HL Deb 08 June 1989 vol 508 cc947-1004

3.38 p.m.

The Earl of Arran

My Lords, on behalf of my noble friend Lord Caithness, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(The Earl of Arran.)

On Question, Motion agreed to.

Clause 7 [General duties with respect to water supply and sewerage services]:

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh) moved Amendment No. 48: Page 7, line 19, at end insert— ("( ) to ensure that the interests of every such person are further protected as respects benefits that could be secured for them by the application in a particular manner of any of the proceeds of a disposal (whether before, on or after the transfer date) of any of that company's protected land or of any interest or right in or over any of that land;").

The noble Lord said: My Lords, in moving Amendment No. 48, I propose to speak also to Amendments Nos. 75, 100, 101, 102, 139, 140, 160 and 161. For the purpose of clarification, I propose to move Amendment No. 48 and speak to it. Then the noble Lord, Lord McIntosh of Haringey, will move Amendment No. 48A. The other amendments will follow on from there and, with the leave of the House, I propose to respond to them at the end of the discussion. I shall take a little time in moving Amendment No. 48 and speaking to the other government amendments because they are of an important and substantial nature.

The government amendments grouped with Amendment No. 48 have two main purposes: to ensure that the special environmental quality of water authority land can be indefinitely protected, and to ensure that the customers of the appointed water and sewerage undertakers share the benefits of any disposals of surplus land.

It is a distinctive feature of this privatisation that the water authorities have very extensive landholdings—more than 430,000 acres, of which some 180,000 acres are in national parks and areas of outstanding natural beauty. The amendments are designed to allay various concerns about the future of this land. We have listened carefully to all that has been said, both by noble Lords at Second Reading and in Committee, and by conservation and other bodies outside this House. I should like to give the House a full explanation of this group of amendments, which will I believe provide a full answer to the concerns which have been expressed.

It may be helpful if I first describe the effect of each of the government amendments in the group. Amendment No. 48 would impose an additional duty on the Secretary of State and the Director General of Water Services to ensure that the interests of customers are protected in the application of proceeds from disposals of protected land. Protected land is defined in Amendment No. 161, and includes all the land transferred to WS plcs under Schedule 2 schemes, and the land held by statutory water companies at any time in the financial year current on the transfer date. It also includes any land which may be held in future by an appointed company for purposes connected with its functions, including any land transferred by Schedule 5 schemes. Amendment No. 160 ensures that the creation of interests or rights over land—for example, leaseholds—is caught by the new provisions, and also the surrender or termination of any interest, as for example where the appointed company has a leasehold and surrenders it.

Amendment No. 75 provides that the management of all land held by appointed companies will be subject to the duties in Clause 8, whether or not the land is being used for functions connected with the carrying out of the functions of a water or sewerage undertaker. Amendments Nos. 100, 101 and 102 will make it possible to entrench certain conditions of appointment relating to disposals of land, so that they cannot be changed except by agreement of the Secretary of State, the director and the company holding the appointment. Amendment No. 139 deletes subsections (7) and (8) in Clause 150, which impose a consent requirement on the disposal of compulsorily acquired land, but these provisions are reintroduced in the new clause which would be inserted by Amendment No. 140.

The new clause is the central piece of machinery of this group of amendments. Companies holding appointments under the Act will be able to dispose of their protected land and interests or rights in that land only with the consent of the Secretary of State or in accordance with a general authorisation given by him. There is a consent requirement for the NRA as well, but this applies only to compulsorily acquired land.

The consent mechanism serves three purposes. First, it will enable the Secretary of State to require that the Crichel Down rules are observed when there are disposals of land which was compulsorily acquired. It is intended that a general authorisation will be issued to each undertaker and to the NRA requiring disposals to be made in accordance with the Crichel Down rules. The rules are designed to protect the interest of the former owners of land. They require that when any land which was acquired by compulsory purchase is to be sold, it should be offered first to the person from whom it was acquired. The rules apply to all agricultural land acquired since 1935, and to other land acquired within 25 years before the date when it becomes available for disposal. Disposals to former owners under these arrangements will be at a price reflecting current market value, as determined by the district valuer.

The second purpose of the consent provisions relates to the new duty concerning the proceeds from land disposals in Amendment No. 48. The intention is to enable customers to benefit from the net receipts from future disposals of land, while preserving incentives for land to be released or developed. It is essential that the arrangements ensure that customers are not prejudiced by two stage disposals via sister companies, with the sister company realising all of the development gains. This is where the consent mechanism in Amendment No. 140 plays a part.

My right honourable friend the Secretary of State intends to give the Director General of Water Services a role in disposals, through a consent procedure which will be constructed to allow as much self-policing as possible. There will in effect be three categories of disposal: In the first, directors of appointed companies will be able to provide the director with a certificate that the disposal is an arm's length disposal, with no continuing interest in the land by the appointed company or any related company, and that the best price reasonably obtainable has been obtained.

Where such a certificate cannot be provided but the disposal is below a certain threshold fixed in relation to the value or area of the land concerned, the company will need a certificate from an independent valuer approved by the director that the best price has been obtained. The independent valuer will report in particular on any prospect that the value of the land may be enhanced by a future planning permission.

In the third category involving disposals above the threshold which are not arm's length disposals a specific consent will be needed. As a last resort the director would be able to block inappropriate disposals at less than the best consideration reasonably obtainable, especially where sister companies are involved. In order to avoid unnecessary complications and to ensure the availability of key assets on transfer of appointment, the general consent procedure will require directors to certify that assets are redundant before they are sold.

The consent requirements are designed to make sure that the best price is realised by the appointed company. There will be conditions of appointment determining how that value is to be taken into account in price control, so that customers share the benefit of proceeds. The intention is to set a target amount for disposals when the RPI plus K price control formula is first set. This will be discussed with each authority and company, but it is proposed that it should reflect 100 per cent. of the open market value of identified surplus sites. Where actual receipts vary from the forecast amount—and because of the difficulty of predicting the enhancement of value that may arise on certain sites as a result of new planning permissions it is likely that out-turn will exceed the initial forecast—a further adjustment of K will be made reflecting 50 per cent. of the excess of shortfall.

Before proceeds are divided between customers and shareholders allowance will be made for transaction costs, and for costs which are necessary in order to release the land, in so far as these are not already taken into account in K. In order to pick up and deal with any transitional problems the amendments apply to disposals by water companies during the financial year current on the transfer date. Companies will therefore have an incentive to dispose of their surplus land, and to the extent that they can improve on the value of land by obtaining planning permission or selling with clawback conditions that operate in the event of a future planning permission, the improvements of value will be shared fifty-fifty between customer and shareholder.

The third purpose of the consent mechanism is to enable the Secretary of State to impose special requirements when there are disposals of land of particular environmental quality. The essential elements are as follows. Within the national parks, areas of outstanding natural beauty, the Broads, and such other areas as the Secretary of State by order designates, special environmental controls will apply to any disposal of land. For any such disposal the Secretary of State's consent will be required, and in deciding whether to give that consent he is to be bound by the Clause 8 duties to further conservation, have regard for access, and so on.

Within these areas there is to be a range of special conditions which he can impose on any disposal. It is intended that he be able to require that the land be offered in the first instance to a conservation body approved for this purpose by the Countryside Commission. He can also require, as a condition of any disposal, that management agreements can be entered into with the relevant park authority or local authority to the satisfaction of the commission. Finally, he can require covenants for the protection of particular features of the land.

The consent procedures will give the Secretary of State a means of ensuring that the special environmental quality of water authority land can be indefinitely protected. Again, we shall look to a general authorisation procedure, including the Countryside Commission, which will minimise bureaucracy and simply filter out the limited number of cases where special controls on environmental grounds are likely to be necessary.

Those arrangements are an addition to the powerful framework of environmental duties which is already provided in Clauses 8 to 10 of the Bill. These set out statutory requirements on conservation and public amenity which go beyond requirements for any other industry, whether in the public or the private sector. That must be right, for no other industry has land holdings of comparable scale and significance; and no other industry's operations have such a deep and pervasive influence on the environment.

It is a tribute to this framework that so many have asked what is to happen to the land should it pass outside it. There is genuine concern that the companies, perhaps subject to commercial pressures, will sell land of great environmental importance in circumstances which could jeopardise its future conservation and the amenity it affords the public. There is concern also that they might be tempted to pass land to subsidiary companies outside the scope of the Clause 8 duties. The Government have weighed carefully the importance and the reality of these concerns.

It remains the Government's view that in most circumstances the planning system will cope with any risks. But at the end of the day, we have to give due weight to two special considerations. The first is that much water authority land is of quite exceptional beauty and environmental quality. In strict logic that is no reason to treat it differently. Extreme cases make bad law. But Thirlmere, High Peak, the Elan Valley and the others are special. And it is right for the Government and this House to require a degree of confidence as to their future security which might not be considered necessary in other areas.

The second is the recognition that, as a consequence of past exercise of their special conservation and amenity duties, water authorities have done more in respect of conservation and amenity than ordinary planning and conservation legislation could secure. Special conservation measures have been undertaken; arrangements entered into with local naturalists trusts and amenity groups; wider public access has been allowed; traditional agricultural and forestry practices have been preserved which are outside the scope of the planning system. These special features, voluntarily entered into, deserve protection.

The risks the amendments guard against may in practice be relatively small. It is the Government's view that, in practice, the great majority of water authority land is likely to have to be retained by the companies for performance of their functions. But while the risks are small, they are risks which in the Government's view should not be run. And it is for this reason that the Government believe that special provisions are appropriate.

We have had no shortage of suggestions as to what those provisions should be. I refer to two in particular. There has first been the proposal, put forward in particular by the noble Lord, Lord Greenway, that disposals should be brought within the scope of the Clause 8 duties, and that no disposal should prejudice the purposes of that clause. We are indebted for the suggestion, and indeed we are adopting features of it. But on its own it may not be sufficient, because the transfer of property rights is a particularly difficult area to leave subject only to duties which are bound to be widely drawn.

There is then the proposal of the noble Lord, Lord Gibson, to rely in particular on a right of first refusal for conservation bodies in the event of sale. We welcomed this proposal also, but it is our view that it could be of limited effectiveness on its own and that it needs to be seen as one of a number of options to address very varying situations.

The merit of the approach adopted in the amendments is its scope and flexibility. Often no controls on disposals, even in national parks and areas of outstanding natural beauty, will be necessary. But sometimes the land will be of such special character that long-term protective ownership by a conservation body may well prove to be the appropriate option. At the other extreme, there may only be one particular feature of a site that requires protection and in these cases a covenant is the appropriate way forward.

Whatever the choice of mechanism, the Secretary of State in making his decision will be bound in deciding which course of action to take in a particular case by the terms of the Clause 8 duties, which are applied to disposals in national parks, the Broads or other designated land, by subsection (7) of the new clause.

On this basis we believe that the new provisions are sufficiently widely and tightly drawn to secure that the special environmental importance of much of the water and land which will pass to the successor companies can be fully and securely protected—and protected indefinitely—in the wider public interest. I commend these amendments to the House. I beg to move.

4 p.m.

Lord McIntosh of Haringey moved, as an amendment to Amendment No. 48, Amendment No. 48A: Line 4, leave out ("application in a particular manner of any") and insert ("distribution to them").

The noble Lord said: My Lords, in moving Amendment No. 48A I should like to pay tribute to the clarity with which the noble Lord, Lord Hesketh, introduced this complex group of amendments. I should also like to follow up his point on procedure by saying that in introducing this amendment I think it would be appropriate for me to do as he has done and speak to all the amendments that I have tabled to the Government's amendments. I shall speak also to the substance of Amendment No. 48, so that we cover the whole range of the debate. As I understand it, the debate will then be open to any noble Lords who wish to speak, including those who have tabled amendments of their own to government amendments which have been grouped together and which have been spoken to by the Minister.

I have no doubt that the Minister will then wish to respond, especially to Amendment No. 48A, and I shall wind up the debate on that amendment by speaking only to that amendment and not to any others. I hope that that procedure will bring as much clarity as possible into the debate, because clearly from the necessary and admirable length of the Minister's speech the issues are complex, as indeed are the issues raised by the various amendments to government amendments which have been tabled.

I shall deal first with the range of amendments which have been tabled to later government amendments and then return to Amendment No. 48A at the end of my speech. I do so because they are somewhat different. Amendment No. 48A is substantially concerned with the financial effect of the Government's proposals and indeed as to whether there is any identifiable financial effect, identifiable provision or identifiable financial benefit to consumers, as they have claimed. The remaining amendments are mainly concerned with environmental matters rather than with the financial protection of consumers. I think it appropriate therefore that I should deal with them first.

Amendments Nos. 48B, 140A and 161A are concerned with the Government's choice of the word "protected" to describe land which is to be covered by these amendments. The trouble with the word "protected" is that such land is not really protected. All that happens is that it is eligible for consideration by the Secretary of State as to whether consent should be given and as to what conditions should be imposed upon the disposal.

The Secretary of State may well conclude—or a Secretary of State may well conclude—that such land is eligible for sale rather than for protection. Further, the Secretary of State may well conclude that such land is eligible for sale without protective conditions. In those circumstances it seems that there is an Orwellian touch in using the word "protected" and that it would be preferable, as we do in these three amendments, to use the more accurate word "eligible" to describe the land which is covered.

Amendment No. 140B brings us back to the point referred to by the Minister about conditions on a sale. Unfortunately, Amendment No. 140 (the new clause) provides only that the Secretary of State or the Minister of Agriculture may put conditions on a sale. It does not bind the Secretary of State to include conditions, except to the extent that he considers them appropriate. Amendments Nos. 140C and 140D are consequential. It is not enough to say that the Secretary of State would have to act reasonably if he failed to impose conditions. We cannot conceive of any significant case in which conditions ought not to be imposed upon a sale if the sale is to be allowed to go through at all. Therefore, we prefer that it should be a duty on the Secretary of State and the Minister rather than a power.

Amendment No. 140E seeks to ensure that conditions will be imposed to carry over the Clause 8 obligation on environment and recreation to the new owners of the land. As the Government's amendment stands at the moment, the Secretary of State has a discretion to require covenants of the new owner, but if there are to be conditions protecting the environment—and with the description that the Minister has given of the coverage of national park land, areas of outstanding natural beauty land and Broads land it is clear that in virtually every case there will have to be duties on the new owners and thus the Secretary of State ought not just to have a discretion to require covenants—there should be a requirement to have covenants.

Amendment No. 140F is a significant amendment. It points to a grave omission in the Government's proposals. As the government amendments stand, there is not only no provision for public consultation about land deals which will take place and which the Secretary of State and the Minister will be considering; there is not even a provision for notification to the public. In other words, the whole thing could go through between the Secretary of State, the water supply or sewerage plcs and the new owners without the public ever being told that it is going to happen. We would finish up wih secret land deals, something against which the House has set its face in almost every piece of legislation concerned with land, and especially public land, for many years.

The Government have made an astonishing omission. It is out of keeping with the spirit of much recent legislation and with the Government's own proclaimed support for open government. We believe that it is especially important that Amendment No. 140F, which provides in two new subsections for consultation and notification procedures, is a vital protection for the public and a vital complement to the efforts which the Government are proposing to make with a view to protecting the public.

Amendment No. 140H is similar to a point made in Amendment No. 140G, tabled by my noble friend Lady Birk, who will no doubt be speaking to that amendment shortly. There are potential conditions set out in subsection (5) of Amendment No. 140, but our point is that they should be included as a condition of every sale so that there would be no possibility of sales going ahead without the land being made available for purchase by suitable bodies such as the National Trust.

I welcome what the Minister said about proposals made by the noble Lords, Lord Greenway and Lord Gibson. He was right when he said that they would not, of themselves, have gone far enough to protect the public interest. In that respect, his own proposals do not go as far as the original proposals of the noble Lord, Lord Gibson, made on behalf of the National Trust. There should be some degree of further protection, which is what we propose in Amendent No. 140H.

Amendment No. 140J follows closely on that point, because it requires that any land made available to a body such as the National Trust should be made available at a price determined by the district valuer. That, again, is a curious omission from the Government's proposals. I am not suggesting that it is sinister. The price should not be set by the purchaser or any other party. It should be set by the district valuer. That was the provision made in the amendment tabled in Committee by the noble Lord, Lord Gibson. It is one which should not have been omitted from the Government's amendments.

Amendments Nos. 140K and 141A remove the curious condition whereby the undertaker may be required either to consult the Countryside Commission or to enter into management agreements or covenants, or both. Surely, there should be a mandatory consultation procedure with the Countryside Commission, or, as other amendments tabled by my noble friends suggest, with other relevant bodies. There should be no possibility of management agreements or covenants supplanting consultations with the Countryside Commission.

Passing over other amendments tabled by my noble friends, I move now to Amendment No. 143A, which removes a restriction—again, an incomprehensible restriction—on the power of the Secretary of State, in subsection (6) of the new clause, to lay down bindng covenants on issues such as freedom of access to the management of lands. At the moment, the subsection applies only to land which is in a national park, an area of outstanding natural beauty or the Broads. There is a whole class of land which may or may not be designated by the Secretary of State—we have no assurance that it will be—which is attractive land and is of recreational value, and where access should be freely available to the public. The Secretary of State not only has no duty to enforce access; he has no power to enforce access. Our amendment would give him that power, which is sadly lacking from the Governemnt's amendment.

Amendment No. 143C follows the same point as Amendment No. 143D because it covers covenants on freedom of access. It reflects the wording which the Government have already accepted and put into Clause 8. Again, it does not seem to make sense to us that concessions on freedom of access which have been made in Clause 8 should not be repeated when land is being sold to new owners rather than kept in the ownership of the water supply and sewerage undertakers. The principle behind all these amendments should be that the protection which is given by ownership by the water and sewerage undertakings should extend indefinitely, as the Minister said in his opening speech, to the new owners of the land which has been disposed of.

Amendment No. 143F extends to a new owner the range of coverage which the Secretary of State can make to include environment and recreation. The government amendment does not go far enough on that point.

The next group of amendments tabled in my name comes after Government Amendment No. 161. We are testing the scope of the definition of protected land which has been put into Amendment No. 161 by the Government. We want an assurance that all land owned by water authorities will be covered by the scope of those provisions. If it is right that the Secretary of State should have power to control the disposal of land assets and to impose covenants and make restrictions, then surely he should do so over any land, because initially those are all public assets and their disposal is presumably because they are surplus to operational requirements.

We return to the fundamental point that we have been making throughout the Bill's consideration: that the Bill should be about water privatisation; it should not be about the privatisation of land which happens to be owned by the water authorities and which is surplus to their requirements.

I apologise for having taken up so much time in explaining these subsequent amendments, but it is clear that when the Government choose to introduce a series of complex amendments at the Report stage of a Bill in the second Chamber there is not very much we can do except to treat the matter seriously, as though it had been in the Bill right from the very beginning and as though we had the opportunity to debate it fully. If I have detained the House for that purpose on Report stage, I can only apologise.

I return to Amendment No. 48A, the specific amendment which I rose to move at the beginning. It seeks to expose the fundamental defect—I am now talking about the financial defect rather than specific environmental defects—in the Government's proposal. Let us agree from the outset that these amendments are a serious attempt to move in the right direction. They are a serious attempt to provide protection for the environment and for customers in the event of disposal of surplus land by water authorities. But they are not as serious an attempt as the Government have been claiming. They are certainly by no means as serious an attempt as has been claimed in the press release issued by Mr. Michael Howard, the Minister of State for Water, when the amendments were first tabled. In his press release Mr. Howard indicated that 50 per cent. of the value of the proceeds of the sale would be made available to the customers. That figure of 50 per cent. does not appear anywhere in the amendments; it is left to the Director General of Water Services who is appointed by the Government. That 50 per cent. has no security whatever, either from this or from any other Secretary of State. It could be made 1 per cent. or 99 per cent.

The only fair thing to do is to do what we have done here—that is, to say that all the proceeds of the sale of the surplus land which is public land should be made available to the customers. If the Government are not prepared to agree to that amendment then one must draw the conclusion that they simply do not mean to protect the customers adequately and to avoid windfall profits to the shareholders from the disposal of surplus land.

The second thing missing from the amendments—although the Minister referred to it in his opening speech—is land transferred to subsidiary companies. There has been a lot of debate about security for the environment and for customers in relation to land transferred by the water supply plcs to subsidiary companies. Clearly if the water supply plcs are able to get round any of the other provisions and protections of the Bill simply by transferring to subsidiary companies, then those protections are a sham. But as I understand it, in opening the debate on these amendments the Minister said that the protection would not cover transferred land and that the Government's view was that the planning system would cope with the problems that arose. They cannot have it both ways. Either the planning system will cope anyway, in which case none of these amendments is necessary—it is obvious that we do not believe that for a moment—or the planning system cannot cope as regards land which has not been transferred, in which case there is no reason whatever to assume that it will cope for land which has been transferred.

So on those two vital aspects—the proportion of the money which is to go to customers and the coverage of transferred land—the amendments are silent. The Minister of State says things, the Parliamentary Secretary may say things now from the Government Front Bench in this Chamber, but the Bill and the amendments do not say so. It is not good enough.

I had prepared a complicated analysis of the financial considerations involved here but I listened with care to what the Minister said. Some of what he said about the calculation of the proceeds and how they should be assessed sounded interesting and I think I could cut out some part of that discussion from my speech. As I understand it, in the initial assessment of K before the first figure for K—which noble Lords will recall is the basis on which water prices and sewerage prices have to be set—the Minister said that there would be a target figure for disposals of 100 per cent. of the open market value of identified sites. That is helpful because it seems to deal with the problem that there might have been in a conflict between the deemed value and the actual value.

Then the Minister is proposing an adjustment to follow that of 50 per cent. of the surplus or shortfall. Since K is proposed to continue for a period of 10 years, is that adjustment for surplus or shortfall to be introduced immediately, in other words into the next year's K or will it be delayed until the end of the 10-year period? The Minister went on to give some more detail about the consents and conditions. I think that in discussing the other amendments I have made it clear how unsatisfactory those are.

I feel that I should summarise our position on the Government amendments by saying that they have exposed a Catch 22 situation as far as concerns the protection of the consumer and the environment. If the proceeds of the sales are to be included in K—as they appear to be—then the Government are accepting that there is a real risk of a continuing threat to the environment which has to be dealt with by these special measures. If it is not to be included in K, then the shareholders are set to receive a quite unjustified windfall gain, especially when there are sales of unprotected land within the Government's definition.

However, well-meaning the amendments may be, the analysis that I have made (at unfortunate length) means that the protection which the public requires and which the Minister claims from the amendments is not actually achieved by them. It is necessary for us to consider the amendments in detail. If the public is to be protected it will be necessary for very substantial changes to be made to this set of Government amendments. I beg to move.

4.15 p.m.

Baroness Birk

My Lords, the amendments standing in my name to the new Government clause fall into two groups. I shall try to be as brief as I can in dealing with them. I was extremely sorry not to have been present at the Committee stage. I am very grateful to my noble friends Lord McIntosh of Haringey and Lord Graham of Edmonton who moved the amendments on my behalf.

The amendments are all concerned with the heritage, archaeology and conservation. They fall into two groups. Amendments Nos. 140L, 141B and 146A concern the general applicability of the clause to the manmade heritage. Amendment No. 144B concerns the addition of specifically archaeological and historic designations. I think the Minister had so much on his mind and so many papers under his arm that he probably did not register that I am not moving Amendment No. 144C which refers to land sensitivity under an agricultural Act. After consideration, I thought that that was taking it rather wide. Nevertheless I hope that the thought behind the amendment will obtain.

Amendments Nos. 140L, 141B and 146A all seek to ensure that this new clause applies to our manmade heritage as well as to our natural heritage. Subsection (7) of this proposed new clause encompasses the provisions of Clause 8 which specify the conservation duties of all the bodies concerned. These duties include the protection and conservation of building sites and other objects of archaeological, architectural or historic interest. Those provisions must be covered therefore by this new clause, and yet there is no mention of them.

In general terms that is rectified by Amendment No. 146A which seeks to insert a new subsection making the provisions apply to buildings and objects of interest, as well as to land. It should be noted that this extension has been carefully restricted to those items of archaeological, architectural or historic interest. Among the assets currently belonging to some water authorities, such as Thames Water, there are major collections of prehistoric and later artefacts, engineering drawings and machinery. These provisions controlling disposal should also apply to all of those things. They will have no other statutory protection unless something is written on to the face of the Bill in that way. Although some provision is made in the code of practice regarding the disposal of objects, it does not provide any control over the process as is envisaged in this new clause, and it does not in any case apply to buildings. Therefore it is essential that protection should be inserted into this new clause.

The inclusion of the Government's statutory adviser on heritage, as dealt with in Amendment No. 140L, the Historic Buildings and Monuments Commission for England, has been provided for in order to ensure that consultations concerning the disposal of items relating to manmade heritage take place with a relevant statutory body. The Countryside Commission may have an overall remit for areas of outstanding natural beauty and national parks, but it does not have a remit for advising on the management of buildings and archaeological sites. These are the specific concern of English Heritage.

Section 17 of the Ancient Monuments and Archaeological Areas Act 1979 provides for management agreements. These are also very relevant to the disposal of archaeological sites. They apply to scheduled ancient monuments and other sites. That is encompassed by Amendment No. 141B.

I shall now turn briefly to Amendments Nos. 144A, 144B and 144C. These amendments seek to extend the range of designated areas to which this new clause applies to those specifically designated as being of archaeological, architectural or historic interest. It is an anomaly that under the new clause as it stands, provisions for obtaining statutory advice and entering into management agreements may apply to land which has general scenic value, but would not necessarily apply to sites of very considerable conservation value outside the general areas of scenic value. That such controls should apply to areas of outstanding natural beauty and national parks is very welcome. However, as the new clause applies to all disposals, it would be wrong to let it go through without consultations with statutory bodies and the provision of management agreements. At the moment, those apply only to landscape designations.

In practice, much of the detailed practicalities of managing specific areas of land relate to conserving heritage or wildlife, whether or not they happen to be within the areas of outstanding natural beauty or national parks. The provision for the Secretary of State to designate areas by statutory instrument is a welcome one. However, it offers no clear guidance on how the specific interest of manmade heritage might be dealt with. Therefore, my Amendment No. 144B seeks to deal with that. It is not a substitute for including a specific relevant statutory designation, but nevertheless it represents a welcome provision in the hope that it may offer for safeguarding sensitive areas which are not already designated.

Finally, I come to Amendment No. 140G. I must apologise because, in its present form, the amendment contains some slight errors. I do not think that they alter the meaning of the amendment, but they make it defective. I have advised the Minister and the department of the errors. However, the objective of the amendment, which I think is quite clear, is to ensure that the various possible options for conditions to be applied to land, buildings or objects being disposed of, are always considered.

This amendment does not go as far as Amendment No. 140H which stands in the name of my noble friend Lord McIntosh. My noble friend has kindly agreed to withdraw that amendment in favour of the amendment to which I am now speaking. My amendment does not commit the Secretary of State to apply conditions in every case. However, it imposes a duty on the Secretary of State or the Minister to consider the various conditions. As it stands, the proposed new clause does not ensure that each case will be considered in the light of all the possible conservation interests and conditions, as my amendment suggests. I must apologise for the number of amendments I am speaking to and for their length. However, they seek to balance in the new clause our manmade heritage with the natural environment. The natural environment is, in many ways, fairly well covered in the new clause as it stands. I beg to move.

Baroness White

My Lords, I have the greatest sympathy with the amendments to which my noble friend has just spoken. However, did my noble friend Lady Birk or my noble friend Lord McIntosh of Haringey agree to the grouping which is before the House? It seems to me that to group these amendments in this way is a very unsatisfactory method of debating difficult issues. As a modest Back-Bencher, I cannot help thinking that it is very difficult for us to follow the arguments in the way in which the Government apparently wish them to be considered. Unfortunately, the noble Lord the Leader of the House is not in his place. I wish he were, as I should like to address my remarks directly to him. These amendments were only available to us recently. To the best of my belief, the grouping was only publicly available today. I consider that it is an abuse of the procedures of the House to proceed with a debate of this importance in this manner.

Lord Renton

My Lords, with great respect I support——

Lord McIntosh of Haringey

My Lords, the noble Baroness was speaking before my noble friend sat down.

Baroness Birk

My Lords, my noble friend Lady White put a question to me and my noble friend Lord McIntosh. I agree entirely with what my noble friend has said. I hope that my noble friend who is leading on this Bill will also comment on this. The alternative would have been to have received answers to every group of amendments. I do not know whether the Government will comment on that. We, and I imagine my noble friend Lady Nicol, have tried to keep the groups together. I do not know what the answer is to this problem. I think it is more a question for the Government than for us. When we were shown the groupings by the Government, we tried to do our best to give them some logical sense.

Lord Renton

My Lords, I wish, first, to deal with the matter which has been so rightly raised by the noble Baroness, Lady White. We are being asked to consider, I estimate, 39 amendments, or amendments to amendments, covering a very wide field. I think it is for consideration by the Procedure Committee of this House, which I hope will take note of what we have been saying, that there are advantages in the procedure used in another place when a new clause or a new set of provisions is being tabled which had not been considered in Committee. In those circumstances there is a procedure called re-committal which enables virtually a Second Reading debate to take place on the general principles involved in either the new clause or the new group of amendments.

That would have been of immense advantage on this occasion. We could then have taken separately the various amendments and new clauses and the amendments to the amendments as they arise, as is done at Committee stage. However, under our procedure, although we are speaking to 39 amendments, nearly all of us are allowed only one speech. The movers of amendments to the amendments will be allowed to reply and my noble friend Lord Hesketh, not only allowed, but expected to reply at the end of what may be a long debate. I do not envy him the task that lies before him. I am sure that we shall do all that we can to make it simple rather than difficult.

I greatly admired the way in which the noble Lord, Lord McIntosh, approached this matter. He did not complain, as the noble Baroness, Lady White, and I have complained. He took things as they are, made the best of them, made his case of substance and, like my noble friend on the Front Bench, spoke with clarity. But I am not able enough to follow what has been said either by my noble friend or by the noble Lord, Lord McIntosh, and at the same time take a useful note for the purpose of the debate.

I see that the Opposition Chief Whip is present. He has a responsibility to help in these matters; he is a member of the Procedure Committee. I hope that as a result of this debate we shall consider whether, for an occasion such as this, the procedure is right. Perhaps I may now move on to the substance of the amendments.

4.30 p.m.

Lord McIntosh of Haringey

My Lords, before the noble Lord proceeds to the substance of the amendments, perhaps I may say a word or two about the procedural aspects, having nothing at all to do with the fact that he has addressed his two kind remarks to me and two unkind remarks to himself.

I appreciate the difficulty to which my noble friend Lady White and the noble Lord, Lord Renton, have drawn attention. I must point out for the purposes of this discussion that the grouping of the Government amendments was proposed by the Government. We do not feel that it is for us to suggest changes to the Government's grouping of their own amendments. We feel free to group our own amendments in the way which best assists debate in the House, but not Government amendments. Therefore, once the Government had taken the decision to take all their amendments together—one can see some argument for that in the sense that they form a coherent, if inadequate, whole—then our amendments had to be grouped together with the government amendments. We had no choice in the matter.

I very much agree with the noble Lord's suggestion about recommittal to Committee. I should have argued for it. However, the trouble with this Bill is that everything is scattered all the way through it. These amendments occur everywhere between Clause 7 and Clause 187. One would have had to recommit the whole Bill in order to deal with this group of amendments. The structural engineering of the Bill is grossly inadequate for the purposes of sensible debate in your Lordships' House. The words of the noble Lord, Lord Renton, have made that clear.

Lord Renton

My Lords, I commend the magnanimous nobility displayed by the noble Lord, Lord McIntosh. I am sure that the Government are grateful to him. Perhaps they will be very grateful on some other occasions, too.

I return to the substance of the amendments. So far as concerns the broad terms and purpose of the amendments I welcome them, as I am sure do my noble friends on this side of the House. They result to a considerable extent—although my noble friend Lord Hesketh did not say so—from representations which we made at Second Reading and Committee stage. I too am grateful, as was the noble Lord, Lord McIntosh, for the valiant attempt by my noble friend Lord Hesketh to explain the meaning, purpose and effect of the amendments. I welcome the broad purpose.

I refer first to the principle one, the new clause at Amendment No. 140. As far as it is expressed it seems to be commendable. However, there was one matter to which my noble friend Lord Hesketh referred which I greatly welcome. That is that land which is to be sold should be offered to the person from whom it is to be acquired. That is a commendable principle, first enshrined at Crichel Down. Alas, if I may digress for one moment, the Forestry Commission is not following that principle, and perhaps representations could be made to the commission to do so. This would achieve consistent government policy with regard to water authority land and Forestry Commission land. Having welcomed the statement of my noble friend, I wonder whether, when winding up the debate, he could tell us whereabouts in the new clause in Amendment No. 140, or elsewhere, that principle is to be stated. At the moment I cannot find where it is stated in the new clause.

I refer next to the amendments moved by the noble Lord, Lord McIntosh, to the very first amendment, Amendment No. 48, which is the one we are discussing. He made two points about that amendment. One is a fairly narrow point—that instead of using the word "protected" we should use the word "eligible". Quite frankly, there is not much in that, but there is an argument in favour of saying that "eligible" might be the better word. However, I keep an open mind on that.

The noble Lord raised a point of much greater substance and consequence when he said, with regard to the proceeds, that we should tie the Secretary of State and all those concerned to distributing the proceeds to the consumers. That is as I understand it. My noble friend Lord Hesketh said in his opening speech that it is intended that they should be divided fifty-fifty; that is to say, 50 per cent. of the proceeds of sale would go to the consumers, presumably in reduced water charges, and 50 per cent. would go to the people who are selling the land. I think that the Government are right on that. After all, they are acquiring and will have paid consideration for, in effect, property which is being sold. I think that they should be entitled to at least 50 per cent. of the proceeds of that property. I hope that the Government will not move from that principle. I am sure that it is right.

The noble Baroness, Lady Birk, made an interesting speech about her amendments to the new clause. I believe it is very important that, somehow or other, ancient monuments and listed buildings should be treated specially in this context. I am sure that she is right. However, technically, I think that we may find—and my noble friend Lord Hesketh will no doubt say in reply—that the existing legislation would be enough to achieve that object. If it is not, no doubt my noble friend will say so.

Of course, each of us could make a speech of half an hour or more about this great mass of nearly 40 amendments, but, realising that I must speak now or forever hold my peace in the course of the debate, I think that I had perhaps better sit down.

Lord Ross of Newport

My Lords, as the noble Lord has commented on quite a number of amendments, will he comment on Amendment No. 140F? Surely he agrees that it is desperately important that, where sales are to take place, some notification of the application by the water authorities to the Secretary of State to be given permission to sell should at least be advertised.

Lord Renton

My Lords, I am sorry, but I have not followed the noble Lord because he spoke rather faster than my mind works. I did not catch the number of the amendment to which he referred.

Lord Ross of Newport

My Lords, I was referring to Amendment No. 140F. I apologise; as an auctioneer, I am always selling 150 lots an hour. That amendment relates to the advertising of the intention to apply to the Secretary of State for permission to sell. Surely it should appear somewhere that an application is being made by the water authorities to the Secretary of State. I should have thought that the noble Lord would have agreed with that amendment.

Lord Renton

My Lords, I do not think that we should write into primary legislation every single bit of administrative procedure that will be carried out, but the noble Lord makes a fair point. I doubt whether we need to write that sort of thing into every Act of Parliament.

4.45 p.m.

Baroness Nicol

My Lords, at this stage, I should like to introduce the amendments which appear in my name and those of the noble Lords, Lord Moran, Lord Norrie and Lord Addington. If the debate is to continue, we shall value the comments of noble Lords on those amendments.

I very much sympathise with the point made by my noble friend Lady White and by the noble Lord, Lord Renton. I grumbled rather seriously about the grouping, but I was persuaded that it should go forward. However, if the House takes a decision on Amendment No. 48A or indeed on Amendment No. 48 at the end of the debate, will that decision be considered binding on the rest of these amendments? I had intended to say—I shall say it now—that, depending on the outcome of this afternoon's debate, I reserve the right to come back again when my amendment is finally called, which I understand will be on Tuesday. I shall then raise any points that still need clarification or an answer at that time. I believe that that approach is procedurally acceptable and I give notice that that is my intention.

There are so many different kinds of amendments. It may well be that many of those amendments will find favour with noble Lords this afternoon. Obviously, others will not. We shall have them all lumped together and lose the opportunity to put them individually.

However, I shall proceed with the material as we have it. I want to confine my remarks to the amendments to be inserted after new Clause 150. The new clause goes some way towards meeting the objections that were raised earlier by what I may call the National Trust amendment, but there are still quite a number of questions outstanding and some omissions to be explored. My amendments—Amendments Nos. 141 to 146—seek to repair some of the omissions.

Amendments No. 141 would add the Nature Conservancy Council to the Countryside Commission as a potential consultee if the characteristics of the land being proposed for disposal made it appropriate. I agree with my noble friend Lord McIntosh when he said that, in the case of conservation bodies and others, it should not be a case of "either/or". There should always be a view from either the Countryside Commission or the Nature Conservancy Council.

There are many sites of special scientific interest in the lands covered by the Government's new clause. Involvement of the Nature Conservancy Council is therefore very important. It will become even more important if my Amendment No. 144 is accepted.

Perhaps I may point out that the new Government amendment still leaves two-thirds of the water authority land—312,000 acres—unprotected. Amendments Nos. 142 and 143 are consequential on Amendment No. 141 and I shall not give them any time.

Turning now to Amendment No. 144, although the provisions of Amendment No. 140 are welcome—as I said earlier—they do not go far enough. The new clause applies only to water authority land in national parks, the Norfolk and Suffolk Broads and areas of outstanding natural beauty; that is, primarily in the upland areas of England and Wales. It does not apply to lowland areas with the exception of the Broads and some lowland AONBs. In particular, it excludes all sites of special scientific interest currently owned by the water authorities, and there are many of them. Many of them are of national and international importance for nature conservation.

By offering to help to protect the upland areas owned by the new water companies, the Government have in a sense given a green light to the exploitation of lowland areas. Indeed, they have admitted that. A Minister in another place, Mr. Michael Howard, announced the measures and outlined the new provisions on 31st May. In his press release, a copy of which I have here, he said: But, outside the national parks and areas of outstanding natural beauty and particularly in urban areas, some of the water industry's surplus land may have valuable development potential". That seems like an invitation to look at the remaining lowland land for development.

The Government's new proposals clearly acknowledge that much water authority land is of high environmental and landscape value and that there is a need to protect it against inappropriate use or development. On several occasions, the Minister has tried to assure Parliament that additional measures are not required for the protection of areas that have been notified as sites of special scientific interest as they are already protected. The Minister must know that that is not the case. The SSSI provisions of the Wildlife and Countryside Act 1981 do not prohibit damaging operations; rather, they require landowners to consult the Nature Conservancy Council which has no power to prohibit damaging activity.

The same consultation mechanism has recently been introduced in Clause 9 of the Bill to apply to water authority land in national parks and, in that respect, to put them on a par with SSSIs. That being the case, why do the additional measures now tabled by the Government apply only to land in national parks and AONBs? Are they more vulnerable or more valuable?

The SSSI network and planning system will not provide adequate safeguards against inappropriate exploitation of water authority land. In its annual report for 1987–88, the Nature Conservancy Council reported 114 cases of damage to SSSIs; 12 of those cases were caused by operations that were granted planning permission.

I do not wish to weary the House with too long a speech this afternoon, so I shall give just two examples. Hyde Heath in Dorset was notified as an SSSI for its range of rare plants and animals, including sand lizards, smooth snakes and club moss. It was partly destroyed 18 months ago by sand and gravel extraction. Approximately two years ago, Warmwell Heath, also a Dorset SSSI, suffered permanent damage following the construction of sewage works commissioned by the Wessex Water Authority. It is therefore quite obvious how important it is that SSSIs should be included in the new provisions.

Much of the land particularly at risk from likely disposal includes areas adjacent to lowland reservoirs. Evidence of commercialisation, using water space as a major investment attraction, can be seen at Rutland in Leicestershire where timeshare flats have been built on private land next to the Anglian Water Authority reservoir. Planning applications around Rutland Water in recent years have included proposals for golf courses and hotels. It is increased development of that kind which causes the greatest dismay to conservation bodies.

I submit that without the inclusion of SSSIs in the Government's proposed new clause, many lowland areas will be vulnerable to damage. Acceptance of the simple measure that I have proposed will fully complement the Government's intentions to help protect land of conservation value. That is why I am so sorry that this particular amendment has had to be included with so many others of a different nature. Amendments Nos. 145 and 146 are consequential upon Amendment No. 144.

The Lord Privy Seal (Lord Belstead)

My Lords, the Opposition Front Bench asked me to confirm that we on this side of the House have heard and approve of what the noble Baroness said; namely, that she has a particular amendment which is part of this grouping but that she would very probably put it to a vote later on in the proceedings of the Report stage of this Bill. That is the noble Baroness's right. As the rubric at the top of the piece of paper which most of us have received states: Although every effort is made to secure agreement to these groupings, they remain informal and not binding".

Lord Norrie

My Lords, I join with the noble Baroness, Lady Nicol, in very warmly welcoming the Government's amendments on arrangements for the disposal of land in national parks and areas of outstanding natural beauty. I also welcome the Minister's indication that the clause has been drafted so that it can and will be applied more widely to land other than national parks and AONBs.

However, there is one category of designated land which it concerns me deeply to see left out of the clause and which has been alluded to by the noble Baroness, Lady Nicol; namely, sites of special scientific interest (SSSIs). SSSIs enjoy similar legislative status to that of the national parks and AONBs and it therefore seems something of an anomaly that they should be omitted. There is no doubt in my mind that SSSIs are likely to be under pressure from water company development and other activites. Indeed many of them lie in lowland areas where development pressures are strongest.

My fear is that my noble friend the Minister will find himself deluged with requests to apply the provisions of this clause to SSSIs each time that one comes under threat. Would it not be better to anticipate those circumstances by including SSSIs in this clause and involving in the process the Nature Conservancy Council, which is the Government's own body responsible for SSSI notification, just as the Minister has already involved the Countryside Commission in the new clause to be inserted by Amendment No. 140?

We know, and have heard numerous examples of it during the debates on the Bill in Committee, that the planning system does not provide adequate protection for SSSIs. The annual report of the Nature Conservancy Council each year cites a number of cases where SSSIs have been damaged by activities for which planning permission has been granted. For the year ending March 1988, for example, such cases amounted to eight sites suffering long-term damage and seven sites suffering partial damage.

The Wildlife and Countryside Act states: It is a reasonable excuse in any event for a person to carry out an operation if—

  1. (a) the operation was authorised by a planning permission granted on an application under Part III of the Town and Country Planning Act 1971 or Part III of the Town and Country Planning (Scotland) Act 1972".
In a nutshell this means that as soon as planning permission is granted, SSSI protection falls.

I know from my own experience how serious these losses can be. Not 20 miles from where I live in Berkshire there is an SSSI known as the Blackwater Valley, where the River Blackwater runs north from Blackwater near Camberley towards. Reading. A survey conducted in 1986 by the local county trust revealed that this wet meadow was the largest and richest site for wildlife in the whole of the Blackwater Valley, containing a diversity of uncommon plants, including spotted orchids and heath spotted orchids, and insects such as the rare seed weaver and rove beetle. They were certainly commonplace in that area. Now 50 acres of that 100-acre site have gone straight out of the window because planning permission has been granted for a hypermarket—a joint venture of Tesco and Marks & Spencer—which as I speak, is well on its way to being constructed. Does not that prove that no SSSI is sacrosanct? It is precisely the kind of situation where covenants on the land, as provided in the Government's amendment, could have prevented such inappropriate development.

If the lowland SSSIs which are currently owned by the water authorities are to be safeguarded against inappropriate commercialisation, it is essential that SSSIs are included in the Government's new clause. The conservationists are not against development of water authority land but they are against uncontrolled development. I have been advised that the Nature Conservancy Council has made formal representations to the Department of the Environment requesting that SSSIs be included.

If I were the Minister responsible for administering the proposed new arrangements I should have sleepless nights worrying about my in-tray being piled high with requests to protect SSSIs as they become threatened. If the Minister cannot accept Amendment No. 144 as it stands, I hope that he will consider bringing forward an acceptable amendment at Third Reading.

The Earl of Onslow

My Lords, I yield to few Members of your Lordships' House in my concern for the environment, and I do not accept that the general protections for SSSIs as enacted in the Wildlife and Countryside Act 1981 (of fond memory in your Lordships' House) are adequate. It strikes me that it is inappropriate to give extra protection to one set of SSSIs just because they have devolved from Thames Water or the Scunthorpe and Middlewich Canal Company or whatever as opposed to the general run of the mill of SSSIs. I believe that such action will involve us in legislative trouble.

My noble friend Lord Norrie recounted the sad story of Tesco ruining an SSSI around Blackwater on the Surrey Hampshire borders. That is a fault in the general legislation which I suggest cannot be rectified by applying in one particular case one particular set of criteria. That will get us into the most unholy muddle. SSSI protection throughout the country is not adequate. In my view that is one completely valid point. However, to single out certain small parcels of land which through historical accident have belonged to one set of owners will lead to even greater muddle than we have at the moment.

Lord Moran

My Lords, I welcome very much the Government's Amendment No. 140 which is in line with what I ventured to suggest when I spoke at Second Reading. I put my name to the group of amendments moved so capably by the noble Baroness, Lady Nicol, primarily because I believe that SSSIs should be included with the other two categories that the Government have designated: national parks and areas of outstanding natural beauty.

I think in particular of areas in Wales. In introducing the government amendments the Minister himself mentioned the Elan Valley. My understanding is that the Elan Valley is made up of several very important SSSIs but it is not in a national park and is not, I believe, an area of outstanding natural beauty. It is owned by Welsh Water, with common grazing rights, and it contains four important reservoirs. It is of national importance on account of a number of very rare breeding birds that it harbours such as the red kite and the merlin. It is very important that such an area should receive the protection which the Government have quite rightly given to special areas under this group of amendments.

Another example in Wales is the Llandegfedd Reservoir near Pontypool. That can hold 2,000 widgeon or mallards in winter. Welsh Water has acknowledged the importance of the reservoir for birds and does not allow sailing and fishing from November to February because of the birds. It has set up a special committee, which includes the RSPB, to manage the fine balance that is required to maintain the nature conservation interest of the site while still allowing recreational use.

That balance has been maintained so far while Welsh Water is a public body. However, one must ask oneself whether it will continue when there is a plc whose overriding duty is to make profits for shareholders. That is the kind of area—and there are a number of others in Wales in that category—about which one must be concerned.

I should like to commend the arrangements made by Welsh Water. It has made an agreement with the National Parks Authority to protect 7,000 acres in the forest Fawr region for the next 25 years. I hope that such arrangements can be extended to other parts of Wales. I feel it is important that SSSIs should be included in the protection arrangements provided by the Government. I hope that they will agree to this.

5 p.m.

Lord Addington

My Lords, I too should like to speak to Amendment No. 141. The evidence that we have already heard indicates that many areas of the land currently owned by water authorities could be vulnerable to commercial exploitation, which may well result in damage to the environment.

The Government's new clause recognises that surplus water authority land is worthy of additional protective measures. This is to be welcomed. However, the Government's new proposals are something of a sop to conservationists and Parliament alike. The amendment promoted by the noble Baroness, Lady Nicol, and supported very strongly by these Benches, would require only a minor addition to the Government's new measures. This would present a considerable improvement to the Bill.

By adding sites of special scientific interest to the protective mechanism now being proposed by the Government, the land most likely to come under threat of increased commercialisation will enjoy the additional safeguards that it rightly deserves and judging from the evidence from all sides of the House urgently requires.

The Minister knows that the land most likely to be developed to benefit shareholders will be land that is close to or even within urban areas. A number of redundant reservoirs have already become the focus of property speculators, in London in particular. This is primarily as a result of the main London link reservoir coming on stream, which means that many of the old reservoirs are no longer required for water production. Sites at risk include Walthamstow and Chingford reservoirs, both of which are SSSIs. Walthamstow reservoir contains one of the top five heronries in Britain and supports nationally important numbers of wild birds, including a winter cormorant roost. It is also worthy of note that not only are these birds under threat but also the ecosystem that supports them would undoubtedly be under threat. Considerations about the environment go further than what we can see in the water and around it. Water quality is involved in the nature of conservation. As these sites are becoming surplus to requirements it is certainly no good to rely on the existing SSSI procedures.

The Government are naturally anxious that blanket prohibitions on the future use of surplus water authority land does not effectively block development potential and thus damage any future flotation by putting off investors. I submit that adding SSSIs to the new measures will not have any untoward effect on flotation since the new measures merely provide a new mechanism that will remain within the total control of the Secretary of State.

Subsection (5) of the new clause states: The conditions of a consent or authorisation for the purposes of this section may"— and I emphasise that— include"— and it lists measures including covenants and management agreements. In other words, the Secretary of State will be given permissive powers to apply various conditions on land disposals. Including SSSIs in this new clause will not prohibit comercialisation. Rather, their inclusion will permit controlled disposals and development with the ability to protect land of conservation value in perpetuity.

Baroness Lockwood

My Lords, this is a very difficult debate. It seems now to have concentrated on Amendment No. 141 in the name of my noble friend Lady Nicol and others. I should like to support what has been said on this amendment. It seems that there is an omission from government Amendment No. 140. However, I wish to support two of the amendments put forward by my noble friend Lord McIntosh of Haringey.

Amendment No. 140B places a positive duty on the Secretary of State in this whole area. It makes the provision compulsory for the Secretary of State by inserting "shall" instead of "may". In the context of this Bill it is important to have that clearly laid down.

I wish also to support Amendment No. 140F. It lays upon the Secretary of State a duty to give notice where an application for consent or authorisation for transference of land takes place. Many of the voluntary organisations—in this context in particular the Ramblers' Association—are very concerned about access to footpaths. In certain areas they are in the process of negotiating with the water authorities for such access. For example, in Nidderdale negotiations are taking place with the Yorkshire Water Authority. Access has not yet been determined but other interest is being expressed about use of the land surrounding the reservoirs there. Organisations such as the Ramblers' Association may be completely unaware of the fact that transference of land is taking place unless there is publication of the fact and it is in a position to make representation to the Secretary of State. I am sure that other voluntary bodies which will have similar interests will want to ensure that they have the opportunity, first, to be aware that the transfer of an area of land is under consideration; and, secondly, to put forward their point of view so that it can be included in the terms on which the land is being sold. I therefore support these amendments very strongly.

Lord Chorley

My Lords, I should like to speak principally to Amendment No. 140 which is, one might say, the centrepiece of this raft of amendments. As one of those who strongly supported the amendment of the noble Lord, Lord Gibson—or perhaps one might say the National Trust's amendment—on the sale of surplus land at the Committee stage, I think it right to acknowledge that the noble Earl the Minister has done what he said he would do. He has listened to the argument and has come back with a new clause which, coupled with other amendments, especially that dealing with the definitions of functional and non-functional land, deals in very large measure with the problems we raised in Committee. Certainly both the National Trust, and, I think I can say also, the CPRE, welcome these amendments. Indeed one could go further for, in many respects, the amendments we are now discussing are wider, more comprehensive and more flexible than our original proposals. That is good.

Let me be quite clear. I am not welcoming the Government's amendments on the basis that half a loaf is better than no loaf at all; the loaf that we are now discussing is a better loaf. Nevertheless, even a better loaf is capable of improvement and I should like to make three points, which I shall do quite briefly. Some have already been touched upon.

First, the Secretary of State will now have wide discretionary powers. That is good. I do not object to that at all. But we need some public understanding of the criteria that he will adopt in exercising them. For my part, I believe that this is best done outside the legislation. One area concerns land lying outside the national parks or areas of outstanding natural beauty status—what I might loosely call Elan Valley-type situations of which there are a number. We need some public clarity on what the Secretary of State's criteria will be.

The second point has already been touched upon to some extent. Areas of special scientific interest are not included in the same way as national parks. This seems to be a weakness. I should have thought that it made administrative sense, creating less future hassle, to have included them. Before taking a final view I should like to hear what the Government have to say. At the moment. I am bound to say that I am minded to support the amendment of the noble Baroness, Lady Nicol.

Thirdly, as regards the sale of surplus; lands, so far as I can see the clause does not really deal with the valuation principles and the question of development benefit. I am bound to say that I have become somewhat confused. Much of what is said does not appear in the legislation; I do not know where we are. I suspect that we shall have to come back to it later on.

Finally, the effectiveness of the proposed arrangements will depend on the attitude of future Secretaries of State. We need to recognise that. I do not particularly object. I have a good deal of sympathy for most of the amendments of the noble Lord, Lord McIntosh—in particular, for the clear and reasonable way in which he proposed them. I shall be minded to support quite a number of them.

Baroness White

My Lords, I wish briefly to add my support to the expressions of concern and interest dealt with by my noble friend Lady Nicol in her amendment and its consequentials. It seems only right and proper to anyone concerned with conservation that SSSIs should be brought within the overview of the Secretary of State, and that this should be regarded as an obligation whatever his ultimate decision may prove to be. But at the moment there is nothing in the Bill, so far as I understand it, to cover the situation whereby, in the circumstances we are dealing with in this grouping, such sites, including national nature reserves—not just local sites of scientific interest—might be disposed of without being adequately considered.

One of my main concerns is Amendment No. 140F proposed by my noble friend Lord McIntosh. It seems essential that there should be public indication that these transactions are taking place and that the Secretary of State should not come to final conclusions as to what conditions he proposes without having given an opportunity for representations by various public bodies and even individual citizens in certain situations, I cannot think that it is good public policy not to make provision, within a reasonable time limit, for representations to be considered. After all, planning applications have to be considered. It seems that decisions taken under the discretions given in the Bill to the Secretary of State are, in certain circumstances, every bit as important.

There should be provision on the face of the Bill for some method of public notificiation that these transactions are proposed and for the Secretary of State to consider what conditions, if any, he wishes to put forward. I hope very much that we shall have a satisfactory reply from the Minister.

5.15 p.m.

Lord Ross of Newport

My Lords, as I intervened earlier, I should also like to say a few words on Amendment No. 140F and the requirement, which I consider absolutely essential, that water authorities should make public their intention to seek permission to sell land. I do not necessarily support the actual wording of Amendment No. 140F, because the obligation should be put on the companies themselves. When they are seeking permission, they should be obliged to place a suitable advertisement in the London Gazette or in local newspapers in locations where the land lies. I see no reasonn why that should not be done. It would be disastrous if not done; there would be accusations of deals behind closed doors. It is essential that bodies like the National Trust, the Ramblers' Association and so on should at least know about an application for land to be disposed of. To learn of it after the decision has been made seems totally wrong.

I tried to get the noble Lord, Lord Renton, on the board, because he is listened to with much respect on both sides of this House. I hope that he agrees with me. As a lawyer—I am not—he will know that charities have to advertise when they are selling and ask for extra bids. That seems appalling. Having agreed a price they advertise that they have agreed to sell at x thousand pounds, unless someone comes forward in the next 21 days. That seems to be gazumping; but it has to be done.

I congratulate the Government very much on their new clause in Amendment No. 140 which is an enormous step forward. But it would be totally wrong not to include this necessity to make known publicly before decisions are made that it is the intention of the boards of plcs to sell some of this highly regarded land. I hope very much, if we cannot get a concession out of the Government, Members on the other side will agree that we should divide the House on that issue.

Viscount Bridgeman

My Lords, may I speak to Amendment No. 140F, and the remarks of the noble Lord, Lord Chorley, about the sale of surplus land? I understand that the intention at present is that this will be at district valuation reflecting market values. I am concerned that the purpose of the element of this scheme will be defeated if it proves too costly to acquire the lands. Will my noble friend the Minister give an indication of any financial assistance which may be forthcoming to help mitigate this problem?

Lord Hesketh

My Lords, by leave of the House, it may assist if I now respond to the substantial and many points that have been made during the debate, and in particular to the amendments which have been tabled to this group of Government amendments. Amendment No. 48A proposed by the noble Lord, Lord McIntosh, requires that 100 per cent. of the proceeds of disposals goes to the customers. The effect of the Government's amendments is to ensure that a fair share of the proceeds from the disposals of land goes to customers, while leaving the companies with an incentive to make efficient use of land, to make every effort to dispose of land which is surplus, and to secure that the customer benefits from the best obtainable price.

Amendment No.48A, in the name of the noble Lord, Lord McIntosh, would require 100 per cent. of the proceeds to go to the customers. I invite the House to recall and consider an observation made by my noble friend Lord Nugent on the second day of the Committee stage. He said that the statutory water company model would give the best safeguard against the development of water authority land holdings because the method of regulation gives no incentive to develop land and in practice it means that statutory water companies seldom have developed land.

I suggest that there are two lessons to be drawn from that observation: first, that the system of regulation, which leaves none of the proceeds from the disposal with the company, will not in practice succeed in maximising benefits to the customer because, as my noble friend rightly said, there will be no incentive. Secondly, it would be a pity and a waste to rely on economic disincentives to produce necessary environmental protections. That would throw the baby out with the bath water.

There is no reason why water companies should sit on idle land of no particular environmental merit because they have no incentive to dispose of it. These amendments are designed to give them an incentive to get the maximum benefit for their customers from their surplus land, subject to appropriate and necessary protections for land of special environmental quality.

Under the arrangements that I have described, somewhat more than 50 per cent. of the value of proceeds will go to the customer, because K will be set in a way which assumes a certain flow of income from disposals, and takes account of 100 per cent. of the open market value of sites which are likely to become surplus. When companies realise more than the forecast flow of receipts—for example, by securing planning permissions which increase the value of land—it is proposed that the net surplus be shared equally between customers and shareholders. Similarly, it is envisaged that 50 per cent. of any material shortfall would be reflected in an increase in K. The details will be finalised after discussion with the industry, but the essential point to be made in response to the noble Lord's amendment is that it is not in the customer's interest for their share of the benefit of proceeds to be 100 per cent. because that would destroy the incentive for the company to maximise receipts and benefit both shareholders and customers.

The noble Lord expressed specific worries about which I hope I can offer some reassurance. The arrangements which deal with disposals to sister companies will be covered by the consent procedures which I have described. They are designed to deal with the potential loopholes which concern him. The reflection of a forecast of expected receipts in K will start from the first year of price control. Essential details, such as the fifty-fifty division of any excess or shortfall of actual receipts in relation to shortfall, will be set out in the initial appointment issued by the Secretary of State. There is provision as I have described to entrench such points in the appointment so that they can be changed only by agreement. I appreciate that this is a complicated issue but I hope that the noble Lord will be reassured when he reads what I have said. I hope that I have covered at least some of his concern.

It may be for the convenience of the House if I deal next with Amendments Nos. 48B and 161A and D, tabled by the noble Lord, Lord McIntosh. These change the term "protected land" to "eligible land", which is I think entirely a matter of nomenclature. I have to say that I much prefer the word "protected", which gives a much more accurate description of the purpose of these amendments than the word "eligible".

All the land transferred to the successor companies by the schemes of transfer is included in the definition. The provisions as to treatment of receipts for the disposal of that land apply to all disposals. The environmental powers apply more selectively in the manner that I have described. The definition of "protected land" is comprehensive. The only significant exception is land which may be acquired in future by appointed companies which is not used for their water and sewerage functions.

Amendments Nos. 16IB and C apply the new provisions to predecessors of appointed companies, and have the effect of making the provisions reach back in time. We believe this to be unnecessary. The water authorities have no incentive to evade the provisions by selling off land in the short interval before the transfer date while they remain in the public sector. They cannot benefit their future shareholders by so doing. Any receipts from disposals before the transfer date would be subject to Treasury requirements and would normally be applied to the reduction of NLF debt, which is in any case to be extinguished before flotation. The government amendments therefore apply to land held by successor companies from the transfer date.

My noble friend Lord Renton asked where the Crichel Down rules were to be found on the face of the Bill. The current expression of the Crichel Down rules is not in primary legislation but in a government circular, No. 1884, issued by the Department of the Environment. The means of applying the rules of the circular to relevant disposals, which is precedented—for example, under the Gas Act—is to issue a general authorisation to disposals under the general consent requirement introduced in this case by Amendment No. 140 requiring companies to follow the rules. I hope my noble friend will agree that that is a sensible way of applying the rules without cluttering the statute.

I turn to amendments tabled by various noble Lords to Amendment No. 140. They amount to the following. All proposed disposals shall be advertised in the London Gazette (Amendment No. 140F). Where a first refusal offer is to be made to a conservation body it shall be a district valuer's valuation (Amendment No. 140J). The environmental aspects of the amendment shall be extended to sites of special scientific interest and lowland areas, historic buildings, ancient monuments, environmentally sensitive areas, and so on. Those would be the effects of Amendments Nos. HOG and 141B, 141 to 146 and 144A and B, but no longer Amendment No. 144C, as the noble Baroness, Lady Birk, pointed out; also, that the Clause 8 duties shall govern disposals generally (Amendment No. 140E). Generally, they remove the Secretary of State's discretion so that he shall be required to apply the protective consultation which we propose he may apply; that is Amendments Nos. HOB, C, D, H, 143C and E. I hope that I shall be able to cover all the points raised in relation to those amendments in this important and lengthy debate.

Amendment No. 140F would require the Secretary of State, wherever he receives an application for disposal consent—however small, even if of little or no environmental significance—to advertise it in the London Gazette. This is surely a recipe for bureaucratic inertia which would serve little purpose. It must be for the Secretary of State, advised as necessary by the Countryside Commission, to satisfy himself as to whether any special environmental or amenity considerations are served by a particular sale. The Countryside Commission will no doubt consult if necessary. Performance of the Secretary of State's Clause 8 duties will in any case require him to take whatever soundings or advice are appropriate to satisfy himself on this question.

Advertisement in the Gazette or local papers may be appropriate for major development proposals, but it will surely be a quite unreasonable extension of those arrangements to impose them in cases where what is at stake is simply a change in ownership. I refer to the point made by my noble friend Lord Renton, who supported the Government on this matter.

The first refusal sales are to be at the district valuer's valuation. Amendment No. 140J, tabled by the noble Lord, Lord McIntosh, proposes that in the case of land first offered to a conservation body the price should be a district valuer's valuation, and I take it at current use rather than a market value. This may be unsound. Anything less than market value raises the possibility of the privileged purchaser changing the use or disposing of some parts of land he acquired and securing a windfall gain. But in any case, in a high proportion of cases, particularly open moorland and countryside, market value and current use value are likely to be effectively the same.

Lord McIntosh of Haringey

My Lords, will the Minister permit me to intervene? Surely, where there is a difference between market value and existing use value the Secretary of State has powers to impose adequate covenant to secure a windfall profit.

Lord Hesketh

My Lords, that is correct up to a point. However, in a way the noble Lord's comments negate his amendment to some extent because of the powers that he has described the Secretary of State as having.

5.30 p.m.

Lord McIntosh of Haringey

My Lords, on the contrary; we have amendments down which force the Secretary of State to impose covenants. At the moment the Minister's covenant provision is not adequate. If he will agree to my amendment which enforces covenants, I will agree to his argument about existing use value.

Lord Hesketh

My Lords, I am just coming to that. Any market valuation will be constrained not only by the conservation and amenity duties of the vendor but by the restrictive covenants or any other conditions of the sale which may be required by the Secretary of State. We are going into familiar country regarding the words "may" or "shall", but the noble Lord, Lord McIntosh, will understand why we on this side prefer the word "may".

On Amendments Nos. 144 to 146, the noble Baroness, Lady Nicol, argued most forcefully for her amendments and said that the government amendments will not protect lowland areas or SSSIs.

The basic consent requirement applies to all land transferred to the WS plcs from water authorities under Schedule 2 schemes of transfers, and to other land they may acquire in future. So too does the power to require that land is offered at market value to a conservation body. Moreover, there is power by order to extend the protection application in national parks and areas of outstanding natural beauty to other areas of countryside of exceptional environmental importance, to the extent that the same considerations arose as in those designated areas. This could include lowland areas of exceptional importance.

I recognise that we have not clarified on the face of the amendment the circumstances to which that order-making power might be relevant, and that it is a point to which we may have to ask the House to return at Third Reading. But in principle relevant lowland areas of exceptional importance could be covered. We believe it will be only very rarely that the current powers will be needed, for environmental protection purposes, outside national parks and areas of outstanding natural beauty, but they are there in reserve if necessary.

As regards the SSSI's, it is not appropriate to apply all the provisions of the clause automatically to them. I pray in aid in support of the Government the very cogent point made by my noble friend Lord Onslow on creating two classes of SSSI. The fact is that there are already in SSSI legislation arrangements addressed to a comparable protective purpose which it would be wholly inappropriate to cut across. But that does not rule out areas of land which are SSSIs being designated for the purposes of this clause in the light of the exceptional and particular circumstances. But, again, we find it difficult to envisage circumstances arising not already covered by existing planning or conservation legislation. On that basis, we do not believe Amendments Nos. 144 to 146 are necessary.

The related Amendments Nos. 141 to 143, would bring the Nature Conservancy Council into the automatic consultation process. This proposal is of course linked with the proposal for automatic coverage of SSSIs, to which I have just responded. I should add that we expect the Countryside Commission to consult with the NCC wherever that is necessary because there are specific interests within the NCC's sphere of responsibility. The reason for making the Countryside Commission primarily responsible is because of its statutory duties in relation to the national parks and AONBs covered by the environmental elements of this new clause.

Perhaps I may not turn to Amendments Nos. 140G, 14IB, 144A, 144B and 146A, standing in the name of the noble Baroness, Lady Birk. Their effect is to extend to ancient monuments and listed buildings the same special provisions which the new clause would make generally within national parks and areas of outstanding natural beauty. We do not believe that that is appropriate. The special legislation protecting ancient monuments is very detailed and specific and applicable to small local sites. It is in no way compatible with the broad national park and AONB designations which tend to raise a wide range of special issues not covered by special protective legilsation. The fact is that the water authorities, in respect of ancient monuments or historic buildings, have not undertaken protective measures which could be at risk in the event of sale. The ordinary legislation is here. We believe that that is fully sufficient and that there is no case for the special elaboration of disposal controls in the way proposed. With that assurance, I hope that the noble Baroness may feel that it is not necessary to press her amendment.

Amendment No. 140E would appear to us to have the effect of requiring that the Clause 8 conservation and amenity duties should apply to all disposals. It is fair and reasonable that they should do so in the case of the special environmental areas—the national parks and AONBs. But to apply the Clause 8 duties elsewhere, in particular in disposals in urban areas, would have the effect of prejudicing unduly the reasonable development of surplus urban land for housing, employment and other needs. Of course conservation considerations will be relevant in these cases, and the planning system and conservation legislation will ensure they are duly taken into account. But to impose the extra obligations of Clause 8 would in our view seriously unbalance the particularly complex decisions which have to be made in such cases.

Perhaps I may turn finally to the Amendments Nos. 140B, 140C, HOD, 140H, 143C and 143E of the noble Lord, Lord McIntosh of Haringey. The essence of those amendments is to take away the discretion built into the Government's proposals and require the Secretary of State to impose the relevant conditions rather than leave him the discretion to do so. The amendments are wholly unacceptable to the Government. The fact is that the regulatory powers in the new clause are very wide indeed, and because of that we feel that their use should be discretionary. If the House wishes to make this application in any circumstances obligatory, the Government would feel it inescapable that the scope of the powers would have to be very greatly restricted. We believe that more would be lost than gained by that.

However, underlying these amendments there may be the inevitable doubt as to how future Secretaries of State can be trusted to exercise their consent power reasonably and on the intended basis. However, no Secretary of State is above the law, and if the government amendments are accepted it will be the legal obligation of the Secretary of State to exercise his discretion in relevant cases so as to further conservation, to put land to the best use for recreation and to achieve the purposes of Clause 8.

Therefore, I commend the government amendments to the House in the fullest confidence that they may provide a means to secure indefinitely the protection and public enjoyment of land of very special value to this nation and to the cause of nature conservation which the authorities have themselves over the year done so much to protect and conserve for the nation. They also provide an appropriate and effective means for ensuring that the proceeds from the sale of the land will be fairly divided between the customers and the shareholders. I apologise if I have taken a considerable period of time in attempting to answer the points raised in the amendments which have been so graciously put forward this afternoon.

Baroness White

My Lords, before the Minister concludes his most lucid speech, for which we are all very grateful—he could have gone on longer for some of us to explain other matters which have been raised—will he comment on his remarks on the very wide discretion which the Government plainly wish to reserve to successive Secretaries of State? Does he not recognise that with such a wide area of discretion in the hands of the Secretary of State there is all the more need to inform the public of the situations over which the Secretary of State is exercising that discretion before he comes to a final decision?

If the Minister does not care for the proposal in Amendment No. 140F, to which some of us spoke, that there should be a notice in the London Gazette because he says that de minimis that is quite unnecessary and absurd, does he not agree that there should be some arrangement for public notice before a final decision is taken at the discretion of the Secretary of State?

Lord Hesketh

My Lords, with the leave of the House, I am grateful to the noble Baroness for her intervention. I apologise for not having made clear the Government's view. The obligations on the Secretary of State and the duties imposed on him will, we believe, result in the discretion being applied in an entirely successful and suitable manner.

Lord McIntosh of Haringey

My Lords, I said at the outset that when I replied on Amendment No. 48A I would not go over the whole ground of the other amendments. I am confirmed in that by the helpful statement from the Leader of the House, who reminded us that these groupings are not binding and that I, my noble friends and other noble Lords who have tabled amendments to later clauses—other than Clause 48—will have an opportunity to have them further debated and even decided upon at a later stage, though I am sure noble Lords will use that power with discretion and with concern for the proper procedures of the House.

Clearly it has been helpful for the Minister to reply to all the amendments but, as the noble Lord, Lord Renton, said earlier, if we had been able to recommit them so that comments could be made after the Minister's observations, clearly it is right that we should be able to return to the matter at a later stage.

Lord Renton

Due to a slip of the tongue the noble Lord referred to Clause 48 when he meant Amendment No. 48.

Lord McIntosh of Haringey: I

apologise to the House; I did indeed mean Amendment No. 48. Perhaps I may then restrict my remarks to Amendment No. 48.

We have what might be called the Government's last-ditch defence of their proposals. When their back is truly against the wall they fall back on the argument that, however unreasonable the legislation may be, the Secretary of State cannot behave unreasonably because he is subject to the common law and subject to judicial review. That simply is not good enough. What we are looking at is the legislation before the House, not at the ultimate control that the courts may have over unreasonable Secretaries of State.

It is not good enough for the Minister to say, "Trust me", as he did in effect in response to my amendment. We do not trust him. We do not trust him and we do not trust any Minister, because we do not trust any government. We are here to enact legislation and not to engage in trust either with individuals or groups of individuals.

The Minister told the House, for example, that the regulatory powers in these clauses are very wide indeed. He can say that again; they certainly are. Any responsible House ought to be resisting legislation in which the regulatory powers are so wide that they cannot be defined properly or cannot be enforced because they would have to be restricted if they were. The Minister says that details will be finalised after discussion with the industry. That is saying "Trust me" as well, is it not? He is, in effect, saying that Parliament is not good enough to know; that it is only the industry which is worthy of the ability to negotiate with the Government and that we in Parliament do not have the right to lay down what that negotiation will be.

No, these clauses are not good enough. They require Parliament at a late stage in the consideration of the Bill to take matters on trust. They require us to take on trust the idea not stated anywhere in legislation, not stated anywhere in these clauses, that 50 per cent. of the proceeds of certain sales under certain circumstances will be for the benefit of consumers. I have no good reason to trust this Minister, this Secretary of State, and still less good reason to trust any future Minister or future Secretary of State of whatever party. On that basis I think it is proper that I should take the opinion of the House on Amendment No. 48A.

5.44 p.m.

On Question, Whether the said amendment (No. 48A) to Amendment No. 48 shall be agreed to?

Their Lordships divided: Contents, 78; Not-Contents, 110.

Addington, L. [Teller.] Birk, B.
Airedale, L. Blackstone, B.
Amherst, E. Bonham-Carter, L.
Ampthill, L. Boston of Faversham, L.
Attlee, E. Bottomley, L.
Aylestone, L. Briginshaw, L.
Bruce of Donington, L. Longford, E.
CaUaghan of Cardiff, L. Lovell-Davis, L.
Carmichael of Kelvingrove, L. McIntosh of Haringey, L.
McNair, L.
Cledwyn of Penrhos, L. Monson, L.
Cocks of Hartcliffe, L. Mountevans, L.
David, B. Mulley, L.
Dean of Beswick, L. Nicol, B.
Donaldson of Kingsbridge, L. Northfield, L.
Dormand of Easington, L. O'Neill of the Maine, L.
Elwyn-Jones, L. Peston, L.
Ewart-Biggs, B. Phillips, B.
Ezra, L. Pitt of Hampstead, L.
Fisher of Rednal, B. Ponsonby of Shulbrede, L. [Teller.]
Gallacher, L.
Galpern, L. Rea, L.
Gladwyn, L. Rochester, L.
Graham of Edmonton, L. Ross of Newport, L.
Gregson, L. Scanlon, L.
Hampton, L. Seear, B.
Hanworth, V. Sefton of Garston, L.
Harris of Greenwich, L. Serota, B.
Hatch of Lusby, L. Shepherd, L.
Hayter, L. Stallard, L.
Houghton of Sowerby, L. Stedman, B.
Hunt, L. Stoddart of Swindon, L.
Irvine of Lairg, L. Taylor of Gryfe, L.
Irving of Dartford, L. Tordoff, L.
Jacques, L. Underhill, L.
Jeger, B. Wallace of Coslany, L.
Jenkins of Putney, L. White, B.
John-Mackie, L. Williams of Elvel, L.
Kilmarnock, L. Winchilsea and Nottingham, E.
Lloyd of Kilgerran, L.
Lockwood, B.
Aldington, L. Hesketh, L.
Arran, E. Hives, L.
Balfour, E. Hooper, B.
Belstead, L. Hylton-Foster, B.
Bessborough, E. Joseph, L.
Birdwood, L. Killearn, L.
Blatch, B. Kimball, L.
Boyd-Carpenter, L. Kitchener, E.
Braye, B. Knutsford, V.
Bridgeman, V. Lauderdale,E.
Brookes, L. Layton, L.
Brougham and Vaux, L. Long, V. [Teller.]
Buccleuch and Queensberry, D. Mackay of Clashfern, L.
Macleod of Borve, B.
Caldecote, V. Manton, L.
Carnock, L. Margadale, L.
Carr of Hadley, L. Marley, L.
Clitheroe, L. Masham of Ilton, B.
Colnbrook, L. Massereene and Ferrard, V.
Constantine of Stanmore, L. Maude of Stratford-upon-Avon, L.
Cork and Orrery, E.
Cottesloe, L. Merrivale, L.
Craigavon, V. Mersey, V.
Craigmyle, L. Milverton, L.
Crickhowell, L. Montgomery of Alamein, V.
Cullen of Ashbourne, L. Morris, L.
Dacre of Glanton, L. Munster, E.
Davidson, V. [Teller.] Murton of Lindisfarne, L.
Dilhorne, V. Norfolk, D.
Dundee, E. Norrie, L.
Eden of Winton, L. Nugent of Guildford, L.
Erroll, E. Onslow, E.
Faithfull, B. Orkney, E.
Fortescue, E. Orr-Ewing, L.
Fraser of Carmyllie, L. Oxfuird, V.
Gardner of Parkes, B. Pender, L.
Geddes, L. Portsmouth, E.
Gisborough, L. Prior, L.
Glenarthur, L. Rankeillour, L.
Greenway, L. Reay, L.
Hailsham of Saint Marylebone, L. Rees, L.
Renton, L.
Halsbury, E. Rochdale, V.
Henley, L. Rodney, L.
Romney, E. Swinfen, L.
St. John of Fawsley, L. Thomas of Gwydir, L.
Saltoun of Abernethy, Ly. Thomas of Swynnerton, L.
Sanderson of Bowden, L. Torrington, V.
Skelmersdale, L. Trafford, L.
Slim, V. Trefgarne, L.
Somers, L. Trumpington, B.
Strathclyde, L. Tryon, L.
Strathcona and Mount Royal, L. Ullswater, V.
Vaux of Harrowden, L.
Strathspey, L. Whitelaw, V.
Sudeley, L. Windlesham, L.
Swansea, L. Wynford, L.

Resolved in the negative, and amendment to the amendment disgreed to accordingly.

5.52 p.m.

[Amendment No. 48B not moved.]

On Question, Amendment No. 48 agreed to.

Lord McIntosh of Haringey moved Amendment No. 48C: Page 7, line 19, at end insert— ("( ) to ensure that the interests of every such person are protected in respect of substantial increased charges which could be passed on to them by the application in a particular manner of provisions in any appointment for adjustments in such charges by reason of new statutory obligations or other unforeseen factors.").

The noble Lord said: My Lords, I hope that the House will not be confused by the numbering. This amendment is not an amendment to Amendment No. 48. It is a separate amendment to Clause 7. Perhaps I may first apologise to the House for having four and-a-half lines of text without a single comma. I have two defences. The first is that the Government have six-and-a-half lines of text without a single comma in Amendment No. 50. Secondly, the alternative that I seriously considered and which caused some white faces in the Public Bill Office, was the entire model appointment as an extra schedule to the Bill which would have meant 65 pages of text. That would have required substantial amendment in order to debate it properly.

The reason why it is necessary to deal with the matter in this way is that a vital part of the financial basis of privatisation is, like so many other matters, not being put before Parliament. Negotiations are taking place behind closed doors as regards the way in which water charges to customers will be determined. Noble Lords who have taken part, or who have been present during consideration of the Bill, will know that the formula appears to be one of RPI plus K in which there are specific circumstances when water companies may increase their prices by more than the retail prices index. Very properly, that has been the subject of considerable debate.

What has not been the subject of effective debate because it is not on the face of the Bill is what is far too politely called cost pass through. That means in effect that the water supply and the sewerage plcs may be allowed to pass on to consumers virtually any unexpected additional costs whether they arise from a change in purity and quality standards, from natural disasters, from their own incompetence and inefficiency or from any other factor. However plausible the RPI plus K formula has been made—it has not been made plausible at all to the House because it has not been explained here—any veneer of plausibility is taken away by the provision that is not being put to your Lordships concerning cost pass through.

Cost pass through means, "If anything goes wrong the customer pays: the shareholders never pay under any circumstances". I apologise for having such a long amendment without commas. Amendment No. 50 is helpful for reasons other than the elegance, or the incomparable inelegance, of its language. The amendment provides that the Secretary of State has the power, to ensure that the interests of the customers and potential customers of any company are protected … in particular, the interests of those who are disabled or of pensionable age".

When we come to deal with the matter I shall be welcoming that amendment, as I know my noble friend Lord Carter would if he were able to be here. Once the position has been established and it is possible, and recognised to be so, for the Secretary of State to take into account the interests of a particular group of customers, there is no logical reason why the same protection could not be applied to all customers. That is what our Amendment No. 48C provides.

As the Bill stands it is simply not the case that the interests of customers are treated with equal seriousness to the interests of the undertakers. When the matter was debated at Committee stage the Government specifically said that they could not do it. They said that it would be unworkable if the duty to secure profitability and the proper provision of services were downgraded to equal effect with the interest of the customers. So we have not repeated that. We have not tried to say that they should be treated equally. We have said that where an undertaker requests an upward revision in the value of K—in other words when he requests to take advantage of the cost pass through provisions—he should not have an automatic right to do so.

I can think of three cases where it would be patently wrong for an undertaker to be able to pass on the costs of unexpected additional expenditure to its customers. The first is where the undertaker, through his own negligence or for whatever reason, has failed to provide a satisfactory water supply or sewerage service and has also failed to remedy the defects in his own service. He should not be able to pass on the costs of remedying the defects to the customer. The shareholders who have been responsible for the defective service should at the very least share in the cost of putting things right. Cost pass through means that they do not have to share because the customers pay it all.

The second example concerns the fault of a third party where there has been spillage into the water system which causes a defect that has to be put right at considerable expense. The Camelford and Southern Water Authority case is a very good, recent and expensive example. Cost pass through means that the customers pay all the cost. I thought that under capitalism this should not be the case because risks of a capitalist enterprise should not be passed on automatically to the customer. If a water company has a complaint against a third party it should sue that third party in the courts in order to recover the cost. Otherwise it is not automatically the case that the customer should pay for everything that goes wrong.

My third example concerns short-term costs. All kinds of additional and unexpected costs which water suppliers may well incur ought not to be passed on to the customer. They ought to be taken into account in the normal to and fro of business profitability and business financing. Yet the cost pass through works only in one direction. It works to the benefit of the shareholder and to the detriment of the water and sewerage customer.

If we take the cost pass through procedure at face value—we have no basis other than the model instrument of appointment for examining it; there is nothing on the face of the Bill—the Government are in effect proposing that the water and sewerage undertakers shall have all risk elements taken away from their operations. They are to be protected from any risk by, in the first place, a combination of a distorted calculation of K and, in the second place, a cost pass through fall-back position. Yet they will be able to make monopoly profits as natural monopolists at the expense of the customer and at the expense originally of the taxpayer who owned the assets. They will not have the risk element, which under capitalist theory ought to apply, for justifying profits.

We do not know where the negotiations are on the model instrument of appointment. We have not been told. Parliament will never be consulted formally on the model instrument of appointment and it will certainly not be consulted before the Bill becomes law. Therefore we must make some effort to see to it that the interests of customers, if not given equal weight with the interests of the water and sewerage undertakers, are at least given better weight than they are given at the moment. The cards are heavily stacked against the consumer and in favour of the shareholders. This amendment does not go as far as the amendments we put forward in Committee. It represents a modest but real attempt to redress the balance in favour of the water and sewerage customers. I commend it to the House. I beg to move.

6 p.m.

Lord Trafford

My Lords, I seem to have a sense of déjà vu in that we went through a good deal of this matter in Committee. In the three examples and in the argument put forward by the noble Lord, Lord McIntosh, he appears to have overlooked subsection (2) and subsection (3)(a), which seem to cover all his points. He referred to a water supplier or undertaker who failed to carry out his duties as a result of his own negligence. It is not the purpose of pass through that it should be recoverable from the customer in third party failure. If there were a third party failure it would be the duty of the water undertaker to sue that third party and not recover it from the customer. This would be the natural practice in any other business. The water undertaker would not be carrying out his duty according to Clause 7(2)(a), as respects every area". That would not be happening. Therefore this cannot be the purpose.

It is also true of certain of the short-term costs that he mentioned. To a large extent, therefore, this amendment is based on a considerable misunderstanding of the provision that the duties of the water or sewerage undertaker should be properly carried out. The duties described in the example given by the noble Lord would be duties not properly carried out. It is a considerable protection to suggest that that is how they should function. It is not true to say that this is a system by which all risks are removed. This is not the purpose of the pass through. All risks would not be removed.

I cannot support the amendment, first, because the customer question is covered; secondly, because the duties are defined as having to be carried out properly; and, thirdly, all the examples and arguments given against it would be covered under those terms.

Lord Renton

My Lords, when starting to move the amendment the noble Lord, Lord McIntosh, graciously conceded that in his opinion it was not very well drafted. I think that it is, strange as it may seem. Short sentences and full stops are well regarded in legal drafting, including statutory drafting. Long sentences and commas are not well regarded. This is inevitably and unavoidably a longish sentence. However, I do not see how it could be made much shorter or that there would be any advantage in having a full stop and turning it into two sentences. From the purely drafting point of view I should have thought that the noble Lord was criticising his drafting unnecessarily.

What about the substance? I agree with my noble friend Lord Trafford, but I would go further. This is a clever clause because, as my noble friend has already pointed out, under subsection (2) there is a duty to finance the proper carrying out of the functions of the undertakers but at the same time the interests of the consumers are quite well protected. Subsection (3)(a) starts with the words: to ensure that the interests of every person who is a customer or potential customer … are protected as respects the fixing and recovery", of charges. There is no undue preference and no undue discrimination. That is a useful quotation. Subsection (3)(b) states: to ensure that the interests of every such person are also protected as respects the other terms on which any services are provided by that company in the course of the carrying out of the functions of a water undertaker or sewerage undertaker and as respects the quality of those services". It mentions quality as well. With that protection already in the Bill, the noble Lord's amendment does not carry the protection any further. But unlike the protection that is already there it is inconsistent with the duty to finance the proper carrying out of the functions. On both of those grounds I am sorry to say that I find myself in disagreement with the noble Lord.

Lord Hesketh

My Lords, I am sure that Mark Twain would have approved of the way in which the amendment of the noble Lord, Lord McIntosh, was put down in terms of whether or not it had commas or full stops. He said to his publisher that he had left those on a separate sheet of paper.

The amendment would add an additional duty to the general duties of the Secretary of State and the Director General of Water Services under Clause 7 as to the manner in which they are to exercise their regulatory powers, in particular under Chapter I of Part II of the Bill. The new duty would require those powers to be used in the manner best calculated to ensure that the interests of customers of the water and sewerage undertakers are protected in respect of substantial increased charges which could be passed on to them, as a result of new statutory obligations or other unforeseen factors, under the terms of conditions of appointment.

The amendment is here clearly intended to refer to the provisions in Condition B of the model instrument of appointment which would provide for the undertaker to apply to the director general for a change to the adjustment factor K in the formula which limits increases in charges to no more than the change in the retail prices index plus K. The adjustment factor K is a number which will be inserted initially in the conditions of appointment of individual undertakers by the Secretary of State. It will be subject to periodic review by the director general after 10 years, or after five years if he or the undertaker so wish. It will also be subject to interim adjustment between periodic reviews under the so-called "cost pass through" arrangements which I have referred to and to which the amendment relates.

We believe that the amendment is rather misleading in referring to substantial increased charges being passed on to customers. The intention is to provide for the material additional costs of complying with new legal requirements to be reflected in K; and to allow the director general to consider what change should be made to K where undertakers are subject to external changes in circumstance, for which they are not responsible, which have a substantial adverse effect on the appointed business.

The amendment once again reflects the noble Lord's different and mistaken view of the primary duty, set out in subsection (2) of the clause, to secure that the functions of an undertaker are properly carried out. As he well knows by this stage of discussion of the Bill, we see securing the ability of the undertakers to finance the proper carrying out of their functions, also covered by subsection (2), as part and parcel of a single primary duty. As one of the secondary duties, subject only to this requirement to ensure that services are properly provided, customers' interest in the level of charges is also to be protected.

We believe that the model instrument of appointment gives correct expression to those duties in the cost pass through provisions, and it is entirely right that it should do so. If new provisions could be loaded onto the undertakers without compensating adjustment in the level of charges, they could find it significantly more expensive to raise finance. It would be counter-productive to try to provide otherwise. Similarly, if circumstances beyond the undertakers' control had always to be financed by shareholders, the cost of finance would again be higher. That is not to say that shareholders should face a risk-free environment, nor does the model condition provide for one. It provides for the director general to consider what change should be made to the charges limit.

We believe that the amendment is not necessary to provide protection as to the level of charges. That duty already exists, as my noble friend Lord Renton pointed out, in Clause 7(3)(a). The amendment falsely relies upon the view that the functions can be properly discharged without protecting the ability to raise finance. As I have already described, that approach can only lead to higher charges, or more seriously, an undermining of the ability to provide adequate services.

The noble Lord, Lord McIntosh, is once again suggesting that there is a duty under Clause 7 to secure profitability of companies. There is no such duty. As my noble friend Lord Caithness made patently clear on Tuesday evening, only efficient companies will be profitable. The duty in Clause 7 is concerned with the true return on capital employed, and not with dividends.

If standards are to be improved, we have repeatedly acknowledged that there will have to be increases in prices. We believe that the noble Lord wishes that fact to go away. I urge the House to reject the amendment.

Lord McIntosh of Haringey

My Lords, what always amazes me is the extent to which lawyers in particular are happy to rely upon words like "properly" and "reasonably" to carry with them not just clauses but virtually whole Bills. This is the most important clause in the Bill. In subsection (2) it says that the duty of the Secretary of State and the director is to secure—as the noble Lords, Lord Renton and Lord Trafford, reminded us—that the functions of the undertakers are properly carried out.

On that aspect the noble Lord, Lord Trafford—and this makes me distrust doctors as well as lawyers now—would have us believe that all is well and that because the undertakers have to carry out such duties properly the interests of consumers are therefore adequately protected. That is very comparable to the argument that a reasonable return on capital does not have to be defined because ultimately it can be defined in the courts. If that were the case, and if the words "properly" and "reasonably" had such overwhelming significance—as appears to be suggested—we might just as well not have a Bill. Let us just say that the Secretary of State shall do reasonably what he thinks proper and have done with it. Let us then not have 200 pages and £20-worth of the Bill in order to debate the issue.

The noble Lord, Lord Trafford, referred to subsection (3), as did the Minister. This deals with the protection of the interests of consumers. However, neither of them reminded the House that subsection (3) is subject to subsection (2). It is in subsection (2) that the overriding responsibility to secure, the proper carrying out of the functions"— whatever that may mean—and to secure the reasonable return on capital is contained. Therefore the interests of consumers are without doubt subordinate to the interests of the water undertakers and their shareholders. That is the truth of the matter; it is not helped by placing such reliance upon the words "properly" and "reasonably".

The Minister sought to claim that the amendment was actually misleading in that it used the word "charges" rather than the word "costs". I do not think that customers will be very appreciative of the difference between the two words. So far as they are concerned, charges will be in pounds sterling and costs will be reflected in charges, which are in pounds sterling. Therefore it does not matter very much which of the two stages of the process you put on the face of the Bill: the point is that under all circumstances the customer pays whether or not the undertaker is doing his job properly.

That is the defect of the Bill and that, above all, is the defect of the one-sided cost pass through provision in the model instrument of appointment. Unless we take out the one-sidedness of that provision, and unless we provide some additional protection for customers, we are simply not doing our job, which is to protect water and sewerage customers, who are so deeply and closely affected by the provisions of the Bill. In the circumstances, I think it right to pursue the amendment and to seek the opinion of the House.

6.17 p.m.

On Question, Whether the said amendment (No. 48C) shall be agreed to?

Their Lordships divided: Contents, 52; Not-Contents. 92.

Addington, L. [Teller.] Longford, E.
Airedale, L. Lovell-Davis, L.
Attlee, E. McIntosh of Haringey, L.
Aylestone, L. McNair, L.
Barnett, L. Monson, L.
Birk, B. Mountevans, L.
Boston of Faversham, L. Nicol, B.
Cledwyn of Penrhos, L. Northfield, L.
Cocks of Hartcliffe, L. O'Neill of the Maine, L.
David, B. Phillips, B.
Dean of Beswick, L. Pitt of Hampstead, L.
Donaldson of Kingsbridge, L. Ponsonby of Shulbrede, L. [Teller.]
Ewart-Biggs, B.
Ezra, L. Rathcreedan, L.
Falkender, B. Rochester, L.
Gallacher, L. Scanlon, L.
Galpern, L. Serota, B.
Gladwyn, L. Stedman, B.
Graham of Edmonton, L. Stoddart of Swindon, L.
Hampton, L. Taylor of Gryfe, L.
Hatch of Lusby, L. Tordoff, L.
Hayter, L. UnderhiU, L.
Irving of Dartford, L. Wallace of Coslany, L.
Jenkins of Putney, L. White, B.
John-Mackie, L. Williams of Elvel, L.
Lloyd of Kilgerran, L. Winchilsea and Nottingham, E.
Lockwood, B.
Arran, E. Macleod of Borve, B.
Balfour, E. Margadale, L.
Beaverbrook, L. Marley, L.
Belstead, L. Marshall of Leeds, L.
Blatch, B. Massereene and Ferrard, V.
Boyd-Carpenter, L. Maude of Stratford-upon-Avon, L.
Braye, B.
Bridgeman, V. Merrivale, L.
Brookes, L. Mersey, V.
Brougham and Vaux, L. Montgomery of Alamein, V.
Buccleuch and Queensberry, D. Morris, L.
Munster, E.
Carnock, L. Murton of Lindisfarne, L.
Clitheroe, L. Napier and Ettrick, L.
Colnbrook, L. Nelson, E.
Colwyn, L. Norfolk, D.
Constantine of Stanmore, L. Norrie, L.
Cottesloe, L. Nugent of Guildford, L.
Craigavon, V. Onslow, E.
Craigmyle, L. Orkney, E.
Crickhowell, L. Oxfuird, V.
Cullen of Ashbourne, L. Pender, L.
Dacre of Glanton, L. Portsmouth, E.
Davidson, V. [Teller.] Rankeillour, L.
Dilhorne, V. Reay, L.
Dudley, E. Rees, L.
Dundee, E. Renton, L.
Eden of Winton, L. Rochdale, V.
Ferrers, E. Rodney, L.
Fraser of Carmyllie, L. St. Aldwyn, E.
Gardner of Parkes, B. Saltoun of Abernethy, Ly.
Geddes, L. Sanderson of Bowden, L.
Gisborough, L. Skelmersdale, L.
Glenarthur, L. Strathclyde, L.
Greenway, L. Strathcona and Mount Royal, L.
Hailsham of Saint Marylebone, L.
Sudeley, L.
Halsbury, E. Swansea, L.
Henley, L. Teviot, L.
Hesketh, L. Thomas of Swynnerton, L.
Hives, L. Torrington, V.
Hooper, B. Trafford, L.
Hylton-Foster, B. Trefgarne, L.
Joseph, L. Trumpington, B.
Killearn, L. Ullswater, V.
Kitchener, E. Vaux of Harrowden, L.
Knutsford, V. Windlesham, L.
Long, V. [Teller.] Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 49 not moved.]

6.25 p.m.

The Earl of Arran moved Amendment No. 50: Page 7, line 25, at end insert— ("( ) In performing his duty under subsection (3) above, so far as it requires him to do anything in the manner which he considers is best calculated to ensure that the interests of the customers and potential customers of any company are protected as respects the quality of any services provided by that company in the course of the carrying out of the functions of a water undertaker or sewerage undertaker, the Secretary of State or, as the case may be, the Director shall take into account, in particular, the interests of those who are disabled or of pensionable age.").

The noble Earl said: My Lords, the amendment would require my right honourable friend the Secretary of State for the Environment and the director general, in the exercise of their duty to protect customers under Clause 7, to take into account the particular interests of those who are disabled or of pensionable age in respect of the quality of any services provided by a company in the course of carrying out the functions of a water or sewerage undertaker.

My noble friend Lord Hesketh gave an undertaking to the noble Lord, Lord Carter, in Committee that we would consider an amendment which would protect the interests of the elderly and the disabled in respect of the quality of services provided and consistent with the precedent set in the legislation concerning other utilities. In the light of that earlier undertaking I am now pleased to commend this amendment to your Lordships. I beg to move.

Lord McIntosh of Haringey

My Lords, I am doubly grateful to the noble Earl; first, because the amendment that he has moved gives us a form of words which we could use in Amendment No. 48C, which gained the approval of the noble Lord, Lord Renton; and, secondly, I speak on behalf of my noble friend Lord Carter, and thank the Minister for what I am sure he will consider to be a real improvement gained as a result of the pressure which he exerted in Committee. I know he is sorry that he was unable to collaborate with the Government in the formulation of the amendment and that he is unable to be in the House today to welcome the amendment. I share his gratitude to the Government for the amendment and I am happy to support it.

On Question, amendment agreed to.

Lord Addington moved Amendment No. 51: Page 7, line 32, leave out ("particular").

The noble Lord said: My Lords, the effect of the amendment is to achieve balance between different interests when considering NRA decisions. The inclusion of the word "particular" in Clause 7(5) weighs the balance in favour of the undertaker. If there is an imbalance, we are effectively countenancing an element of prejudgment of any given issue, thus ruling out a balanced and accurate judgment. On those grounds, the amendment should be considered with all due respect and sincerity. It is designed to give an element of balance to the Bill. I beg to move.

Lord Hesketh

My Lords, Amendment No. 51 would remove from the NRA the duty, in carrying out its functions, to have particular regard to the plcs' own statutory duties as regards water supply and sewage disposal.

I happily acknowledge that that duty does, to some extent, put water and sewerage undertakers in a privileged position in relation to the way that the NRA carries out its functions; but that seems to me absolutely essential. The water supply and sewerage businesses are essential to the health and well-being of every one of us. The ability of the water and sewerage undertakers to fulfil their statutory functions in accordance with the rigorous duties that will be imposed on them by this Bill will be vitally dependent upon the NRA in a number of important areas. For instance, the NRA will issue the abstraction licenses that the utilities will need to abstract water from rivers for water supply purposes. Similarly, the NRA will issue the discharge consents to enable the plc to discharge the effluent from its sewage treatment works.

Given the importance of water supply and sewerage, it is surely right that the NRA should be required to have particular regard to them. In many cases, the safe and uninterrupted supply of drinking water and disposal of sewage will rightly override other considerations, however important. There is nothing new in the provision. Section 103 of the Water Resources Act 1963 imposed a precisely similar duty on river authorities vis-à-vis statutory water undertakers. That did not represent unfair protection of private interests then, any more than Clause 7(5) does now. However, I must stress that the wording of this duty does not prevent the NRA taking the view, in any particular instance, that some other consideration—an environmental issue or the prevention of flooding—is more important than the statutory duties imposed on the water and sewerage undertakers.

In such circumstances, the NRA would need to demonstrate that it had carefully considered the implications for the undertakers before exercising its powers in any particular case. I must therefore ask your Lordships to reject the amendment. To omit the word "particular" would fail to give sufficient weight to the immediate day-to-day importance to all of us of the water supply and sewerage functions.

Lord Addington

My Lords, having heard what the noble Lord has said I am reassured to a certain extent that enough weight will be given to interests other than those of the undertakers. I am nevertheless wary of the fact that greater emphasis is still given to them and that the element of balance is therefore not totally represented. However, at this stage I am not prepared to press the amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

6.30 p.m.

Clause 8 [General environmental and recreational duties]:

Lord McIntosh of Haringey moved Amendment No. 52: Page 7, line 46, leave out from ("body") to end of line 48.

The noble Lord said: My Lords, in moving Amendment No. 52 I wish also to speak to Amendments Nos. 53, 54, 58 and 59. My noble friend Lady Birk will speak to Amendment No. 55. The purpose of my amendments is to attempt to get rid of some of the unnecessary and weakening verbiage which exists in the early part of Clause 8. It is a very important clause concerned with environmental and recreational duties. The problem with it and its introduction is that it is restricts the duties of the Secretary of State, the Minister, the director and the water and sewerage undertakings to cases where proposals are before them relating to the functions of the water and sewerage undertakings.

Amendment No. 52 would take out the phrase about, formulating or considering any proposals relating to the functions of any relevant body".

Amendment No. 53 would take out a complicated phrase which qualifies the duties of the Secretary of State and the director. Instead of the Bill saying, so far as may be consistent with the purposes of any enactment relating to the functions of that body".

we suggest, I believe, much more simply, the wording, in accordance with the requirements of this Act and of any enactment".

Amendment No. 54 takes out the phrase: with respect to the proposals".

Amendments Nos. 58 and 59 do very much the same thing, the latter being a consequential amendment.

We spent a great deal of time on Clause 8 in Committee and I certainly do not propose to go over all or even many of the arguments which took place. Some improvements were made to the wording of the clause and there is scope for much further improvement. There is however a substantive weakness. The clause relies on the formulation and consideration of proposals relating to the functions of the relevant body. The protection of the environment and of recreational facilities should not depend on proposals. That protection should exist at all times; it should not be qualified.

I am not sure whether it is unnecessary or dangerous (or, as the Government like to say when talking about Opposition amendments, whether it is both unnecessary and dangerous) to retain these phrases. I know that they complicate the Bill and introduce a quite unnecessary concept of a proposal which is never adequately defined. I know that they give rise to what seems to me an entirely justified mistrust of whether the Government are sincere and unequivocal in their commitment to the environment and recreational duties proposed in the clause. It is for those reasons that I beg to move the amendment.

Lord Trafford

My Lords, I have only one quick point to make, especially as I know that the noble Lord, Lord McIntosh, trusts neither doctors nor lawyers. The amendments that he proposes so tighten the activities which can be carried on that we run the risk that the undertakers would only be able to do those things which conserve the environment, flora and fauna and so forth. I understand the point of the amendments. But, surely, there is a risk of the wording being so tight that it becomes self-defeating. For that reason I have some reservations about the amendments.

Lord Hesketh

My Lords, the amendments concern the conservation duties in Clause 8(1). Those duties relate to the functions of the relevant bodies. They are to be exercised consistent with the purposes of any enactment relating to the function of those bodies. Such provisions necessarily appear in the corresponding section of the Water Act 1973. Amendments Nos. 52 to 54 would mean that any powers exercisable by the new companies, no matter where they were, would have to be exercised for the furtherance of conservation. Amendment No. 55 which deals with the historic buildings element of the clause——

Baroness Birk

My Lords, I apologise to the noble Lord, I do not know how to put the situation right. I thought that the Minister was replying to Amendments Nos. 52 to 54, after which I should deal with Amendment No. 55. I realise now that he is dealing with the whole group. Perhaps he would allow me to say a few words now on Amendment No. 55.

Lord Hesketh

My Lords, I am at fault. I leapt to the Dispatch Box with undue vigour. I apologise profusely to the noble Baroness and await her remarks.

Baroness Birk

I thank the noble Lord very much. We appear to be in competition as to who is more wrong. I feel that the fault is mine, but never mind. We return to the desirability of protecting the heritage, a matter which arose at the Committee stage. It was touched on quite considerably this afternoon when we were discussing Amendment No. 140 but I am sorry to say that I felt very little joy from the outcome. The Minister's response as regards the man-made environment, the heritage, was most upsetting and disappointing.

The phrase, to have regard to the desirability of protecting", keeps on coming through not only in this but other legislation. It is not only an inelegant phrase; it is inexact and should find no place in legislation. It does not do what we wish it to do as regards protecting the types of objects, such as structures and buildings, with which we are concerned.

The phrase, so to exercise any power conferred on him or it as to further the protection of", accords, as I am sure the Minister is aware, with what appears in Clause 8. It provides the same protection for the built heritage, the buildings and objects of archaeological, architectural or historic interest, as that given earlier in the clause to the enhancement of the natural beauty and to conservation. I should have thought that the Minister would look kindly on this proposal. It evens out matters out with a greater degree both of interest and approval. We accept that protection cannot always be an overriding and all consuming duty. The Minister pointed that out in Committee. However, he also said in Committee: Protection of historic features is an important objective to which we require the water industry always to have regard".—[Official Report, 8/5/89; col. 446.] I take that to mean that it is accepted by the Government that as far as is humanly possible the water industry should have the same regard to historic features as anybody else. Therefore, I do not see the reason for turning this provision down.

When the Minister spoke to Amendment No. 140 he seemed to give the impression that there were not many archaeological objects, structures or buildings that needed conservation. However, that is not the case. To give just one example, Thames Water is in possession of a great many extremely valuable and unique objects, and also has archives. The water industry is quite a large owner of a great many of the things we are trying to protect. I cannot see why there should be so much resistance to placing a duty on it to protect these things.

At the moment the duty to protect our man-made heritage is less strong than the duty to protect wildlife. However, our man-made heritage is not a dynamic regenerating system but a finite and non-renewable resource. Any damage or destruction that occurs now will remain for all time. Archaeological sites cannot repair themselves in the way that ecosystems, albeit perhaps over a very long time, can. There must therefore be at least as strong an obligation to plan carefully as regards our man-made heritage, and to do as little damage as possible. My noble friend Lady Nicol and the Peers who have put their names down to her amendments have taken great care to ensure that the man-made heritage has the same protection and is subjected to the same careful conservation as wildlife and the landscape.

This amendment does not seem to me in any way to conflict with the objectives that were spelt out by the Minister in Committee. In fact, I think it supports those objectives. I hope that now that this provision has been completely redrafted and inserted in a different place, the Minister will at least give us some encouragement. If the amendment needs any form of redrafting, we would be quite agreeable to that. It is the substance of the matter with which I am concerned.

Baroness Blatch

My Lords, Clause 8 already lays a duty on the undertakers to: have regard to the desirability of protecting buildings or other objects of archaeological, architectural or historic interest". The amendment, as set out, places an absolute duty on the undertaker to protect any object, however insignificant. I think it is absolutely essential that a balance is struck between the undertaker getting on with its proper duties and having regard to the desirability of protecting such objects. I believe the balance as set out in the Bill is right. The duty is there to protect certain objects. However, if, for example, when pipe-laying some objects have to be disturbed and perhaps even damaged but they are totally insignificant in the sense of being of any interest to any historical society, there should not be a duty on the water undertaker to protect them.

6.45 p.m.

Lord Hesketh

My Lords, these amendments concern the conservation duties in Clause 8(1) and the duties related to the functions of the relevant bodies, and provide that those duties are to be exercised consistently with the purposes of any enactment relating to the functions of those bodies. Such provisions necessarily appear in the corresponding section of the Water Act 1973, as I said earlier in my false commencement of replying to these amendments.

Amendments Nos. 52 to 54 would mean that any powers exercisable by the new companies, no matter what they were, would have to be exercised for the furtherance of conservation.

Amendment No. 55, which deals with the historic buildings element of the clause, would have the effect of tightening the duties by deleting the words: have regard to the desirability of protecting". It would require the exercise of powers of the relevant bodies directly for furthering the protection of historic buildings. Similarly, Amendments Nos. 55 and 59 achieve the same effect in relation to the duty to take account of the beauty and the amenity of urban and rural areas by requiring that the relevant bodies' powers be used directly for their promotion.

I shall deal first with Amendments Nos. 52 to 54. The formulation proposed is not one that the Government consider desirable. The reference to formulation and consideration of proposals is in our view a helpful one because it gives the duties something specific on which to bite, and will direct attention clearly at decision-making by both the relevant bodies and the Secretary of State and director. Moreover, in eliminating any reference to functions—the most relevant consideration for conservation—the amendment goes too wide. The new companies may from time to time do some things which cannot reasonably be construed as part of their functions and which it would be unreasonable to constrain to the furtherance of conservation.

But, while we cannot adopt the terms, we have already accepted the key substance. We accept that there may be circumstances, although we think they are narrow and unlikely, where the companies could undermine the purposes of the legislation by declaring land surplus to their functional requirements.

Much concern has been expressed that the general effect of the duties could be undermined in this way. That is something we want to avoid. Earlier this afternoon we discussed Amendment No. 75 in the context of the land group. That amendment will secure this provision by extending the duty to cover proposals in respect of the management of land, whether it is functional or non-functional. I hope that the House will accept that it is sensible to do this in relation to the aims of Amendments Nos. 52 to 54.

As regards the tightening of the terms of the historic buildings and landscape duties by Amendments Nos. 55, 58 and 59, we believe that what is proposed is not practical. The amendments would, for instance, require the Secretary of State and the companies to exercise their powers so as to promote natural beauty and amenity and to further the protection of historic buildings. These obligations are to be totally unqualified. They are not to be performed only so far as is consistent with their main water supply and sewerage functions. They are not to be performed only so far as is reasonably practical having regard to cost or other considerations. There are no qualifications of these kinds.

The obligation is simply this: in supplying water and disposing of sewage, the undertakings are to do that—regardless of all other considerations—which furthers protection of landscape and historic buildings. Indeed it is arguable that the duty is so tight that the companies would be able to undertake only those water supply and sewerage functions which actually promoted conservation. We believe this is not reasonable. Its effect is to subvert the whole purpose of the legislation. Instead of, as now, the companies being required to have due regard to historic buildings and landscapes in performing their functions, the protection of those landscapes and buildings could override water supply and sewerage functions. We believe that such subordination is simply not appropriate.

We have to strike difficult balances. We have to reconcile conflicting objectives. We have to recognise that, while historic buildings and landscapes are valuable objectives, they cannot and must not be ones to which all other considerations are subordinated. We believe that the Bill as drafted preserves these essential balances. I suggest to the House that it is important that we ensure that they can continue. It is in those circumstances that I hope the Opposition will not feel it necessary to press these amendments.

Lord McIntosh of Haringey

My Lords, I am grateful to the Minister for that explanation. He will not be surprised to hear that I do not find it particularly reassuring. The problem, as I have said, with the drafting of the Bill is not only that it is exceedingly complex but also that it relies on the concept of proposals. The proposals are brought forward by the undertakers. In other words, nothing can happen except on the initiative of the water or sewerage undertakers. That is what is unsatisfactory. I listened carefully to the noble Lord, Lord Trafford, on this point and he did not convince me either. I remind him that Jack Cade said, "Let's kill all the lawyers first". We might move on to the doctors after that.

To return briefly to Amendment No. 53, that relates to a point where the drafting of the Bill causes me the utmost puzzlement. The Bill reads: so far as may be consistent with the purposes of any enactment relating to the functions of that body and, in the case of the Secretary of State and the Director, with their duties under section 7 above". Why do we have to go such a long way round the houses, particularly as when we talk about the Secretary of State and the director we are talking about this Bill? Why can we not just say, as Amendment No. 53 does: in accordance with the requirements of this Act"? It is not particularly restrictive. It removes unnecessary confusion and what may be, although I have not been convinced that it is, an unnecessary, justifiable source of mistrust about the Government's intentions in regard to Clause 8.

However, as the Minister has said, the issue is complex and the balance to be struck is difficult. It may be that even now we have not got the wording of our amendments right. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 53 to 55 not moved.]

Lord McIntosh of Haringey moved Amendment No. 56: Page 8, line 9, leave out ("buildings or other") and insert ("and conserving buildings, sites and").

The noble Lord said: My Lords, in moving Amendment No. 56 I should like to speak also to Amendment No. 60 in my own name and Nos. 57 and 61 in the name of my noble friend Lord Howie of Troon, who is unable to be with us this evening and sends his apologies. The amendments follow very closely debates which took place on the definition of buildings and other places where objects of archaeological, architectural or historic interest might be found. The Minister conceded at Committee stage that the word "building" was not adequate to the intention, which I think we all shared, as to the protection that is required.

I am very glad that it has been possible for the department to come up with the drafting changes which are included in Amendments Nos. 56 and 60 which give effect to that intention. I understand that that wording is acceptable to the Government. I am very happy to move Amendments Nos. 56 and 60 on that basis.

Amendments Nos. 57 and 61 are put forward by my noble friend Lord Howie, who is a civil engineer and who took part in the debates on the Copyright Bill on a comparable issue. In the debates on the Copyright Bill he pointed out that neither buildings nor sites covered some of the major artefacts of the water industry. One could not very well describe an aqueduct, for example, either as a building or as a site. When he pointed out that fact in relation to the Copyright Bill the Minister responsible acknowledged that he had a point and the phrase "fixed structures" was added into the Copyright Bill. He argues—I think that he has a very good point here—that if that is appropriate for the Copyright Bill then it is appropriate here.

I hope that in accepting Amendments Nos. 58 and 60 the Government will give serious consideration to the point made by my noble friend in Amendments Nos. 57 and 61. I beg to move.

The Deputy Speaker (Lord Murton of Lindisfarne)

My Lords, I understand that in line 2 of Amendment No. 56 the word is "conserve" and not "concerning". Is that agreed?

Lord McIntosh of Haringey

My Lords, that should be Amendment No. 57 and not Amendment No. 56. What my noble friend meant was conserving buildings, sites and fixed structures.

The Deputy Speaker

My Lords, I apologise, but my brief gave it as Amendment No. 56.

Lord Hesketh

My Lords, the Government are happy to support the amendments standing in the name of the noble Lord, Lord McIntosh, and which flow from points he put to the House at Committee stage. We regard the insertion of the word "conserving" as helpful in that it goes wider than the reference in existing legislation to "protecting". Equally, the reference to sites makes clear that the scope of the duty extends to ancient monuments and industrial remains.

If the amendments are accepted the formulation "buildings, sites and objects" will cover all matters which the duty in Clause 8(1)(b) should cover. We are able to support the amendment because the language is in suitably simple and embracing terms and avoids technical terms not precedented in legislation elsewhere. Having said that, it appears to us to achieve in full the comprehensive coverage of aspects of archaeological, historical or architectural interests which the House seeks.

Turning to Amendments Nos. 57 and 61, standing in the name of the noble Lord, Lord Howie of Troon, these would import the concept of fixed structures to the duty. It is certainly our intention that dams, pumping engines of historic interest and so forth should be covered by the duty. We are not certain whether the formulation proposed in Amendments Nos. 57 and 61 is necessarily the right one but, if the noble Lord, Lord McIntosh, is content, I shall undertake to consider the point and come back with a suitable form of words at Third Reading if the formulation as amended at Report is not adequate.

We certainly support Amendments Nos. 56 and 60, to which I hope the House will agree.

Lord McIntosh of Haringey

My Lords, I am most grateful on behalf of myself and my noble friend Lord Howie for the consideration which the Minister has undertaken to give to the phrase "fixed structures". In his examples he did not repeat the example of aqueduct which I gave. He might also like to take that into account.

I am also grateful for the support he has given to Amendments Nos. 56 and 60. Indeed, his extravagant support for the wording is only tempered by the knowledge that I had already acknowledged the assistance of the department in producing the wording. What he is doing is praising himself and his own officials. He is perfectly entitled to do so. They are good amendments. I commend them to the House.

On Question, amendment agreed to.

[Amendment No. 57 not moved.]

Baroness Birk moved Amendment No. 57A; Page 8, line 10, after ("interest") insert ("including ancient monuments, machinery, portable antiquities and documents").

The noble Baroness said: My Lords, this amendment returns to the same theme and deals with ancient monuments, machinery and other portable antiquities and documents. Again, we are concerned that these should be saved.

The inclusion of the sites of buildings and objects which has been accepted clarifies to some extent the range of items covered. There still remains scope for making the Bill more explicit than it is at present. As I understand it, it is the Government's intention that all those items should be included because they are specified in the code of practice. However, as we are aware, inclusion in a code of practice is not the same as inclusion in the statute. We believe it is essential that the Bill should be as clear as possible rather than it being left to a code which is not directly enforceable and has no long-term standing.

The terms used have been carefully chosen. The term "ancient monument" is defined in the National Heritage Act 1983, the Act which gave birth to what we now call English Heritage. "Machinery" is included here as it does not specifically fall within the scope of "ancient monument" but is a very important example of the ancient objects which we are trying to preserve as far as possible in this country. It specifically cannot be included in the listing of a building. "Portable antiquities and documents" represent further categories of "object" of which the present water authorities—as I have mentioned previously—have important collections, many of which relate to the development of the water industry itself and are therefore worthy of being kept and looked after without any extra work or necessary expense for the Government.

The amendment does not seek to alter the Government's intentions. It is designed to make the Bill clearer and more explicit and to incorporate into it primary matters of principle at present not covered in the code of practice. If, as on an earlier amendment, the Government had put forward and accepted "fixed structures" as well as "sites" and everything else, it would be difficult to argue against "portable antiquities", objects and—most importantly—"machinery", which is so often left out and is not included in the definition of an ancient monument. Some people think that it is included, but I can assure the Minister that it is not. That is why it is important to have it on its own. I beg to move.

The Earl of Arran

My Lords, I hope that the noble Baroness will forgive me for asking, but is she moving all the other amendments in the group that starts with Amendment No. 57A?

Baroness Birk

My Lords, I shall speak to Amendment No. 58A. That is a rather different amendment, but I am perfectly happy to speak to it. These are all slightly different amendments. I think that I should prefer to divide them.

The Earl of Arran

My Lords, I thank the noble Baroness for giving way. I understand what she says, but the amendments are all grouped together on the list.

7 p.m.

Baroness Birk

My Lords, I understand that very well, but, after all that we have heard about grouping earlier this afternoon, I should have thought that it would be a great relief and that everyone would be pleased to consider these matters singly instead of their being grouped. I am prepared to go on so long as I can be assured that the amendments will be dealt with separately. In that case, I shall continue.

I originally hesitated because the next amendment—Amendment No. 58A—is entirely different. It is a very important one and does not give rise to the points that we have repeated several times. The objective of the amendment is to make it clear that the duties towards conservation imply a positive attempt to restrict damage to vulnerable habitats, heritage features and landscapes and, where damage is unavoidable, to take such remedial action as is appropriate. I think that the Minister will understand why I divided the amendments.

The phrase "to take into account" provides no specific standards of procedure for safeguarding conservation interests. As I am sure the Minister is well aware, the amendment is in line with the objectives of environmental assessment and reflects the wording of paragraph 3(d) of the schedule to the Land Drainage Improvement Works (Assessment of Environmental Effects) Regulations 1988. I do not think that one could do better than copy that all over again. The Government are already committed to the principle that the overall objectives of environmental assessment should be met even where formal environmental assessments are not required. The amendment would help to achieve that aim.

In Committee, the noble Lord, Lord Hesketh, agreed to consider the concepts and terms which may provide a most positive and helpful expression of both historic building and landscape duties which were presented in this and other amendments at the time. I wonder whether we may know the results of his deliberations. If he accepts the amendment, we need not go into any further explanation. That would be perfectly acceptable to us and we should not need him to explain the matter any further. But, as he said that he would look into the matter and as this is a limitation of damage amendment, it is in rather a different position from the others.

The objective of Amendment No. 62C is to ensure that due consideration is given to public access to the man-made heritage. This is again an entirely different subject. That is the problem of the grouping. There is considerable public interest in the heritage and it is important for recreation, education and cultural enrichment. The present water authorities currently own a wide range of cultural assets in terms of ancient monuments, buildings, water supply mechanism, industrial machinery, portable antiquities and documents. Any or all of those may be of interest to the general public.

The issue of access has generally been considered in respect of land for recreation. It is also desirable in that context that there should be access to important collections of historic artefacts and buildings, whether for enjoyment or for serious scholarly study. The heritage deserves equal standing with wildlife and amenity interests in this matter. I remind the Minister that the importance of the whole question of access, whether to museums, galleries or the objects that are of value to the country, is on the increase all the time. More and more people want to see things and visit our museums and their outside archaeological collections. The amendment simply seeks to ensure that consideration is given to the question of public access to the man-made environment.

I am still a little worried because these are all separate subjects, but I am sure that the Minister has carefully noted that fact and has the amendments before him. The objective of Amendment No. 70A is to ensure that the implications for the heritage of activities connected with inland waters are covered. The protection of the man-made heritage is a primary duty in Clause 8(1) and yet is not included here despite specific requirements comparable with those relating to landscape amenity and nature conservation.

Four aspects must be highlighted. First, many inland waters and associated buildings and structures, especially on canals, are of considerable historic interest, and a major relic of the industrial revolution—a cultural and economic heritage in which Britain led the world. Secondly, many rivers, especially the Thames, have produced thousands of artefacts, most significantly the majority of prehistoric weapons in Britain. Those were deliberately deposited as sacrificial offerings and are exceptionally well preserved. Thirdly, several archaeological sites are being eroded by rivers. Fourthly, of particular importance are water-logged structures and artefacts whose exceptional preservation relies on a high water table and whose destruction can be triggered within weeks by drainage. Such sites are among Britain's rarest, best preserved and most fragile archaeological remains.

Those aspects represent four specific reasons for the amendments. Inland waters and areas subject to drainage preserve special heritage which, in the case of organic materials, is particularly precious and vulnerable. The functions of the National Rivers Authority impinge on that particularly distinctive and vulnerable heritage. Because of the threats posed by drainage, English Heritage has, to its credit, funded a major programme of surveys over the last few years to identify and record the existence of sites in major wetland areas. These areas have been selected as having the highest priority for survey because of the quality and fragility of the archaeological deposits within them. I think that the current undertaking of English Heritage speaks for itself in pinpointing the value of such sites.

Turning to Amendment No. 78A, the objective is to give equal weight to the man-made heritage which potentially is equally as affected as the natural environment. Subsection (2)(a) refers to: land in relation to which . . . section 8 above has effect". Since that clause includes buildings, sites or other objects of archaeological, architectural or historic interest and these occur on land within national parks and the Broads, they must logically be included where the interest of such land under Clause 8 is specified.

The amendment is simply for clarification. I am sure we all agree that whatever goes into a statute should be as clear as possible and beyond any danger of causing confusion. Although it is hard to tell, given the frequency with which the Government do not include references to it, we believe that it is accepted that the man-made heritage should be given equal, not to mention integrated, consideration with the natural environment and landscape. This is a question of balance. I am not trying in any way to give an edge to the man-made environment over the natural environment but to ensure that there is adequate protection for it. That is the concern of the amendments. I have come to the end of my comments on the amendments in that group. I beg to move.

Baroness Blatch

My Lords, it is difficult to argue—indeed, I do not wish to do so—with the need to protect flora, fauna and objects of archaeological and architectural interest. However, taking all these amendments together, it would be difficult to argue other than that the water authority should now shut up shop and go home. They make it nearly impossible for them to carry out their normal duties.

I believe that it is right for the Bill, and the Act when it comes into force, to put upon the water companies a duty to protect all those interests. However, I think it is unreasonable to make an absolute duty to protect absolutely everything, whether it is of significant or insignificant interest. For example, in Amendment No. 70A as it stands the duty laid upon them makes it almost impossible for them to function. Is the noble Baroness asking the water companies to conserve all buildings, sites and other objects of archaeological and architectural interest that rely upon a high water table and that may be affected? If for one reason or another that water table is reduced, either through drought conditions or even perhaps from over-abstraction because the companies have a duty to provide water to domestic and non-domestic users and there happens to be some damage, is the water company not only to be responsible for the restoration of any damage but for all time must conserve those buildings and sites?

I think that that lays an impossible duty on the water companies and I therefore ask my noble friend where possible to produce the strongest possible wording to make sure that a duty is laid upon the water companies to have reasonable regard for all those interests but not an absolute duty to conserve them for all time.

7.15 p.m.

The Earl of Arran

My Lords, I am sure that we are very grateful for the clear and concise explanation of the amendments in this group to which the noble Baroness, Lady Birk, has spoken. I hope to be equally clear and concise in stating the Government's reaction and attitude to them.

With regard to Amendment No. 57A our view is that a reference to "including ancient monuments, machinery, portable antiquities" is an unnecessary elaboration of the provision, as we indicated in our response to Amendments Nos. 56 and 60. We believe that the reference to buildings, sites and objects satisfactorily covers all those without going into the specific detail which can cast doubt on the generality of the provision. Therefore we believe that the formulation proposed, as I have said, is over-elaborate and best avoided.

Turning to Amendment No. 70A, this would add to the NRA's general promotional duties in Clause 8(4) a duty to promote conservation of antiquities and remains dependent upon a high water table. We understand the concern here, but there must be limits to the duties and obligations that we place on the new authority. That was a point brought out by my noble friend Lady Blatch. In this case the duty is unnecessary and will add little to the obligations already falling upon the authority by virtue of the duties already given to it. It will have general responsibilities in respect of water resources and abstractions, and hence of the water table, and it will have an obligation to have regard for the conservation of objects of archaeological and historic interest.

Our conclusion is that the combination of those two factors already meets the concerns of the noble Baroness, Lady Birk, so far as it is reasonable and practicable to do so and that to add a general promotional duty in this area would be an unnecessary and undesirable over-elaboration of the legislation.

I turn now to Amendment No. 62C, which would extend the duty to have regard to the desirability of preserving public access to cover access to archaeological or historic buildings, sites or other objects. We have been giving careful thought to this proposal. On balance, our conclusion is that this would be a reasonable and sensible extension to the clause. We do not think the wording is quite right, but subject to that we would be willing to bring forward an amendment to the effect desired at Third Reading.

Finally, on historic buildings I turn to Amendment No. 78A which in Clause 9 seeks to insert a notification procedure in respect of historic features into the provision dealing with national parks and sites of special interest. I have to say that insertion of that reference in the provision would be wholly out of place and frankly would complicate and confuse the clause. General legislation dealing with historic buildings is already full and effective, and we can see no sufficient case for seeking to insert special provision for them here. We feel that it would be both unnecessary and incongruous.

Amendment No. 58A takes us into the general duty in Clause 8(1)(c) to take account of the effects of proposals on the urban and rural environment and proposes to amend this specifically to refer to the need to avoid, remedy or reduce any adverse consequences of proposals. We already have in Clause 8(1)(a) and 8(1)(b) explicit duties on the relevant bodies to further conservation of landscapes, flora and fauna and buildings, and in these circumstances the elaboration proposed for subsection (1)(c) would, we believe, be quite redundant.

In the circumstances, we believe that the amendments in this group are not necessary, except for Amendment No. 62C which we believe is sound and we are prepared to consider it in detail with a view to an amendment at Third Reading.

As regards the other amendments, I hope that I have been sufficiently persuasive to enable the noble Baroness to withdraw them.

Baroness Birk

My Lords, I thank the noble Earl and should like to respond first to the good news. I am most grateful to him for accepting Amendment No. 62C and I am happy that it should be redrafted, if necessary, so long as the phrase "with regard to the desirability of is not used. I should be pleased if the Government could avoid that. I think that this is an important amendment and we appreciate the concession.

I do not think that the Minister would expect me to agree with his objections to the other amendments. On Amendment No. 58A, the main point is that, as the precedent has already been set, there seems to be no need for any objection to including the provisions in the same way as for the environmental assessment, land drainage improvement works and so on. I have quoted the noble Lord, Lord Hesketh. What he said seemed to be very sympathetic to such an amendment. I shall not press it. I believe that the Government are wrong.

On Amendment No. 70A, the noble Baroness, Lady Blatch, thought that to insist on something so inclusive would be too pressurising. However, as I said on Amendment No. 55, we accept that it cannot always be an overriding or consuming duty to protect the man-made heritage. There must be a balance of public interest. We are concerned that that balance is right and does not work against the man-made heritage as it so often does, because there are comparatively few people interested enough in the issue to do anything about it. People are on the whole much more interested in what I call the green issues—the nature parks, the areas of outstanding beauty—as I am also. They are highly important. Nevertheless some of us have continually to speak up for such issues as the preservation of archaeological artefacts, which are irreplaceable. On the other hand, it is not suggested that everything has to be kept exactly as it is, because that is impossible.

Baroness Blatch

My Lords, with the permission of the House, if the noble Baroness will allow me to intervene. I was not arguing against the desire to protect these buildings. However, Amendment No. 70A seems to put a duty on the water companies, whether or not they are working on these sites or buildings, to conserve them. I think that that is unreasonable.

Baroness Birk

My Lords I tabled the amendment because the archaeologists are worried not just about the conservation of the building sites, and so on, but the in situ organic archaeological deposits and artefacts dependent for their survival on a high water table. All these items must be possible to be saved and must be worth saving. There is nothing absolute about this amendment any more than any of the others that I have moved. That is no reason for turning it down. The danger of losing some of these highly valuable organic materials is very great. However, the Minister seemed rather reluctant to accept the amendment. Therefore, for the time being, I shall not move it.

On Amendment No. 78A, the same arguments prevail. It is put forward simply for clarification. We are trying to achieve equality between the man-made heritage and the natural heritage. The same arguments seem to have been given in reply to this as to the other amendments. Since I am repeating my arguments in reply, there is a point at which we have to draw the discussion, if temporarily, to a close. I shall therefore not move that amendment either.

The Deputy Speaker (Lord Murton of Lindisfarne)

My Lords, does the noble Baroness wish to withdraw Amendment No. 57A?

Baroness Birk

My Lords, yes, and I shall not move the other amendments, including Amendment No. 62C, in the hope that the Government will come back with something on that.

Amendment, by leave, withdrawn.

[Amendments Nos. 58, 58A and 59 not moved.]

The Deputy Speaker

My Lords, does the noble Baroness move Amendment No. 60?

Baroness Birk

My Lords, with great respect, that amendment comes in a different grouping. It is all very confusing.

The Deputy Speaker

My Lords, I must put the amendments in the order that they come.

Baroness Birk moved Amendment No. 60: Page 8, line 13, after ("buildings") insert (", sites").

On Question, amendment agreed to.

The Deputy Speaker

My Lords, perhaps I may say that Amendments Nos. 60 and 61 are alternatives. I understood that the Government were prepared to accept Amendment No. 60. Therefore Amendment No. 61 as an alternative should, I suggest, not be moved.

[Amendment No. 61 not moved.]

The Deputy Speaker

My Lords, is Amendment No. 62 moved?

The Earl of Arran

My Lords, your Lordships may agree that this is a suitable moment at which to break for dinner. I suggest that we return to further consideration on Report at 8.30 p.m. In the meantime I beg to move that further consideration on Report be now adjourned.

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