced of the desirability of making collective agreements legally enforceable contracts for them to be workable in this country. That difficulty, it seems to me, is recognised in the amendment moved by the noble Lord, Lord Irving.

At the same time, the feature of the recent water dispute which was most objectionable to me—and I daresay to many of your Lordships—was the failure of the unions to honour the undertaking in their current procedural agreement to go to arbitration. Against that background, I should like to revert, if I may, to a suggestion which I made in a debate in this House on trade union immunities nearly two years ago: namely, that the Government should consider introducing a further code of practice dealing specifically with negotiating procedures. Basically the idea was that throughout British industry arrangements should be established like those operating elsewhere in Europe, under which disputes concerning agreements already entered into should be settled ultimately by arbitration instead of by industrial action.

The provisions of such a code might thus become admissible in evidence and taken into account in proceedings before an industrial court or a tribunal. In that way I thought it might gradually, and with a sufficient degree of consent, be possible to reach a position where the organisers of industrial action taken in breach of collective agreements would no longer have legal immunity and could be sued for damages.

In reply to that debate, the Government spokesman—I think it was actually the noble Earl, Lord Gowrie—was kind enough to say that serious consideration would be given to that proposal. Yet when, during our discussions on last year's Employment Bill, I reminded the Government of that undertaking, I was told that there was no plan to advance the matter. I have told the noble Lord, Lord Bellwin, that I was going to raise this matter again and therefore I shall quite understand if he does not feel able to give me an immediate answer; but if that is still the position, I should like to know why it is.

For the rest, it is my view that in essential services such as water supply, as elsewhere in industry, the best hope of making progress lies in increasing employee involvement, and particularly in achieving a common awareness on the part of all employees in these undertakings of the relationship between pay, prices and jobs. That may sound an unexciting and lengthy process, as indeed it is; but I fear that any attempt prematurely to enforce collective agreements by law will, as the Donovan Commission concluded and as was demonstrated by the outcome of the 1971 Industrial Relations Act, fail until such time as changes in our dual system of collective bargaining arrangements have been effected and the incidence of unofficial industrial action has been greatly reduced.

Lord Howie of Troon

I want to do something which it never occurred to me in my wildest dreams I would ever dare to do, and that is to disagree with both of my noble friends Lord Irving of Dartford and Lord Shinwell at the same time, and to go further than that and agree with the noble Lord, Lord Nugent of Guildford, who is clearly in the right in this instance. I hope that, whether or not he is successful in carrying the amendment today, he certainly carries the idea and persuades the Government, whom we know to be open-minded in all matters.

But, first, like my noble friend Lord Irving of Dartford, I should like to declare an interest. He declared an interest in that he had a relationship with a trade union, and a very important one at that. The interest that I declare is the interest which we all have in this House and elsewhere as consumers. We are all occasional users of water—in moderation, it is true—and we cannot escape it. But this fact, that we are all consumers of water, highlights the weakness in the case of my noble friend Lord Irving.

He, to my mind at least, laid out clearly, strenuously and convincingly the generalised argument in favour of trade union activity in the normal relationship between employer and employee. But the case that we are considering today is not of that order. Because water is an essential, the strike or the industrial activity, whichever form it takes, moves beyond being a dispute between employer and employee and becomes, by its very nature, a dispute between the employee and the consumer. That means that the strong arguments, which my noble friend Lord Irving used in one context, do not survive when they are translated into this new context.

By its very nature, a strike in an essential service industry of this kind, regardless of the intentions—however pure they are—of the unions, must be directed against the consumer, and these are the very consumers whom the noble Lord, Lord Campbell of Alloway, and the noble Lord, Lord Renton, desired to be drawn into this. I think that, in some respects, the noble Lord, Lord Renton, was correct. In so far as there is some kind of tribunal, it must be a tribunal of five, if you can have such a thing, rather than a tribunal of three. So I think that there is great strength in the argument that, in these essential industries, strikes should be forbidden or, if not forbidden entirely, subject to the strictures of this amendment.

But that, of course, as my noble friend Lord Irving rightly hinted, lays employees open to great danger. It is not always the case that people who give up the right to strike find that they are rewarded by justice; and under some Governments the justice would be less than under others. I do not name any Government in particular in that respect. So that means that if employees give up the right to strike and to attack the neighbours—which is what they do, however well-meaning they may be—they must be given some other kind of safeguard, which must be some form of comparability in their earnings with the earnings of others. That comparability has to be worked out through some kind of public board. Whether the public board is the tribunal, as instanced in this case, or whether it is some longer-standing organisation, this is not the place to argue today. But there should be a machinery which replaces the strike weapon as a means of acquiring, or hoping to acquire, justice and which does it instead.

I thought that the recent strike in the water industry was an almost total shambles. It was an almost total shambles, because neither side really wished to be involved at all in a strike. I think both sides realised in their heart of hearts that they were in the wrong context for striking and, consequently, everything in it was handled badly. The only element of professionalism which I, as an outsider, could discern in the strike was the performance of Mr. Jim Dickens, who at one time was a notable and persuasive advocate of the Tribune view in another place—and a most admirable Member of that other House he was, as all of us who were colleagues of his in those days will readily agree. He shone through that whole amateurish shambles as the only professional in sight. But, be that as it may, in the end the strike had to be resolved by something not unlike the kind of thing which I dare say underlay the amendment put forward by the noble Lord, Lord Nugent. It may not have been exactly what he had in mind, but it was an ad hoc version of something like what he had in mind.

I have only one last point to make before I resume my place. In the course of his remarks, the noble Lord, Lord Nugent, said that both Front Benches were probably agreed to oppose him on this matter. Of course they are. In the face of sense, the two Front Benches always combine to oppose it. I hope that, whether or not the noble Lord, Lord Nugent, succeeds today, the idea that he has in mind succeeds and that it will not be too long delayed.

Viscount Massereene and Ferrard

I heartily agree with everything that the noble Lord, Lord Howie, has said. In fact, I myself have used his words in the past. We are inclined to forget that we are talking about a public utility. We ourselves are composed of nearly 90 per cent. water and for 29,000 workers in a public utility to hold the nation to ransom is deplorable. It is a question of what I call the last link in the chain. These water board workers have not invented water. They have not manufactured water. It is a gift of God or, if you prefer, nature, which comes out of the ground. They have not even erected the buildings or invented the machinery that pumps up the water. Yet they have this vast power. They can hold the whole nation to ransom, except for parts of Scotland where you just put a pipe in a burn. In other countries, employees in public utilities, especially water, have to sign a special agreement to the effect that they will not strike. It is time that we in this country had something like that, because we are out of date. I shall not go on, because I came in at the end of the debate. But if my noble friend Lord Nugent of Guildford takes this amendment to a Division, I will vote for him.

4.29 p.m.

Lord Bellwin

We have had a very good debate, although some may think that it was more appropriate to a Second Reading than to a Committee stage. But that seems to be a fate to which I am committed. I am sure that my noble friend Lord Nugent will be gratified by the very constructive nature of the debate and, certainly, I welcomed it for that. I, too, am speaking to Amendments Nos. 15, 16 and 50. Perhaps I may say at once that my noble friend Lord Nugent has clearly thought out his proposals with great care, as we would expect of him. Nobody underestimates the importance of this subject.

To deal first with Amendment No. 16, your Lordships will notice that it seeks to reinstate provisions which are in the Water Act 1973 and which will disappear when the Bill becomes law. These provisions relate to negotiations over terms and conditions of service. Even when the Bill was first drafted the Government considered it undesirable and unnecessary for there to be statutory requirements as to arrangements to be made for the negotiation of agreements on pay and other terms and conditions of employment. The Government's view has been, and remains, that employers and trade unions should be free to establish whatever machinery they consider appropriate and to change it by mutual agreement, if and when circumstances require.

It is too early, perhaps, finally to draw any general lessons from recent events about industrial relations in the water industry or how they are to be improved in the future, but the all-out strike, which ended when it was halfway into its fifth week, can hardly be regarded with equanimity. The Government's mind is not closed to any possible further measures needed in the context of such strike action. We shall not hesitate to take any measures, statutory or otherwise, which we are convinced would be both effective and beneficial.

Section 26 of the Water Act 1973 provides for the National Water Council, which is comprised as to half its members by the chairmen of water authorities, to seek arrangements for the negotiation of conditions of employment, in very much the same way as this amendment proposes in respect of the water authorities, one and all. The recent strike and the recent difficult negotiations on pay occurred within a framework similar to that which would result from the present amendment. I am sure the Committee will agree that this statutory framework has not proved entirely satisfactory and that at the least the two sides should be free to seek any other framework which will serve them, and the public interest, better. Whatever views may have been expressed before, both by the parties and by others, I have no doubt that the right course is for all concerned now to think out afresh what negotiating framework is needed. I hope that my noble friend will accept that what is proposed is not bound to help the establishment of the proper dialogue between management and employees in the water industry which is in the best interests of good industrial relations. In the light of that reply to my noble friend's amendment, I hope he will accept the Government's view.

To turn to my noble friend's Amendment No. 15, I am sure that we all understand well the wish to establish a means of resolving disputes in the water industry. I, too, share his concern—as must we all—in the light of the recent dispute and the way it remained unresolved for a considerable space of time before being finally settled in the way that it was. Partly with these events in mind, therefore, and partly for more general reasons, I must question this amendment which would have the effect, as my noble friend has told us, of setting up an arbitration board which would hand over to a third party the responsibility for determining the industry's wages bill, whatever the wishes of the two sides.

There is already provision for arbitration in the industry's national agreement—for example, if the two sides of the water industry's National Joint Industrial Council cannot resolve a difference. That provision rests on a statutory basis. Subsection (2) of Section 26 of the Water Act 1973, to which I have already referred, includes the words "with provision for arbitration" in its specification for the negotiating arrangements to be procured by the National Water Council. The NJIC agreement provides for arbitration by the Advisory, Conciliation and Arbitration Service, or some other body as may be agreed between the two sides. The national agreement is that arbitration shall take place on the reference of either side and will be binding on both.

Whatever its foundations, however, arbitration is the last stage in the resolution of a disagreement and is only practicable where both sides are ready to resolve their difference in that way. That is a clear lesson from the recent dispute. It is to be expected that when the employers and unions consider what their negotiating arrangements are to be, they may wish to include provision for arbitration when other processes are exhausted. But the formulae must take account of the rest of their procedures and cannot be considered, let alone legislated for, in isolation.

I can illustrate this point by referring to the amendment itself, which says: Any dispute concerning any matter relating to the remuneration or other terms or conditions of employment…shall be referred to the [arbitration] Board". It is impossible in legislation to specify who will refer disputes to the arbitration board, and on what basis. And what would happen should one party not wish to seek arbitration at a particular stage in negotiations? There are other problems to be faced. What is a dispute? Does it include a dispute involving only one worker? Who are the parties to a dispute? It is hardly practicable to work backwards from a particular form of arbitration to establish the rest of the negotiating machinery. Arbitration is an integral part of the machinery itself and cannot be considered in isolation. The Government do not wish to impose a particular form of negotiating machinery and so restrict the options available to the parties. ACAS is in being and available, with a wide range of experience and facilities. Why is it inherently less suitable to ask ACAS to appoint arbitrators than to constitute a new body to carry out such arbitration as my noble friend proposes?

We also recognise—this point was brought out in several of the speeches which were made earlier, notably in the speech of the noble Lord, Lord Shinwell, who speaks with such authority on these matters—that in a matter of this kind it is impossible to deal in isolation with one essential service. The essential point for the Government—and for the unions, come to that—in deciding how to pursue wage claims is surely that the interests of the consumer and the national economy must be paramount. We, for our part, will be bearing this point well in mind as we reflect on the recent sad events.

One other point is that there is nothing in the amendment which would prevent a strike from starting or continuing, once started. In that respect, does it not miss one of the intentions which may have given rise to it? With these considerations in mind, which derive from both recent experience and a more general view of what is politic and realistic, I have to say that the Government consider it inappropriate to prescribe in this legislation the form or framework, or the final tribunal, for the negotiation of terms and conditions of employment in the water industry or the resolution of disagreements about them. We remain of the view that, within the general framework of law and practice, each industry should be free to make and adopt its own arrangements.

In conclusion, I applaud—who would not?—my noble friend's motivation in bringing forward these amendments. With his background in the water industry, few, if any, can be better qualified to speak on the subject. I have answered at length, and in doing so I hope I have indicated to my noble friend and to others who have spoken the importance which the Government attach to the matter. There will be further consideration of it, and my noble friend's contribution will be of immense value, as will the observations of all noble Lords who have spoken, including my noble friend Lord Campbell of Alloway, my noble friend Lord Renton, the noble Lord, Lord Rochester, and the noble Lord, Lord Howie of Troon. This matter is of considerable importance, whose significance lies beyond just this Bill. For that reason, I am particularly grateful to my noble friend. While the future is all to play for, I hope he will understand why the Government do not feel inclined to go for the arrangement which he has proposed in the amendment.

Baroness Fisher of Rednal

I think the noble Lord, Lord Nugent, has great knowledge and great experience, and he has drawn that to our attention with the amendment. He I think is in the same predicament as noble Lords on this side of the Committee. What concerns everybody is: what will happen to the procedures when the National Water Council is abolished? I want to reiterate something that the noble Lord, Lord Nugent, said: it is a topical amendment, it is topical because we have just had a recent water dispute. I am not so sure that you change legislation because you have a topical interest, because 50 years of collective bargaining in the water industry has not produced any national dispute until 1983—I repeat, 50 years of collective bargaining and not a strike until 1983!

In this amendment we are trying to set up an arbitration on one strike. I accept what noble Lords have said about the inconvenience—in some cases the hardship—but I would not accept that 60 million people were held to ransom. I come from a very large city and I do not think those people in that large city, about 1 million of them, were held to ransom; I think a few hundred were inconvenienced. If we think of 50 years' of collective bargaining without any disputes, does not that reflect well upon the effectiveness and the lasting acceptability of the existing negotiating machinery? How the negotiating machinery should carry on was spelled out by the noble Lord the Minister. What we see in this amendment is an intent to interfere in that agreed collective bargaining arrangement. Of course, if one reads the newspapers, if one listens to the radio and the other media, we are all well aware that the Government are considering a review of public sector arbitration arrangements, those arrangements where employers should be encouraged to end unilateral access. If I was cynical—and I am not—I might pose this question to the noble Lord, Lord Nugent: is this initiative on his part to further the Government's intention? Is this laying down the path? Is a Water Bill one way in which perhaps the Government would get satisfaction? The noble Lord the Minister has said that he does not want it through a Water Bill, and that I would accept.

If we look at the amendment—and I know the noble Lord, Lord Nugent, said that he did not think the wording was correct and could be amended—it reads as follows: The Secretary of State shall appoint a Water Industry Arbitration Board … Dear, dear! We had enough on Second Reading about the people the Secretary of State was going to appoint to the regional water authorities; we would be going into another debate if we were thinking who was going to be appointed to an arbitration board.

Though noble Lords have said how many persons there might be, there is nothing in the amendment that says one, two, three, four or five. There is nothing to say what qualifications. It does not say that the trade union movement shall be consulted, it says any individual or organisation which would be appropriate. Is it going to be a supposedly independent body? As the noble Lord the Minister said, it covers "any dispute". What disputes! Might it be a dispute on protective clothing? Might it be a dispute on safety? There are all these matters about which I think nobody would wish to go to such a board although they would have to do so.

Then we find in the amendment: … to consult with any individual … Does this mean a general chat round a table? Does it mean that the unions would no longer be able to negotiate? Then we have: … adjudication by the Board … shall form part of the contract of employment … I would have said, speaking from this side of the Committee, that this could only mean compulsion, and legally imposed settlements of disputes in industrial relations matters are rejected by the British trade union movement. There might be one or two Members on this side of the Committee who perhaps do not agree wholeheartedly with that, but the British trade union movement think it is an abrogation of basic rights in a free society. Decades of collective bargaining as they have gone on do not in my view merit an arbitration board of this description.

Of course, as noble Lords on both sides of the Committee have said, "and be enforceable accordingly", obviously means that the workforce would not be allowed to withdraw their labour. As my noble friend Lord Irving said—and of course I am in full support of his amendment—a compulsory arbitration system which is foisted on either side, whether the employer or employee, will not work. The only way arbitration can work is by mutual principled acceptance of the system. As the noble Lord, Lord Irving, said—and I repeat—legally imposed arbitration is a recipe for conflict and not for conciliation.

I think all of us recognise that arbitration in public utilities tends to militate against the fuller consideration of the wider issues behind a dispute. They tend to degenerate into a technical discussion on the amounts of monies available which the Government feel the employer can pay. In that way there is no room for argument when the negotiations start, no consideration of social justice. Nobody can possibly say that in the recent dispute the water workers were in any way in what one would call the higher paid parts of employment in this country. Even if one uses the very maximum figures that were used, they do not come up to the average weekly earnings of the manual employees in the country.

I think what we have to say to ourselves is that we have in this country a system for settling disputes that go to arbitration. As the noble Lord the Minister has said—he uses ACAS as the example—there is the existing machinery in ACAS which the water industry can use and does use for settling disputes. Disputes of course can only come about when the two sides are failing to agree. ACAS has that machinery, and if we accept this amendment it will mean that ACAS are in a very difficult position regarding the water industry. They will be placed outside of what is a public utility, and I would have thought that that was not an acceptable position for ACAS to be put in because they will find themselves with a duty to uphold the existing procedures. Therefore, those in a public utility find themselves at a disadvantage as compared to every other aspect of industry.

There may be a great deal of concern regarding what might arise if fixing of wages and conditions is carried out by the individual regional water authorities in the future, and we shall have to come to that at a later stage. At the present moment the fixing of wages and conditions is carried out nationally. However, if—as perhaps might happen in the future—this will be in the hands of the regional water authorities, that might be another forum where one will get greater activity, where one might even get leap-frogging by trade unions trying to get better wages and better conditions. A much harsher water authority might try to clamp down on the workers in that area. I do not accept that the answer to the problems of the water workers' wages lies in individual water authorities taking over the responsibility of the national organisation. It is also important to say that the amendment that has been moved would be extremely difficult to impose, and it could be well-nigh impossible to enforce on angry workers, at the most.

Perhaps there is an argument—and I could use it quite easily—that there needs to be a more coherent approach to public sector pay and conditions. But with the abolition of the National Water Council we are obviously getting ourselves into all these problems. Until the Government spell out quite clearly what will arise from the passing of this Bill, with all the functions that the National Water Council used to operate, we shall be continually having these debates, because there is nothing in the Bill that tells us who is to take over the responsibilities.

Noble Lords have talked about compulsory arbitration, but that does not guarantee swift settlement of disputes. As witness of that we need to look only at the protracted procedures in the Railways Staffs' National Council, and at how those arbitrations go on and on.

I wish to support the amendment of my noble friend Lord Irving of Dartford. We have tabled this amendment to make quite sure that there is a negotiation procedure after the passing away of the water councils. There is nothing in what the noble Lord has told us. It will be left to individual water authorities to make their own arrangements. Therefore, it is important for us to put down something that will safeguard the interests of those who work in the industry.

I conclude by saying that all of us know—and I repeat what I have said previously—that the Prime Minister and the Government are of a mind to enact legislation against strikes in essential industries and to generally curb trade union power. We all know this, and we know that in the next few days or weeks we shall be discussing in this Chamber democracy in the trade unions—the Green Paper. The amendment that we have before us pre-empts that kind of discussion. If the Government, at some later date, think that it is wise to bring before Parliament a Bill that will curb trade union power, the correct procedure to do that is through a Bill which should be brought forward just on those lines—an amendment on trade union activity. It will then be debated in both Houses and a full exposition of the total case will be put forward. That can be debated, and that is the way I suggest it should be done. I reiterate what other noble Lords have said. It will be quite wrong, in my view, to start off that legislation by agreeing to this amendment. In other words, I think it would be a backdoor method of trying to get in that kind of legislation.

Therefore, I have to say that I oppose the amendment of Lord Nugent of Guildford and give my support to the amendment in the name of my noble friend Lord Irving of Dartford.

4.55 p.m.

Lord Winstanley

Before the noble Lord, Lord Nugent of Guildford replies may I make a very brief point? I understood that the advice given to us by the noble Lord, Lord Bellwin, was to the effect that he felt it would be extremely unwise to deal piecemeal with this very important matter of pay determination in vital public services by singling out one section of vital public service workers—the waterworkers. I should like to know: what is the precise meaning of the noble Lord, Lord Bellwin? Does he offer that advice as a justification for doing nothing at all, or are we to take it that he and the Government intend at some later date to do something more collective to cover these vital public services as a whole? In other words, I am again putting to the noble Lord the question that was put to the Government by my noble friend Lord Rochester during the debate on the gracious Speech, and on a later occasion. It was a fairly specific question regarding the Government's intentions in general. What I am saying is that the point made by the noble Lord, Lord Bellwin is a vital one. It really is unwise to single out one section of vital public service workers and deal with them.

I also think that it is perhaps unwise to use that as a justification for doing nothing at all about an extremely important subject. So I should like to know from the noble Lord which way he wants us to take it. Does he want us to take his advice as meaning that the Government intend to do something about this subject as a whole at a later date and not that they merely want to ask us to do nothing at all ourselves?

Lord Bellwin

I shall respond equally briefly to that point. I made it clear—at least I thought I did—that I was responding to an amendment tabled by my noble friend—and, indeed, to the noble Lord, Lord Irving of Dartford. I said quite clearly that I thought it would be wrong to deal with this in isolation for this industry. But we must also recognise that my noble friend is fully justified in bringing forward this amendment because here we have a new situation that is arising, through this Bill, for the water industry. What pertained previously will no longer apply. That is, previously there was the National Water Council, which conducted negotiations, but this will not be there in future under this Bill. Therefore, it is perfectly proper at this time for my noble friend, or anyone else, to bring this forward as an alternative. It is not for me to answer for my noble friend, he will do that much more competently than I can, but that is how I understand it.

As to the Government's line on the kind of situation that has arisen in industries of this kind, I think I said that I welcome debate in terms of the future. I think I used the expression, "it is all to play for", and that is why it is constructive that all that has been said should be said. We shall take note of it. To say that we will do nothing is to pre-empt the kind of things that the Government have talked about. As I said on another matter only last week in your Lordships' House, just a little more patience and—who knows?—we may yet see something which your Lordships can debate.

Lord Howie of Troon

Would it not be more valuable to deal with a matter such as this piecemeal and get it right a bit at a time rather than try something more all-embracing and get the whole thing wrong at once?

Baroness Birk

I agree that this has been an extremely interesting and wide-ranging debate. It seems to me that what we are left with now is an amendment moved by the noble Lord, Lord Nugent of Guildford, which has been very highly praised but generally turned down, I think, by most people, for different reasons. We are then left with the amendment in the name of my noble friends. If that amendment is not accepted it means that the Bill will go forward—and the Minister has just said so himself—without any form of replacement for the type of machinery that has been operated until now by the National Water Council. It is perfectly true that in this Bill we cannot, and should not, be dealing with a whole code of practice for the trade union movement and employers, and for everything generally. That must be for the future, but I think that we on these Benches would feel very unhappy if this Bill went forward without anything in it at all.

The way we read it, at the moment it means that each of the authorities would be left to decide themselves and to make their own arrangements, so that there would be, as my noble friend Lady Fisher pointed out, the possibility—indeed, I would say even more than that, the probability—of leapfrogging. There could also be great differences between different parts of the country and different authorities. Therefore, I think that the only solution is for this amendment to be accepted or for the amendment standing in the name of my noble friends to be pressed, so that we have at least some machinery in the Bill for dealing with these problems at the present time.

Lord Nugent of Guildford

As my amendment was the start of this interesting discussion I should like to thank your Lordships for making it such a worthwhile debate. I confess that my motive for putting it down was not really in the belief that my amendment would be accepted. Back-Bench amendments are very seldom accepted in any circumstances, and, as I anticipated in my opening speech, both Front Benches united against me, so I was sunk from the start. My only noble friend was Lord Howie of Troon on the Back-Benches at the opposite end of the Chamber, who saw that there was some validity in the point that I was putting forward. Any suspicion that the noble Baroness, Lady Fisher, might have had that this was some deep-laid plot which was to bring in by the back door the start of the Government's new policy on the matter must have been completely swept away by the gallons of cold water which were poured on my amendment, very charmingly, by my noble friend Lord Bellwin.

I really come back to where I started. I felt—and I believe all noble Lords feel the same—that we had had an experience of a very unpleasant kind which we would like to see our people spared from in the future; that is, a future water strike. It is therefore incumbent on my noble friend and on his noble friends and his right honourable friends to give the deepest possible thought to the method that can be found to strengthen the negotiating machinery to safeguard the public against such a happening in the future.

The noble Baroness, Lady Fisher, made the point that the existing machinery has lasted for 50 years. In fact, it has not; it has lasted for only ten years. The existing structure was created by the Water Act 1973, which made the water industry a national industry and therefore made these negotiations national in a way that they had never been before. Before, there were 166 individual water undertakings, I think it was, 29 water companies and 1,400 sewage authorities, and the whole thing was fragmented. Therefore, the punch which the three trade unions could bring to the negotiating table has been in action only for the last ten years.

Although I would entirely agree with the noble Baroness that these men in the water industry are peaceful, public-spirited men, they are not badly paid. With the increases now, their average earnings with overtime—a good deal of overtime—are up to about £150 a week, which is not too bad with an index-linked pension and security of job.

They are a peaceful lot. I am bound to say that when I had the privilege of conducting the negotiations for the employers' side we had some pretty long and arduous negotiations. In fact, it is a way of life to conduct an NJIC and an NJC, and I spent a great deal of my time doing it; but I found the men in the water industry very good to deal with. We won each other's confidence. I would never have thought that this industry would have drifted into such a national strike. But if ever a series of negotiations was mishandled from the start, this one was. The less said about it the better, I think. Nevertheless, it has happened, and I think it is essential that my noble friend and his ministerial colleagues should now really apply their minds to finding some way to safeguard the country against the same thing happening again.

Of course, I understand what a major concession it would be if the trade unions concerned here, or, indeed, in any other part of the public sector, gave up the right to strike. In the splendid speech of the noble Lord , Lord Shinwell, we heard the authentic voice of the man who fought for the trade unions to have the right to strike. I understand that that is sacrosanct, and something very solid has to be given if there is to be agreement—because there must be at the end of the day—to bring the trade unions and the employers' side together to find a better solution. But it is not going to be easy.

The noble Lord, Lord Irving, is absolutely right in saying that the major part of industrial relations is just hard work: hard work understanding each other's problems; considering them; giving where you can; where you cannot, explaining why you cannot; and throughout fostering human relationships, so that the machine works satisfactorily—because it is working continually. The employers must learn to be as professional as the employees—and the employees, in the voice of the trade union leaders, are very professional indeed. So that is the basis of it, whatever machinery one has. But my concern is to try to have some ultimate safeguard which would save our people from the experience they have recently suffered.

I feel that in that spirit this debate has perhaps added something. It has certainly given us some notable speeches. It has given us, from my noble friend the Minister, a reply with at any rate some comforting words. Like my noble friend Lord Campbell of Alloway, I heard the Secretary of State last night, and he is obviously thinking of it, too. I guess that he may not be thinking of quite such a consensus as I should like to see, but evidently the Government are thinking about it and realise that something needs to be done. In that spirit, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Irving of Dartford moved Amendment No. 16: After Clause 3, insert the following new clause:


(".—(1) It shall be the duty of each water authority and other statutory water undertaker to seek, either in conjunction with every other such authority or undertaker or by means of such association or other person or organisation as may represent all of them for this purpose, consultation with any organisation appearing to them to be appropriate with a view to the conclusion between them and that organisation of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for the settlement by negotiation of terms and conditions of employment of persons employed by the water authorities, other statutory water undertakers and any person referred to in section 3(4) of this Act with provision for reference to arbitration in default of such settlement in cases as may be determined by or under the agreements.

(2) It shall be the duty of every water authourity and all other statutory water undertakers and all employers coming into existence as a consequence of this Act to comply with any such agreement.

(3) Copies of any such agreement and of any instrument varying the terms of any such agreement shall be sent to the Secretary of State.")

The noble Lord said: I think that it would be out of order if I opened the debate again, so I shall confine myself to moving formally that Amendment No. 16, the new clause, be set in the Bill. I beg to move.

5.8 p.m.

On Question, Whether the said amendment (No. 16) shall be agreed to?

Their Lordships divided: Contents, 77; Not-Contents, 120.

Aberdeen and Temair, M. Houghton of Sowerby, L.
Ardwick, L. Howie of Troon, L.
Aylestone, L. Irving of Dartford, L.
Bacon, B. Jacques, L.
Banks, L. John-Machie, L.—[Teller.]
Beswick, L. Kirkhill, L.
Birk, B. Lee of Newton, L.
Bishopston, L. Listowel, E.
Blease, L. Lloyd of Hampstead, L.
Blyton, L. Lloyd of Kilgerran, L.
Boston of Faversham, L. Longford, E.
Brockway, L. Lovell-Davis, L.
Brooks of Tremorfa, L. McNair, L.
Bruce of Donington, L. Mayhew, L.
Burton of Coventry, B. Melchett, L.
Byers, L. Milford, L.
Chitnis, L. Molloy, L.
Cledwyn of Penrhos, L. Ogmore, L.
Collison, L. Oram, L.
Davies of Leek, L. Peart, L.
Davies of Penrhys, L. Phillips, B.
Diamond, L. Pitt of Hampstead, L.
Donaldson of Kingsbridge, L. Ponsonby of Shulbrede, L.—[Teller.]
Elwyn-Jones, L.
Ewart-Biggs, B. Prys-Davies, L.
Fisher of Rednal, B. Roberthall, L.
George-Brown, L. Rochester, L.
Gladwyn, L. Ross of Marnock, L.
Hale, L. Seear, B.
Hampton, L. Shinwell, L.
Hatch of Lusby, L. Simon, V.
Stedman, B. Underhill, L.
Stewart of Alvechurch, B. Wade, L.
Stewart of Fulham, L. Wallace of Coslany, L.
Stone, L. Wells-Pestell, L.
Strabolgi, L. White, B.
Taylor of Gryfe, L. Wigoder, L.
Taylor of Mansfield, L. Winstanley, L.
Tordoff, L. Wootton of Abinger, B.
Allen of Abbeydale, L. Maclehose of Beoch, L.
Allerton, L. Macleod of Borve, B.
Ampthill, L. Malmesbury, E.
Auckland, L. Mancroft, L.
Avon, E. Mansfield, E.
Behaven and Stenton, L. Mar, C.
Bellwin, L. Margadale, L.
Beloff, L. Marley, L.
Belstead, L. Massereene and Ferrard, V.
Bessborough, E. Merrivale, L.
Boyd of Merton, V. Mersey, V.
Caccia, L. Mills, V.
Campbell of Alloway, L. Molson, L.
Cathcart, E. Morris, L.
Cockfield, L. Mottistone, L.
Cottesloe, L. Mowbray and Stourton, L.
Cullen of Ashbourne, L. Moyne, L.
Daventry, V. Newall, L.
Davidson, V. Norfolk, D.
De La Warr, E. Northchurch, B.
Denham, L.—[Teller.] Nugent of Guildford, L.
Dilhorne, V. Onslow, E.
Dormer, L. Orkney, E.
Duncan-Sandys, L. Porritt, L.
Ellenborough, L. Radnor, E.
Elliot of Harwood, B. Rankeillour, L.
Elton, L. Renton, L.
Energlyn, L. Richardson, L.
Faithfull, B. Rochdale, V.
Ferrers, E. Romney, E.
Forester, L. St. Aldwyn, E.
Fortescue, E. St. Davids, V.
Fraser of Kilmorack, L. St. John of Bletso, L.
Gainford, L. Salisbury, M.
Gainsborough, E. Sandford, L.
Geoffrey-Lloyd, L. Sandys, L.
Gibson-Watt, L. Selkirk, E.
Glanusk, L. Sempill, Ly.
Glenarthur, L. Sharples, B.
Gray, L. Shaughnessy, L.
Gridley, L. Skelmersdale, L.
Hailsham of Saint Marylebone, L. Somers, L.
Stamp, L.
Henley, L. Stanley of Alderley, L.
Hives, L. Stodart of Leaston, L.
Home of the Hirsel, L. Strathcona and Mount Royal, L.
Hornsby-Smith, B.
Hylton-Foster, B. Strathspey, L.
Ingrow, L. Swinfen, L.
Kilmany, L. Swinton, E.—[Teller.]
Kinloss, Ly. Taylor of Hadfield, L.
Kinnaird, L. Terrington, L.
Lane-Fox, B. Tranmire, L.
Lauderdale, E. Trefgarne, L.
Lawrence, L. Vaux of Harrowden, L.
Long, V. Vivian, L.
Loudoun, C. Wakefield of Kendal, L.
Lucas of Chilworth, L. Ward of Witley, V.
Lyell, L. Westbury, L.
McAlpine of Moffat, L. Wise, L.
Mackay of Clashfern, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.17 p.m.

Lord Melchett moved Amendment No. 17: After Clause 3, insert the following new clause:

("Reservoir construction and the conservation of water supplies.

.It shall be the duty of each Water Authority, before seeking planning permission to construct new reservoirs which involve the loss of grade I and II agricultural land, or land within a Site of Special Scientific Interest or National Park, to satisfy the Secretary of State—

  1. (a) that no alternative source of supply exists from neighbouring Regional Water Authority reservoirs or plant, and
  2. (b) that all reasonable steps are being taken by the Authority to conserve water, and to make the most efficient use of existing water resources and supplies.").

The noble Lord said: I beg to move Amendment No. 17, which also follows on from the provisions of Clause 3 of the Bill and the dissolution of the National Water Council and the Water Space Amenity Commission, but which deals with a point which is certainly as important but rather broader than the amendments which your Lordships have just spent some time discussing.

In previous debates during the Committee stage and throughout the debates on the Bill there has been general recognition that it made sense to organise water authorities on a regional basis taking into account river systems, catchment areas and so on. There has been no real dispute about that division of responsibility. But it is fair to say that, although that is accepted, there is fairly widespread concern that there is not enough co-ordination and liaison between water authorities even under the existing system with the Water Space Amenity Commission (WASAC) and the National Water Council in existence, and in particular not enough co-operation and consultation on the points about which this amendment aims to do something. The intention is that all these different regional water authorities should take into account over-supply in one area and attempt to do everything possible to match over-supply with under-supply before a particular region decides to make a massive investment of public funds in new capacity, in new reservoirs in particular.

Another worry which is shared—I almost said "for once" but the noble Lord, Lord Stanley, would complain if I did so and, indeed, it would not be true—both by nature conservationists and those involved in agriculture concerns the loss of rural land. Very often it is extremely agriculturally productive land and on other occasions land of great importance either for amenity or for wildlife interests. There is a fairly widespread feeling in both agricultural and conservation and amenity camps that water authorities are rather too ready to invest in the large new reservoir instead of tackling what may be more difficult, more time-consuming, involve more difficult management decisions and involve smaller amounts of expenditure over a longer period—namely, taking steps to conserve water rather than provide more of it.

Let me give an example of reservoir building which has caused concern. First, in the early 1970s there was the Cow Green Reservoir in Upper Teesdale, where, from a nature conservation point of view, an enormous amount of damage was done and large amounts of alpine flora, which are very rare in this country, and some endemic species were destroyed. Rutland Water, by contrast, concerned the loss, largely, of extremely productive agricultural land. I know that there is a great deal of quite justified concern nowadays among the farming community and people who farm in that area in particular, that Rutland Water, having swallowed up huge amounts of agricultural land, is not being used to anything like full capacity. As I understand it, very little use has been made of the Rutland Water Reservoir, and I hope that the noble Lord may be able to confirm that this huge area of agricultural land has been taken for a reservoir which is now not really being used to anything like full capacity in any event.

Rutland Water was a reservoir which was built in the late 1970s, but more recently Kielder was opened. This was built on the basis of plans which foresaw increasing industrial demand. The plans have been proved to be wrong. As I understand it, there is virtually no demand for the water from that reservoir. Not only is industry suffering from the depression, but in that area it is having to pay higher water rates to pay for a new reservoir which was to provide it with water which it does not actually want.

To take a current case, considerable arguments are going on in the Dartmoor area about the proposal to build a reservoir there—arguments between those who want the reservoir to be in the upland area and those who prefer it to be in the lowland area. Nevertheless, once again it raises the issue: is it necessary that more rural land be lost to reservoir construction and is each individual water authority really taking sufficient account of the overall picture in the country? That is why the amendment would put a duty on the water authority to consider that; and, in particular, where a site of special scientific interest or a national park on the wildlife or amenity side were concerned or, on the agricultural side, the loss of grade I or grade II agricultural land. I think that the amendment should be changed to include grade III agricultural land, which is the bulk of it. My own view is that in these cases water authorities should have to take special care and have a special duty in this regard before going ahead with their plans.

The second part of the duty that would be laid upon them, apart from looking at alternative sources of supply already in the national system, would be to look at the possibilities for conservation of water. It is a well known fact that a very large proportion of the water which is actually stored in these reservoirs—and I hope that the noble Lord who will reply for the Government can give an up-to-date figure—once released into the system, simply runs straight back into the ground because of leaks from the mains. So this huge loss of productive land, wildlife or amenity interests is being swallowed up by water which is then simply poured back underground because the pipes leak so much and because not enough money is being spent on keeping the distribution system up-to-date and in good order. So the distribution system is one side of it.

On the other side, measures can be taken to reduce the use of water. I have seen a quote from a study which showed that if London's toilets were converted to variable flushing so that they sometimes used more water than on other occasions, that would save an amount of water equivalent to the contents of a large scale new reservoir. In other words, it would make the construction of one new reservoir unnecessary for about the same or a lower cost. I hope that the noble Lord will be able to confirm that that is correct; that the Thames Water Authority, in fact, did such a study; that the results showed that that was the case; and that unfortunately, so far as I know, no water authorities have adopted that approach, whereby, instead of looking round for some new area of rural land to swallow up with water, they tried to encourage customers to use rather less water and therefore to reduce the demand.

This is a very reasonable request to put to water authorities and in the end it does not preclude them from building a reservoir should one be shown to be necessary—I would not attempt to do that. I am simply asking them to take special care and to give special consideration to these areas of rural land. I hope that the Government will welcome this and will see it as a way of allaying some of the fears which have been expressed about what appears to be a move in this Bill towards even more fragmentation of the water supply industry in this country. I beg to move.

Lord Gibson-Watt

I should like to speak to this amendment quite quickly; I shall not take up very much time. I certainly have some sympathy with the thinking of the noble Lord, Lord Melchett, although I cannot in fact support his amendment. I should like to draw noble Lords' attention to two comments that he made in his opening remarks. One is that nobody wishes either good agricultural land or anything to do with nature conservation to be unnecessarily lost to water. But, equally, nobody will argue against the necessity of good water supplies not only for domestic but also for industrial use.

Secondly, in his remarks the noble Lord rather suggested that water authorities did not have sufficient contact one with another. Of course, his experience may be different from mine, but I happen to know that the role of a water authority and, particularly the chairman of any water authority, is a very invidious and difficult one. They are always criticised for something. In mid-Wales in the Elan Valley reservoir complex, which was once owned by the Birmingham Corporation, before the economic recession there was a plan for an extra reservoir above Craig-goch. Indeed, for a long time it was going to come about. This plan was to be carried out by the Welsh Water Authority in conjunction with the Severn-Trent Water Authority. I only wish to say to your Lordships that there is perhaps rather more co-operation between authorities than the noble Lord, Lord Melchett, said in his opening remarks.

The Earl of Onslow

I should like to rise to support what the noble Lord, Lord Melchett said, not because I think that my noble friend is incorrect in saying that there is consultation between water authorities, but land use in this country is extremely critical and we are not very good at it. Since the war we have created quite a lot of unusable land by bad planning; we have created quite a lot of derelict land. At the moment farmers are criticised for over-producing; that is, actually for doing what the taxpayer and Parliament have asked them to do. But when the world comes out of recession—and history teaches us that one day it will come out of recession—we must be very careful before we use up permanently good agricultural land.

When my noble friend Lord Mowbray was answering for the Department of the Environment I asked him a Question about the Rutland reservoir, which I believe has now dropped by something like seven feet round the edges, although I am not absolutely sure that I have the figure right. But there is a form of dead beach round the edge. Next door, just over the watershed, in, I think, the Severn-Trent Authority, a reservoir is definitely being built on which at the time—and this was about two years ago, towards the beginning of the life of this Government—the Guardian published a very strong leading article saying that this was rather a silly way in which to go about things. I am not saying that water authorities do not consult, but I suggest to noble Lords that if it is put in the Bill, they will have to consult. They will then have a duty upon them to consult. It is really a question of good housekeeping, and this is something in which we all ought to encourage everybody to indulge.

5.30 p.m.

Baroness White

I should like in general terms to support my noble friend Lord Melchett, although I would say to him that so far as the Principality of Wales is concerned there is virtually no grade I land. We have very little grade II land, and any reservoirs that we have are likely to be built on grade III or even a lesser categorisation of land. From our point of view that part of his amendment is almost irrelevant.

Lord Melchett

I do not know whether my noble friend heard me, but I have had that comment made to me and it is a good argument for saying that the amendment should cover grade III agricultural land as well, and I said that.

Baroness White

I listened to my noble friend with the utmost attention. I heard him refer to Grade III land, but it is not in the amendment as it is proposed. I am in a little difficulty about advertising the report of the Select Committee on Science and Technology in a debate on the water industry because unfortunately we have been pre-empted by this Bill, and the report has not yet been debated in the House as a report. But as we pass through the various stages of this Bill it is helpful to remind noble Lords that their own Select Committee, under the chairmanship of the noble Lord, Lord Sherfield—who unfortunately is abroad at the moment, and hence I am speaking in a sense for the Select Committee—has made a fairly thorough study of, among other matters, the question of methods of water storage. We reached the conclusion, as we state in this report, that most water authorities are satisfied that their resource needs will be met without major reservoir construction at least during the rest of this century, and several of them are fairly confident that it will be some distance into the next century before they are obliged to turn to reservoir construction for their water resources.

This is partly because of a new look in the storage of water. Among other things, considerable progress is being made in the combination of ground water—that is, underground aquifers—with river sources, and the techniques for using the underground waters to top up river resources when they are low, and so on, are being developed the whole time. There is also what is called in the jargon "conjunctive use". We had a number of instances of this brought to our notice. For example, in Lancashire the North-West Water Authority are very proud of one of their schemes.

They are convinced that by bringing together several resources into an operationally integrated scheme the total quantity of water made available for supply was more than the sum of the yields of the individual resources if they had been operated separately. They admitted that the scheme was relatively costly both in investment and in operating costs. Nevertheless, it had provided water supply to meet the authority's needs into the next century with scarcely any works above ground. The only two new service reservoirs were underground and covered.

When we are discussing this matter of reservoirs we should recognise that considerable attention has been paid to new operational techniques in the matter of water storage. This is encouraging. We reached the conclusion that reservoirs are likely to be built in the future only where they are absolutely essential.

As someone who, like the noble Lord, Lord Gibson-Watt, took a great interest in the proposed Craig-goch scheme, I think one can say that that was deferred not only because of economic recession but because the Severn-Trent Water Authority decided to use its underground aquifers as a first source before going to the expense of building the Craig-goch reservoir. I would further say that if in the western part of the kingdom more water supplies are needed in the future, then the Craig-goch scheme is one of the best that could be undertaken. It is in an area where we already have considerable reservoir installations and where there would be a minimal disturbance of either agriculture or population.

Lord Winstanley

I too should like to support this amendment moved by the noble Lord, Lord Melchett. It is a simple amendment. It does no more than require the water authorities to do in advance the kind of things which they are invariably asked to do when, at the end of the day, their proposals have to go to a public inquiry. Every time there is a public inquiry—and frequently there is on proposals such as this—the questions asked of the water authorities, and upon which evidence is given, are, have they demonstrated the need? Have they explored alternative sources? Are they making the optimum use of existing sources of water, and so on?

The noble Earl, Lord Onslow, is right to underline the importance of land as a resource within our community. There is no resource under such desperately heavy demand and in such short supply in these islands as land. Once land is submerged under water, then from the point of view about which I am talking, whether it is agriculture or nature conservation, or whatever, it ceases to be land. I am not saying that it does not then have other values, of course it does, but we have to conserve our supplies of available land not only in national parks, which are referred to specifically in the amendment, but in agricultural areas, and in fact throughout the country as a whole.

I acknowledge that the kind of forecasts which water authorities have to make are extremely difficult. One can tell that by considering the experience which we all enjoy every year. Wherever we happen to live, we tend to find that for part of the year we are being told that we must not have baths, and we sometimes have to get our water from standpipes, and then within a matter of weeks we are all wandering about in wellingtons or taking to the boats. Plenty of water falls on our country, but we do not always collect it or conserve it as well as we might.

I acknowledge that it is difficult to make accurate forecasts. The noble Lord, Lord Melchett, referred to Kielder. There, of course, we had this enormous reservoir constructed on the assumption of, and in the anticipation of, an enormously increased demand for water from Redcar Steel and from ICI at Billingham—both places which are either closed now, or diminished so much that the demand for water in that area has been very much less. Therefore, an alternative use has had to be found for the Kielder reservoir until the time, perhaps 40 or 50 years' hence, when its water will be required for water purposes. Alternative uses are now being found. I merely underline that to show that I acknowledge that it is difficult to make accurate forecasts.

That being acknowledged, I am sure that with regard to the kind of land considered in this amendment—and it refers to grade I and grade II agricultural land—there is not a lot of either of those grades of land knocking about in Britain going spare, as it were, that we could afford to have submerged under water. I acknowledge that in the National Parks mentioned specially in the noble Lord's amendment there is very little grade I or grade II agricultural land, but there is land which is of immense value for other purposes. However, the difficulty of forecasting is acknowledged.

The noble Earl, Lord Onslow, was right in what he said about Rutland Water. That was a matter on which there had been major errors of forecast. If we once acknowledge that, and acknowledge the vital importance of seeing to it that valuable agricultural land is cherished and protected, and also acknowledge the importance of preserving sites of special scientific interest, sites which are important for wildlife, and also in preserving countryside land in our national parks, then surely we have a right to insist that the water authorities, by one means or another, take the kind of steps envisaged in this particular amendment.

At the end of the day, when disputes over proposals for new reservoirs, such as the one on Teesside to which the noble Lord, Lord Melchett, referred, come to a public inquiry, it is invariably these points upon which the water authorities are cross-examined. It is invariably on these points that evidence is brought forward. The amendment merely requires the water authorities to satisfy themselves with regard to these points in advance. If, on every occasion and with regard to every possible future project, the water authorities satisfy themselves on these particular points, then the decisions which will be taken are more likely to have public approval, and less likely to result in conflict at the end of the day.

Earl De La Warr

I find this a sensible and important amendment for reasons I shall not rehearse again because they were adequately given by the noble Lord, Lord Melchett, and more particularly on the agricultural side by my noble friend Lord Onslow. I have only two points to make. First, I agree with the noble Lord that grade III land should be included, and I hope he will find a way of doing that. Secondly—I say this because I am so seized of the importance of the amendment—I suggest we consider bringing in the Ministry of Agriculture at the point at which the Secretary of State is informed. It may be that the noble Lord has thought that out and there is some reason why that should not be done, in which case I should be interested to hear it. I am simply saying that, if anything, I want to make the amendment stronger.

The Earl of Gainsborough

I wish briefly to support the amendment because I have myself had close knowledge of Rutland Water, living close to it and being, at the time, chairman of the local authority in whose area the reservoir was being constructed. The noble Earl, Lord Onslow, was right to say that that reservoir has now been reduced in size because the water level has run down by about 12 feet all round. So much water was running out of the reservoir back into the limestone that it was costing a fortune to pump water out of the river to keep the reservoir level up.

That was one matter that was not properly looked into before and is one of the reasons why an amendment like this should be considered by the Committee; not enough was done at that time to look into all the possibilities that might occur, with the result that today only about 10 per cent. of the water is being used, and the rest is just nice to look at. People sail boats over it and go in for all sorts of other activities, but that was not what the reservoir was built for; it was built to provide water for the anticipated demand of the South-East.

I hope the amendment will be given consideration by the Government. It is true that most of the land that was taken by Rutland Water was grade III—some of it belonged to my family, but that is neither here nor there; we were quite prepared to see it being used if it was going to be for the benefit of the country—but some of it was grade II. If the Government consider that this is worthy of consideration as a principle, grade III land should be included in the amendment, as several noble Lords have suggested.

Lord Stodart of Leaston

I can see no possible reason for not supporting the principle of the amendment, though, as the noble Lord, Lord Melchett, suggested, the wording may not be entirely perfect. I also support the suggestion that, when the point at issue comes to be decided, there is a case for bringing in the Ministry of Agriculture.

One cannot but be somewhat appalled by the fact that, I think to this day, about 50,000 acres of agricultural land are going out of production every year in England and another 5,000 in Scotland. The most greedy devourers of it are not reservoirs but, I suspect, motorways and roads. Just as when land is submerged with water it will never return to agriculture, the same happens when it is submerged with concrete, housing or roads. Therefore, considering that at 50,000 acres a year, the equivalent of the County of Norfolk has totally disappeared, since the war, it is of crucial importance that we pay more attention not only to the preservation of land but, as my noble friend Lord Onslow said, to its proper use, be it for farming, forestry or the needs of the population in terms of water.

I think the idea is that at least one must convince the powers-that-be that one has examined grade I, grade II and grade III agricultural land, sites of special scientific interest and the national parks. Having done that, I am wondering where reservoirs will be put because I can think of little land that would be left. I recall my time at the Ministry of Agriculture and a plan to build a reservoir on, I suspect, either grade II or grade III agricultural land in the West Country. The alternative suggestion was made that land for it should be taken either from Dartmoor or Exmoor, and the roof went off with indignation from people who said it would be an outrage to put water in either of those places. While I support the principle of the amendment, it needs careful tidying-up.

Lord Davies of Leek

While I support what the noble Lord, Lord Stodart, has said, I would add a few caveats. I was pleased when my noble friend Lady White referred to the Select Committee which went into the question of science and water. It is a pity that we did not have an opportunity, before discussing this Bill, to debate the valuable report produced by the committee chaired by the noble Lord, Lord Sherfield. I read the report and the debates that have taken place on the subject of reservoirs—despite the fact that I have not been in your Lordships' House lately—and it is clear that a number of reservoirs are almost unknown today. There are others which need masonry work and general attention; just like the sewers, they have been neglected. Research should be conducted into the matter.

I support the main contention of the Bill, but I must introduce the caveat that if we are to have an authoritative authority which, as part of its set-up does not like the attendance of the public or the press at its meetings, there could be problems. We know how at present farmers and people in certain areas can have vital information thrust on them too late. The Ministry of Agriculture should be brought in, but I would go further. The most active defender of the farmers, especially the small ones whom I represented (although not all of them voted for me; that did not matter because I liked them) is the NFU, and it too should be brought into the forefront of any great changes in this area.

In that way farmers generally, and particularly the small farmers on the contour line above 600 feet or, as in the Lakes and Pennine areas, those on the 1,200 foot contour—where there are some of the highest villages and highest country pubs in England—will have a better chance of knowing what is going on. Water is of paramount importance above the 1,000 foot contour level, enabling the small farmer to get water to his cattle at the right time. Consequently, reservoirs are often needed in hilly country. When we are thinking of reservoirs, let us also bear in mind the small, hardworking farmer in marginal areas who sometimes has to get by on less than 100 acres. There were 3,000 farms in my area, 1,400 of them under 30 acres. That is hard work. Those farmers should be kept informed about what is going on.

Lord Energlyn

It seems to me that the amendment is somewhat unnecessary and to some extent rather naïve. The noble Lord, Lord Davies, made a pertinent point when he said that many of these parts of Britain are above the 1,000 foot contour. They are the very ones the noble Lord, Lord Melchett, wants to preserve. Those areas will be producing reservoirs at high levels. They will provide water not only for the farms but also for the hydro-electric power for those farms. Many of those proposals have been held up by admittedly well-meaning objections to the formation of the reservoirs, which ostensibly are claimed to disfigure, or alter, the wildlife of the area. There is a naïve suggestion contained in paragraph (b), and therefore personally I should not approve of the introduction of the paragraph, because I should have thought that it referred to one of the natural functions of a water authority.

5.50 p.m.

Lord Skelmersdale

I hope that your Lordships' Committee will accept that I am second to none, inside or outside the Chamber, in my determination to see the principles of conservation prosper. I hope that the Committee will also accept the fact that I appreciate the concern, which the Government most definitely share, that land should not be taken either unnecessarily or arbitrarily for the purpose of reservoir construction. It is therefore with sincere regret that I must tell the Committee that the effect of the proposed new clause would be damaging to the interests which, quite naturally, its sponsors wish to protect. It would succeed in ensuring neither that certain kinds of land are taken for a reservoir only when absolutely necessary, nor—as the noble Lord, Lord Melchett, has said he requires—that a reservoir is built only if water from existing resources is used to the utmost. The planning legislation as it stands, together with Section 22 of the Water Act 1973, do that better, and I hope that your Lordships' Committee will agree not to disturb it.

As the noble Lord, Lord Winstanley, pointed out, proposals to build a new reservoir, or to extend an existing reservoir, have to be the subject of planning applications to the local planning authority. Invariably there is then a local planning inquiry into the water authority's application. The inquiry will be held by an inspector, and in a case such as we are talking about he will be supported by expert assessors. The kind of issues with which the proposed new clause is concerned can be—and if they applied in a particular case, I am quite certain would be—thoroughly discussed by the parties at the inquiry. The important point here is that the discussion would be in public and what was said would be testable. The inspector would report to my right honourable friend with a recommendation, and my right honourable friend would reach a decision. He may or may not agree with the inspector's recommendations; but he would know that the water authority's case and the objections to it had been fully and publicly considered, and he would be able to reach a decision balancing the evidence.

What the new clause proposes would be a backward step in two respects. First, it would mean that my right honourable friend had already heard the water authority's case and had reached a view on it before, as part of the normal procedure for seeking planning permission, the inspector's report came to him. That would seriously prejudice my right honourable friend's quasi-judicial position when considering the inspector's report.

My noble friend Lord Stodart of Leaston suggested that the Ministry of Agriculture, Fisheries and Food be brought in. I would tell him that we cannot do that when, as in this case, the Secretary of State for the Environment acts in a quasi-judicial capacity. Of course the other ministries' evidence on the importance of land is significant at any local planning inquiry.

Secondly, the new clause would mean that my right honourable friend would have had to be satisfied, or would have been able to have been satisfied, that the conditions which the new clause would impose had been met in private. That, I submit, would not be the best way of reaching decisions on these important matters. Not only my right honourable friend but also public opinion should be satisfied that all the issues have been fully and properly aired, and that at the very least there had been an opportunity to put counter-arguments. Otherwise it would be quite unfair—I should even go so far as to say, improper—to everybody, including my right honourable friend.

The noble Lord, Lord Melchett, and other noble Lords supporting him, asked various questions. I am afraid that I must say at the beginning that, with a new move afoot on public inquiries generally under the planning law, all the specific instances and suggestions which the noble Lord, Lord Melchett, and other noble Lords have made—on, for example, the use or otherwise of existing reservoirs; the adequacy of the piping system; and the various other points that have been mentioned—would be taken into account. In other words, all these inquiries would be very wide-ranging indeed. I suppose that, thinking of another subject, one could equate such an inquiry with the current Sizewell inquiry—

Lord Melchett

I am listening very carefully to what the noble Lord is saying; it is very interesting and helpful. He said that the question of the condition of a distribution system would be a matter which could be considered by future public inquiries. Would the noble Lord also include in the list the other question that I specifically mentioned: whether it would be as cost-effective, or more cost-effective, for an authority to take steps to reduce the demand for water, for example, for domestic use?

Lord Skelmersdale

I think that I should have to consider that point and return to it, if I may.

I am afraid that I cannot agree that Rutland Water is surplus to needs. It was designed originally to meet projected needs over a very long period, and that applies also to the Kielder Reservoir, which, as the noble Lord, Lord Melchett, reminded us, was planned at a time when anticipated industrial needs were much greater than they now are—

Lord Winstanley

Will the noble Lord allow me to intervene? On that particular matter, surely the point made by the noble Earl, Lord Onslow, was with regard to the surplus water in Rutland Water which in fact is no longer in Rutland Water. I think that the noble Lord the Minister has to accept the point that water which may not have been surplus is no longer there because the level has been reduced by about 12 feet.

Lord Skelmersdale

Yes, but I would suggest that that is rather off the basic point of the argument, in that the reservoir has already been built. There is a perfectly good argument—which I have a feeling the noble Lord, Lord Melchett, might well accept—that in the reduction of the amount of water in the particular reservoir to which my noble friend and the noble Lord, Lord Winstanley, have been referring, there is increased opportunity for conservation of wildlife and plant life.

Before the noble Lord intervened I was going on to talk about Kielder Reservoir. The sad industrial decline of the area (to which the noble Lord, Lord Melchett, referred) has meant that the demand is now much less than had been expected, but Kielder will meet projected needs well into the next century as an important reserve and resource for the North-East.

In what I hope he will consider as a slightly unfortunate phrase, the noble Lord, Lord Winstanley said—and I think that I have his words correctly—that alternative uses are now being found for the Kielder Reservoir. I hope that he did not mean that had the reservoir not been there the need would therefore not arise, and that these uses would not now be identified. I hope that he did not mean that; I assume that he did not mean it. Much—

Lord Winstanley

I am most grateful to the noble Lord for giving way. Perhaps I did not make myself clear, and since the noble Lord did not understand me, it would appear that I did not. All I said was that, since there has been a reduction in demand for water, to which the noble Lord has referred—and I acknowledge that; I also acknowledge that it could not have been forecast—alternative uses have been found. In other words, the Kielder Reservoir has become an extremely important centre for water-based recreation. That is quite valuable, and it is a very sensible thing to do with a piece of water that is not now used for the purpose for which it was originally provided.

Lord Skelmersdale

I am very grateful to the noble Lord. I had indeed entirely missed the point of what he had been saying, and I am obliged for that elaboration.

To return to my basic theme, I would say that public inquiries can take account of all these factors; such as, for example, does a particular reservoir meet a proven need? Can the water be piped satisfactorily from somewhere else to supply the same need? Can the need be met in some other way? I said that I would look into the fact of conservation of water supplies for the noble Lord, Lord Melchett, and I meant just that.

Lord Melchett

Was the noble Lord answering the point? I was talking about reduction of demand by consumers. It would be helpful to have it on the record if he is saying that that will be something that a future public inquiry would consider.

Lord Skelmersdale

Yes, I did understand that noble Lord correctly—the reduction of demand by the use of conservation measures (if I may put it that way) within a particular industry or a particular domestic user. I am not able to give an off-the-cuff answer to that tonight but I will write to the noble Lord. I have spoken of the worthy objectives of this amendment. That they are worthy has been evidenced by the general support received from all quarters of the Committee. As I have said, without further thought, I believe that the amendment does not achieve its stated objectives and that existing legislation is adequate to achieve them. I hope the Committee will agree with that.

The Earl of Onslow

Perhaps my noble friend could help us a little further. He says that existing legislation is adequate to achieve the objectives. I think the reason why this amendment was put down is that that has actually proved not to be the case, because we have an imbalance of water supply in some parts of the country. The question of Rutland has been proven. If you knock 12 feet off (I do not quite know how many acres) it is a monumental amount of water. I suspect that nobody now would start to build Kielder. There is also the Trent area reservoir. If I had had the time, I would have done my homework properly. I apologise for not doing so. They wanted to build this just over the border. We then had the problem (in a way) of too many reserviors in Wales—mostly for Birmingham, saving the noble Baroness. Then the poor Welsh were the ones who had to pay the highest amount for their water. Again it is in the West Country where the largest amount of rain falls, yet they are the ones who suffer. At the moment there is a drought. My noble friend Lord Nugent went around producing water "out of the air" in 1976, the year of the drought. I just wonder if this legislation has achieved its objective.

I can understand that the drafting of Lord Melchett's amendment leaves a lot to be desired. Perhaps it could be changed or we could consider coming back at Report stage with a clause which would place a duty on water authorities to consult with their neighbours to see if they could find surplus water from their sources. That would help. I think it is important to put something in the Bill at some stage. I hope that the noble Lord, Lord Melchett, will come back at Report with something.

Lord Skelmersdale

My noble friend is confusing two situations. What he is looking at at the moment is past reservoir building in today's conditions. What I am saying is that the planning law was perfectly adequate at the time to give the necessary safeguards—safeguards which the noble Lord, Lord Melchett, and my noble friend who put his name to this amendment, genuinely and sincerely desired. I must say that I agree with them.

Lord Melchett

I think there is a real problem here. The noble Lord, Lord Skelmersdale, said some interesting things. I would like to consider what he said and think about it before the next stage of the Bill and, in particular, I look forward to having something in writing on the one question he was not able to answer. The point is that, however comprehensive the planning machinery was in the past, and however many issues could be considered at public inquiries, two things are nevertheless the case—and I would suggest that he think about this before the next stage.

First, some very bad decisions have been made. I say this, I admit, with the benefit of hindsight in changed economic circumstances. Nevertheless, they were decisions which were catastrophically wrong. It is all very well for those who defend decisions like Rutland and Kielder to say that they are going to be jolly useful in the next century. There are 1,001 things which are going to be jolly useful in the next century and which cost millions and millions of pounds. That is no good reason for spending public money on them today or for having done so last year. I do not think that argument is good enough.

The second thing that I would put to the noble Lord (and I think it was reflected in the debate that we have had on the amendment) is that there is widespread concern about this among many different interests. One has only to read the farming press at the moment about the proposed reservoir near Dartmoor to see that it is a current concern and not one that arose in the past. These decisions are not being taken after sufficient consideration of the points which the amendment covers. What was said in the debate today supported that. I think it was the noble Earl, Lord De La Warr, who said that MAFF should be included. That is a good point—although it may be that neither the Minister of Agriculture nor the Secretary of State is the right one for the amendment to mention in view of what Lord Skelmersdale has said about the semi-judicial role which the Secretary of State plays following a public inquiry.

Perhaps the right thing—and I would have to think about this—would be to place a duty on an inspector at a public inquiry to give special attention to the particular points I mentioned. I would certainly wish to include—and my noble friend Lady White has emphasised that I should do so—agricultural land, for that is important in Wales. As the noble Earl, Lord Onslow, has said, it is Wales which has either suffered or benefited—and I think that the general consensus is that it has suffered—from a large number of reservoirs in the past.

If I could deal with one other point raised in the discussion, the noble Lord, Lord Stodart, said that if you took all these areas into account, there are not many places left where you could put a reservoir. I want to emphasise that the amendment does not stop a water authority or an inspector or the Secretary of State from finally deciding to put a reservoir in the middle of a site of special scientific interest which is capable of being grade I agricultural land in the middle of a national park. But they will have to take a great deal of trouble and care before reachig that decision. A great deal of extra trouble and care is what the amendment is asking for as opposed to putting it in some place where none of those other considerations applies. I think that that remains a good point and one that we should put in the Bill. I will take account of what the Government have said and the comments of other noble Lords and come back to this at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

6.10 p.m.

Lord Melchett moved Amendment No. 18: 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: We now come to a series of amendments which deals with the question of land drainage and improvement schemes. All of them raise separate points. I will try to introduce them briefly for I know that your Lordships have a good deal to get through. Amendment No. 18 deals with the question of cost-benefit appraisals and the fact that these are not available either to the general public or to other interested statutory or local government organisations concerned with particular land drainage schemes. These schemes are invariably withheld from public scrutiny and yet they contain the financial data by which the scheme is justified, and which it rests and on which expenditure of very large sums of public money rests as well. Every land drainage proposal of this sort is subjected to a cost benefit appraisal and these appraisals, as I have said, are regarded as secret, once they have been done, between the land drainage authority, the regional water authority or the internal drainage board, the Ministry of Agriculture and the Treasury.

This has been subject to very widespread concern by people of all parties and of many different interests; those whose primary concern is to contain the wasteful expenditure of public money; those whose primary concern is to prevent land drainage schemes which will damage the environment and show no real public benefit and those who show both interests or a range of interests in between.

The reason, under pressure, which the Ministry of Agriculture and the Government have given for this secrecy, to justify the withholding of this information which is gathered at public expense and which justifies the expenditure of public money, is that some of the information contained in these cost benefit appraisals is given by private individuals, on the whole farmers or landowners, who are, incidentally, potential beneficiaries of the schemes and, because this information is given in confidence, it cannot be released. The noble Earl, Lord Ferrers, said that when we were debating the Wildlife and Countryside Bill in November 1981 and it has been repeated more recently in another place. I shall come back to that in a minute.

There is widespread concern not just because secrecy in principle is wrong but it is being used to hide a number of fundamental flaws in the methodology of cost benefit appraisal, which means that, while a typical scheme will be presented as achieving more than the required test rate of discount, which is 5 per cent., more often the true rate of discount or return will be around 2 or 3 per cent. or even less.

Very briefly, there are a number of ways in which this can be achieved in drawing up a cost benefit appraisal. First, the financial benefits are assessed on the value of increased agricultural production, but the calculations exaggerate the economic gain estimation, because no allowance is made for the fact that the prices of many farm products are themselves subsidised by the taxpayer. In other words, the subsidised price of extra production is taken as wholly of benefit under the scheme, whereas, in fact, part of that price will, not always but very frequently, contain a small or even a very large element of public subsidy. That is therefore a cost to the nation not a benefit. Secondly, figures on the rate of return are distorted because forecasts of the realisation, in other words the take-up of agricultural improvement and increased production under schemes, are over-optimistic.

Thirdly, products subject to producer quotas—for example, potatoes and sugar beet—are treated in the cost benefit appraisal as if they were quota-free. In other words, it wrongly is assumed that an unlimited extra acreage of such crops can be grown once a land drainage scheme has been completed, even though there is a quota on that acreage, let us say, of sugar beet, which is a crop I know myself, and it is impossible for the farmer to grow any more of the crop at the rate of return which would normally be available.

Fourthly, projected yields used in cost benefit analysis are those which are theoretically attainable and they are not, as far as I know, ever based on actual yields obtained in the area where the scheme will take effect.

I would add a final point which has been put to me by someone who has been involved in drawing up such cost benefit appraisals, and that is that it is an extremely simple matter to make sure that the rate of return comes out at the magic 5 per cent. or more. All that is needed, if the rate of return looks a bit on the low side, is to put into the scheme an extra field of some crop which is particularly high yielding. Celery is apparently the Ministry of Agriculture's answer to everybody's problem in cost benefit appraisal. The yields are enormous. In any scheme which is showing less than a 5 per cent. rate of return, you bung in a field of celery and all your problems are solved. As I say, that was said to me by somebody who has been involved in the process. Nevertheless, the feeling that these schemes are widely and wrongly being drawn up to justify public expenditure must be met. The fact that they are so assiduously kept secret raises very widespread and legitimate concern.

It is my view that disclosure of cost benefit appraisals should be the norm—public disclosure to everybody. The amendment I put forward is a great deal more limited than that. At the moment, even bodies which are governed by the Official Secrets Act, which are quite clearly capable of honouring confidentiality, are not allowed to see a cost benefit appraisal. There is a case in point at the moment over a scheme in Norfolk which affects local authorities, the Nature Conservancy Council, a national park authority, the Broads Authority and the Norfolk County Council. Those organisations have all, as I understand it, been told that they may not see the cost benefit appraisal on the Yare barrage scheme—a scheme which will involve considerable expenditure by ratepayers in the area, by the Ministry of Agriculture and others—because the water authority's money does not come from the water authority but from the ratepayers, the Government or a levy put on local authority rates. Yet the people who may be raising the money for the water authority—the local authority—are not allowed to see the cost benefit appraisal to justify the expenditure. That cannot be right.

As I say, the one argument, the first line of defence as it were, that the Government have on this is to say, "Well, the cost benefit appraisals contain confidential information". The Parliamentary Secretary at the Ministry of Agriculture, Mrs. Fenner, said in another place on 17th February: Cost-benefit appraisals for land drainage improvement schemes are compiled from information obtained from individuals on a confidential basis and it would be a breach of confidence to make this information public". [Official Report, Commons, 17/2/83; col. 461.] My amendment avoids that problem by allowing the information to be made available only in very specific cases and to an organisation whose staff are themselves covered by the Official Secrets Act and no more or less likely to leak the confidential personal information given than members of the staff of the regional water authority, the Ministry of Agriculture or the Treasury.

There is a second quite simple answer to this; and that is simply to aggregate the information. There is no need, in publishing a report or providing a cost-benefit analysis to another party, for the information to be indentified by farm, by landowner or by field. It is perfectly possible to provide a summary of the cropping pattern that is expected after the land drainage proposal is complete, and the extra income which is likely to be produced by that cropping pattern. That argument seems to me a non-starter, even if my amendment went much wider. As I say, it does not arise in this amendment.

The next argument used by the Government—and this is at column 462 on 17th February—is that cost-benefit appraisals are not the only thing taken into account. One might be able to aggregate the information, but many other things are taken into account and, therefore, "We do not need to bother to see these". That seems to me to be way behind the last line of defence. If the thing is not important, why bother to produce it? If it is not important, why do the Treasury make it a test of whether such a scheme can go ahead or not? If it is not important why bother about letting people see it? There really is no argument at all. It is an argument of desperation. I therefore hope that the noble Lord will not be driven to use it or the argument about confidentiality tonight and that he will accept my amendment. I beg to move.

The Earl of Onslow

I want to support the amendment to which I have put my name, which I suppose is not so surprising. I wish to say two things about it. First, this country is totally obsessed with secrecy in Government and it does not really seem to matter whether it is noble Lords opposite who are advising the Queen or my noble friends on this side in their advice to Her Majesty. It seems that we have this obsession with secrecy which, as it is taxpayers' money, is the wrong way round.

Secondly, regarding confidentiality, if I am going to be the beneficiary of a drainage scheme, as a farmer, I do not see that I have anything to be ashamed of and I cannot really see that it is very confidential. If it were a case of industrial confidentiality, where you are seeking a market for something new and you want to hide your marketing strategy, I could understand that. But because of the method of agricultural marketing and support systems, I would think that the fact that my field is gong to increase its yield from two tonnes to three tonnes of wheat per acre, for the sake of argument, is not something that I particularly want to hide from my fellow farmers, from the taxpayer, from the land drainage authorities or anybody. I do not see that there is anything to be confidential about.

Furthermore, it would seem to me that this is a perfectly good, sound, Thatcherite argument. I must say that I never thought I would see the noble Lord, Lord Melchett, producing Thatcherite arguments, and it gives me a certain amount of pleasure to watch him. But if it is a question of public scrutiny of these figures and more accountability for them ending up by showing that some land drainage schemes are not worthwhile, then public money is going to be saved and we can then spend it on supporting some of the dotty things the Greater London Council spends money on or on something else. But at least we would know where the money was going, and that seems to me a very important, sound, Thatcherite argument. I am sure that is something which my noble friend, who is anxious for promotion, will follow with the greatest ease.

6.22 p.m.

Lord Skelmersdale

Perhaps on this amendment particularly I can produce yet another Thatcherite argument for not accepting it. I would refer the Committee to the actual wording of the amendment: 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.". What on earth do the noble Lord, Lord Melchett, or my noble friend Lord Onslow think the Nature Conservancy Council are going to do with this? Are they suggesting in all seriousness that this is going to produce better conservation of a particular piece of land? Are they suggesting that the Nature Conservancy Council will be diverted in any way from the strict scientific criteria which Parliament has imposed upon them for deciding such things? I simply cannot believe that. But even if I am wrong on that, as the noble Lord, Lord Melchett, said at length, I have other reasons why I cannot accept the amendment. As part of their general duties to further conservation, the drainage authorities are already required to consult the Nature Conservancy Council before carrying out works in any area of land which has been notified to them by the council as being of special interest by virtue of its flora, fauna and geological or physiographical features.

Over and above this, land drainage matters are currently subject to a review by an inter-departmental committee and Ministers are intending to publish a discussion paper in due course. I suggest therefore that it would be inappropriate to impose on water authorities any further responsibilities in relation to land drainage prior to the publication of this paper, when all the interests concerned will have the opportunity to comment. This amendment would require the disclosure of a cost-benefit assessment for any proposed land drainage improvement scheme when this is requested by the Nature Conservancy Council.

Also these assessments are compiled from information obtained on a confidential basis—the noble Lord has already attacked my argument but perhaps I may give it in a slightly different way from the standpoint from which he attacked it. It would therefore be a breach of confidence to disclose this information either to individuals or public bodies, whoever they may be, and it would be likely to hamper effective scrutiny by reducing the willingness of the individuals concerned to co-operate.

The cost-benefit assessment is only one of the factors taken into account in deciding whether to approve a scheme for grant. It is no more than a basic test of economic viability which every scheme must pass. Financially unquantifiable effects such as damage to wildlife, the risk of people drowning and the advantages to public health are also taken into account. Disclosure of the assessment would therefore serve little real purpose, as it would not provide the whole picture.

This amendment obviously revolves around exactly what are cost-benefit appraisals, and, in my opinion, they are no more than these basic tests, as I have said. The Minister of Agriculture, in considering whether to offer grants, and hence to use these, has also to take account of the duty imposed on him and on water authorities and internal drainage boards by Section 22 of the Water Act 1973, as amended by Section 48 of the Wildlife and Countryside Act, to further the interests of conservation and to lessen the risk to the public.

The objections to disclosure are twofold. First, the assessment of benefits to agricultural areas is based largely on returns to farmers from the increased production made possible by the improved drainage. Information on their future business plans is given by farmers in confidence and it would really not be proper for it to be disclosed, even on a restricted basis. Secondly—

Lord Melchett

Before the noble Lord goes on, would he deal with the suggestion I made that the cost-benefit appraisal would be just as useful if the information were aggregated? In other words, if particular copies of plans were not identified with particular land-holdings but just given as a total acreage summary of whatever it happened to be in the appraisal, that would completely get over the problem that he has.

Lord Skelmersdale

I am afraid it would not get over my basic hurdle of what the Nature Conservancy Council is to do with this information once it has it. Considerable delays could well be caused by opponents of sensitive schemes requiring detailed discussion of what is, as I have said several times in my reply to this short debate, no more than a basic test of economic viability. On all these counts, I would ask the noble Lord to reconsider this amendment.

Lord Beaumont of Whitley

It really is an appalling situation when we come across these objections to having the kind of information that the general public needs and that Members of your Lordships' House need when it comes to putting into operation any of these particular schemes. This seems to be—I will not say one of the last havens, but one of the most obvious and dreadful havens of secrecy for no known reason. It seems to me that the noble Earl, Lord Onslow, and the noble Lord, Lord Melchett, between them have thoroughly demolished the case that there is any real need for this confidentiality. Admittedly, once the thing has been entered into on a confidential basis the authorities do find themselves in a difficult position, but of course it ought never to have been entered into on such a confidential basis. Landowners and farmers are the trustees of the land for the community—a concept which I think is very well taken and indeed accepted widely by people of all political parties. As the noble Earl, Lord Onslow, said, there is very little in what I might call the industrial details—the economic details—of the agricultural plans which by being made public is going suddenly to mean great disaster, or that kind of thing, for the individual farmer.

It is becoming increasingly impossible for the public as a whole, for Members of Parliament and for everyone who has to deal with these drainage plans—some of which, as the noble Lord, Lord Melchett, said, are being pushed through with gravely inflated ideas as to the benefits that are going to flow from them. One is before your Lordships' House at the moment—the Severn-Trent scheme, with which I have something to do—and I do think it is intolerable all round that we should not have publication of these details.

What is the Nature Conservancy Council to do with the information that it gets? That is what the noble Lord, Lord Skelmersdale, asked. The answer is to publish it. It may not be the right answer. This may not be drafted exactly right. It may be that the Nature Conservancy Council should be first. But that we should all have it is really a reform that is very necessary.

The Earl of Onslow

The whole point of the amendment is that the Nature Conservancy Council do not intend to get hold of the information by the back door and put it on the front page of the Muddlecombe-under-Slosh Advertiser. They will use it for their own purposes, and when the noble Lord has finished I will suggest a very sound and money-saving use for that information.

Lord Beaumont of Whitley

I shall look forward to hearing that, and I have no doubt that that can be so. But what I am saying is not necessarily that just the amendment by itself is something which I support. I do not have my name to it, but I think that the idea behind it is a reform which is absolutely necessary, and which we in the legislature must do something about as soon as possible. This is a prime way of tackling this matter, and I hope that the Government will have another thought about it before the next stage.

Lord Stanley of Alderley

I am getting in a terrible muddle now. As I read the amendment, it is only the council which will get this cost benefit analysis, whereas the noble Lord, Lord Beaumont, wants to publish it, and I get the feeling that my noble kinsman Lord Onslow also wants to have public government. But this amendment does not say that; it refers to just the council. I hope that the noble Lord, Lord Melchett, agrees that I have interpreted it correctly—

Lord Melchett

I am grateful to the noble Lord for giving way, and he has interpreted it correctly. What I certainly feel—and my view is clearly shared by the rest of your Lordships—is that it would be much better if this information were widely disseminated. But the noble Lord will appreciate that, because of the usual way of drafting amendments in your Lordships' House, I have tried to be modest and to make as small a change as I could envisage, in the hope of getting, as I am sure I will, the noble Lord's wholehearted support.

Lord Stanley of Alderley

I thank the noble Lord, Lord Melchett. I always try to understand what he is thinking, as opposed to what he is writing. But I can only understand what he has written in the amendment, so we are on the same net. If I may continue, if that is the case, the people who will get the cost benefit analysis are the NCC and they will look at it. My question—and I am going to answer my noble friend Lord Skelmersdale—is: what will they do with it? Here we are giving a cost benefit analysis to an organisation—I am sure that I shall now get into trouble—which is greatly over-pressurised. Many are great experts on birds, butterflies and bees, but one thing that they are not experts on is human nature and the whole set-up in agriculture. Until they get to that stage—and they will, given 20 years like the Ministry of Agriculture, who took that time before they were confident—there is no point in giving them this information. Their job is to advise the Minister—which they do—on the scientific side of a particular development; not to have the final veto.

Baroness Seear

Would the noble Lord explain why knowing about bees prevents the NCC from knowing about human beings?

Lord Stanley of Alderley

I can see that the noble Baroness was at school much more recently than I was. Of course, it does not prevent them. But what I am saying is that they are trained in that way and they are not trained in agriculture as such. Meet any of them and they will be the first people to admit that. They are not given an overall training.

My first objection—and I shall not keep your Lordships waiting any longer—is that by this amendment you are putting a quango, like the NCC, above the Minister. I have reservations about Ministers—I am sure that all of your Lordships do—but to elevate the NCC into a position above an elected Minister of the Crown seems to me a crazy thing to do.

The Earl of Onslow

I promised your Lordships another session on this wretched thing, but I shall try to be as brief as I can, because we want to get on and we have been 25 minutes on this amendment. The Nature Conservancy Council, who have a duty to enter into management agreements where sites of special scientific interest are concerned, have to know about farming, cost-benefit analyses and human beings. If they see a cost-benefit analysis which turns out to be faulty, they will offer less of the taxpayers' money on a management agreement.

I do not think any of your Lordships would recommend that a farmer should be compensated by more than the amount that we, in Parliament, have said he should be paid under the Wildlife and Countryside Act. We do not want to give him extra money. We have enacted that the Nature Conservancy Council shall give him fair and reasonable compensation for any notional loss of profit, in the event of the NCC objecting to an improvement scheme on grounds of conservation. If the council have the cost-benefit analysis they can then argue that it is wrong and they will not have to give so much of the taxpayers' money to a farmer in the event of a management agreement. I should have thought that that was something which your Lordships would support on grounds of both equity and fiscal prudence.

Lord Melchett

Some calculations which I have seen suggest that farmers contribute less than 10 per cent. to the cost of land drainage schemes from their drainage rates. All the other 90 per cent. comes from the public purse generally. It seems to me, therefore, that in this case there could be some argument for elevating somebody or other above the Ministry of Agriculture, before such decisions are taken, but that is not what this amendment does. If I may say so to the noble Lord, Lord Stanley, it is going over the top a little to suggest that simply providing some body with some information, which is available to the Minister anyhow, and on which the Minister makes the final decision unencumbered by anybody else, is to put them above the Minister. That is patently not the case. The NCC can only give advice and make representations about something which, at the moment, they cannot even see.

The noble Lord, Lord Skelmersdale—as I am afraid I thought he would—relied on the two tired old defences of this monstrous secrecy. First, he said that this information is given in confidence by individuals, and therefore should not be disclosed. He did not adapt his defence to take account of the wording of the amendment, which he might have had the courtesy to do, because the amendment suggests only that the information goes to a statutory body, the NCC, and it does not seem to me that the defence is useful in this situation. But when I pressed him—and I shall have to look at Hansard tomorrow—and suggested that, anyhow, the information could be lumped together, so that individuals' land and cropping programmes could not be identified, the noble Lord said that that would get over the problem. So at least that defence can be forgotten.

The noble Lord said something extremely important. He said that the cost-benefit analysis was the basic test of economic viability which every scheme must pass. He said that in a way which was attempting to say that this is not at all important; that there are other things after that which we consider. But a basic test which every scheme must pass is of fundamental importance. To use that form of words to suggest that this is not at all important, and that we should not be worrying about it, is ridiculous. If the noble Lord looks at what he said, he will see that he was contradicting himself as he spoke. This is of fundamental importance. No scheme can proceed without overcoming the basic test of viability, and that is why so much concern is expressed about it. It may not provide the whole picture, but the picture does not even get shown until it gets over that test, and that is why it is important.

Finally, the noble Lord asked: what are the NCC going to do with this? The noble Lord, Lord Stanley, said that they will look at it with a very inexpert eye. But, as the noble Earl, Lord Onslow, pointed out, the NCC are looking at much more detailed confidential information—such as farm management accounts over three years and the whole detail of the accounts; not just the proposed cropping on certain fields, but every item of expenditure on a farm—in order to negotiate management agreements under the Wildlife and Countryside Act. So the NCC are bound to develop expertise in this field. In any event, in public inquiries where the cost-benefit analysis has been made available, particularly at Amberley Wildbrooks, it is clear that there are consultants who are available to the NCC, and who can look at these matters and advise the NCC if they do not have their own expertise.

The noble Lord, Lord Skelmersdale, made the extraordinary suggestion that it did not matter whether or not the NCC saw this: that they are able to express their own view about the scheme and that is all that matters. It is rather like saying that someone can be adequately defended in court without ever hearing the prosecution case. "So long as a defence can be put up, it does not matter what the other chap says", is what the noble Lord is asking us to believe. That cannot be acceptable to your Lordships' Committee and I hope noble Lords will accept the amendment.

6.41 p.m.

Lord Skelmersdale

Before the noble Lord decides what to do with this amendment, he has not commented very carefully upon my statement that the land drainage matters are currently subject to review by the inter-departmental committee, upon which Ministers intend shortly to publish a discussion paper. Will not the noble Lord therefore agree with me that it will be inappropriate to write this into the Bill, either at the Committee stage or at the next stage, before the matter can be considered by that review committee and a discussion paper published upon it?

The Earl of Onslow

I did hear that point and I believe it to be extremely important. I apologise to your Lordships for not having commented upon it. If we can get the satisfactory land drainage plan about which the noble Lord has spoken and if there is time to introduce legislation as a result, I would not wish to push this amendment into the Bill. That is not to say I do not believe that the arguments put forward by the noble Lord, Lord Melchett, and those of us who feel that there is a much stronger case to be made for much more careful scrutiny of land drainage schemes, are valid. If, however, an inquiry is to take place, that would be a very good reason for not trying to push the amendment into the Bill—provided always that anything which comes out of the review results, if possible, in legislation.

Baroness Fisher of Rednal

I wonder if the noble Lord could say whether the land drainage findings will be published and made available before Report stage. Otherwise my noble friend will be in some difficulty, because at a later date there will have to be amending legislation, which for Back-Benchers is almost an impossibility. If therefore the noble Lord could say that at Report stage the Government will be able to say how the land drainage committees might be reorganised, it might help to solve the problem.

Lord Skelmersdale

The review began at the end of last year and it is impossible for me to be definitive as to when the discussion paper might be published. The review is not yet finished. The Report stage is due to take place I believe at about the beginning of April. I very much doubt whether the discussion paper will have been published by then. If, however, the Committee is beginning to be swayed by this part of my argument, the normal way of conducting these affairs would be to allow the inter-departmental committee to report, to have discussions on the document, to have proposals submitted to my right honourable friend the Minister of Agriculture and subsequently to legislate, if it is agreed so to do. That, I should have thought, would be the reasonable procedure to follow in this case.

Lord Melchett

I, too, apologise to the noble Lord for not dealing with this point when I spoke earlier. It is a serious one, although promised consultation documents arising from inter-departmental reviews which are not yet completed are fairly nebulous creatures at the best of times. In a year when an election is due and the Government are going to change, they become even more nebulous than in ordinary circumstances. Nevertheless, I take the noble Lord's point. If he is putting it forward as a serious reason, could he give us a little more information about why amendments to the Bill on land drainage matters should not be made at this stage by the Committee? It would be helpful, for example, if the noble Lord could say that the inter-departmental committee or review group are looking at the question of cost-benefit appraisals, that they are aware of the concern and that they have looked at the three or four points which I mentioned when I introduced the amendment about the way in which cost-benefit appraisals can be modified to meet particular rates of return.

Perhaps the noble Lord could say whether the Treasury are represented on the committee so that we know that a fairly keen eye is looking at this matter. If it should be a Ministry of Agriculture-Department of the Environment inter-departmental committee of some sort, it might not have quite the same sharpness of financial scrutiny applied to it as would otherwise be the case, although I accept that both departments will be governed by Ministers in the attitude which they take regarding public expenditure. It would be even more helpful—I hope the noble Lord does not feel that I am pressing him too far, but it makes a great deal of difference as to whether or not the argument he is putting forward is relevant to the amendment—if he could say that he expects the consultation document which is to be issued to mention cost-benefit appraisals and to be made available either to the general public or at least to interested statutory bodies like the NCC and local authorities.

Lord McIntosh of Haringey

Before the noble Lord answers those questions, I wonder whether he would undertake to give consideration to the point which seems to arise from my noble friend's amendment and the Minister's reply: that many other parts of the Bill could be thought to prejudge the decision of the interdepartmental committee. I wonder therefore whether the noble Lord would undertake to go through the Bill with the usual fine toothcomb and come back to the House on Report and indicate what other parts of the Bill would be affected in this way and whether or not they ought to be withdrawn as well.

Lord Skelmersdale

I thought that I was going to start by being grateful to the noble Lord, Lord McIntosh of Haringey, for his acute observations, because I was going to make a rather different point: that Amendments Nos. 19 to 21 also have the same defence, although there are other specific defences which I shall make to those amendments, if they are moved. It is rather difficult to stand here and answer hypothetical questions from the noble Lord, Lord Melchett, about what may or may not be in a review which is being conducted at the moment. To suggest that the committee will have a sharp edge only if it has Treasury approval and has Treasury representatives upon it is going a little far. So often have I heard the noble Lord use exactly the opposite argument. However, I can assure him that even if they were not going to do so before today's debate, the interdepartmental committee will most certainly look at every word which has been said in this short debate on the subject of cost-benefit appraisals. What I cannot do is to prejudice the outcome of their investigation.

Lord Melchett

I do not want to prolong unnecessarily this debate, but subsequent amendments are to some extent affected by it and to deal with the matter now may speed up the process in the long run. Therefore, I should be grateful if the noble Lord could answer one other point, which troubles me at least. I do not know whether it troubles anyone else. If an inter-departmental committee is to take a disinterested look at the issue of cost-benefit appraisals and whether they should be published, why are the Government fighting tooth and nail to defend the existing practice while the committee is sitting? If they read the debate and what the noble Lord has said on behalf of the Government, will that not prejudice the officials who are conducting the review? The noble Lord said, first, that it is ridiculous to give it to the NCC, secondly, that these documents are full of confidential information and cannot be released, and, thirdly, that they are not important enough to justify release. The noble Lord, speaking on behalf of the Government, has tried in every way to suggest that there is absolutely no case whatever for making them public while an inter-departmental committee is meant to be looking at this in, I hope, an even-handed way.

Lord Skelmersdale

Perhaps I do not have quite the same respect for Governments as the noble Lord, Lord Melchett, but I cannot see any good reason whatever why the inter-departmental committee should not examine my words just as they might examine his words or those of my noble friend Lord Onslow. With regard to his general point about the interdepartmental committee, I did not say it was a committee looking at cost-benefit appraisals. What I said was that the committee was looking at the whole field of land drainage and I would now make sure that it also looked at the cost-benefit appraisals.

The Earl of Onslow

I should like to thank my noble friend for that answer. If we could all look at the consultative paper when it comes out, it would seem to me that after the next election—when presumably my noble friend will be sitting in exactly the same place—this will be a very suitable Bill which could start in your Lordships' House. There seems to be a certain amount of knowledge on the subject of land drainage. I think it would be seriously and constructively criticised by Members on both sides. I thank the noble Lord, Lord Melchett, for putting down the amendment in both our names and for a very useful debate. I personally am satisfied with my noble friend's undertaking on the question of the interdepartmental report, the fact that it will read what has been said and will produce a consultative White Paper, and if legislation is needed it will flow from that consultative document.

Lord Melchett

I think that is a sensible course in the circumstances. I still have one worry and it may be the noble Lord can clear it up if I put it more precisely. He said that the people conducting the review will read his words as well as mine. He represents the Government; I do not. They are likely to place a great deal more weight on his words; indeed, he has simply repeated what Ministers in other places and in your Lordships' House have said on numerous occasions in the past. It would be useful to have an assurance that although the Government have defended the existing practice, as is the Government's wont, nevertheless they will approach anything that comes from the review with a completely open mind and will be prepared to consider recommendations, if the review makes them, for cost-benefit appraisals to be made more widely available. If the noble Lord can say yes to that, I shall withdraw the amendment.

Lord Skelmersdale

I am not sure whether it will be the review or the subsequent consultation that will bring up the noble Lord's points, but I am convinced that by whatever method they will be looked at both objectively and fairly.

Lord Melchett

I am grateful to the noble Lord. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Melchett moved Amendment No. 19: Before Clause 5, insert the following new clause:

("Power to hold inquiries 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: This amendment also affects questions of land drainage, and in fact more directly because it would amend the Land Drainage Act 1976. The amendment is very simple. It simply extends the power to call a public inquiry, which at the moment in land drainage matters rests solely with the Minister for Agriculture, Fisheries and Food under Section 96 of the Land Drainage Act, to the Secretary of State for the Environment, so that either the Minister or the Secretary of State is empowered to call a public inquiry about a land drainage scheme, should they wish to.

We have discussed earlier this afternoon the merits or otherwise of public inquiries, and I think that the noble Lord, Lord Skelmersdale, in suggesting that they provided sufficient safeguards so far as conservation and water supplies and loss of agricultural land are concerned, said that at public inquiries all the issues can be considered in the open and the various points assessed. I agree with that; it was a good point on that amendment, and it was one of the reasons why I withdrew it. What this amendment is trying to do is to make sure that wherever there is a good case for a public inquiry, whether on agricultural or environmental grounds, the relevant Minister can call for one and derive the benefits which flow from public inquiries which the noble Lord himself mentioned earlier.

The concern which lies behind this is the feeling that the Ministry of Agriculture have taken at least a policy decision—it may be one that can be subsequently overturned by the inter-departmental committee or not—that public inquiries into land drainage issues are unnecessary and should be avoided. There has been only one public inquiry into a land drainage proposal since 1976, which was the one where the Southern Water Authority had a drainage scheme for Amberley Wildbrooks, which I mentioned, which was held in March 1978. In that case the inspector found against the proposals to conduct the drainage and the recommendation was endorsed by the Minister.

After that one failure to get a land drainage scheme through a public inquiry, there has not been one subsequently and Halvergate Marshes and the proposal for a land drainage scheme there was the subject of a long, bitter, acrimonious dispute which stretched over months and months, and must have become as wearisome to the Ministers involved in various departments as I am sure it was to the farmers whose land was affected; and it certainly was to those of us trying to take an intelligent interest in the progress being made from a conservation or landscape point of view. It seemed to me that at the end of the day it would have been much simpler, quicker and cheaper if we had had a public inquiry at the outset and the matter could have been determined by public debate one way or another.

It may be that the noble Lord will feel that this is covered by the inter-departmental review and the need for public inquiries may be something which falls within their terms of reference. If he can confirm that they are looking at this, that will be helpful, but I hope he will also agree with me on this occasion, so that the officials can read views which coincide rather than disagree, that it would be a useful power for the Secretary of State to have. I beg to move.

Lord Skelmersdale

I must be in an unduly cynical frame of mind this evening. I hope the noble Lord will accept that, even if other parties do not, the Government speak with one voice at any one time. The decision to hold a public inquiry is made by a Minister on behalf of the entire Government. It is very difficult for me to see the practical advantage in increasing the number of Ministers involved. Government policy in regard to potential conflicts between the interests concerned with or likely to be affected by a land drainage scheme is to encourage maximum consultation between the different interests in order to secure a solution acceptable to all.

A public inquiry can be unhelpful to all the interests involved and is only considered if reconciliation proves difficult. The Minister takes all relevant factors into account in deciding whether to hold such a public inquiry, which in this case he is empowered to do under Section 96 of the Land Drainage Act 1976. He naturally consults his ministerial colleagues if necessary. There is nothing to be gained by extending the power in the manner proposed. However, I am most grateful to the noble Lord for raising this point. As we now know at great length, we have an interdepartmental committee studying this and related issues, and I am sure that they will discuss this aspect as well.

Lord Stanely of Alderley

Before the noble Lord, Lord Melchett, replies, I think I am correct—I am sure he will correct me if I am not—in saying that over Halvergate, which he mentioned, the Minister of Agriculture and the Secretary of State did consult together. The noble Lord nods, so I think again we are on the same net. If that is done, this amendment would have no relevance.

Lord Melchett

It would have no relevance if it was invariably the case that a Minister of Agriculture who received a request from the Secretary of State to hold an inquiry simply did it there and then, I agree; but anyone who has been involved either directly in Government or indirectly through reports in newspapers with rows between different Government departments and Ministers at various times knows perfectly well that life is not like that.

In any event, I am afraid that, while there was consultation on Halvergate, that was an area where a great deal of public attention was being focused on a large-scale scheme. There are other examples, and Sedgemoor is one, where there have been a number of land drainage schemes affecting a large area—18 capital works since 1977 which have been proposed for the area—all of which have been approved and grant-aided by the Minister of Agriculture. I do not know whether every one has been approved after consultation between the Minister and the Secretary of State, but I very much doubt it. This is despite causing an extremely damaging impact on the wildlife of that area. There is a great deal of concern in the public mind about the impartiality with which the Ministry of Agriculture would look at such proposals and deem them worthy of public scrutiny.

The noble Lord said that the interdepartmental committee will look at this. I hope it can so redefine the criteria under which land drainage schemes are proposed in the first place that these conflicts will not arise and will not need to go to any sort of ministerial or public inquiry, because the schemes will be put forward only where they are really justified and in the general public interest. That would solve a great many problems and reduce public expenditure and the number of schemes that are likely to be put forward, if not to zero then very close to it. However, in the light of what the noble Lord said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7 p.m.

Lord Melchett moved Amendment No. 20: 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: Once again we are on the Land Drainage Act, and this amendment would require the Secretary of State to appoint two people to the regional land drainage committees who have a special knowledge of wildlife or landscape conservation. It seems to me that this amendment raises a point much more directly concerned with changes made in the Bill. For that reason I do not think that it will be satisfactory for the noble Lord to say that the interdepartmental committee will consider this. In this Bill we are making major changes to the composition of regional water authorities. We are greatly reducing the number of elected representatives on the authorities and thereby greatly reducing the opportunities for public access to members of the authorities.

There is no doubt that access to a very large number of people—I agree, incidentally, that it is sometimes far too large on occasion—has been very useful in allowing people to question particular land drainage schemes which are of concern to them. It seems to me that with smaller, more secret authorities—if the noble Lord does not feel that is being unfair, but I think it is inevitable—which will be in charge in future it will be much more difficult for interested organisations and members of the public to put pressure via the authority on to their regional land drainage committees.

Given the changing composition of the regional water authority, it appears to me that the regional land drainage committees are likely, if anything, to have rather more power over land drainage matters than they do already. I think it is generally accepted that they are extremely influential, if not the determining factor, in making decisions on land drainage proposals. These committees vary in size between 13 and 20 members at the moment, and I hope that the suggestion that two members should be appointed with the specialist knowledge that I have mentioned will not seem unduly onerous to the noble Lord, Lord Stanley, or to anyone else who might be concerned about a very small minority voice being heard.

I think it would be overdoing it to go into any detail about the extent of the interests which wildlife and landscape conservation bodies and members of the public interested in this subject have in land drainage matters. I think that is generally accepted on all sides of the Committee. What we are discussing is the best mechanism for seeing that that interest is taken into account by the regional water authorities—we will come to that later in, I think, my noble friend's Amendment No. 34—and, in the case of this amendment, by the regional land drainage committees. I beg to move.

Lord Skelmersdale

I am afraid that yet again I must disagree with the noble Lord, Lord Melchett, on the subject of this amendment. He must, I feel, be prepared to distinguish between two different things: one is the membership of the water authorities themselves and the second is the membership of the regional land drainage committees. They are two completely separate entities.

Incidentally, the noble Lord goaded me by suggesting that our attitude to water authorities will now be a lot more secretive. My answer, of course, is that we will be a lot less secretive in that we are setting up not only consumer consultative committees but also recreation and conservation committees. Subject to the will of the Committee we have now reconsidered the position of the local ombudsman on water authorities.

Water authorities and other drainage bodies, like the Minister, are already required to further the interests of conservation and they carry out extensive consultations with conservation and wildlife interests. The Minister is always concerned to take into account all relevant factors when assessing land drainage schemes for grant aid and seeks to ensure that all concerned have made their views known on any particular scheme and have had those views taken into account.

The amendment asks specifically for two members appointed by the Secretary of State on the regional land drainage committees to be persons with a special knowledge of wildlife and landscape conservation. In my view, this is not necessarily due to the general statute that the regional land drainage committees have to take account of conservation and wildlife interests, as I have said. Over and above that, I agree that it is a separate point, but this is also something which would come within the remit of the interdepartmental committee on land drainage.

Lord Winstanley

Before the noble Lord sits down, can he explain further the point he made about the noble Lord, Lord Melchett, confusing the new water authorites with the land drainage committees? It seems to me that the amendment is perfectly clear. It asks for these two people with special knowledge to be on the regional land drainage committee. I am wondering if by his words the noble Lord was suggesting that we would have the remotest hope of getting two members with this specialised knowledge put on to the water authorities. I should have thought that that was a very vain hope indeed, but it appeared to be the suggestion behind the noble Lord's comment on what the noble Lord, Lord Melchett, said.

Lord Skelmersdale

Perhaps we should not preempt the discussion on a subsequent amendment. What I meant was that the noble Lord announced his remarks by saying that we now come rather closer to the main purport of the Bill, or words to that effect. I was merely pointing out that I disagreed slightly with him.

Baroness White

I hope that the noble Lord will nevertheless think again about this matter, because those of us who have some experience of environmental questions in certain parts of the country are not always convinced that the land drainage authorities take full account of their obligations under Section 48 of the Wildlife and Countryside Act. This is partly because of the composition of these particular bodies. It is an historical anomaly in many ways that in their relationship with the regional water authorities, as such, the water authorities really have no jurisdiction over what the land drainage committee does unless its activities in some way impinge upon the direct responsibilities of the water authority.

I know that that causes a good deal of concern to members of the water authority who happen to be interested in conservation, landscape or wildlife matters. I should have thought that to secure the representation on the drainage board of someone who had an interest in those questions would lead to a much more realistic discussion when they were taking their own decisions than can always be ensured as things are at the moment.

I do not want to delay the Committee, because I am quite sure that Members would like to resume and have their dinners. But this relationship between the water authorities and the land drainage boards is one which has caused considerable concern, and I am not at all surprised that my noble friend Lord Melchett has sought to make an amendment to the Bill.

Lord Stanley of Alderley

I want before my noble friend replies just to put the record straight, although the noble Baroness, Lady White, I am sure will not believe me. But many farmers, believe it or not, think that the drainage committees bend over backwards against their interests and in favour of the conservation interests. It is not just on the one side. We also feel sometimes that they lean over backwards the other way. The other point that I would make, which was made by my noble friend on the Front Bench, is that the drainage committees are duty bound by statute to do that and presumably, if they offend against that statute, they can be taken to task.

Lord Melchett

Before the noble Lord, Lord Skelmersdale, replies to my noble friend Lady White, may I just put another point to him? It is a question which arises out of what he and the noble Lord, Lord Stanley of Alderley, said. If it is simply enough to have a statutory duty to take account of a particular interest, why are there two members appointed by the Ministry of Agriculture on regional water authorities? Regional water authorities have statutory duties in regard to agriculture and fisheries, and yet agriculture and fisheries interests insist on a statutory obligation and upon the Minister appointing two people to those authorities. Really, it cannot be that people have it both ways.

Lord Howie of Troon

I wonder whether I may say just a very brief word here. As a civil engineer who has spent many years trying to build things, I have always found conservationists and people of that sort extremely tiresome. I say that with the kindest thought for my colleague, my noble friend Lord Melchett. But tiresome or not, they have a right to be heard and I grant them that entirely.

I wonder whether the noble Lord the Minister has thought of this: if he follows the course of action proposed by my noble friend Lord Melchett he will find that these tiresome people will be properly heard in the machinery and will therefore be relieved of that sense of injustice which very often permeates their thinking and makes them even more tiresome than they would otherwise be. I am not saying that we should take the bite out of their teeth. That is not what I am saying at all. But these people should be properly heard; they should be heard out in the open and should have removed from them any sense of injustice under which they may labour. Then honest civil engineers such as myself could get on with making the country much better than it would otherwise be.

Lord Skelmersdale

I take the point of the noble Lord, Lord Howie of Troon, that to him and his colleagues in the civil engineering field the conservationists are tiresome people, but without entering into an argument on the subject, perhaps he will accept that in the conservationists' eyes the boot is on the other foot.

Lord Howie of Troon

Not at all.

Lord Skelmersdale

Land drainage is one of the fundamental duties of the water authorities and conservtion is also a duty, but that is one, I am told, which is incidental to their functions. But I do very much take the point of the noble Baroness, Lady White, and I have absolutely no doubt that that will be considered at some stage during the consultation process to which we have already referred on numerous occasions.

Lord Melchett

I really have not been having much luck with the noble Lord today. I do not claim that that entitles me to any special privileges. But this is a simple amendment and it might even be one, if the noble Lord took it away and looked at it, which could be achieved by the Government giving an assurance or, after consultation with the water authorities, saying that when making appointments to regional land drainage committees those factors will be taken into account. It could be met without the need of an amendment. I really do think that it is a sensible point, for the reasons which my noble friends Lady White and Lord Howie of Troon and others have put forward.

I know that it must be very difficult if somebody has said, "Do not accept anything on land drainage; there is a committee sitting. That is all you need say". The noble Lord is more intelligent than that, I am sure, and will listen to the arguments put forward. I just wonder whether he might be prepared on this one to take it back, consider it and perhaps explore whether it is something on which the Government are prepared to give an undertaking that at least it will be taken into account when appointments are made by others to these committees. If he would do that, I think that it would meet some quite genuine concern which, after all, will possibly exist for a very long time. We do not know when the interdepartmental committee will report, let alone when the legislation that flows from it, if it ever does, will reach the statute book.

Lord Skelmersdale

With such a tutor as my noble friend Lord Bellwin sitting beside me on this Bench, most certainly 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. 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.

Lord Melchett

I am grateful to the noble Lord the Minister for that. I think that it would be very helpful if he could do that and perhaps in particular look at the suggestion that, if there is this veto—I will not say from where—which says, "No legislation on land drainage", it is something where a few kind words and good intentions might go a long way towards solving the problem. That might help the noble Lord; it will certainly help me and others who are concerned about this. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.17 p.m.

Lord Melchett moved Amendment No. 21: 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—

  1. "(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.
  2. (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: This is a point which I think that we should and can take fairly quickly. As it would affect nature conservation bodies and the amount of tax in the form of drainage rates that they pay, I should declare an interest as someone involved in the Royal Society for the Protection of Birds and other conservation bodies, although I think that that is the one among those with which I am associated which will be most beneficially affected if the amendment is accepted by the noble Lord.

Wetlands are extremely important for wildlife. Many of them in this country are owned by nature conservation bodies, in particular, as I say, the Royal Society for the Protection of Birds. In many cases, along with county naturalist trusts, it owns significant areas of wetland in the Ouse washes near where I live in Norfolk. The wetland is owned jointly by the Royal Society for the Protection of Birds, the Wildfowl Trust and the Cambridgeshire Naturalist Trust. That is a very good example. It is a huge area of wetland owned not entirely but very nearly exclusively by nature conservation interests.

The amendment will have the beneficial effect of directly assisting the owners of important nature reserves who are subject to land drainage charges. Only areas which are sites of special scientific interest and are managed as nature reserves would benefit, as these are, by their designation as SSSIs, recognised as being of national importance. The amendment would remove the owner's drainage charge which is levied to meet part of the cost of improvement works, the rest being covered by the Ministry of Agriculture. If that were removed, conservation bodies would no longer be asked to contribute financially to works which are inevitably damaging to the wildlife interests of the land that they own.

What is happening under the existing regime is that conservation organisations which own land as land owners are being asked to pay for work which has the effect of destroying the purpose for which they own the land. It is like a farmer who owns land which is about to be flooded for a reservoir being made to pay in large part for the reservoir at the same time. However keen anyone may be on reservoir building, and however unsympathetic to farmers for that matter, all of us would feel that that was going a bit too far.

The amendment would not reduce or introduce any exemption from the occupier's drainage rate which goes towards the cost of maintenance works. In other words, maintenance works will continue to be necessary whether or not the land is owned and managed as a nature reserve. The exemption is sought from the owner's drainage charge which covers the cost of improvement—that is, capital works. It goes without saying that nature reserves do not make a profit; and, in fact, to manage them properly requires a great deal of money being spent on them which is raised by public subscription by the bodies I have mentioned. Despite this, internal drainage boards levy the same capital drainage charges on areas managed as nature reserves as they do on highly profitable farmland. If the press reports from the Ministry of Agriculture are to be believed, somebody may have been making in the past year huge profits from farming land which is drained, and the owner's drainage charge—the capital levy—will be a relatively insignificant charge. But for a nature reserve which is already costing an organisation a great deal of money, to have to pay a capital improvement owner's charge as well really can be going over the top.

I reckon that the loss to drainage board funds as a result of the amendment will be of the order of £30,000 a year. That will be the benefit to nature conservation organisations. It may not sound a great deal, but for very hard-pressed voluntary organisations—which are, particularly in time of economic recession, finding it very difficult to raise sufficient funds—it represents a real benefit. They have difficulties raising funds from the public simply to keep pace with inflation, let alone increase the expenditure which they are now being called upon to do as a result of, in part, the Wildlife and Countryside Act, the debates we have had on it, and the changes in the law that have flowed from it. As I have said, it may be a small sum to your Lordships and the Government, but it would nevertheless represent a real benefit to the organisations concerned. I beg to move.

Lord Skelmersdale

The noble Lord, Lord Melchett, has just said that he has not had very much luck with me as regards his previous amendments. I must say that I am beginning to feel that I have an eel as my kinsman. Be that as it may, I am afraid that I must tell the noble Lord that in my view this particular amendment is rather akin to a house that is based on sand. I appreciate the concern of the noble Lord—let us get that straight right away. This amendment seeks to provide an exemption from liability to some of the drainage rates which are levied in respect of land which has been designated as a nature reserve, and so on. The amendment as drafted probably does not meet the noble Lord's intention as it only provides exemption in respect of drainage rates which are made to meet the costs of new and improvement works. But even if that were not the case, I would have—

Lord Melchett

I am sorry to interrupt the noble Lord but with respect that was exactly the case I was making. I was saying: okay, it is quite reasonable to pay drainage rates which meet maintenance costs, because maintenance will be needed however the land is managed and it is fair for conservation bodies to pay towards that. It is the capital improvement expenditure which sticks in the gullet, and the amendment is solely and deliberately aimed at that.

Lord Skelmersdale

Perhaps I was not enunciating clearly—but in any case the noble Lord did not let me finish my sentence. I was saying that this amendment only provides an exemption in respect of the costs of new and improvement works. Even if that were not the case I would have reservations about the proposal.

The main reason why I oppose the adoption of this amendment is that all land within drainage districts which is below certain heights above sea level, and which thus derives benefit from the works carried out by the drainage board, has always been liable for drainage rates. No statutory exemptions have ever been made to this general rule. I do not consider that it would be right to begin now with land which has been designated as a nature reserve. However, in any case, since drainage rates are already calculated on the basis of the annual value of the land and property within a drainage district, reduced drainage rates will already be being paid in respect of such land which is being managed solely as a nature reserve. This is because the land which such reserves occupy will have a much lower annual value than that which is used for farming or is in urban occupation.

In my view we have heard quite enough about the inter-departmental committee this evening, but I hope that the noble Lord will accept that that is a basic reason why the amendment really is not appropriate.

Lord Melchett

No, I do not; and, with great respect to the noble Lord, I think that the amendment deserved a little more care and attention in responding to it than it has been given. First, the noble Lord implied that I drafted an amendment to attempt to achieve a complete exemption from rates and that I had failed to do so. However—as I said in introducing the amendment—I deliberately drafted it in a way so that it was intended simply to allow conservation bodies not to have to pay for capital improvement works which in effect destroyed the very reason for their owning the land in the first place. I was not suggesting that they or anybody else should be exempt from drainage rates which pay for maintenance works in an area which the noble Lord said everybody was liable to pay.

The noble Lord did not, with respect, deal at all with the argument—and I think this argument was based on absolutely solid foundations, whereas the noble Lord's argument was based on some pretty soggy sand—that it really is very unfair for an organisation which has bought land to manage in a certain way to have to pay capital charges which will go towards schemes which will destroy the land for the purpose for which it is holding it. The noble Lord did me an injustice in not dealing with that point.

Secondly he said, "Well, in any event it is no real problem because the annual rate charge will be based on the capital value of the land"—the noble Lord will correct me if I have it wrong—"and that will be lower because it is a nature reserve". With respect to the noble Lord, that is simply not true in a very large number of cases, particularly as regards wetland sites. In fact, it can be the case that land of scientific interest will actually be worth more in capital value than land of a similar agricultural quality which is not of scientific interest. That is because it is already clear that in some areas the capital value on the open market of such land reflects the fact that it may be eligible for compensation payments under the Wildlife and Countryside Act.

If the noble Lord cares to go and try to buy some land on West Sedgemore at the moment, he will see exactly what I mean. The capital value of that land on the open market is very high indeed. It is high because of the nature conservation interest and the likelihood that the people owning the land will be eligible for compensation payments. So in fact, if anything, the reverse is true of what the noble Lord said. Conservation bodies are not only having to pay to destroy their land, but they are having to pay more than a farmer nearby who is still able to farm the land profitably. If the noble Lord were to tell me that it would be possible to levy drainage rates on the basis of the income generated from the land, then that would be fine and would meet the point entirely—or, if not entirely, at least in part. But, so far as I understand it, that is not the case at present.

Lord Skelmersdale

I must say that I really cannot agree with the noble Lord, Lord Melchett, that the land value is high necessarily because of the nature conservation interest. The noble Lord says, "Go to West Sedgemoor". The fact is that one simply cannot buy any large areas of West Sedgemoor because it is split up into very small areas often owned independently by absentee landlords and because the almost Napoleonic code has applied to that particular area of the country. I suggest to the noble Lord that the reason why land prices in West Sedgemoor are so high is that the individual plots of land are so small. It has nothing to do with conservation interests whatever. However, I accept that there is a problem here with which I have not been able to deal satisfactorily this evening; I readily concede that. I should like to take the matter away and look at it.

Lord Melchett

I am very grateful to the noble Lord for that, but I think he is wrong about land values in West Sedgemoor and a number of other areas in the country. This is a sensitive issue for those concerned in both selling and buying the land, but I am sure that there are organisations that would be able, in confidence, to provide the noble Lord with some information. I know that, with his keenness on confidentiality in these matters, he would respect that, which would support what I have said.

The noble Lord has very generously said that he will look at this again. It was a narrow point at which I was aiming, and the aim may not have been as accurate as I intended. Amendments drafted by Back-Benchers never are, but in introducing it I did try to make it a little more precise. I am very grateful to the noble Lord for his offer to look at the point again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Glenarthur

I think that this might be a convenient moment for the Committee to break for dinner until 8.30 p.m. I beg to move that the House be now resumed.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.