Lords Sitting of 31 January 1995

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by
the Lord Bishop of Chester.

Private Finance Initiative: Scope
Lord Barnettasked Her Majesty's Government:
What is their policy on the Private Finance Initiative.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, the aim of the Private Finance Initiative is to ensure that, where appropriate, private finance is the first choice for investment in government infrastructure and services.
Lord Barnett: My Lords, is the Minister aware that I would agree with those sentiments in principle provided always that the transaction offers value for money? I am sure that the Minister is aware of the Chancellor of the Exchequer saying last week—he also issued a press release—that one of the first projects to be undertaken under the Private Finance Initiative would be redevelopment of the Treasury building itself, so I assume that nothing is sacred any more. I am sure that the Minister is aware too that the Chancellor said that the idea is to go right across the public sector with the Private Finance Initiative. Can the Minister confirm whether that applies also to local government? If so, will local authorities be able to build homes through the Private Finance Initiative, using private builders, and lease them back, thus providing much needed homes as well as jobs that are greatly needed in the building industry?
Lord Henley: My Lords, I can confirm that my right honourable friend addressed a packed audience last week at the very successful private finance panel conference. As the noble Lord so clearly said, my right honourable friend announced plans for the work at the Treasury to be undertaken under one of the initiatives. That shows that the Treasury puts its money where its mouth is. I hope that that will be a highly successful initiative along with the other £5 billion-worth of private finance contracts due to be signed in 1995, with another £1 billion-worth in the pipeline. As regards local government and whether it can partake in the initiative, I should prefer to take advice because that question goes slightly beyond central government. However, I can confirm that although the Private Finance Initiative is focused predominantly on transport initiatives, we should like it to be focused across all government departments.
Viscount Caldecote: My Lords, will the Government be prepared to put public sector finance into private sector enterprises where there is a long payback period to ensure that the Government share the risk of important developments in strategic industries?
Lord Henley: My Lords, obviously there will be occasions when the Government put money into such
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things. What we want to do is to ensure that the risk is shared between the private sector and the public sector. We are certainly not looking to transfer all risk onto the private sector.
Lord Wyatt of Weeford: My Lords, can the Minister say whether the Treasury is a listed building and, if so, to what extent can it be hacked about?
Lord Henley: My Lords, the Treasury is a listed building, and the degree to which it can be hacked about, as the noble Lord puts it, would be a matter for the appropriate authorities on advice from English Heritage.
Lord Ezra: My Lords, is the Minister aware of general agreement that this is a desirable initiative, especially if it means that there can be additional investment in essential public services? However, is the Minister also aware that the definition of what is "appropriate" is still somewhat restrictive? The Minister referred particularly to risk. Is he aware that those to whom I have spoken believe that there is a tendency to ask them to shoulder more of the risk than the profits will bear?
Lord Henley: My Lords, I am grateful for support from the Liberal Benches and I hope in due course to receive support from the Benches opposite. It is important to get the share of the risk exactly in the right place. I was trying to stress in reply to an earlier question that we believe that the risk should be shared. It should not all be placed on the private sector; nor for that matter should we be removing all risk from the private sector. There must be a degree of risk.
Lord Dean of Beswick: My Lords, my noble friend Lord Barnett asked the Minister an important question about whether private money is now available, or can be made available by agreement, to local authorities so that they can build much needed housing for those who are poorly housed and, in many cases, homeless. As the Minister must be aware, that would provide extra work for the building industry which is once again in decline. If a local authority and a private finance company were able to do a deal to build houses, would that, in the interests of everybody, have the blessing of the Government?
Lord Henley: My Lords, as I made clear in reply to the noble Lord's noble friend, I answered purely in terms of central government and undertook to take advice on that issue. In so doing, I shall write to the noble Lord as well as to the noble Lord, Lord Barnett.
Lord Marsh: My Lords, will the arrangements that are envisaged for the Treasury involve a purchase and lease-back arrangement? Would that apply to the entire building and could it be applied to government buildings generally?
Lord Henley: My Lords, it could be applied to all other government buildings. The exact details of the Treasury's proposals still have to be worked out. All my right honourable friend the Chancellor of the Exchequer

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announced was that there was a prospect of making use of the Private Finance Initiative to bring much needed money into redevelopment of the Treasury building.
Lord Eatwell: My Lords, will the Minister confirm that the Private Finance Initiative was announced three years ago? Will he also confirm that of the nearly 700 projects so far proposed by the Government a mere 26 have passed the tender stage? Is that not a clear indication that, despite Sir Alastair Morton's best efforts, the project is being seriously mismanaged and indeed obstructed within the Treasury? Is not the reason for the Government's failure in that respect that they are trying to hive off the public sector rather than to build constructive private/public partnerships?
Lord Henley: My Lords, I do not agree with the noble Lord. I should have thought that the fact that my right honourable friend the Chancellor of the Exchequer took so seriously the conference to which I referred stresses the importance that he attaches to it. That is why he announced in the Budget that some £5 billion of private finance contracts were due to be signed this year, with a further £1 billion in the pipeline. That does not show that we are going slow on the matter. The project relating to the Treasury building shows, as I said earlier, that the Treasury puts its money where its mouth is.
Lord Monkswell: My Lords, the House will be glad to know that the Government have learned the creative accounting techniques pioneered by both Tory and Labour local authorities in the 1980s which enabled their capital budgets to go ahead. Are the Government aware that now they are using those techniques to get around their own Treasury rules, local government might find it useful to have the same freedom of manoeuvre?
Lord Henley: My Lords, I totally reject the noble Lord's suggestion, as I imagine will most of the House, that this is merely creative accounting. The key point is to introduce private sector management and expertise so as to deliver better project management and value for money for the taxpayer.
Lord Barnett: My Lords, I would not want to see the Government doing any creative accounting, as I am sure the Minister is aware. I am surprised by his reply that he needs to take advice about the local government sector as last week the Chancellor of the Exchequer said:
"We are seeking to push the Private Finance Initiative right across the public sector".
The Chancellor also said that there would need to be value for money before he agreed a project. How will he do that?
Lord Henley: My Lords, as we all know, the noble Lord is an accountant and he is creative, but I should be the last to say that he was ever a creative accountant. I said earlier that I would prefer to take advice on that point. I shall do so and write to him.

Motorail Service: Future
2.47 p.m.
Lord Rentonasked Her Majesty's Government:
What steps they will take to ensure that the service currently provided by Motorail will continue to be provided after privatisation of the rail network.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, the franchising director has announced that he will not be requiring a future franchise operator to provide the Motorail service through the passenger service requirement. However, franchisees will be free to use their commercial judgment on whether to operate the Motorail service in addition to the PSR.
Lord Renton: My Lords, I thank my noble friend for that somewhat disappointing reply. Is he aware that the Motorail service has proved to be a great advantage to many people, and has the further advantage that it keeps cars off the road over long distances? Will he point that out to the franchising director?
Viscount Goschen: My Lords, I agree with my noble friend that the service has provided a valuable facility to many people, but it is extremely expensive to operate. It is used to carry very few vehicles.
Lord Clinton-Davis: My Lords, does the Minister recall undertaking after undertaking given by Ministers during the passage of the Railways Bill that there would be full consultation whenever controversial issues of this kind arose? Is he aware that there has been no consultation with the Central Rail Users Consultative Committee—a matter of complaint registered by Major-General Lennox Napier? Is he aware that there has been no consultation with the tourist industry which is bound to be vitally affected by these decisions? What would be the use of consultation now that the franchising director has made up his mind and pre-empted any alternatives?
Viscount Goschen: My Lords, the franchising director has taken fully into account the factors mentioned by the noble Lord. No final decisions on ScotRail's PSR have yet been made. There will be formal consultations with the rail users consultative committees, the bodies set up under the Railways Act 1993. Consultations in respect of ScotRail's PSR will be held later this year.
Lord Clinton-Davis: My Lords, why was there no consultation before the franchising director made those two critically important decisions?
Viscount Goschen: My Lords, in order to end speculation about the service the franchising director made an earlier announcement. It is clear that the service is extremely expensive to operate, uses specialised machinery that is not used elsewhere and the benefit is limited to the small number of people who use the service.
Lord Brabazon of Tara: My Lords, does my noble friend agree that from the point of view of taking cars

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off the road Motorail is almost wholly irrelevant? The total capacity of Motorail is approximately 17,500 cars per year whereas on the busiest stretch of the M.1 to Scotland the total daily traffic is approximately 120,000 cars.
Viscount Goschen: My Lords, my noble friend described the situation perfectly. Motorail represents a valuable service to the few people who use it. However, in context with the number of cars travelling to and from Scotland it is insignificant.
Lord Bruce of Donington: My Lords, is the Minister aware that his answers to the supplementary questions that have been asked from all parts of the House indicate that the privatisation programme is a lot of nonsense and that most members of the public disagree with it? It is only the Government's dogma which persists in going through the formalities of getting the Bill through the House. Why do they not ditch the whole idea?
Viscount Goschen: My Lords, I do not agree with a word that the noble Lord said. Franchising will bring considerable benefits and economies to consumers and will involve the use of private finance. We firmly believe that the franchising business will be a great success. Similar remarks were made by other noble Lords in advance of privatisations which have proved to he great successes.
Lord Renton: My Lords, is the Minister aware that when voting for privatisation I did so enthusiastically and on the assumption that what he has called "a valuable service" will be retained?
Viscount Goschen: My Lords, the service caters for few people and costs a great deal of money. The franchising director is under an obligation to spend the limited amount of subsidy that is at his disposal on the services which are most necessary.
Lord Dean of Beswick: My Lords, if and when the Government's programme for rail privatisation reaches fruition will enough trains be left running to keep the train spotters occupied?
Viscount Goschen: My Lords, yes.

Carbon Dioxide Emissions
2.53 p.m.
Lord Carverasked Her Majesty's Government:
What further measures they propose to ensure that the Rio target of reducing carbon dioxide emissions to their 1990 level by the year 2000 is met.
The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, the Government are committed to fulfilling their obligations under the Climate Change Convention which was signed at Rio. We are currently considering whether further measures are needed in the light of recent developments,
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and will also be taking account of the revised energy projections which the Department of Trade and Industry is working on.
Lord Carver: My Lords, I thank the Minister for that Answer. But does he agree that, as VAT on domestic fuel is not going up to 17.5 per cent., as the report on transport and the environment by the Royal Commission on pollution showed that the proposed periodic increases in the price of petrol and diesel would not bring about the expected reduction in CO2 emissions and as the economy is likely to grow at more than 3 per cent., the assumptions behind the Government's 1993 climate change paper have been undermined? Is it not therefore essential that they at least give Nuclear Electric the go-ahead to build Sizewell C? Like Sizewell B, which opens today, it will produce a great deal of power but with no greenhouse gas emissions.
Viscount Ullswater: My Lords, we are reviewing the impact of the measures in the climate change programme, including the VAT position, as part of the monitoring process. We shall take whatever steps are necessary to ensure that we remain on course. Our monitoring shows that we are currently on course to meet our commitments under the Climate Change Convention. Obviously, carbon dioxide emissions from the electricity sector have fallen by about 20 per cent. since 1990. That is due in part to increased output from gas-fired and nuclear power stations.
Lord Ennals: My Lords, there appears to be a degree of uncertainty in the Minister's Answer. Will he give an absolute assurance that the commitment entered into at Rio will be kept and, I hope, improved upon?
Viscount Ullswater: My Lords, the Government are fully committed to fulfilling their obligations under the Climate Change Convention. We played a leading role in the international negotiations on the convention and remain committed to active participation in the process. The UK climate change programme, which was published in January last year, sets out in full the measures aimed at returning CO2 emissions to 1990 levels by the year 2000.
Lord Campbell of Croy: My Lords, does my noble friend agree that, although opinions differ as to the extent and effects of climate change and global warming, it is in any case prudent to restrict emissions of carbon dioxide in order to avoid upsetting the balance in the atmosphere, especially when the natural cycle is being affected by the disappearance of forests and other green areas of the world?
Viscount Ullswater: My Lords, yes. My noble friend has raised an issue which needs to be taken forward on a global scale. From an environmental point of view, the Government, and I am sure the whole House, would regret the disappearance of many forest areas around the world.
Lord Ezra: My Lords, the Minister's reply indicated that the Government are contemplating further measures to achieve their emissions objective. Will he indicate

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what those measures might comprehend? Will they comprehend fiscal stimuli to improve efficiency in the home and industry?
Viscount Ullswater: My Lords, the budget for the home energy efficiency scheme, for instance, has been increased to more than £100 million in 1995–96. The scheme provides advice and grants as regards insulation and draft-proofing for low income households. The energy efficiency best practice programme aims to generate additional energy savings of £800 million. By 1994 it achieved savings of some £300 million per year, or a 2 million-tonne reduction in carbon dioxide emissions. I believe that the stimulus that those schemes have produced makes a great contribution towards the 10 million tonnes by which we have agreed to reduce our carbon dioxide emissions.
Lord Jenkins of Putney: My Lords, is the Minister aware that reducing carbon dioxide emissions by building nuclear reactors is jumping out of the frying pan and into the fire? Much more attractive alternatives are open to the Government.
Viscount Ullswater: My Lords, the noble Lord expresses his own view. There are two sides to the issue, but there is no doubt that nuclear power has a part to play in the reduction of CO2 emissions.
Lord Clifford of Chudleigh: My Lords, does the Minister agree that as regards nuclear energy, if Sizewell C and the proposed Hinkley C power station were built we could reduce the amount of nuclear powered fuel that we are importing from France and at the same time create an enormous amount of employment, certainly in the south west, which is in need of a great deal of employment?
Viscount Ullswater: My Lords, the noble Lord must be patient. The House will know that the Government are undertaking a nuclear review. They have not completed or published their conclusions and it would be premature for me to comment on the matter.
Lord Williams of Elvel: My Lords, does the Minister recognise that the Government's record on energy efficiency and the proper use of electricity is lamentable? Do the Government recognised that at every stage of the Electricity Act in your Lordships' House they resisted putting a duty on the distributors of electricity to ensure and promote energy efficiency? If the Government are so keen on energy efficiency and the proper use of electricity, why do they not restore that duty?
Viscount Ullswater: My Lords, the Government have established the Energy Savings Trust which is being funded by the electricity generating companies. That will promote energy saving in the private sector and will include options for less energy consumption.
Lord Stoddart of Swindon: My Lords, does the noble Viscount not agree that there has been a very sharp reduction in CO2 produced by power stations? The increase in such emissions does not emanate from power stations but from motor vehicles. Will the Government
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give that aspect far more attention than they are giving to the prospect of building additional nuclear power stations?
Viscount Ullswater: My Lords, in the climate change programme which was put forward by the Government, we committed ourselves to a longer term strategy of increasing transport fuel duties by at least 5 per cent. per year on average above the rate of inflation. At the last Budget, duties were raised by 8.6 per cent. above the rate of inflation. That indicates the seriousness with which the Government regard the part that transport plays in relation to CO2 emissions.

Palestinian Territories: EU Declaration
3.1 p.m.
Lord Hyltonasked Her Majesty's Government:
What response was received from Israel to the declaration by the Presidency on behalf of the European Union on the situation in the Palestinian territories, dated 5th January 1995.
Lord Inglewood: My Lords, the Government of Israel are aware of the European Union's concerns about the situation in the occupied territories, including the situation in relation to settlement building.
Lord Hylton: My Lords, I thank the noble Lord for that reply. Is it not the case that the declaration demanded a total cessation of work on expanding settlements? Will the presidency of the European Union now inform Israel that further private house building in such places as Maale Adumin, Gush Etzion and Giz'at Ze'ev will provoke financial penalties on Israel's trade with Europe?
Lord Inglewood: My Lords, the building of settlements in the occupied territories is contrary to international law and is an obstacle in the way of peace. The matter of settlements is one that has been reserved under the declarations of principle of the Oslo Agreement of 1993 until issues relating to permanent status are determined. Nevertheless, the building of those settlements is in breach of international law and we believe that it is contrary to the spirit behind the declarations of principle.
The EU troika of Foreign Ministers will visit Israel next month and that matter will be brought very forcefully to the attention of the Israeli Government. Indeed, in the following month, the Prime Minister of this country is to visit Israel and he too will be bringing forward those matters.
Lord Wright of Richmond: My Lords, in view of the Minister's very welcome reaffirmation of the Government's view that the settlement policy of the Israeli Government is illegal and contrary to international law, will he join our European partners in trying to persuade the United States Administration to follow the precedent of their predecessors in also declaring illegal the Israeli settlement policy?
Lord Inglewood: My Lords, we are at one with our European partners in our attitude towards those

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settlements. We understand that that is the view of the United States Government. Obviously it is for them to take their own decisions on those matters.
Lord Kennet: My Lords, in view of the grievous situation now developing on the West Bank, will the noble Lord say anything about the trend of British arms exports to Israel since their resumption last summer? While one can understand that any equipment which would help the Israeli Government to detect suicide bombers in bus stations is a very good kind of export, what about the more lethal equipment which I presume that we are still sending to Israel?
Lord Inglewood: My Lords, I am grateful to the noble Lord for reiterating the degree of seriousness in connection with the state of relations in Israel. I am not in a position to give the noble Lord any detailed reply about arms exports other than to say that the normal criteria obviously apply in this case.
Lord Mayhew: My Lords, has it not been clear for many years now that peace in the region will never be possible while the Israelis continue to build settlements in occupied Arab territories? The noble Lord rightly says that the Government have protested often in line with the Security Council and the European Community. But why have they always opposed bringing pressure to bear on the Israeli Government, perhaps along the lines suggested by the noble Lord, Lord Hylton?
Lord Inglewood: My Lords, I do not think it is true to say that the Government are opposed to bringing pressure to bear on Israel. In the current circumstances, where matters are extremely sensitive, it is our priority and that of our European Union partners to see whether we can proceed with the current negotiations. That is the cardinal principle behind our policy at this time.
Lord Avebury: My Lords, has the European Union noted the watering down of the safeguards against torture in the process of interrogation of terrorist suspects which was announced by the Israeli Justice Minister on 13th November of last year? Have the Government noted also any response from the Israeli authorities to a human rights Middle East report which refers to the use of torture and ill-treatment by Israelis in their interrogation of Palestinians from the occupied territories? Will the European Union consider raising those matters at the Geneva meeting of the UN Human Rights Commission?
Lord Inglewood: My Lords, I am not in a position to answer the detail of the question posed by the noble Lord, Lord Avebury. But it is a matter which is at the forefront of our concerns; that proper human rights provisions should be observed by the Israelis.
Baroness Blackstone: My Lords, given that there is now a serious danger that the peace process will stall completely, will the Minister tell the House whether the Government intend to have any discussions with the
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United States Government to ask them to put pressure on the Israelis to go back to the table and to rethink their settlement policies?
Lord Inglewood: My Lords, as I hope I explained earlier, it is a matter of the greatest concern and importance to Her Majesty's Government that the peace process continues. The House may rest assured that we shall not spare any effort to try to ensure that that occurs.
Lord Haskel: My Lords, does the Minister not agree that in spite of the wave of terrorism which is taking place, it is important for both the Israeli Government and the Palestinian Administration that the peace negotiations should continue?
Lord Inglewood: My Lords, I concur entirely with the noble Lord's remark.

Petition: Berkshire County Council
3.9 p.m.
The Earl of Carnarvon: My Lords, I beg to present a Petition from Berkshire County Council which prays that this House will urge the Secretary of State for the Environment to reject the final recommendations of the Local Government Commission in so far as they relate to Berkshire. The Petition prays also that this House will vote down any orders placed before it seeking to implement the final recommendations of the Local Government Commission in so far as they relate to Berkshire
Petition presented.

Law Reform (Succession) Bill [H.L.]
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to amend the law relating to the distribution of the estates of deceased persons and to make provision about the effect of the dissolution or annulment of marriages on wills and appointments of guardians. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Legitimated Persons (Succession to Titles) Bill [H.L.]
Lord Kilmarnock: My Lords, I beg to introduce a Bill to enable legitimated persons to succeed, and to transmit a right to succeed to dignities and titles of honour; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Kilmarnock.)
On Question, Bill read a first time, and to be printed.

Business of the House: Debates, 1st February
3.10 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Northbourne set down for tomorrow shall be limited to 2 hours and that in the name of the Lord Allen of Abbeydale set down for the same day to 3 hours.—(Viscount Cranborne.)
Lord Bruce of Donington: My Lords, I am all in support of the Motion on the Order Paper which relates to the Business of the House. However, I should be glad if the noble Viscount the Leader of the House would explain to us the specific authority claimed by the Government in respect of the Unstarred Question this evening which is tabled in the name of the right reverend Prelate the Bishop of Norwich by which the debate is limited to one hour. Where is the specific authority for that step to be taken? I have in mind the very great importance of the matters that are the subject of the Unstarred Question for the whole issue of the preservation of historic buildings in this country and the ecclesiastical and general culture that is associated with them.
Lord Gisborough: My Lords, in view of the fact that there are 21 speakers for the first of tomorrow's debates and only 15 for the second, will my noble friend have further discussions through the usual channels to see whether he can revise the time limit for the short debate which has the greater number of speakers?
Viscount Cranborne: My Lords, with the leave of the House, I can readily understand the motives of both my noble friend and the noble Lord for intervening in the Motion. Perhaps I may, first, address the noble Lord, Lord Bruce of Donington. As I am sure the noble Lord will know, a recent amendment was made to the Companion to the Standing Orders at page 83, which reads:
"On an experimental basis, Unstarred Questions, time-limited to one hour, may be asked during dinner adjournments. These should be limited in scope. The questioner is allocated 10 minutes and the Minister replying 12 minutes".
Noble Lords will be aware that recently, following the Third Report of the Select Committee on Procedure of the House for the year 1993–94, that experiment was made permanent with the agreement of your Lordships. I should add that the right reverend Prelate was very clear in his desire to introduce such a debate—on a question which, quite rightly, exercises the minds of many noble Lords—that a firm date should be secured well in advance of the time.
Therefore, although the right reverend Prelate was well aware of the risks attendant on securing such a fixed date—namely, that many people would want to speak in a very short debate—he preferred to do so, as I understand it, rather than take the risks attendant upon going for a balloted Motion.
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I must tell my noble friend Lord Gisborough that we are discussing a Motion which was put forward by the Cross-Benches. I believe that it has been made clear by the representatives of the Cross-Benches, through the usual channels, that that is the balance of time that they would prefer. I am sure noble Lords would agree with me when I say that it would be discourteous of the rest of the House to interfere with the preferences of Members of the Cross-Benches, who form such a substantial part of the Chamber, when they have expressed such a desire for the management of the time which has been allocated to them. I hope that my noble friend will accept that that is something to which I believe the House should adhere.
Lord Bruce of Donington: My Lords, I am most grateful to the noble Viscount for his response. Is the noble Viscount aware that I was merely seeking to be helpful to Her Majesty's Government to enable them to get out of their difficulties in the matter? However, I should stress that my services will be available on another occasion when I hope to be helpful to the noble Viscount.
Viscount Cranborne: My Lords, I am always extremely grateful to any offers that the noble Lord, Lord Bruce of Donington, makes when he wishes to be of help to the Government. I particularly note the fact that, unlike many consultants who are employed by Her Majesty's Government, the services of the noble Lord come free.
Lord Monkswell: My Lords, can the noble Viscount comment on the fact that, while the Order Paper suggests that speakers in this evening's Unstarred Question will be allocated two minutes so as to fit in to the one-hour schedule, when an Unstarred Question was scheduled on a previous occasion to take place during the dinner hour, the rest of the Business of the House was completed before that time, thus leaving the Unstarred Question, effectively, without a time limit? Will the House take note of the latter as a possible precedent which might be used this evening?
Viscount Cranborne: My Lords, I am most grateful to the noble Lord, Lord Monkswell. My understanding—and I am open to correction in such matters—is that, under the circumstances that the noble Lord predicates, the hour is extended to an hour-and-a-half. Although in this particular instance I believe that noble Lords would not find themselves with very much more time at their disposal, it may be worth underlining to your Lordships that the risks associated with the procedure have always been made clear. In particular, the Select Committee recommended that noble Lords should, perhaps, consider carefully before adding their names to a list of speakers, the length of which already indicates that speech times will be short. If the procedure is to work, it is, to a degree, in your Lordships' hands; as, indeed, is the case with all things in this House.
On Question, Motion agreed to.

Environment Bill [H.L.]
3.16 p.m.
Viscount Ullswater: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Viscount Ullswater.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
[Amendments Nos. 191A and 191B not moved.]
Lord Beaumont of Whitleymoved Amendment No. 191C:
Before Clause 35, insert the following new clause:
("Emergency drought orders
In section 73 of the Water Resources Act, 1991 (power to make ordinary and emergency drought orders), after subsection (2) (b) there shall be inserted—
"(c) is satisfied, after consulting the Environment Agency, that the deficiency is such as to be likely to threaten the environmental well-being of flora and/or fauna."").
The noble Lord said: Looking at the long list of groupings that is before the Committee today, I believe that it would be unwise to wish your Lordships Kung hei fat choy, although it does look as if it is a good start to the Year of the Pig.
The purpose of the amendment, and of many of the others which are to be discussed in the grouping, is to enable the Secretary of State, or the agency, to issue drought orders on environmental grounds. The Water Resources Act 1991 enables the Secretary of State to issue drought orders whereby water abstraction from specific sources may be limited or prevented during a period of drought. However, the Secretary of State may do so only on the grounds that a deficiency has been wrought in the supply of waters due to a lack of rain. Requests for such orders to be made come either from the NRA or a water undertaker.
The legislation initiating the new agencies would have been an ideal opportunity to offer further protection to the environment by enabling drought orders to be made on environmental grounds; indeed, it would be and is an ideal opportunity. Situations often arise where a serious lack of rain has caused, or threatens to cause, serious damage to the environment. Of particular vulnerability are sites of special scientific interest.
Such protection could be offered by amending Section 73 of the Water Resources Act 1991, which deals with,
"power to make ordinary and emergency drought orders".
The environment agency should have the ability to issue drought orders where it believes that there is a risk to "flora and/or fauna". I beg to move.
Baroness Nicol: I wish to speak to my amendments which are grouped with this one. May I first say that I support the amendment to which the noble Lord, Lord Beaumont, has just spoken. I have a similar one which I shall deal with briefly when we come to it.
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My Amendment No. 203 is aimed at managing water resources so as to protect nature conservation interests. The amendment would allow statutory nature conservation agencies to request revocation or modification of an abstraction licence where it appeared that the licence was causing significant damage to a site of special scientific interest.
Section 52 of the Water Resources Act 1991 allows the NRA or the Secretary of State for the Environment to formulate proposals for revoking or varying an abstraction licence. The owner of fishing rights in an inland water supply can apply for such revocation or variation. The amendment would allow the statutory bodies to make a similar application to that of fishing interests to protect sites for which they have a statutory responsibility.
Amendment No. 204 concerns licences of right and licences of entitlement granted under the water Acts of 1963 and 1989. Abstraction levels for the licences were set at relatively high levels to allow for possible future demand. There was not at that time any consideration of environmental impact. The system, I understand, has had considerable adverse effects on SSSIs and on some rivers. The RSPB, which supports the proposed amendments, suggests that over 100 sites of special scientific interest and 40 rivers have been damaged. The licences have also created difficulties in re-allocating water between users in an effort to balance supply and demand. Amendment No. 204 would ensure that abstractions were formally reviewed by the agency within five years to take account of the environmental duties of the new environment agency. Has the Minister considered the matter? Does he intend to do anything about the licences even if he cannot accept the amendment?
Amendment No. 205 seeks to clarify the emergency drought orders. The noble Lord, Lord Beaumont, dealt quite extensively with that; I shall therefore be brief. I notice that the amendments in the names of the noble Lord, Lord Crickhowell, and the noble Viscount, Lord Mills, which appear much further on in the Marshalled List, are on the same lines. It seems important that the environmental considerations of drought orders should be taken into account.
Amendment No. 207 seeks to allow the Secretary of State to set mandatory leakage targets for water undertakers. This touches on discussions we had earlier in the Bill, but I remind the Committee that about a quarter of treated water is lost through leakage. The setting of targets is supported by the National Rivers Authority, the Royal Town Planning Institute, the Association of County Councils and the Nature Conservancy Council. Diminishing the rate of loss would obviously be of benefit in reducing demand on existing supplies and in the creation of new sources which in turn would lead to a reduction in pressure on the natural environment.
Finally, my Amendment No. 222 seeks to introduce an incentive charging scheme for abstraction licences. The present cost recovery system does not encourage the abstractor to conserve water. Incentive charging could be a useful tool in encouraging the wiser use of water. I understand that following consultation on the

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paper Using Water Wisely the Government are considering the possibility of introducing incentive charging for abstractions. I hope that the Minister will be able to tell us how far that has progressed. I hope he recognises that the Bill provides an opportunity to introduce such a system if that is what the Government intend.
Lord Stanley of Alderley: Perhaps I should declare an interest. I am an abstractor. Unless I am mistaken, the NRA has powers to take environmental measures. I should have thought that those powers would be transferred to the agency. Therefore I do not see any need for the amendment. While on the subject of abstraction, perhaps I should mention irrigation. I know that irrigation is hated by many because it is thought that it increases yield. Actually that is not its main purpose. If farmers are not allowed to irrigate, none of the supermarkets will take our produce. One may think that that is wrong. I think that it is wrong, but that is the fact of the matter. Therefore we will have imported substitutes for what we can produce ourselves. I cannot see the necessity for the amendment.
Baroness Hilton of Eggardon: I wish to speak in general in support of the amendments spoken to both from the Liberal Democrat Benches and by my noble friend Lady Nicol. Water is one of the essential elements of life, not just for ourselves but also for many wetland plants and animals. It is becoming an increasingly scarce resource, and not just in this country. However, one would not think that that was the case given the current floods in northern Europe. However, it is thought that in the next century countries will fight over water rather than oil. Therefore the more rigorous we can be in preserving water and in ensuring that it is not wasted and that abstraction levels are kept at a minimum, the better placed we will be to cope with shortages and with droughts. I support this group of amendments.
Lord Gisborough: The NRA is surely already responsible for the protection of water and is able to revoke licences. That power is being handed to the agency. Therefore surely the amendment is not necessary.
3.30 p.m.
Viscount Ullswater: In replying to this amendment I am speaking also to Amendments Nos. 203, 204, 205, 207, 222, 377A, 378ZA and 378ZB. The amendments are concerned with changing the powers of the Secretary of State to make drought orders on environmental grounds. Amendment No. 191C introduced by the noble Lord, Lord Beaumont, seeks to permit drought orders to be made to provide means of protecting the aquatic environment by extending the grounds on which drought orders can be made. Amendment No. 205 introduced by the noble Baroness, Lady Nicol, similarly seeks to permit drought orders to be made to provide means of protecting the environment as well as on the present grounds of a threat to public water supplies. Amendment No. 378ZA in the names of my noble friends Lord Crickhowell and Lord Mills is similar to Amendment
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No. 191C in that it seeks to widen the grounds under which a drought order can be made to include protection of the aquatic environment.
At Second Reading my noble friend Lord Crickhowell drew attention to the absence of any such provision in spite of frequent requests from the NRA for it. We are now faced with no fewer than three attempts to rectify the matter. Experience has shown that it can be necessary to take action to preserve aquatic environments during droughts. However, the department is advised that the present wording of Section 73(1) of the Water Resources Act 1991 does not permit a drought order to be made for the preservation of an aquatic environment: the trigger is,
"a serious deficiency of supplies of water,"
which, in the general context of the 1991 Act, has to be taken to refer to the activity of supplying water. Amendment No. 205 is defective in that it would not have the intended effect but would probably limit the making of any drought orders to cases where both public supplies and an SSSI were threatened. While I am sympathetic to the idea behind the amendments I would hope that, in asking noble Lords not to pursue them they will take some comfort in my undertaking to further consider the amendment of my noble friend Lord Crickhowell which goes some way towards our requirements on the issue.
Amendment No. 378ZB also seeks to make changes to the powers for dealing with drought orders in that it seeks to give the new agency powers to issue drought permits. A high proportion (about 60 per cent.) of drought orders made are in effect temporary substitutes for licences to abstract water or temporary amendments of the conditions of such licences. Those powers would allow the agency to issue drought permits under similar circumstances as currently apply to the making of ordinary drought orders. They would allow the agency to authorise changes to compensatory abstraction and discharge conditions affecting mainly either rivers or reservoirs. We have already published our intention to bring forward changes of this nature and are broadly in agreement with the amendment. The Government are therefore happy to give it further consideration.
I now come to the second tranche of amendments in the group concerned with changing the system of licensing the abstraction of water from surface waters and ground water.
Amendment No. 203 introduced by the noble Baroness, Lady Nicol, aims to give English Nature and its Welsh counterpart the power to seek the review by the agency of any water abstraction licence where they think this necessary.
At present the agency will inherit from the NRA full discretion to undertake a review of any licence, either on its own initiative or at the request of anyone else, and to propose any variation that it thinks appropriate. Given its duty to conserve the aquatic environment, it would seem necessary for it to take seriously any request from a statutory nature conservation body. Furthermore, the Secretary of State will continue to be able to direct the agency to carry out such a review. If

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English Nature is dissatisfied with the response from the agency it can ask my right honourable friend to intervene.
We therefore see no reason for legislation to restate what is already the case. We think that it would be retrograde to do so by specifying a requirement for the agency to act on a request from a statutory conservation body since that might be used by a licence holder to justify objections to doing so at the request of a non-statutory body such as the RSPB.
The second amendment on water abstraction licences tabled by the noble Baroness, Lady Nicol, (Amendment No. 204) seeks to pre-empt any such applications from the conservation agencies by requiring the agency to review all existing licences of right. The noble Baroness asked whether the Government had considered that.
The suggested duty to review all licences of right within five years seems to us undesirable. First, the proposal would require the agency to review a very high proportion of all licences. There were initially just under 50,000 licences of right: there are still only just over 50,000 licences in total. Few of those licences seem likely to give grounds for serious anxiety. Such a review would therefore impose substantial costs not merely on the agency but also on the licence holders. Secondly, such a blanket approach would cut across the more selective system set up by the NRA. That programme requires the NRA to inspect about 2,000 highly critical licences and about 13,000 critical licences every year. If those inspections show grounds for concern negotiations for change can take place and, in the last resort, proposals for compulsory change can be developed. It seems far better to concentrate the available resources on licences identified as critical, rather than to look at those that merely have a particular history.
Amendment No. 377A in the names of my noble friends Lord Crickhowell and Lord Mills would correct the confusion caused by the 1991 consolidation over succession to water abstraction licences. We have already said that it was our intention to correct that inadvertent change to the legislation, caused as a result of the 1991 consolidation, as soon as the legislative opportunity arose. While the amendment affords the ideal opportunity, at this stage I can only undertake to give it further careful consideration.
Amendment No. 207 would permit the setting of mandatory leakage targets for water undertakers. Leakage control targets need to be set at a level which is the lowest reasonably achievable, not for the water company as a whole but in each water supply zone. The Ofwat consultation paper Paying for Growth emphasises that it will in general require an assessment to be carried out by a water company of the relative merits of demand management measures, including leakage control, before taking new resource development into account in setting price limits. The NRA has also made it clear that it will not normally grant further abstraction licences for additional water to a water company unless leakage levels in the supply area are at the lowest level that is economically reasonable. Persistent failure to deal with leakage levels might even result in a review of existing
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licences. Finally, the actual working of the non-domestic rating system as applied to water companies provides a significant economic incentive to reduce leakage. I suggest that such steps, which are already being taken within the existing legislation—and which are already resulting in substantial reductions in leakages—are better than a new system requiring universal setting of an overall target for the whole of a company.
Finally in this group of amendments, Amendment No. 222 in the name of the noble Baroness, Lady Nicol, would enable the agency to promote a charging scheme for water abstraction which would allow charges to be more than is required to recover the costs of running the licensing system, and would enable the Secretary of State to direct the agency to consider terminating or reviewing the water abstraction charging scheme.
The second proposal in the amendment is clearly otiose: the general power of direction in Clause 38 would cover this. The first proposal is, however, much more interesting. In effect, it would allow the agency, with the approval of the Secretary of State, to introduce an economic instrument to regulate the allocation of water rights.
This raises major questions. There has always been a close link between property rights and rights to use water. A water abstraction charge that did more than recover the costs of administering the system could be represented as charging people for the use of their own property. That is not to say that there may not be arguments for such a charge, but they would have to be considered very carefully before it was introduced. We do not think that it would be proper to leave decisions on the form which it might take to the agency: it raises questions which go much wider than its interests. The Government have undertaken to publish a consultation paper on the use of economic instruments to regulate both discharges into water and the abstraction of water. I suggest that it would be better to wait until that paper is available and we have had the benefit of comments from all those interested before we take a decision on the proper form of an economic instrument in this field. Therefore, I ask the noble Baroness to withdraw that amendment, together with all the others.
Baroness Nicol: I am very grateful for the Minister's full reply. However, I may have misunderstood one point. In relation to licences of right, who can trigger a review other than the inspectors? Can anyone do so?
Viscount Ullswater: If I recall correctly what I said, anyone can trigger such a review.
Lord Beaumont of Whitley: I am grateful for the Minister's reply. If I understood him correctly, he gave an undertaking that the Government are interested in the first amendment and those which fall into the same category and will look at them again. That being so, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
Clause 35 [Incidental general functions]:
Lord Carmichael of Kelvingrovemoved Amendment No. 192:
Page 29, line 18, leave out ("functions") and insert ("purpose").
The noble Lord said: The purpose of the amendment is to flag the potentially wide-ranging powers of Clause 35. As the clause is currently drafted, many of the agency's functions have yet to be decided and so will be determined under ministerial guidance. Therefore, enabling the agency to do anything which is "conducive or incidental" to its functions is a very wide-ranging power. The amendment alters the emphasis away from the functions of the agency to the purpose of the agency, on the understanding that that purpose is integrated environmental protection management enhancement. We believe that that would be much better than referring solely to the functions, which have not yet been decided. I beg to move.
Viscount Mills: I should like to speak to Amendment No. 193 in my name and that of my noble friend Lord Crickhowell. My noble friend Lord Crickhowell apologises to the Committee for the fact that he is unable to be present today. It therefore falls to me to present this amendment and the other amendments in our names.
The purpose of Amendment No. 193 is to ensure that in all its main functions the agency would have a right to take civil action in the courts should that be necessary. The current situation is anomalous. The NRA has a common law right to take out an injunction to protect a public right but needs the consent of the Attorney-General. The waste regulation authorities are under no such constraints, while Her Majesty's Inspectorate of Pollution has specific powers to apply directly to the High Court in order to back up its enforcement powers.
By way of example I should like to refer to the Durham coalfield. When British Coal was closing the Durham coalfield, it proposed that it would switch off the pumps used to pump out minewater. There was no statutory restriction on that due to the defence of Section 89 of the Water Resources Act 1991. As a result the NRA considered instituting civil proceedings. However, given its existing powers, it was advised that it would need the Attorney-General's consent to do so. The delay in obtaining that consent would obviously have led to an increased risk of pollution occurring. Happily an understanding was reached between the NRA and British Coal which was not tested in the courts. It was a happy outcome; but that may not always be the case.
Similar issues have arisen with respect to local government. However, Section 222 of the Local Government Act 1972 expressly provides for local authorities to institute proceedings in their own name. They can now obtain injunctions without the consent of the Attorney-General. I ask the Minister carefully to consider the amendment which would harmonise not only the powers given to the different functions within
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the new agency but indeed the power between the different public bodies with a common responsibility to safeguard public rights and prevent public nuisance.
Viscount Ullswater: Clause 35(1) allows the agencies to do anything calculated to facilitate the carrying out of their functions. Amendment No. 192, moved by the noble Lord, Lord Carmichael, contains a drafting change substituting "purpose" for "functions". I imagine that the noble Lord's aim is to extend the power under Clause 35(1) but I fear that the effect would simply be to leave its scope uncertain.
The noble Lord indicated that he preferred the word "purpose". Clauses 1 and 20 define the purpose in relation to the discharge of each agency's functions. The agencies cannot do things for which they have neither powers nor duties. The agencies' functions are the totality of their powers and duties. The clause as drafted will therefore enable the agencies to do anything calculated to facilitate the carrying out of anything that they can properly do. It is difficult to see how it could be appropriate to go further.
Similarly, I do not believe that there is any need for Amendment No. 193, moved by my noble friend Lord Mills. Each new agency will be able to commence civil proceedings through its general powers in Clause 35(1) (a). An unfortunate side effect of the amendment, however, may be to give agency officials standing in proceedings on matters for which they would not have proper locus under normal court rules. I therefore hope that both noble Lords will see fit to withdraw the amendments.
Lord Peyton of Yeovil: Perhaps I may ask my noble friend for clarification. He stated that the amendment moved by my noble friend Lord Mills would give the agency the right to appear where that was not allowed for by court rules. If I have understood it correctly, that seems a strange argument. My noble friend who moved the amendment has a point. I hope that my noble friend on the Front Bench will look at the matter again.
Viscount Ullswater: Of course I undertake to look at the issue again. When I was briefed this morning, I questioned carefully the wording to which the noble Lord draws attention. I have been advised that the words,
"and appear in any legal proceedings",
would give the agency officials standing in proceedings for which they would not have a proper locus under normal court rules.
I have also said that with regard to civil proceedings I believe that that power is now awarded to the agency.
Viscount Mills: Before my noble friend sits downs, perhaps I may say that I am grateful for those comments. I shall be grateful, too, if he will look again at the issue before Report stage.
Lord Carmichael of Kelvingrove: I am slightly disappointed. I had sought to explain that "functions" have not yet been fully decided. They have yet to be considered and expanded by the department. Therefore the functions could change a little. We are referring to the purpose of the agency.

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However, that is a matter to which we can return later. It is not simply a semantic point. It is an important matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.45 p.m.
[Amendment No. 193 not moved.]
[Amendment No. 194 had been withdrawn from the Marshalled List.]
Lord Lucas of Chilworthmoved amendment No. 195:
Page 29, line 23, at end insert:
("(c) without prejudice to the generality of that power, may, for the purposes of, or in connection with, the carrying out of those functions, establish subsidiary companies.").
The noble Lord said: The amendment proposes that the agencies should have a specific power to set up subsidiary companies. I understand that there are similar provisions in the Local Government Act 1972 and the Local Government and Housing Act 1989, although those provisions are somewhat disputed. In this case the waste regulation authorities are the local authorities and presumably local authority powers would move to the new agency. Since the powers to which I have referred are imprecise, it seems necessary to clarify the position.
The Committee may recall that during Second Reading I discussed the great difficulty for the waste industry in meeting the obligations put upon it by the waste regulatory authorities: to provide moneys in whatever amounts to an escrow account at the beginning of and during a licensed period to ensure that at the time the site is closed there will be sufficient moneys to meet any obligation which may occur, at whatever cost and at whatever time. The timing may cover two or three generations and may be for remedial effect. The WRAs are currently asking for sums of the order of £4 million for an average site.
There are many sites across the land authorised and under licence. But it is proving nearly impossible to find a solution. It may be reasonable to say that so far it has been impossible to find either an insurance company or a bank which will underwrite those sums. It falls therefore on the companies to provide cash. One can easily see that £4 million for an average site amounts to a lot of money across the industry. It is money that is totally frozen; it cannot be banked or used for any other purpose.
Following my remarks at Second Reading, my noble friend the Minister wrote to me on 25th January, for which I am grateful. However, I am sorry to say that his letter shed no great light on the matter, other than he said that discussions to develop arrangements which would enable applicants for waste management licences to meet the financial provision requirements of the legislation were in hand.
"The Department welcomes these moves and is keeping in touch with the discussions… There will certainly be other means of meeting this requirement, one of which may be a mutual fund arrangement".
That is so, but seems to me that, if the agency had the opportunity to set up a subsidiary company—which might well be the fund managers—this would provide
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another opportunity. There is no thought behind the amendment that the industry should escape its obligations in licensing matters under the 1990 Act. The amendment would, therefore, merely give the agency an opportunity to set up a company if that were thought desirable by both the agency and the industry. I beg to move.
Viscount Ullswater: The effect of Amendment No. 195, introduced by my noble friend Lord Lucas of Chilworth, would be to provide specifically, as part of each new agency's general powers, for an agency to be able to establish subsidiary companies in connection with the carrying out of its functions. We can see no reason why, for the effective discharge of its functions, an agency should need to establish such companies. Furthermore, those functions are to be conferred on the agencies. The public needs to be clear as to who it is that has the responsibility for environmental regulation. It would be wholly inappropriate for the agencies to be able to set up subsidiary companies to perform some of their functions.
However, my noble friend went on to explain that the motivation behind this amendment was to provide for the new agencies to be able to establish a subsidiary company for the purpose of managing a mutual fund by which waste management operators who contribute to the fund would be able to meet the financial provision requirements on waste management licensing. A person wishing to obtain a waste management licence must satisfy the waste regulation authority—in due course the appropriate agency—that he has made financial provision which is adequate to discharge the obligations arising from the licence.
My noble friend indicated the sum of money that is being talked about. The statutory guidance issued to waste regulation authorities by my right honourable friends the Secretaries of State explains that there are a number of ways of doing that. One means identified is a mutual fund.
I am aware that the National Association of Waste Disposal Contractors put considerable effort into the development of such a fund in advance of the introduction of the new waste management licensing arrangements in May last year. I understand that the proposal was not taken forward.
I know that the waste regulation authorities and the National Association of Waste Disposal Contractors are working together to try to develop an alternative scheme which would offer one means of meeting the financial provision requirements of the legislation. It would be quite possible for such a scheme to be based on the concept of a mutual fund. Clearly the agencies, as regulators, would take a close interest in any such fund designed to provide resources to meet the long-term obligations of licences which remain the responsibility of the waste management operators. It would not, however, be necessary for such a fund to be managed by a subsidiary company of an agency. Furthermore, it would be inappropriate for either agency to manage a fund which was intended to take on responsibility for licence obligations along the lines of the scheme proposed by the association. I see no reason why such

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a scheme could not be developed without the need to involve subsidiary companies of the new agencies. I therefore ask my noble friend to withdraw his amendment.
Lord Lucas of Chilworth: I am grateful to my noble friend for his full response, although I am disappointed in it. He mentioned sums of money "being talked about"—those were his words—but it is not a matter of talking about the sum. A Cambridgeshire firm was required by the waste regulation authority, which was the county council, to provide £1.6 million for a comparatively small site. I do not believe that the Government realise the great difficulty that could be met by setting up what might be called a mutual fund—in other words any other funding arrangement—to meet the obligations for which the industry is quite prepared to pay. It seems to me that if the agencies were given the power, they could accept or reject the responsibility and no one could say any more about it. But to deny them the opportunity of assisting in the setting up of a fund seems to me a negative approach.
I do not believe that I can let the matter go like that, although I do not propose to divide the Committee this afternoon because I wish to study carefully what the Minister said. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvelmoved Amendment No. 195A:
Page 29, line 23 at end insert:
("() without prejudice to the generality of that power, shall, for the purposes of, or in connection with, the carrying out of those powers promote energy efficiency.").
The noble Lord said: I wish to move this amendment standing in the names of my noble friend Lady Hilton and the noble Lord, Lord Beaumont of Whitley. It may be for the convenience of the Committee if I also speak to Amendments Nos. 198, 199 and 200.
This is an important group of amendments, although at this stage I regard them as probing. The reason I do so is that I wish to explore how far the Government will move along with us in setting a different agenda for the agency from the rather limited one which the noble Viscount set out on Second Reading when he introduced the Bill.
Clause 35 gives us an opportunity, if we wish, to insert a number of other functions which are relevant to the environment and which could be performed by the agency. They are the subject of the amendments to which I am speaking this afternoon.
First, I refer to Amendment No. 195A. At Question Time today the noble Viscount and I agreed on one thing: efficiency in the use of energy is of vital importance in sustainable development and the Rio plan, if I may call it that. The burning of fossil fuels for energy by industry and in our power stations is the largest source of UK carbon dioxide emissions. Carbon dioxide is the most important greenhouse gas causing climate change. Therefore, it is a vital element in the environment, in the wider sense of the word.
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The UK is, of course, a party to the United Nations Framework Convention on Climate Change. Under that convention the UK is required to return its emissions of carbon dioxide to the 1990 levels by the year 2000. One of the major control operators in the programme is HMIP. The chief inspector of HMIP has said that it will be an inspectorate that will have to deliver the CO2 targets for this country.
Energy efficiency is widely recognised as being the most cost-effective means of reducing carbon dioxide emissions: the improved use of electricity, the improved use of any substance which, when burnt, emits carbon dioxide. It therefore seems to us to be important that the new agency—which, after all, will incorporate HMIP within itself—should have a central role in monitoring and indeed promoting energy efficiency. That should be one of the functions that both agencies should use when exercising their powers. If we were to give that remit under Clause 35, it would improve the profile of the agency as we see it.
To refer to Amendment No. 198, as I mentioned at Second Reading, there has been considerable progress—not least through the energies of the Confederation of British Industry—in making sure that companies take account of and start to report the environmental effects of their activities. There is within the CBI an environmental group, which—and I hope that I am not saying anything out of turn—is making very good progress. A number of companies have signed up for that group. One of the conditions for signing up is that you have to have a director on the board who is specifically responsible for environmental matters; you have to have an environmental audit, and all sorts of other things. I should like to see the two agencies that are being set up in this Bill promote this sort of activity. An important function that the two agencies could assume is to encourage companies to report the environmental effects of their activities. That is the objective of Amendment No. 198. I do not see that any Member of this Committee could possibly disagree with the thrust of that amendment.
Turning for a moment to Amendment No. 199, I would have thought that it is, again, an amendment which every Member of this Committee would encourage. As I said at Second Reading, we have an enormous opportunity in this country of being in the forefront of clean technologies. Such an agency as we propose to set up—not the agency that the Government propose to set up, but the one that I should like to see set up—should have a function to promote the development in the United Kingdom of clean technology and to encourage its export. We have to be in the forefront of such technology and be able to sell it to other countries, where it will be sorely needed if the Rio targets are to be met, as we hope they will be.
Amendment No. 200 is slightly more modest. It simply seeks to put the drinking water directorate into the agency. The drinking water directorate, as the Committee will know, has been the object of some controversy over the years. On these Benches we are not entirely happy that it is working to our satisfaction. For instance, one environmental organisation describes the drinking water inspectorate as a "dormant

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watchdog". While that may be overstating the case, there is some point in incorporating into the agency what the drinking water inspectorate does at the moment.
In moving Amendment No. 195A and speaking to the others, I come back to where I started. This is an agenda for the agency which is rather more forward than the agenda that the Government have announced. The Government's agenda is simply to merge three organisations which already exist. Our agenda is to make this agency a powerful environmental agency. It is on that basis that I beg to move Amendment No. 195A.
4 p.m.
Viscount Ullswater: The amendments in this group seek to place a variety of additional duties on the agencies. The noble Lord, Lord Williams, indicated that these were probing amendments. He also indicated that in his view the agencies should have a different agenda; namely, to be made into a much more powerful environmental agency. I have to indicate to the noble Lord that the Government have considered many of the things that he wished the agency to do. But during the course of my remarks I shall indicate some of the reasons why we did not feel that it would be appropriate for that agency to undertake those duties.
Amendment No. 195A would require the agencies to promote energy efficiency. The Government attach great importance to the efficient use of energy. It saves money which could be used to develop businesses, improve homes and living standards and boost the economy. It helps to protect the environment by reducing the threat of climate change—all the things that the noble Lord indicated were important, and I agree with him. It also helps us to carry forward our sustainable development policy, changing people's culture by promoting realistic ways of achieving development at lower cost to the environment.
But, the new agencies will have specific tasks related to environmental regulation. The legislation should concentrate on these primary functions, leaving it to others such as the Energy Saving Trust and the regulators of the gas and electricity industries to promote the efficient use of energy. The noble Lord proposes that that should be a requirement of the agency; but I believe that there are separate bodies of legislation which deal with these issues.
Amendment No. 198 seeks to place a duty on each new agency to promote the proper reporting by private companies of the environmental effects of their activities. The noble Lord made reference to making a corporate commitment, which is what companies undertake at the moment. This kind of reporting on environmental performance is something we would undoubtedly wish to encourage, and we would wish to see the development of business-led good practice. But the agencies will not have dealings with all companies, and there seems no reason for singling out those with whom they will have dealings for special treatment. Nor is it clear what in practice this duty would entail. It is of course right that in seeking authorisations for potentially polluting processes, companies should assess and provide information on environmental impacts. This is
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why the Environmental Protection Act 1990 provides for this. But I believe that the proposed amendment could lead to additional and unjustified burdens on both the agencies and on industry.
Amendment No. 199 seeks to place a duty on the agency to promote the development and encourage the export of clean technology. In exercising its IPC functions, each agency must encourage the use of the best available techniques not entailing excessive costs (the BATNEEC techniques), and the concept of best practicable environmental option underlies many of the agencies' functions. BATNEEC in itself encourages innovation, and this seems the appropriate way for regulatory bodies such as the agencies to encourage clean technology. In addition, one of the objectives to be included in the national waste strategy under Clause 75 will be to encourage the prevention or reduction of waste through the development of clean technologies. However, the stand alone duty proposed by this amendment appears inappropriately wide-ranging and would go well beyond this.
The purpose of Amendment No. 200 appears to be to make the new agencies responsible for the inspection of drinking water. The Government considered whether or not the drinking water inspectorate, which is presently part of the Department of the Environment, should be transferred to the proposed new environment agency for England and Wales. Its conclusions, having considered carefully the responses to our consultation document, were that such a transfer of functions should not take place because drinking water quality relates to public health rather than to the environment.
The amendment is a little confusing, because it refers to the "functions for inspecting drinking water assigned to the National Rivers Authority by Section 86(1) of the Water Industry Act 1991", and, so far as I am aware, there is none. Section 86(1) of that Act does allow for the appointment of technical assessors to advise the Secretary of State on drinking water matters, and it is under that section that the present chief inspector is so appointed. The amendment therefore proposes the transfer of functions which the NRA does not have.
I do not quarrel with the noble Lord concerning the technicalities of the amendment: I understand the purpose. I am also a little unclear about the intended scope of the amendment because it refers to "each" agency, which implies in context that SEPA is also to have the powers of the National Rivers Authority transferred to it. But, for the record, I should make it clear that in Scotland, where the Scottish Office Environment Department is responsible for drinking water quality legislation and its enforcement, no changes in the existing arrangements are envisaged.
I hope, in view of what I have said, that the noble Lord will feel able to withdraw his amendment.
Lord Renton: I too hope that the noble Lord, Lord Williams of Elvel, will withdraw his amendment. I respect his motives. The matters that he has mentioned in the four amendments which he has on the Marshalled List are important matters. But I think that, if we wish this new environment agency to succeed, we must not turn it into too great a mammoth. It is going to have

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vast responsibilities as it is, as a combination of several public bodies already exercising various responsibilities. If we try to shove on to it everything we can think of, then I am afraid that the whole administration will break down.
We have to have a sense of proportion over all this. It is a fact, as my noble friend Lord Ullswater has pointed out, that with regard to energy we have other statutory requirements, as we have with regard to drinking water, and in Scotland there are the special arrangements which my noble friend has mentioned.
I really think it is best to leave things as the Government propose.
Lord Beaumont of Whitley: I should like just to comment on the noble Viscount's reply to Amendment No. 195A, to which my name is attached. If I understood the noble Viscount rightly, he is in sympathy with the general thrust of it, but thinks that it is all dealt with under other arrangements.
I have sympathy with the idea that we should not overload the Bill with extra bits which are not needed, but the point raised by the noble Lord, Lord Renton, is a slightly different one, surely: it is whether or not the environment agencies should actually perform this function that we have put down as an amendment, and which we say should be written into the Bill. One cannot at the same time say that they should not be loaded with these functions, and that they will in fact be carrying them out.
I should be most grateful if, before we come back to the Report stage, the noble Viscount would rather fill out his reply to this amendment by showing why there is no need for this particular amendment and why it is totally covered by other legislation and other arrangements. I think that would help us all a great deal.
4.15 p.m.
Viscount Ullswater: I indicated in my reply that I believe the new agencies are set up with very specific tasks which are related to environmental regulation. What the noble Lord proposes is that they should have a requirement to promote energy efficiency. I indicated that I thought this was the duty of other regulators, the regulators for the gas and the electricity industries, and that there were separate bodies of legislation which dealt with the operation of those two regulators. I felt that it was covered in legislation, and that, bearing in mind that other legislation, this would be a confusing duty for the agency to have, and I did not really believe that it should have it in the first place.
Lord Williams of Elvel: I am grateful to the noble Lords who have taken part in this short but important debate. It brings out the difference in opinion between these Benches and, I think, the Benches to my right, and certain noble Lords opposite, on the real function of these two agencies.
As I said on Second Reading, I regard the Government as adopting a minimalist approach. The noble Lord, Lord Renton, accuses me of putting everything we can think of into the agency. There we have the difference of opinion. It is not everything that
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we can think of: if I sat down with a blank sheet of paper, I can tell the noble Lord, Lord Renton, that I could think of an awful lot of other things that I might wish to put into the agency. It seemed to me that these were the fundamental things that should go into these two agencies in so far as they could do so. I accept that the drafting may not be right, and that the Scottish matter is different. But these are essential things to put into the agency if it is to be an environment agency rather than a simple merger of three existing bodies. Here, the Government and we have a very clear difference of opinion. I accept that the noble Lord, Lord Renton, is on the side of the Government in this matter.
I emphasise that, because this is going to be a recurring theme, not only during the Committee stage, where we are at the moment, but also at the next stage of the Bill—and also, I can assure the noble Viscount that when this Bill goes down to another place it will be a recurring theme, because there is a difference of philosophy between ourselves and the Government as to how we see this agency working.
The noble Viscount says that the agency would not have contact with many companies. I was rather surprised by that comment, I must say, because I should have thought that an agency which comprises the National Rivers Authority, HMIP and local waste regulation authorities, would have contact with a great many companies. Indeed, if an agency of this nature wanted to get into touch with any company, whether privately or publicly owned, I am absolutely certain they would have no difficulty in doing so.
I was also rather surprised that the theme lying behind his criticism of Amendment No. 198 was that this would be laying too many burdens on industry. As I tried to point out, the CBI itself believes that the environment and environmental considerations should be built into the centre of economic company operations. All I am doing is echoing something—not what trade unions say—that the CBI is saying, and I believe the agency should have an important function in that.
I am told by the noble Viscount that I should not insist on Amendment No. 199, because it is too wide ranging. I do not mind wide-ranging amendments for an agency such as this. Indeed, we had a debate in the course of this Committee about a possible amendment of a strategic nature, right at the beginning of the Bill, pointing out what this agency was about. That would have been a wide-ranging amendment. I am not bothered about that. I believe that the agency, if it is going to be the sort of agency we want as opposed to the sort of agency that the Government is proposing, should have wide-ranging powers and wide-ranging functions of this nature.
Lord Renton: I am grateful to the noble Lord for giving way. I ask him to bear in mind that, in asking in Amendment No. 199 that each new agency should encourage the export of technology, he is placing upon the agencies a very wide and highly technical responsibility. It is something for which I would not have expected them to have the quite large numbers of staff which would be required, and which in any event

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is the responsibility to a great extent of private agencies like the CBI and of the Department of Trade and Industry.
Lord Williams of Elvel: I am grateful to the noble Lord, Lord Renton. But that again demonstrates the difference of opinion between him and me. All Amendment No. 199 seeks to do is to "encourage" the export. If I were to table an amendment saying that the agency should discourage the export, I am sure that the noble Lord, Lord Renton, would say that that just is not on.
Lord Renton: I would not agree.
Lord Williams of Elvel: The noble Lord would not agree with me; that is absolutely right. I am saying that the agency should have a function which recognises the importance of the export if this country is to be in the forefront of clean technology.
Lord Marlesford: I have great sympathy with what the amendment seeks to achieve. But I question whether one wants to write into the statute those specific requirements. For many years I was a member of the Countryside Commission and for fewer years the Royal Development Commission under the chairmanship of my noble friend Lord Vinson. Many things were done by those two agencies which were desirable but not in the statute.
If we put in the statute a duty to promote exports we are asking for the setting up of a great bureaucracy. Therefore, though I sympathise greatly with the noble Lord in terms of what he would like to see happen in this country in terms of energy conservation and so forth, one needs to focus the function of the agency rather closely in order that it performs as well as possible. I do not believe there is a difference in philosophy between the noble Lord and myself in relation to the agency's functions; it is a matter of how one sees the style of the agency.
Lord Williams of Elvel: I am grateful to the noble Lord, Lord Marlesford. I know that he and I are in sympathy as regards the aims of the agency. I do not want to persist in this matter. This is a House of Parliament. The only opportunity the Opposition has to affect what is done in smoke-filled rooms in quangos operated by whoever it may be of the noble Lords opposite, is to put something in the Bill. That is the object of the exercise. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Greenwaymoved Amendment No. 196:
Page 29, line 23, at end insert:
("() Without prejudice to the generality of subsection (1) above, the Agency may make and carry into effect agreements with any other person, on such terms and conditions (including as to payment) as it thinks fit, with respect to the carrying out by any other person of any of the management functions of the Agency in relation to any waterway in respect of which the Agency exercises functions as a navigation authority, harbour authority or conservancy authority.").
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The noble Lord said: Amendment No. 196 is by nature a probing amendment. As I mentioned earlier in Committee, all navigation and boating interests are awaiting a consultation document from the Department of the Environment. That follows the recommendation of the environment Select Committee of another place that a review be carried out of the navigation functions of the NRA and British Waterways. I understand that that document is due fairly soon. In view of that it is difficult to comment on policy issues in relation to where navigation should sit within the Government structure.
Those bodies who look after the interests of the navigators do not at this stage want to propose any radical change. They would rather wait and see the consultation document and respond to it in a constructive way. In the meantime—this is the reasoning behind the amendment—I am seeking confirmation from the Minister that the powers contained in Clause 35 as drafted, or an equivalent power at the end of the Bill, would allow the new environment agency to delegate the management of its navigations to a third party. That would not involve the transfer of parliamentary powers or authorities for the navigations as was proposed by the noble Lord, Lord McNair. They could remain with the environment agency. Rather it would be the day-to-day management of the agency's navigations that may be subcontracted in the future to a third party.
I stress that I am not advocating such a change now. I just want to be comfortable that the legislative provisions are in place should all parties find a unanimous alternative as part of the DoE's consultation process. I beg to move.
Viscount Ullswater: I hope in replying that I can make the noble Lord, Lord Greenway, more comfortable.
Amendment No. 196 tabled by the noble Lord, Lord Greenway, would allow the agency to contract out to a third party the management functions in respect of any waterway that it enjoys as a navigation authority, a harbour authority or a conservancy authority. It refers to the agency making agreements for the carrying out by others of its management functions in respect of certain waterways.
It would not be appropriate for the agency to seek to divest itself of its statutory responsibilities. If, on the other hand, it is the intention behind this amendment that where it has those responsibilities the agency should be able to contract out day-to-day running of particular waterways to third parties, I believe that the Bill would allow appropriate delegation or contracting out of the type I have described. I hope therefore that the noble Lord will feel able to withdraw the amendment.
Lord Greenway: I thank the Minister for his reply and do indeed draw comfort from what he said. It confirms what I hoped was already written in the Bill. In view of that, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
The Earl of Lindsaymoved Amendment No. 197:
Page 29, line 24, leave out second ("the") and insert ("each new").
The noble Earl said: Amendment No. 197 would extend to SEPA the duty on the environment agency in England and Wales to provide advice and assistance to the Secretary of State or the Minister as requested. It corrects an erroneous reference to a single agency in a provision which should apply to both. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 198 to 200 not moved.]
Baroness Hamweemoved Amendment No. 200A:
Page 29, line 41, leave out ("may") and insert ("shall").
The noble Baroness said: In moving Amendment No. 200A I shall speak also to Amendments Nos. 200B, 201A, 224, 224ZB, 224ZD and 224ZF. Those are amendments directed at providing affordable access to information and therefore genuine open government rather than merely lip service.
The first amendment seeks to change subsection 35(b) so that each of the agencies is obliged to make available the results of its research and other matters rather than it having the discretion to do so. The second of the amendments is to provide for a reasonable fee rather than again leaving the appropriate fee to the discretion of the agency.
I tabled the amendments particularly in the light of work undertaken recently by the Campaign for Freedom of Information as regards the charges made by government departments in response to requests for information under the new code of practice on access to government information—a code which is supervised by parliamentary ombudsmen and which promises more openness in Whitehall. My attention to its work was attracted by a short press item which referred to what the campaign describes as being the worst example. Sadly, it is the National Rivers Authority, whose photocopying charge for information is £100 a page for an A3 photocopy and £50 a page for an A4 photocopy. The NRA's comment was that its policy is to properly maximise income. I dare say that some noble Lords would attack its policy on the basis of a split infinitive, but that may be the fault of the Campaign for Freedom of Information.
Her Majesty's Inspectorate of Pollution indicated that for the time inspectors spent on deciding whether information about radioactive waste could be disclosed under the environmental regulations, it would charge £993 per day. Following that, I understand that the Department of the Environment said that the charge was calculated on the wrong scale. However, as the Campaign for Freedom of Information comments, it is alarming that that figure was put forward at all.
I accept that there are occasions when charges of some significance need to be made. I appreciate that one can sometimes believe that requests for information made by members of the public are frivolous and time consuming and not perhaps generally in the public interest. Having seen the charges that are made at present—I will not weary your Lordships with further
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examples—I believe it is proper for the criterion of reasonableness to be applied perhaps without specifying the precise charge. I beg to move.
4.30 p.m.
The Deputy Chairman of Committees (Lord Brougham and Vaux): I advise the Committee that, as the noble Baroness is also moving Amendment No. 200B, if the present amendment is agreed to, I cannot call Amendment No. 201.
Baroness Hilton of Eggardon: This group of amendments is an entirely logical one, which is a great relief to me in that it is so much easier to make speeches. I entirely support what the noble Baroness has said. The aim of my amendments is exactly the same: to increase accountability and information to the public. Amendment No. 201A, which is a rather obscure amendment, refers to the European directive on information relating to the environment which requires that charges for that information should be reasonable. Amendments Nos. 224ZB and 224ZD require that the annual reports of the agencies are published, not just to Parliament. That is consequential upon Amendment No. 224ZDB: the deletion in line 26.
The other amendment to which I speak is Amendment No. 224ZF. That provides that if any advisory committees are set up their reports should also be made public and information should be made available to the public. In relation to the environment where so many hazards to the public and pollution may occur, it is essential that this information is in the public domain, however uncomfortable that may sometimes prove to be for Ministers or public bodies who are responsible for clearing up that pollution. It is essential that what the agency does and the things done in its name should be in the public domain. That is the objective of these amendments.
Lord Marlesford: I strongly support what the noble Baroness, Lady Hamwee, has said. I was horrified to hear of these matters. It seems to me that this is an example of the need to protect people from the tyranny of government. I speak in the absence of my noble friend Lord Crickhowell but in the presence of my noble friend Lord Mills, who I understand has some knowledge of the workings of the National Rivers Authority. If these charges are being made they are clearly an abuse of public power, and somebody ought to answer for the agency. I hope that the Government, if not supporting the wording of these amendments, will assure us that they will include at Report appropriate words to give substance to the case that is being made.
Lord Peyton of Yeovil: I am sorry to differ with my noble friend. Personally, I would go with him to any lengths to stop the tyranny of government, but I do not believe that this amendment, which is a strange one, will do anything of the kind. The agency is required to have an opinion. Surely, that means a judgment. If the agency is compelled to follow its opinion, this seems to me to be unnecessary. It ought to be in a position to consider the practicality of doing something which at first sight seems to it to be reasonable. I very much hope that my

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noble friend will not look with any sympathy at this amendment which I regard as simply plausible but as not having any real effect whatever.
As to the second amendment which deals with cost, I have no brief for the National Rivers Authority. My noble friend Lord Mills can speak much better on this topic. I believe that we are steeped in information of every possible kind today. To put upon authorities the burden of providing information, which may be unimportant and trivial, without putting some deterrent element in the price, is I believe unreasonable. We do not want to inflate the costs of these agencies, or make them inefficient and too bureaucratic. I very much hope that my noble friend will dismiss them summarily.
The Earl of Onslow: Surely, it must be right that the maximum information is available to the public. It seems to me that this is a defence of the future environment protection agency. If it is asked by a hack from the Sun, "Why have you allowed 3,000 gallons of sewage to go somewhere where it should not have gone?" It should be able to say, "There is all the information. You should have been able to look it up. Nothing has been hidden." The moment that somebody says, "But it is hidden. We have not been able to get it because it is too expensive", it builds up a "them and us" situation. It is so much more sensible that the maximum amount of information is in the public domain so that we can all get it without hassle. I say that in spite of my noble friend Lord Peyton saying that it is all ruddy garbage, as I heard him murmur to my noble friend Lord Mills. He may take that view of what I say on frequent occasions; but in this case, I pick him up on the point.
Lord Peyton of Yeovil: If it is of any comfort to my noble friend, I did not intend to refer to his utterances as garbage. I was merely referring to the volume of information. I was not making a public remark. Nevertheless, he attributed it to me. I merely say that there is a flood of information about, not all of which is very valuable. A great deal of it can well earn the description that my noble friend has given it, with which I do not disagree.
The Earl of Onslow: It is up to the public to look at the flood of information—garbage, call it what you will—and make a judgment whether or not it is valuable. Above all, it gives the environmental protection agency the right to say, "It is in the public domain. You have all known about it, so do not complain", whereas if it has to be levered out of the agency with a crowbar it is to its disadvantage. If in doubt, publish.
Viscount Mills: To respond to my noble friend Lord Marlesford, I believe that the figures to which the noble Baroness, Lady Hamwee, referred are the maximum charges for the most complex data that the NRA provide. I can assure the Committee that the NRA provide a great deal of information free of charge. I wholly concur with the remarks of my noble friend that
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it is vital that information both from existing agencies and the new agency is made freely available, or if necessary at cost, to everyone who requires it.
Lord Elton: If I have correctly understood the discussion so far, the issue is a very narrow one—that is, whether or not the authorities should be able to make deterrent charges or those which roughly reflect the cost of making available that information. I hope that is the issue my noble friend will address, rather than the question of oceans of garbage, etc. Nobody will pay money for garbage. People will pay money only for what they want to obtain.
Lord Lucas of Chilworth: I have some sympathy for Amendment No. 200B and the proposal to take out the word "appropriate". In every major Bill in Committee that I can recall somebody has wanted the word "appropriate" taken out and the word "reasonable" put in. The main reason for that is that "reasonable" is a condition that is easily challenged in the courts, whereas "appropriate" is not.
The charges that local authorities in the tendering system have employed as appropriate charges to be taken into account have included, one might almost say, everything including the kitchen sink. What one is trying to establish by the use of the expression "a reasonable fee" is a fee that is reasonable in the circumstances under which that particular piece of information is made available and bearing in mind the purpose for which that information is to be used. It seems to me, therefore, that my noble friend Lord Peyton of Yeovil is really quite wrong in suggesting that charges should be set so as to discourage the use of such information or wild or frivolous inquiries. All of us who have had anything to do with public authorities, institutions or research organisations know full well that one gets a whole raft of frivolous information, whether it comes from the press or from people thinking that they might do a piece of research on their own one day. That is one of the hazards of life in that kind of environment.
I hope that my noble friend the Minister will give serious consideration to this single word "reasonable". Fees have to be paid. Everyone knows that. The fee has to relate to the amount of work that goes into providing the information. It is not good enough to use the word "appropriate". "Appropriate" means very many different things to those who begin to build up the Bill. I hope that my noble friend the Minister will be sympathetic to that amendment.
Baroness Nicol: I hope that in the general discussion the Minister will not lose sight of Amendment No. 224ZB because it is important that the agency should publish its report and that it should be readily available. After all, it will have considerable interface with the European environment agency. It is important that the information which will be going to that agency from ours should also be freely available—I do not mean free of charge but available freely—to members of the public in this country and particularly to NGOs, which cannot

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afford to pay enormous amounts for it but, as always, will be willing to pay a reasonable amount. I hope that the publication of the report will be taken seriously.
4.45 p.m.
Viscount Ullswater: I certainly take note of the large number of your Lordships who have spoken to this group of amendments. I consider that there is a fundamental point here which we need to clear up on the first occasion. My noble friend Lord Elton indicated that the whole of this debate was about whether reasonable charges should be made or whether deterrent charges should be made. That was the point put forward by my noble friend Lord Peyton. I do not believe there is any intention on the part of the agency to make deterrent charges. We ought to start from that basis. There is no intention to make deterrent charges.
Amendment No. 200A, introduced by the noble Baroness, Lady Hamwee, would oblige the agencies to make available any research which they carry out. As I explained on the second day of Committee, much of this work will be available under the Environmental Information Regulations. However, this amendment goes much further and would remove any discretion on the part of the agencies to restrict access even if the research were commercially confidential or carried out by third parties.
Amendment No. 200B seeks to change the basis on which a new agency may charge a fee for making available the results of research or related activities. As it stands, the Bill provides that the fees should be such as the relevant agency considers appropriate. This amendment would replace the term "appropriate" with "a reasonable fee" and would also remove the onus from the agencies in considering what fee would be reasonable. That would unnecessarily leave unclear who has this responsibility.
Amendment No. 201A would make this provision explicitly subject to Article 5 of the EC directive on freedom of access to information on the environment. That is the article which provides for reasonable charges.
The noble Baroness, Lady Hamwee, referred to reports which she had seen in the press regarding very high photocopying charges being made by the NRA. I am advised that perhaps the noble Baroness may have missed the subsequent letter from the NRA which was published explaining that the report was in error. It is again a case of perhaps not believing everything one reads in the paper.
I do understand the concerns behind the amendments—that the fees in question should be reasonable—but I believe that the concerns are unfounded. I have said that the agencies will be subject to the Environmental Information Regulations. The regulations transpose the EC directive into domestic law. But for the research which falls outside the scope of the regulations—research not related to the state of the environment—I believe an "appropriate" charge is preferable. That would enable the agency to sell, on a competitive basis, research such as work it might undertake on new analytical methods.
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We have already discussed at some length the agencies' powers and duties concerning the provision of information to the general public. Amendment No. 224, in the name of the noble Baroness, Lady Hamwee, seeks to give to each new agency powers to furnish the general public with information relating to each new agency's property, functions and responsibilities generally. Once again I assure the Committee that I fully agree that it is right that the agency should have the ability to provide information to the general public and that it should actively try to contribute to public information and debate on environmental issues, but it has that ability without this amendment.
I appreciate the concerns that have been expressed in the debate about transparency. That is why we have included in the draft guidance on Clause 4, as one of the objectives of the agency, that it should provide clear and readily available advice and information on its work. We are satisfied that its incidental powers under Clause 35(1) are sufficient to enable it to do that. However, Clause 48 is not concerned with information for the public. It is a provision which is designed to ensure that Ministers can get the information they need from each agency about its property, functions and responsibilities generally in order to be able to do their own job properly.
Amendments Nos. 224ZB and 224ZD, in the name of the noble Baroness, Lady Hilton, seek to replace the duty on the Secretary of State to arrange for the publication of the annual report with a duty on each agency to publish it. I do not see that that is necessary. What is important is that the report is published and made available to the public and it seems right that the Secretary of State, who is responsible to Parliament for the agency, should be responsible for ensuring that that happens. I see no reason to change that arrangement.
Amendment 224ZF, in the name of the noble Baroness, Lady Hilton, seeks to place a duty on the advisory committee for Wales and on the regional environmental protection advisory committees to prepare each year a report on their activities which they would send to the appropriate Minister and publish. As far as concerns the advisory committee for Wales, the equivalent committee of the NRA prepares such a report each year for the Secretary of State for Wales and copies of it are placed in the Libraries of both Houses. I would expect the agency's Welsh advisory committee to continue that practice.
As regards the regional environmental protection advisory committees, it is important to remember that they are advisory and not executive bodies. They do not have a budget for which they are responsible; nor do they carry out any functions; so there is a limited number of matters for them to cover in a published report. It would seem unnecessarily bureaucratic and costly to put such bodies under a statutory duty to produce an annual report which would simply cover the matters they had considered during the year. The NRA's annual report contains a brief overall summary of the work of its regional committees. I would expect the agency to continue that practice which seems to me to represent an appropriate level of reporting on advisory committees.

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I understand that there is a difficult balance to be drawn on the question of transparency. I believe that the measures in the Bill allow the agency to publish the material that is at its disposal and that that is as far as the agency and the legislation should go. I therefore ask whether the noble Baroness feels able to withdraw her amendment.
Lord Lucas of Chilworth: Before my noble friend sits down, he spoke earlier about the agency being able to charge competitively. Is he suggesting that in its preparation of research documents the agency should compete with other institutions involved in the same area of research and that it should therefore use some of its powers to engage in competitive tendering for pieces of research? That suggestion seemed to emanate from my noble friend's earlier remarks, but perhaps I completely misunderstood.
Lord Peyton of Yeovil: I wonder whether I may intervene in respect of one or two of my noble friend's comments. I should like to make clear what I should have said and what I mean. In my view, the agency should be free to charge the full costs of replying to questions. If that cost is surprising to some people—so surprising that it deters them from asking questions—that cannot be helped.
The Earl of Onslow: Perhaps I may return to what my noble friend said earlier. It appears that the agency may arrive at something commercial in the course of its research. Does my noble friend follow the precedent of the Admiralty which during the 19th century took charts of the world and sold them to anybody wanting one? Or does he follow the precedent of finding the maximum economic value to be derived from information or research obtained by the environment protection agency? I am not quite sure where I stand on this. It is perfectly reasonable that the agency should face that dilemma, especially when money and government funds are involved. Can my noble friend help?
There seems to me a difference between something which is commercially useful to the outside world, discovered and developed by the environment protection agency during the course of its business, and general information which should be available to the public. If a noble Lord asks a Question, he is not charged personally for the hard work that is done by my noble friend's civil servants in finding an obfuscatory Answer—or an informative Answer. Given that a noble Lord is not charged for that, why should the public be charged for a piece of information which should be available in the public interest? There is a difference between information which should be available and information which it is perfectly reasonable to say is commercially useful and should be confidential to the agency.
Baroness White: We in Wales expect to have fully adequate reports of the activities of the agency in the Principality. If our advisory committee is not allowed to give an adequate description of its activities, we shall be considerably disappointed.
Viscount Ullswater: I agree with my noble friend Lord Peyton that to charge the full recovery costs might
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be off-putting. Although they would not be levelled as a deterrent to making inquiries, I have to agree that in some instances the costs may be a deterrent. It would depend on how deep the pocket and how deep the requirement to know the information. I have some sympathy with my noble friend's suggestion that the information should not be so freely available as to encourage the agency to do nothing else but provide free information. It has other duties to perform.
In reply to my noble friends Lord Lucas and Lord Onslow, the agency's research will need in the first instance to be related to its activities. That research may reveal results which could be exploited by a third party. That is why I distinguished between information subject to the environmental information regulations, which relate to the state of the environment, and other information. Some of the research will relate to the state of the environment. It is, however, right that the agency should be able to sell some of its other research on a basis that is competitive with other research institutions. I stress that the agency is not primarily a commercial organisation. It will be undertaking research that relates to its activities. I have not sought in anything I said to put the agency in the place suggested by my noble friend Lord Onslow who said that it occupies a commanding position and can therefore charge competitively for its research. What I am talking about is where, in undertaking its activities, it strays into areas where its research may be sold on a competitive basis.
I believe that I said—I was questioned on this by the noble Baroness, Lady White—that the equivalent committee of the NRA prepares a report for the Secretary of State for Wales. I would expect the new Welsh advisory committee also to report to the Secretary of State for Wales. A copy of the NRA committee report has been placed in the Libraries of both Houses to date and I see no reason why the new advisory committee should not continue that practice.
Baroness Hamwee: The debate has highlighted the importance of the issue. The noble Lord, Lord Peyton, referred devastatingly to my amendment as being "plausible" on the basis that the agency must first have an opinion—I believe that the noble Lord is referring to subsection (5) (a)—as to whether it will undertake a piece of work, and that it is only after that that the issues of accessibility and copying come into play. The noble Lord's comments are always attractive—
Lord Peyton of Yeovil: I assure the noble Baroness that there was absolutely no intention in my mind of being "devastating" towards her personally. Many other people are much higher on my list for that purpose.
Baroness Hamwee: I am not sure what it will do for my reputation if I thank the noble Lord for that. Nevertheless, I accept the noble Lord's point that the agency has first to decide whether to undertake a certain piece of work. But, as we have said many times in our consideration of its commercial and quasi-commercial activities, the agency is a public body. I think we should start from there. Subject to the question of licence fees, the agency is publicly funded. Therefore, the results of its work should be publicly available.

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On the question of setting the level of the fees, it was not so much the word "appropriate" and the substitution of "reasonable" that was in my mind as the phrase, "such fee as it"—that is, the agency—"considers appropriate". I stress the word "considers". What concerns me is the agency's element of discretion leading to the setting of the fee and not whether the fee is reasonable or appropriate.
The Minister said that there was no intention to make deterrent charges. As the agency is not the Government, I wonder how he knows, although I am glad to be assured that the question has been taken up and the Government know what the agency will or will not do. I shall of course consider the Minister's response. Today may not be the day to take this matter further, but it is a subject which should be taken further on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 200B to 201A not moved.]
5 p.m.
Viscount Millsmoved Amendment No. 202:
Page 30, line 5, at end insert ("or consents or approvals involving or relating to land drainage").
The noble Viscount said: The amendment seeks to rectify an omission. Clause 35(7) empowers the agency to charge for advice and assistance prior to the application for environmental licences. Thus time spent on advising on abstraction licences and discharge consents will be rechargeable. However, much of the agency's time will be spent on advising individuals and companies who wish to build or create structures under, over, or on main water courses for which a land drainage consent is required.
At present the NRA grants some 6,000 land drainage consents per year. The Bill as drafted does not include the ability to charge potential applicants for those land drainage consents. That is what the amendment seeks to redress. This is an important issue, given the scale of some of the projects involved. An example I can give is of proposed barrage schemes. They have involved NRA staff from a variety of different disciplines in weeks or even months of work, both in assessing the environmental implications of those schemes and advising potential promoters.
The amendment will ensure that advice sought not just for abstraction licences or discharge consents but land drainage consents will be charged for in a consistent manner. I beg to move.
Viscount Ullswater: Amendment No. 202 would extend the agencies' powers to make agreements to charge fees in connection with requests for advice (or assistance) in relation to environmental licences to requests for land drainage consents or approvals. My noble friend gave instances of how that works.
The amendment could give rise to problems of interpretation. Consents and approvals relating to land drainage are subject to provisions in the Water Resources and Land Drainage Acts of 1991 which we propose to retain. Both Acts include a power to charge a fee of £50 and would therefore be covered by the
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savings in subsection (8) (b) of this clause. I appreciate that a fee of £50 may not cover costs in all cases. However, there is also provision in both Acts for other sums to be specified by order made by Ministers. I am sure that Ministers would be prepared to consider proposals for changes to the fees put to them by the agency if those were well founded. That procedure provides for some flexibility and seems preferable to extending the provisions in this clause which require the agreement to the fee by the person being charged.
I hope that that explanation will satisfy my noble friend and that he will not press the amendment.
Viscount Mills: Perhaps I may ask my noble friend two questions about what he said. I am grateful for his comments, and that may well be a solution to the problem. But how quickly might an order be brought in? Would it involve a scale of charges? Perhaps I may expand on that point. It is worth pointing out that land drainage consents are issued for minor projects such as putting in a number of rocks to provide habitat for fish, right up to the scale of activity that I have just mentioned; namely, barrage schemes.
Viscount Ullswater: I said to my noble friend that Ministers would be prepared to consider proposals put to them by the agency for changes to the fees. In that instance it would be up to the agency to say that it wanted to change the fees. If it put forward a proposition to Ministers which Ministers found acceptable, then I dare say that regulations could be brought forward. I cannot tell my noble friend how quickly that might happen. I would need to confirm this with advice; but if the proposal was for a scale of charges, then I dare say that Ministers would be prepared to consider that.
Viscount Mills: I thank my noble friend for his comments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 35, as amended, agreed to.
[Amendments Nos. 203 to 207 not moved.]
Baroness Hilton of Eggardonmoved Amendment No. 208:
After Clause 35, insert the following new clause:
("Agency to certify pesticides
.—(1) Each new Agency shall have the function of inspecting and certifying pesticides as safe for use.
(2) In carrying out its function under subsection (1) above, each new Agency shall satisfy itself that any pesticide certified as safe for use has no adverse environmental effects.").
The noble Baroness said: The amendment is part of our attempt to put clear-cut duties for the agency on the face of the Bill, and not just leave them to the whim of Ministers. It is also related closely to the fact that Clause 1, which we shall continue to attempt to amend, has no clear purpose for the agency.
The amendment ties in with ones moved earlier by my noble friend Lord Williams in relation to drinking water and other responsibilities that we feel the agencies should have. In 1993, there were breaches of the pesticide standard in drinking water from all 10 water companies. For example, 77 per cent. of the supply zones of the Thames Water area were contaminated by

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herbicide. For that reason we feel that the control of pesticides should go naturally with attempts to provide us with decent drinking water, and with the overall strategy in relation to our rivers, reservoirs and so on. The amendment would fit neatly into that logical set-up.
We feel that we should have more on the face of the Bill in relation to the actual purposes of these agencies. We should continue to press for at least a general purpose to protect the environment—an issue to which we shall return on Report. This is a specific duty that we feel the agencies should have. I beg to move.
Viscount Ullswater: After my previous remarks, I do not believe that the noble Baroness would expect me to accept the amendment. There is a well established and comprehensive system for authorising pesticides before they can be used and no purpose whatsoever would be served by sweeping this away and giving the task to the new agencies.
I should remind the Committee of the current arrangements for ensuring that pesticides used in this country are safe. These require that Ministers in six departments, including the Department of the Environment, and the Scottish and Welsh Offices, must authorise the marketing or use of any pesticide. Before Ministers will consider granting an authorisation, they will take full account of the recommendations of the expert Advisory Committee on Pesticides, which is independent of government and of industry. The committee in turn has the benefit of an exhaustive assessment of the relevant data by MAFF's Pesticides Safety Directorate or the Health and Safety Executive. Ministers and their advisers, as one would expect, consider fully environmental effects including effects on wildlife, soil and water. But they look also at human safety, whether it be of the pesticide user, of bystanders or of consumers of food. They also take account of the effectiveness of the proposed product in tackling its target pests or diseases.
The present system has been developed over a number of years and works well to make sure that human and environmental safety are ensured. There is no need to give this work to the new agencies, and much of the work involved—for instance, the human toxicology and agricultural efficiency —lies far outside their remit.
I hope that I have persuaded the Committee to reject the amendment if it is pressed.
Baroness Hilton of Eggardon: The Minister is right; I am not at all surprised by his response. The amendment is part of our overall attempt to give the environment agency clear responsibilities, if not specific functions. The fact that six Ministers are required to oversee the safety of pesticides suggests that it might be useful to have a single point of responsibility. However, in view of our intention to return at a later stage to the overall duties of the agency, I beg leave to withdraw the amendment.
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Amendment, by leave, withdrawn.
Clause 36 [Delegation of functions by Ministers etc. to the new Agencies]:
Lord Lucas of Chilworthmoved Amendment No. 209:
Page 30, line 27, at end insert ("or a power to determine appeals against decisions of a new Agency.").
The noble Lord said: I shall speak also to Amendment No. 343, which is consequential. Although Amendment No. 209A in the name of the noble Baroness, Lady Hilton of Eggardon, is grouped with my amendments, I do not propose to speak to it.
Clause 36 gives Ministers wide-ranging powers to agree with the new agencies that they carry out such ministerial functions as shall be appropriate. However, the Bill allows for the delegation of certain specified functions. In cases where those functions should properly be exercised only by government, they are not appropriate to the new agencies. They are set out in Clause 36(2).
I believe that there has been an oversight in the drafting of the clause. Clause 36(2) provides that an agreement between a Minister of the Crown and the new agency under subsection (1) leaves the agency, or any of its employees:
"to exercise on behalf of a Minister of the Crown any function which consists of a power to make regulations or other instruments of a legislative character or a power to fix fees or charges".
There is, however, another responsibility which should not be delegated to the agencies. It is the vital safeguard against unreasonable or unsound decisions for those who will be regulated by the new agencies; it is the right of appeal to the Secretary of State. To be effective and credible regulators, the agencies must have the confidence of those they regulate and must be seen to be accountable. Clearly, it cannot be the Minister's intention that the agencies might be allowed to determine an appeal lodged against them under subsection (2). My amendment corrects that oversight. I beg to move.
Baroness Hilton of Eggardon: I shall speak to Amendment No. 209A, which seeks to prevent Ministers from acting unreasonably. Clause 36(1) provides for any Minister of the Crown to enter into an agreement with the agency to carry out a function on his behalf. However, Clause 36(7) allows the Minister to exercise that function himself, even though the previous agreement exists. My amendment is designed to ask the noble Viscount whether it would be reasonable for a Minister to ignore the agreement and act in his own right. The fear is that, having reached an agreement with the agency on some specific matter such as the level of activity in combating certain polluters, the Minister might ignore or overrule findings which would lead to their prosecution.
The current position on licensing scrapyards, for example, makes it clear that scrapyards fall within the class of operations which will be subject to waste licensing. For many years waste regulators have been making it clear that scrapyards present considerable potential for serious pollution. However, the

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Government are taking extensive steps to exempt many scrapyards from licensing and are ignoring the pollution potential of such places.
A similar conflict could arise where the agency is required to exercise the Minister's pollution prevention powers while the Minister might refuse to apply them to certain undertakings. I therefore ask the noble Viscount to resolve the apparent contradiction between Clause 36(1), where an agreement can be reached with the agency to carry out certain functions, and Clause 36(7), which will allow the Minister to overrule that agreement. The amendment is intended to ensure that the Minister acts reasonably in carrying out that overruling.
5.15 p.m.
Viscount Ullswater: I have every sympathy with Amendment No. 209, moved by my noble friend. If an appeal against an agency decision is made to the Secretary of State, it would clearly be quite unreasonable for the Secretary of State then to delegate the determination of that appeal back to the agency.
It seems to me that what is at issue is the appropriate form of drafting to achieve the policy. Clause 36 allows only the delegation of "eligible functions", which are defined in Clause 36(10) as those which the Secretary of State considers can appropriately be exercised by the Agency in question. As it would obviously be inappropriate for the Secretary of State to delegate the determination of an appeal back to the agency which made the original decision, I am advised that there is no need for the clause to make an express provision to this effect. I hope that my noble friend is reassured and will feel able to withdraw this amendment and Amendment No. 343 which is consequential upon it.
Amendment No. 209A, moved by the noble Baroness, Lady Hilton, seeks to amend Clause 36(7) to ensure that any Minister who has delegated an eligible function of his to a new agency may only exercise this function himself "reasonably". I do not believe that this amendment is necessary. The current provision ensures that any agreement by a Minister to delegate a function to a new agency does not prevent him from exercising the function. If such an agreement ends, or if the agency fails for any reason to exercise the function adequately, the Minister would need powers to exercise the function himself. I would not expect a Minister to delegate function of his to a new agency should he wish to continue to exercise the function himself under normal circumstances. But since the clause also provides that anything done, or not done, by an agency shall be treated as having been done, or not done, by the Minister —except in the case of consequent criminal proceedings—it is the Minister who still has responsibility for ensuring that the function is exercised or performed satisfactorily and who is, of course, accountable to Parliament for this.
I believe that I comprehend what the noble Baroness is seeking to do by this amendment but I cannot see that it is necessary. Clause 36(7) as it stands ensures that Ministers have sufficient power to exercise delegated functions themselves should this be necessary; the
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normal test of "reasonableness" should apply and there is no need for such a qualification to be inserted into each relevant subsection of legislation. I hope that the noble Baroness will withdraw her amendment.
Lord Lucas of Chilworth: I am grateful for my noble friend's response to Amendment No. 209. In drafting the amendment I have not taken into account subsection (10) to which he referred. Since the advice which my noble friend gave to the Committee in response to me is somewhat to the contrary to that which I have, I should like to give further consideration to what has been said. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 209A not moved.]
Clause 36 agreed to.
Clause 37 [General duty of the new Agencies to have regard to costs and benefits in exercising powers]:
Viscount Millsmoved Amendment No. 210:
Page 31, line 32, after ("shall") insert ("subject to subsection 2(b) below or").
The noble Viscount said: In moving this amendment I shall speak also to Amendments Nos. 212 and 213. I shall take first Amendments Nos. 210 and 212 which deal with costs and benefits not being applicable to enforcement issues.
The purpose of the amendments is to ensure that decisions to enforce and in particular to prosecute under environmental legislation are not thwarted by reason of cost benefit. Without the amendments potential defendants could challenge any decision taken to prosecute on the basis that the prosecution was not the most cost-effective solution.
The costs of taking enforcement action should not be the primary factor used to decide whether to enforce the law and to protect the environment. If costs become paramount, we may reach a situation in which many cases are taken against those who cannot afford to challenge the environmental regulators but fewer cases are taken against industry and large businesses which are able to afford lengthy and expensive legal cases. Will the Minister give me a clear assurance that the agencies' discretion in those matters permits the exclusion of enforcement decisions from cost benefits?
The purpose of Amendment No. 213 is to provide the agency with an essential additional power to obtain information from a third party. That information is needed to comply with the new duty relating to costs and benefits in Clause 37. If the agency is to fulfil that new duty, it must have the necessary powers including the power to obtain the information necessary to make the decisions in the first place.
Any lack of information may inhibit or even prevent the accurate assessment of costs and benefits as directed by government. I received recently a parliamentary brief from the CBI, as I am sure did many Members of the Committee. That brief advised opposition to the amendment on two grounds. The first ground was that the necessary information is already accessible. I wonder how the CBI knows that all the information that

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may be needed for those purposes is accessible. At this point in time, I do not believe that anyone can know that.
The CBI is concerned also that if the amendment is accepted and the regulators' powers extended, that would introduce both unnecessary bureaucracy and complexity of decision making. Again, I ask why that is so. It is in the agencies' own interests to avoid bureaucracy and complex decision making. After all, what is the advantage of the agency doing that?
Further down the same page, the CBI brief states:
"Business expects that on strategic issues the Agencies should carry out a rigorous appraisal of costs and benefits".
I quite agree with that. On major strategic matters, the agencies may be asked quite rightly to justify their decisions in relation to costs and benefits. But in order to do so, they must first have access to the information on which they need to base their decisions. I believe that the amendment is necessary and I hope it is accepted as such by the Minister. I beg to move.
Lord Jenkin of Roding: I apologise for not having attended the Committee earlier but I have been attending a Select Committee which was considering sustainable development.
I am rather concerned about the first two amendments dealt with by my noble friend Lord Mills; that is, Amendments Nos. 210 and 212. It may be that my noble friend moves the amendment in order to probe the Minister in relation to the questions that he asks. But if the amendments were accepted, it seems to me that the new agencies could be relieved largely of their subsection (1) duty in exercising the general run of their powers. I find it difficult to believe that that is what my noble friend intends.
Among those powers are consenting to discharges to controlled waters, especially those from sewage treatment works, and the licensing of the abstraction and impounding of water. It seems to me that it is rather extreme to have a blanket relief of those powers because those are the very areas in which the quality regulators' requirements might impose on water or sewerage undertakings significant costs without any requirement to justify them as economically efficient.
It is true that those decisions are subject to appeal to the Secretary of State. But that is no substitute for the duty which Clause 37 is intended to impose on the agencies. It may be that my noble friend on the Front Bench will be able to relieve my anxieties and make it clear that the amendments are unacceptable. It may be that my noble friend Lord Mills had not appreciated their impact on what is a rather important core function. However, I hope that when the Committee considers the arguments, it will not succumb to the blandishments of my noble friend Lord Mills.
Lord Elton: My noble friend has made a very powerful point, which I shall not repeat. I agree with him. It seems absurd to have an agency and then make the performance of its powers purely voluntary.
But I am puzzled by the use of the language in the amendment. One does not enforce powers; one enforces requirements. A power is used to enforce regulations
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and so on. Therefore, I should like to know more precisely what is intended and how it is proposed that it will work. Which of the functions which we are expecting the agency to carry out will it be at liberty not to do? Some are duties and some are powers. I do not wish to go through the Bill picking them out, but I hope that those drafting the amendment have done so.
Lord Carmichael of Kelvingrove: Amendment No. 211, which stands in my name, is also in this group of amendments. The purpose of the amendment is to restate what the Bill is all about—the environmental and human effects of the Bill. I can see that in some circumstances, it may leave the SEPA open to incurring very high charges but I am sure that common sense will overcome that. The decisions as to necessary work by the SEPA should be made on environmental and cost grounds. There should be a marrying of them both. The agency must be conscious that its first duty is to the environment, but it must use its money in the best possible way to look after the environmental and human factors involved. I believe that my amendment creates the right balance.
Lord Wade of Chorlton: I hope that my noble friend will strongly resist any of the amendments to Clause 37. As I said on Second Reading, I believe that it is a very important part of the Bill. It helps those whom it will affect to accept it and to make sure that it works in a proper and effective way.
As has emerged clearly from a number of debates on amendments in that regard, environmental measures now affect the lives of us all and they affect business. If that is so, we must remember that the environment is not the only matter which business must take into account. Business is also about wealth creation and achieving what is possible in society to benefit a whole range of people. If we expect—and it is quite right that we should—that everything is done in a proper and effective environmental way, similarly, we must impose the regulations in such a way that they do not put undue costs and restrictions on the ability of business to create wealth and employ people and also add to the other responsibilities with which those concerned have to deal.
In my view it is extremely important—and I know that I have the support of all the major organisations in this respect—that Clause 37 should stay on the face of the Bill unchanged. Like my noble friend Lord Jenkin, I hope that my noble friend the Minister will ensure that that happens.
5.30 p.m.
The Earl of Lytton: I rise to speak briefly to Amendment No. 211A which is tabled in my name. I should explain that the intention behind the amendment is, it is to be hoped, to tease out from the Minister a comment that he made on Second Reading; namely, that third party costs and environmental benefits would be taken into account.
The purpose of the amendment is merely to probe. We are not just talking about the costs and benefits of the agency itself; we are talking about the economic costs and benefits to the agency, to third parties and to

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the environment. I should be most grateful if the Minister could confirm that that is indeed what is intended. While noting the comments made by the noble Lord, Lord Wade, I hope that my proposal will also be in line with his intentions.
Lord Moran: I should perhaps say a few words about Amendment No. 214 which is also included in the grouping and tabled in my name. One of the crucial tests by which the new agencies will be judged is whether they deliver effective enforcement of environmental regulations and rigorous and effective prosecution policies for those committing offences. In that, the NRA has, I believe, been notably successful.
One of my main concerns about Clause 37 as it stands is that the agencies should not always be looking over their shoulder wondering whether they can enforce proper environmental regulations or prosecute environmental offences, or, indeed, whether their assessment of costs and benefits has gone far enough to allow such proper enforcement.
We do not want the new agencies to be inhibited in carrying out their proper enforcement duties. Ideas of costs and benefits are, I believe, already a proper general consideration in deciding whether to bring prosecutions, as set out in the guidelines of the Attorney-General. However, that is expressed in a very general way. We need to be very clear that the clause does not stand in the way of effective enforcement. I hope that the Minister will be able to reassure me on that point.
Lord Renton: I have a few brief comments to make. They arise from the discussions surrounding each of the amendments that have been mentioned. Whenever we are enacting any legislation, quite obviously we should be careful to ensure that it is enforceable. Otherwise, we are merely enacting a dead letter. When we give power, we are giving a discretion. But if the body to which we are giving the power exercises its discretion in favour of using such power, it must have adequate power of enforcement.
Amendment No. 212 tabled in the name of my noble friend Lord Mills uses the expression "to enforce powers" which has been criticised. Nevertheless, I have some sympathy in that respect. The implication in the amendment is that those concerned have decided to use the power and that they then need to be able to enforce it. However, it is a rather tricky drafting matter about which I shall express no more than an opinion.
The expression "costs" in relation to benefits has also been commented upon by several noble Lords. I wonder whether "costs" is the best word in that context. We are always talking about cost benefit; in other words, comparing the advantages and disadvantages of steps which may be taken in a wide range of circumstances. But, in that connection I should have thought that we are really considering the expense involved and it might be better if "costs" was replaced by "expenses". I know that it would mean sacrificing the usual cost-benefit comparison, but in the context in which it is used in the amendments I believe that "expenses" might be the more appropriate word.
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I have a great deal of sympathy with the remarks made by the noble Lord, Lord Moran, regarding his amendment. I must confess that I have a little doubt about Amendment No. 213. That amendment seeks to introduce a new criminal offence, whereas it may not be necessary to do so. I know that we must have adequate powers of enforcement, but I should have thought that most of the enforcement which will be needed will be enforcement by the civil process of the courts. It does not seem to me that that process should have to be enforced with the aid of the creation of the minor criminal offence outlined in the amendment. I shall be most interested to hear what my noble friend Lord Ullswater says in his response.
Lord Vinson: Before my noble friend responds, I should like to lend my support to those who believe that he should resist the amendments. It would be very strange indeed if the new agency were given exception to the well accepted, tried and tested mechanism, not only in this country but also in America and elsewhere, for assessing the appropriate remedy for any environmental damage.
On Second Reading I was glad to see that my noble friend the Minister made it clear that such a consideration does not override the agency's other duties and obligations; in other words, I take it that it does not override the agency's emergency powers but that it does give time for considered thought as to what the appropriate remedy would be and prevent unnecessary costs being put on to the firm or individual involved, which at the end of the day are costs that are borne by all of us because they are ultimately reflected in prices.
I hope that my noble friend the Minister will clarify the position. At the same time, perhaps my noble friend could also assure me that the provisions of the deregulation Bill that made it possible for sensible appeals procedures to be introduced early on can be built into the new agency's remit in line with that legislation.
Lord Marlesford: I agree with my noble friends Lord Wade and Lord Vinson, and, indeed, with other noble Lords, on the need to ensure that decisions or proposals made by the new agency should take full account of the cost-benefit part of the equation. I understand why the provision has been included in the Bill in the form of Clause 37. We have had so many examples of extremely burdensome proposals from various agencies. Perhaps the Health and Safety Executive is the most notorious. That is why I very much supported the Government's attempts to lighten the burden through the deregulation legislation, which is now an Act. But having said that, I would ask the Government to consider carefully whether including this provision in Clause 37 is the right way of doing it.
Of course we must take more seriously both costs and benefits in putting forward environmental regulations. It is only now that some of the most ill considered matters that were introduced several years ago are coming into practical effect.

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I wish to give the Committee one small example which has just come to my notice. Under the Control of Pollution Act and the Environmental Protection Act horse manure has been classified as industrial waste. Believe it or not, under Statutory Instrument 819 of 1988, that means that unless the animals concerned are being used for agricultural purposes their muck has to be put onto a licensed tip. Apparently there is no de minimis exemption to that. It would be a laughing matter were it not quite serious for some people. I am told that in the county of Cambridgeshire it has been customary for the muck from the Newmarket horses to be stored in a field by an enterprising entrepreneur who collects it from the stables and then sells it to gardeners and others. The environmental department of the Cambridgeshire County Council has now said that that is illegal as the field is not a licensed tip and those concerned have been fined £1,500. No doubt that will result in the end of that particular enterprise.
I give that as an example of the crazy sort of things we have to avoid. However, there have been other cases where expectations have been aroused by environmental legislation which have not been met. Often those expectations have been aroused because the costs have not been taken account of in the legislation. One of the most obvious examples is the bathing water directive from Europe. It was all embracing and in certain cases was unachievable, and therefore has not been achieved, and in many other cases it has been used as an excuse to do nothing. It is a thoroughly unsatisfactory method of proceeding. I am one of the relatively few Members of this Chamber who has spent 16 weeks of my life in Blackpool—not on holiday. I had to attend every party conference of both parties there for 16 years. I am not decrying Blackpool; it is a wonderful place. However, the beach there has singularly failed to benefit from the directive. I am merely trying to illustrate the nonsenses which can arise when a provision is ill digested. That is the important point.
Of course one can understand why the Government have been tempted to introduce into the statute a costs and benefits provision. However, I question whether that is the right way of proceeding. It is, I understand, a precedent in environmental legislation and as such its implications need to be thought through carefully. Some Members of the Committee may be aware that I am chairman of the Council for the Protection of Rural England. In order to obtain an objective view of this issue the CPRE asked Mr Jeremy Sullivan QC, who is the CPRE's honorary standing counsel—he has just taken over that role from Mr Justice Carwath on the latter's appointment to the High Court Bench—for an opinion. Mr Sullivan's advice is clear. If I may, I will send my noble friend a copy of the advice which I have here. Mr Sullivan states—this is the crucial point—that the drafting is in such generalised terms that it will positively invite challenges to almost anything that this agency does, by way of judicial review. In other words, if it is a case of saying that the benefits were not properly taken into account in a decision that is made, there is a challenge of judicial review; or it may be a case of saying that the costs of the measures that are
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taken were not properly accounted for. The measure is going to make, or could make, the whole of the agency's operations unworkable. That cannot be desirable.
Starting from the simple premise that I fully support the need for a balanced decision based on cost benefit in any such agency's activities, I would suggest that the right way of doing that is by advice and guidance from the department to the agency. It is a much more difficult matter to challenge judicially regulations which the agency may make if that is done on the basis of common sense and good practice. I believe that most of the agencies—I am afraid the Health and Safety Executive is an exception; in general the National Rivers Authority is not an exception—have not put forward foolish measures.
Noble Lords: Oh!
Lord Marlesford: I think many of them have put forward some foolish measures, but in general they have recognised that they have to accord with what will be seen as possible, desirable and justifiable. That is the right way to proceed. I believe it would prove to be technically flawed to incorporate in the Bill a provision which would enable judicial review to be used in a campaign against the agency. This would weaken its role not only as a champion of the environment but also as an organisation which could take a sensible and balanced view of what is possible in terms of cost and benefit.
5.45 p.m.
Viscount Ullswater: I am glad that my noble friend Lord Marlesford eventually reached the end of his speech because I was confused to begin with as, in the first instance, his words seemed to promote this clause and then he managed, with dexterity, to say that we should not have the clause in the Bill. I also notice that he wishes to oppose the Question that Clause 37 shall stand part of the Bill. Perhaps we should have another debate on that matter when the proposition that the clause should stand part of the Bill is before the Committee, because I believe that many of the other amendments tackle the different view.
Sustainable development involves reconciling the needs of economic development and effective environmental protection. Regulators should not therefore be able to impose costs which are not justified by the environmental benefits which they bring. In saying that I hope that I have the approval of my noble friend Lord Wade and of course my noble friend Lord Vinson. The provision should require the agencies to consider costs and benefits in the round, including environmental costs and benefits. It is not intended to restrict that consideration either to only specified sorts of costs and benefits or to costs and benefits falling only on specified classes of organisations or people.
Large amounts of work have been and continue to be done on quantification of environmental costs and benefits. But I accept that not all costs and benefits can be quantified in financial terms. This is why the clause is not intended to restrict consideration to those costs and benefits which can be quantified or to require the agencies to act only where they can demonstrate an

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excess of benefit over cost. The agencies must use their judgment and the clause is intended to enable them to do so.
My noble friend Lord Marlesford pointed to some of the difficulties which can occur on both sides and warned us to beware of that. All of these amendments seek to modify the proposed duty on the agency to have regard to costs and benefits. Amendments Nos. 211 and 238 in the name of the noble Lord, Lord Carmichael of Kelvingrove, seek to limit the cost to environmental and human cost. The former of those amendments would amend the general duty on the agency, and the latter would apply both to the agency and to local authorities and would apply specifically in relation to remediation notices for contaminated land. Amendments Nos. 210 and 212 in the name of my noble friend Lord Crickhowell and moved by my noble friend Lord Mills and Amendment No. 214 in the name of the noble Lord, Lord Moran, would exclude the need to consider costs and benefits in relation to enforcement functions. Amendment No. 213 in the name of my noble friend Lord Mills would provide a new power for the agency to require any person to provide information that it reasonably considers it needs to take account of costs and benefits and would make non-provision of such information an offence. Amendment No. 211A in the name of the noble Earl, Lord Lytton, would specify that the cost to be taken into account includes the costs of third parties.
As I have sought to make clear, the Government accept that the costs and benefits to which the agency should have regard should not be limited to financial costs and benefits but must include the wider costs and benefits with which the noble Lord, Lord Carmichael, is concerned. But it cannot be limited to environmental and human costs. The justification for financial costs imposed, for example, on those who are required to meet particular standards in terms of releases to the environment, must also be considered. That is recognised in the existing provisions in the Environmental Protection Act 1990 and we believe must equally be recognised here.
My noble friend Lord Mills and the noble Lord, Lord Moran, are clearly anxious to ensure that decisions to enforce and, in particular to prosecute, under environmental legislation are not thwarted by challenges on the basis that prosecution was not the most effective solution. They have stressed that there may be valid reasons why a prosecution is appropriate in a particular case which do not relate solely to the cost of environmental damage in that case, and which may not easily be quantified.
I recognise the validity of that argument. Nor do such considerations apply only to enforcement. Equally, the agency must not be thwarted, for example, in its ability to deal effectively with environmental emergencies by a need to undertake costs and benefits analysis. That was a point made by my noble friend Lord Vinson. It is to cover such cases, which I do not believe can be listed exhaustively, that the Bill qualifies the requirement in Clause 37(1) to take account of costs and benefits:
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"unless and to the extent that it is unreasonable for it to do so in view of the nature or purpose of the power or in the circumstances of the particular case".
It seems to me that this provides a more effective way of dealing with the concerns which have been raised than the amendments proposed.
I listened particularly carefully to the explanation of my noble friend Lord Mills of the need for Amendment No. 213 and will wish to look at the record in Hansard. Clearly it is important that the agency should not be thwarted from effective action by those who would seek to challenge its decisions on the grounds of cost but then withhold from it the information it would need to take proper account of costs and benefits. But equally I believe that we should avoid if possible the need for the agency to take account of costs and benefits leading to the imposition of additional burdens on regulated organisations and the introduction of new offences and penalties. That point was brought forward by my noble friend Lord Renton. On the basis of experience with the assessment of best available techniques not entailing excessive cost under integrated pollution control I do not believe that such additional information-gathering powers are required. In practice the agency can only properly have regard to information on costs and benefits that is available to it. Those who wish to argue that a particular course of action is too costly would therefore need to provide evidence to support their claims. If they decline to do so the agency would be justified in acting on the basis of the evidence it had. Indeed, I believe that there is a risk that the amendment would have the perverse effect of helping those who might wish to challenge the agency on the ground that it had the power to obtain further relevant information but failed to use it in a particular case.
In Amendment No. 211A the noble Earl, Lord Lytton, seeks to specify that the costs to be considered include those of third parties. I believe that the clause as drafted covers such costs and that such an explicit statement is therefore unnecessary. Indeed, by specifying that costs to one set of parties are specifically covered the effect may be to cast doubt on whether all other costs are to be considered equally.
My noble friend Lord Vinson suggested that there should be some form of appeal mechanism. This Bill and the environmental legislation under which the agency will operate include a number of appeal provisions. It is not proposed to rewrite all of those to bring them into line with the model provision being developed under the deregulation Act. However, they incorporate the principles which are to be reflected in that model provision.
At an earlier stage in the Committee proceedings I undertook to take further legal advice on whether costs and benefits should be interpreted as restricting the types of costs and benefits which are relevant. I am advised that there is no doubt that benefits should be construed widely, including environmental benefits. However, it is possible that costs incurred could be construed more narrowly as actual financial costs. We are continuing to examine the matter, but if there is real doubt I shall consider introducing an amendment to remove it.

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With that assurance and those explanations I hope that noble Lords will feel able to withdraw their amendments.
Lord Renton: In examining the matter further will my noble friend consider the possibility of replacing "costs" and "benefits" with "advantages" and "disadvantages"?
Viscount Ullswater: I shall certainly consider everything that has been said today and take further legal advice on the matter.
Viscount Mills: I am encouraged by the remarks of my noble friend the Minister, particularly with respect to Amendment No. 213. I shall read carefully in Hansard all the comments made by Members of the Committee. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 211 to 214 not moved.]
On Question, Whether Clause 37 shall stand part of the Bill?
Baroness Hamwee: The Minister has taken a little wind out of my sails with his final comment about reconsidering the use of the terms "costs" and "benefits". Nevertheless, it is important that at this stage we should have a short general debate on the place in the Bill of a provision for cost-benefit analysis.
The more we talk about the new agencies the more I see them as not merely regulatory bodies. Therefore, I accept that they will have a function in assessing relevant criteria in the decisions that they take. However, I join with those who doubt whether the balance within the clause is correct, and in particular the relationship between subsection (1) and subsection (2).
Subsection (2) states that the duty imposed on the new agency to consider costs and benefits does not affect its obligation to discharge its duties. In other words, there is a distinction between its duties and its powers. That was a point which the noble Lord, Lord Elton, mentioned earlier this afternoon. However, how is the agency to perform a duty if its power to perform that duty is limited?
Subsection (2) overrides subsection (1). That being so, what meaning is to be given to the cost-benefit provisions of subsection (1)? Subsection (1) must have a meaning; subsection (2) must also have a meaning. I am not yet convinced as to which is secondary.
In his evidence before the Environment Committee of another place, the Secretary of State put cost benefit in the context of sustainable development. He said that it gives a real reference to the meaning of sustainable development. It will not have escaped the Committee's attention that we have not defined that clause. Indeed, some will quarrel with his exposition on the term and his acceptance that there is a need for growth.
The Secretary of State also indicated before the Environment Committee that the subject will be a matter for guidance and that draft guidance in that specific area would be available by Committee stage in another place. He indicated that there will be a dialogue with the new agency and others. From that dialogue a guidance will emerge. That is to be welcomed.
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The noble Lord, Lord Marlesford, has stressed that the issue might be more safely dealt with by guidance. However, I wonder whether cost benefit is an appropriate tool, with the assessment of costs on the one hand and advantages or disadvantages of benefits on the other. One has to ask: what costs, and to whom? The Minister has indicated the Government's further consideration of whether environmental and human costs come within the term. I had approached the issue on the basis that they could not do so because that seemed to be the way in which the Bill was to be read. However, that is perhaps not the only issue. The central issue relates to how one assesses the cost on the one hand and the value on the other of achieving or not achieving an aim. I refer to the protection of a geographical area or a specific species of flora or fauna. Such matters are probably the central issue. I do not believe that society has sufficiently advanced the dialogue regarding how one assesses the cost when considering the loss of a species or the threat to a geographical area.
In considering the provision, I have asked: the cost to whom? A small undertaking required by the agency to clean up its act may incur considerable costs. Those costs would be considerable to that small undertaking. They might indeed lead to its liquidation. The costs would be proportionate to the small business's expenditure but, proportionately, a small environmental cost considered globally in absolute terms. I have difficulty regarding how the impact on different sizes of organisations and on the environment as a whole is to be assessed.
The noble Lord, Lord Marlesford, reminded us of the legal fragility (if I may use that term) of the provision—that it may be open to challenge. Constant legal challenge from powerful industries would compromise the agency's effectiveness and make it consider whether it has the means, funded by government, and indeed the will, to resist the big guns of big business. (I hope that I am not too pejorative.) I note that Ofwat supports the clause. I do not believe that it lies well in the mouth of that industry to comment on the costs of environmental protection given the profits earned in the water industry. Even if there is no major challenge, it must be likely that the agency will become bogged down on the wrong issues. After all, it has much to do.
Reference has also been made to the fact that whether or not there is such a provision, public bodies cannot simply take wild decisions. Such bodies are always open to challenge by the courts if they are clearly acting unreasonably given the state of knowledge at a specific time. Without that provision, I do not believe that the agencies would be free to impose clearly impossible and unreasonable costs on society.
Article 130(r) of the Treaty on European Union prioritises the following principles: the precautionary principle; the preventative principle; and the polluter pays principle. It states that costs and benefits are to be "considered". I am interested in the advance—if it is an advance—that the Government consider should be made in the Bill.

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I hope that the Minister can explain in some detail the best practicable environmental option, and the best available techniques not entailing excessive costs, matters to which he has already referred. There is now a good deal of literature on BATNEEC and BPEO. I had thought that the principle of BATNEEC was supported by Government. I do not understand the relationship between those and the provisions of Clause 37; perhaps the Committee does. It would be helpful to understand them.
Clause 37 gives the wrong balance. It will require the agency to compromise itself. We must ask ourselves whether cost, as defined in terms which are normally used with regard to costs to individual businesses, is a cost to be put on the environment.
Baroness Hilton of Eggardon: I echo much of what has been said. I welcome what the Minister said, although it confirmed some of our worst fears: that the term "cost" tends to be measured only in financial terms. That is our specific anxiety about Clause 37.
It has been interesting to note that briefing material which has flowed in has been sharply divided between the industries' interests on the one side—I refer to the CBI, Ofwat and the Institute of Directors, which are all much in favour of the clause—and the environmental groups which are much opposed to it. For some of the reasons just given, industry clearly sees the provision as a means of avoiding the imposition of anti-pollution measures—measures which will support the environment. The environmental groups fear that that is what will happen.
We are all in favour of efficiency and the BATNEEC principle. As the noble Lord, Lord Marlesford, said, ridiculous costs should not be imposed on our society. As the noble Lord said, it would be sensible if the issue were subject to ministerial guidance as opposed to being on the face of the Bill. Our anxieties are that there is no purpose laid down for the agency. Its aims and objectives are not laid down in the Bill. Those are subject to ministerial guidance and are therefore much weaker. For some mysterious reason the duty relating to cost-benefit analysis has been written on the face of the Bill.
There is a reference, too, in Clause 37 to the objectives and aims of the agencies, but those are not spelt out in the Bill. There seems an imbalance in favour of considering the costs of any environmental measure as opposed to the other duties, aims and objectives of the agency which are merely subject to ministerial guidance and are not written into Clause 1 of the Bill as its overriding, overarching purpose.
That is our specific concern about the clause. It is not that one is opposed to the idea that the expense of any proposed measure should be part of the assessment as to whether that measure should be put into effect but rather that the agency's position in pursuing environmental objectives is considerably weakened by Clause 37.
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It is interesting to note that the CBI's briefing on this issue refers to aims and objectives of the agencies as though those were clearly laid out and we all knew what they were. It opens by saying:
"Clause 37 provides a significant move forward in ensuring that the new Agencies will take action proportionate to their objectives".
But as the Bill does not lay down any aims, objectives or purpose for the agency, one cannot agree that the balance has been correctly struck. It is precisely for that reason that we have considerable doubts about having Clause 37 in the Bill when the agency has not been given clear directions and powers elsewhere.
It is not my intention that Clause 37 should necessarily be removed from the Bill, but it should be balanced by a clear purpose for the agency elsewhere in the Bill. That is something to which we propose to return at Report stage.
The Earl of Onslow: At Belshazzar's feast there appeared on the walls the words:
"Mene, Mene, Tekel, Upharsin".
When translated, the phrase did not mean: "unless and to the extent that it is reasonable" etc., it meant:
"Thou art weighed in the balances and art found wanting".
So we know early on what a cost-benefit analysis is. I should like to see in the Bill words more like those my noble friend Lord Renton suggested, using "advantage" or "disadvantage". Of course, the agency must rightly make value judgments and ask: "Do we save this one bogwort but ruin employment for 800,000 people?". I take the argument obviously ad absurdum. It seems to me that the language of the clause is convoluted and in some ways over-precise but in other ways not precise enough. If the Old Testament can get it right—which it did fairly easily with:
"Thou art weighed in the balances and art found wanting"—
and we all know exactly what that means—then surely the drafters of government Bills, with the assistance of the Renton Committee and possibly the previous lesson in English from the authors of the Authorized Version of the Bible, could make a better attempt at laying out what the view of the agency must be in this example rather than what is written in very obscure language.
6.15 p.m.
Lord Peyton of Yeovil: My noble friend Lord Onslow is being extraordinarily optimistic in suggesting that the parliamentary draftsmen, given the instructions they receive from Ministers, could possibly match the Old Testament for clarity. However, I echo some of the questions asked by the noble Baroness, Lady Hamwee, in moving the Motion, but that is not to say that I look for the same answers to her questions.
First, there is a small point about which I should like to be clear. In balancing costs against benefits, is it right that when we use the word "costs" we are talking about financial costs? I take it that that is correct but I should be grateful if my noble friend could confirm it. I repeat what the noble Baroness said about that: whose costs, what benefits and to whom will those benefits accrue?

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The second question is one which the noble Baroness also asked: what is the second half of the clause intended to do? I have a nasty feeling that, having done what I consider to be the right thing in the first half of the clause, the Government then seem to have had second thoughts and said: "Oh no, sorry, we didn't really mean that. We will go back to where we were, without the first half of the clause". I hope that my noble friend will be able to give us a lucid explanation of the meaning, value and import of the second half of the clause.
The most important point that I wish to make is that I believe that the Government are absolutely right to take into account the costs of doing all those things. Everyone who is sensible and sane, including industry, wishes to see the environment improved. There is no question or doubt at all about that. But to say that the costs must be regarded as secondary or put up as an excuse by industry is quite wrong. It is high time that the country, and all of us, remembered that when we mention costs we are talking about the competitive capacity of British industry and about jobs. Let that not be forgotten.
When my noble friend Lord Marlesford said on an earlier amendment that departmental advice was preferable to having something in the statute for ministerial guidance, I respectfully beg leave to differ with him. I can think of nothing I would rather avoid in this context than ministerial guidance or departmental advice. I mean no offence to my noble friend.
Lord Moran: I hope that the Government will take careful note of what the noble Lord, Lord Renton, said, as it seems to me important. If they do not do so and if we maintain the present wording of Clause 37, one point bothers me; namely, that in many cases it must be much easier to calculate industrial costs, for example, than to calculate environmental benefits. Perhaps I may give one example of what I mean. As my noble friend Lord Elis-Thomas is present, perhaps I may give a Welsh example. A power station in Wales may burn some agreeable substance like orimulsion, emitting a good deal of sulphur. The regulating agency—at present the NRA and HMIP, but in future the environment agency—applying BATNEEC, may say that the power station must install the best form of flue gas desulphurisation. It is clear that that is a very expensive option and there is no difficulty in calculating the cost of the operation. However, on the other side, the environmental benefits may largely consist of ensuring that fish, invertebrates, dippers and other organisms may continue to survive in large numbers of Welsh rivers and lakes. It must be extremely difficult to calculate that against a clearly defined industrial cost.
Lord Vinson: Will the noble Lord give way? He may be comforted to know that the cost of cleaning up orimulsion to the levels which I believe he would find acceptable and which would make the atmosphere or the exhaust gases of the power station fully within the regulatory limits, is about 5 per cent. of the cost of the electricity generated. I believe that everyone would
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agree that that is a wholly acceptable cost. It can be calculated and therefore I do not think that the point the noble Lord makes will stand up.
Lord Moran: I am glad to hear what the noble Lord said and, if it is correct, it is good news. I was only giving it as an example because, as a general principle, it must often be difficult to balance an assessment of the rather intangible but still extraordinarily important environmental benefits against the quite easily calculated industrial costs. That is what worries me and why I much prefer "advantages" and "disadvantages", as suggested by the noble Lord, Lord Renton.
Lord Elton: Despite what my noble friend Lord Vinson said, there will be occasions when, supposing the calculation given had been 50 per cent. and not 5 per cent., either an important question will be unanswered in the Bill or we shall have to compare apples with eggs, counting them against each other. I suspect that the clause, as drafted, takes account of that. If Members of the Committee will turn to page 50, there is a proposed insertion in the Environmental Protection Act 1990. At line 13 it will read:
"Without prejudice to section 37 of the Environment Act 1995".
That is the part that we are looking at. To summarise, there shall be a duty on the agency to have regard to,
"the cost which is likely to be involved",
on a person on whom it has served a notice. That clearly is a financial cost. By preserving the duty under Section 37 and introducing a duty dealing with cost in this new clause, it seems to me that a distinction is made between them. I merely ask my noble friend whether, if that is so, it could not be more clearly stated than it is now, for example, in some way such as that suggested by my noble friend Lord Renton.
Lord Chorley: This is an occasion when, perhaps surprisingly, I find myself in some sympathy with the Government on this matter. I am sure that we need some provision on the lines of Clause 37, though it may not be precisely right. I spent much of my professional life off and on being involved in cost-benefit analysis, so I know all about the pitfalls and so forth. In the world in which I moved in those days it was a well understood term of art. Perhaps that is part of the problem.
However, I emphasise—I refer to what the noble Viscount, Lord Ullswater, said on a previous set of amendments, on which he said that he would come back to the House—it is not just a question of financial costs. It is a question of costs right across the board, including all the environmental costs. That is what the term of art means.
There is another point which it is important to emphasise and which has been touched on by other Members of the Committee. There is a great problem, in that many of the costs are not readily, or even, in some cases, at all quantifiable. That has to be recognised. It is important to set out clearly in each case the distribution of costs and benefits and who incurs them or benefits from them—in other words, the distribution of the costs and benefits, whether quantifiable or not. It is important that these matters are described. Whether any advantage is to be gained from

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the use by the noble Lord, Lord Renton, of the term "advantages and disadvantages", I do not know. It is not normally a term of art in the world in which I moved. However, I would possibly go along with it provided that there is some reference to costs, because it is very important to know what costs (whether or not they can be measured) are being incurred.
Lord Beaumont of Whitley: I agree strongly with the noble Lord who has just spoken. But he has underlined the necessity to spell out what is needed rather more clearly than is done in this clause. Given the way in which he described it, I believe that almost all of us would agree. I could not accept, for instance, what the noble Lord, Lord Peyton, as I understand it said. The noble Lord said that everyone wanted to improve the environment, which is probably more or less true. He then went on either to state or to imply—I believe he stated it—that therefore people would all act accordingly. What happens is that everyone is in favour of improving the environment so long as the cost does not fall on themselves but on someone else. Therefore there is absolutely certainly a need to sort out what the cost benefits are. It is in relation to that aspect that we need from the Government rather more clarity than is presently the case.
Viscount Ullswater: Clause 37 requires each new agency, in considering whether or not to exercise any of its powers, or how to do so, to take into account the costs which are likely to be incurred and the benefits which are likely to accrue as a result. This duty is subject to two exceptions. First, it does not apply to the extent that it would be unreasonable for a new agency to take into account costs and benefits because of the nature or purpose of the power or the circumstances of the particular case. Secondly, the duty to take into account costs and benefits does not affect the non-discretionary obligations of the new agencies. That is set out in the second half of Clause 37.
This clause has attracted considerable comment both at Second Reading and in Committee. There has been erudite discussion of the strengths and weaknesses of cost-benefit analysis, its ability to deal with costs and benefits which cannot adequately be quantified, the circumstances under which it might be unwieldy or inappropriate, the information that might be required for it and, as my noble friend lord Marlesford said, the risks of legal challenge to which it might lead.
The noble Baroness, Lady Hamwee, asked me where I felt that BATNEEC and BPEO fell into the duty. When I was explaining the Government's response to the last group of amendments, I indicated that we have experience with the assessment of BATNEEC under the IPC. I did not believe that additional information gathering powers were required, as put forward in Amendment No. 213 by my noble friend Lord Mills. BATNEEC is a mandatory requirement. It must be applied under Section 7 of the Environmental Protection Act 1990. We therefore take the view that its application is an obligation for the purposes of Clause 37(2) of the Bill. Therefore there is no discretion for the agency in that instance.
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My noble friend Lord Peyton wanted me to expand a little on what I intended to reply to the noble Baroness, Lady Hamwee. He asked me whether the costs were just to be financial costs. In my reply to the last group of amendments I said that I believed there would be a possibility that "costs incurred" could be construed more narrowly as actual financial costs. We are examining the matter and we may need to introduce an amendment to remove that narrow definition.
My noble friend also asked me who is to judge what the costs and the benefits are and to whom they should apply. As the clause sets out, that is for the judgment of the agency. That is what the agency is required to do; namely, to make a judgment as to the costs and benefits. But of course it will have guidance from Ministers. The noble Baroness, Lady Hilton, asked me about guidance. The guidance under Clause 4—I refer to the guidance under paragraphs 5.3 and 5.4; of course these are only draft guidance notes—states that,
"many forms of economic development make demands upon the environment and these have to be assessed. Such an assessment ought to take account of all the costs and benefits involved—economic and environmental equally … Often however it is difficult to establish what the environmental costs and benefits are. To assist, a number of supporting principles have been developed",
and so on. Therefore there is ministerial guidance to assist the agency in fulfilling its functions.
I must stress again that the Government are not seeking to impose upon the agency a requirement to undertake a full cost-benefit analysis before it acts in any case or to follow slavishly the results of such analysis. We recognise that costs and benefits must be considered broadly and in the round. I pray in aid the remarks of the noble Lord, Lord Chorley, who I believe stands with me on that. We recognise that cost-benefit analysis is a tool whose value will vary from case to case and that the agency must be free to exercise its judgment. We recognise that the consideration of costs and benefits must be capable of being exercised on the basis of available information and that there will be circumstances in which it would be unreasonable or would conflict with the agency's environmental obligations. That is why the clause is drafted as it is to reflect the core proposition that the agencies should have some regard to the likely costs and benefits of their actions but this must not interfere with their ability to ensure effective environmental protection, management or enhancement.
I believe that to reject this clause—which is the proposition before the Committee—would send a very damaging message to all those who are looking to us to reconcile the needs of the environment with the needs of economic development as part of a balanced and sustainable approach to environmental protection, and I therefore commend the clause to the Committee.
6.30 p.m.
Lord Peyton of Yeovil: I have two questions, which I shall ask very shortly. But first I have one comment: official guidance on industrial costs is not always very convincing or very valuable, and I personally would put a very large question mark over the usefulness of such guidance.

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The second point concerns the question I asked him, which I do not think he has dealt with and which is: what exactly is the effect of the second half of the clause on the first half? It seems to me to go some way towards apologising for the first half.
Lord Renton: Before my noble friend replies to that, perhaps I may take the liberty of reminding him that he did give an undertaking to reconsider the question of how the guidance in Clause 4 should be expressed constitutionally.
The Earl of Onslow: There is one other factor which has arisen out of my noble friend's reply. I personally like the idea of some such clause as this in the Bill. It seems to me that it is essential, because it is a guidance measure as much as anything else.
What happens if the agency, in weighing and balancing, makes a grave error and puts 4lb in one set of scales and 3oz in the other? Is there any method of appeal to say that, "You, 0 agency, have weighed it very incompetently", to use the words of the Book of Daniel, rather than those of the environmental protection agency establishment Bill?
Baroness Hamwee: Before the Minister sits down, I wonder whether he can tell the Committee when he thinks he will be able to come up with any alternative, if that is what his legal advice in fact suggests, because clearly the timing of any alteration in the approach that this clause takes is a matter of concern to many Members of the Committee. I hope that he will be able to pursue as a matter of some urgency the question of legal advice as to whether "costs" and "benefits" are the best terms?
I wonder if he could also include in consideration the point on BATNEEC, to come back to that. I understand the comments he has made, BATNEEC being an obligation for the purposes of subsection (2) BATNEEC is about avoiding excessive cost. That suggests to me that excessive cost may be reasonable within Clause 37(1).
I am not asking the Minister to respond to that now. I hope I have made myself clear, but I think that the relationship between the two propositions requires some further investigation.
Lord Marlesford: Before my noble friend finally responds to the remarks of my noble friend Lord Peyton about ministerial guidance and all that, the problem surely is that costs are relatively easily measurable and expressible in monetary terms. Benefits are identifiable just as costs are identifiable, but are much harder to measure, and the value imputed in an equivalence of costs to benefits will be a function of—if you like, in a democratic society—opinion at the time. This is why a government is much more easily able to give guidance as to the resolution of such an issue than if the matter is left to an agency which is made up of people who are not in any sense elected and who, although responsible ultimately to Parliament, have no particular skill at interpreting the public mood. We all know that the public mood towards environmental problems has changed hugely in all our lifetimes. To reflect that, I should have much preferred to see the Government
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made responsible for giving guidance to the agency as to how it should assess, in the phrase of my noble friend Lord Renton, "the advantages and disadvantages of a particular proposal".
Viscount Ullswater: I am not sure that I can say a great deal more at this stage, but I should like to take up the point which my noble friend Lord Peyton made because I believe that this is where the distinction can be drawn, and I think it also encompasses the point made by my noble friend Lord Marlesford.
The difference between the two sections of the clause, as I understand it, is that in Clause 37 subsection (2) refers to the "duties", and therefore it does not give the agency any measure of discretion. That is the requirement of Clause 37(2) and that is where it differs from Clause 37(1). I believe that we need the clause so as to distinguish between these two matters, which would not necessarily be undertaken —or, let me say, it seems as if we are going further by putting this on the face of the Bill than we would necessarily do by taking the advice of my noble friend Lord Marlesford and merely putting it into guidance. I believe that we are making it quite clear that the new agency has duties. That is taken under Clause 37(2).
My noble friend Lord Renton also asked me about the status of the guidance. On the first Committee day, I said I would consider whether the guidance should be published and should be subject to consultation, and I am obviously in the process of considering that at the moment. So the status of the guidance is as it is at the moment on the face of the Bill, but I am considering whether those two matters should be taken into account.
I trust that I have explained in what I have said to the noble Lord, Lord Peyton, the role which I believe BATNEEC plays. This is a tried and tested method, and it falls under the obligations of the agency to use it in certain circumstances. I do not believe that that has been questioned during the course of the debate—except perhaps in parenthesis by the noble Baroness, Lady Hamwee. I do not believe that the technique has been questioned, and I therefore consider that I cannot go any further on that particular matter. I commend the clause to the Committee.
Clause 37 agreed to.
Clause 38 [Ministerial directions to the new Agencies]:
The Deputy Chairman of Committees (Baroness Lockwood): If Amendment No. 214A is accepted, I cannot call Amendment No. 214AA under the pre-emption rule.
Lord Carmichael of Kelvingrovemoved Amendment No. 214A:
Page 31, line 41, leave out subsection (1).
The noble Lord said: I should like to speak also to Amendments Nos. 214AA, 214AB, 214BA and 2 I4BB. This first amendment curtails the overall power of Ministers, which we feel is rather too great in this group of provisions and the Bill generally. Amendment No. 214A is an amendment from the Law Society of Scotland, a very reputable body, which is normally very

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correct and conscious of the importance of the Government getting things right. It has been a great help to all of us on this side of the House.
The Law Society has asked that the Government should abide by their stated intention referred to earlier in the booklet, Improving Scotland's Environment: The way forward, which was to provide an agency at arm's length from the Government. That is ideal for an environmental body. Clause 31(1) contravenes this intention and gives all the power to the Minister.
Amendment No. 214AA is too widely drawn. The Minister should give specific guidance and not guidance which is as general as it appears in this particular subsection.
Amendment No. 214AB addresses the question of whether there is a contravention of Community law. It is suspected that that may be the case and Ministers should be aware of it. Amendment No. 214BA is a consequential amendment. Amendment No. 214BB seeks to preclude the exemption for emergencies. I beg to move.
Viscount Ullswater: It is not unusual for bodies which are accountable to Ministers to be subject to direction from those Ministers on a range of issues. Indeed, the power to give directions contained in Clause 38(1) is very closely modelled on an existing power of Ministers to give directions to the NRA. Nor is it our intention that Ministers should be able to use this power coercively. The Bill provides that, except in an emergency, this power shall be exercisable only after consultation with the new agency concerned.
Amendment No. 214A seeks to omit Clause 38(1) from the Bill, thus removing the power for the appropriate Minister to give a new agency general directions in relation to its functions. Amendment No. 214AA would preclude ministerial directions of a general character unless they implement a Community treaty or another international agreement. Such directions could only be specific.
The noble Lord, Lord Carmichael, explained that the purpose of the amendments is to highlight concern about the broad nature of the powers to issue directions to the agencies. As non-departmental public bodies, it is appropriate and indeed necessary that the agencies are properly accountable for their work to the appropriate Minister and through him to Parliament. Along with ministerial accountability, there must be responsibility. And there cannot, I would suggest, be proper responsibility without power to direct an agency, where necessary.
It has been mooted that the powers of direction in this Bill are in some way exceptional. That is not the case. Let me pray in aid Section 5 of the Water Resources Act 1991 and Section 11 of the Natural Heritage (Scotland) Act 1991, which contain broadly similar direction-making powers in relation to the NRA and Scottish Natural Heritage.
A power to issue general directions is required, as it might not always be practicable or appropriate to issue specific directions. For example, if there were to be a direction covering the procedure to be followed by an
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agency in appointing persons with powers to inspect MoD premises, while it might be possible to replicate a direction for each individual MoD premises, it would be extremely cumbersome.
Amendment No. 214AB would require the appropriate Minister to direct a new agency to advise him on relevant Community treaties or other international agreements. I have no doubt that the agencies' advice on such matters is likely in many cases to be invaluable. But I do not believe the amendment is necessary. Clause 35(2), already requires the agency to provide such advice and assistance as requested by the Secretary of State or the Minister. The amendment does, of course, require that advice to be sought. There will, I imagine, be few cases in which Ministers would not wish to have the advice of the agencies. But I think the amendment is unduly prescriptive.
Community treaties and other international agreements are made through a series of negotiations which are often lengthy, going through numerous drafts. Would an agency need to be directed before every meeting and give its views formally to every twist and turn in the drafting process? I would suggest that it is best left for Ministers to determine when they require advice and for that advice then to be given.
Amendment No. 214B would require the appropriate Minister, before giving directions under Clause 38 to the environment agency for England and Wales, to consult that agency and other affected bodies as to the direction's content. Amendment No. 214BB would preclude any direction being issued unless the appropriate Minister first consults a new agency.
Clause 38(6) already makes provision for the appropriate Minister to consult the relevant agency in this matter. It will therefore come as no surprise that I am sympathetic to the motives behind the amendment. Given that directions may affect a large number of bodies, not all of whom could be readily identifiable, I do not believe that a requirement for consultation with all affected bodies would be practical. Nevertheless, where and to the extent that they consider it appropriate, my right honourable friends will consult persons or bodies other than the agency in question before giving directions. The clause as drafted recognises the importance of first consulting the agencies, and there is a requirement on Ministers to do so. But, while I accept that as something which should be done where at all possible, I cannot accept that such consultation should stop action being taken quickly in an emergency. Our first priority must be to prevent harm to human health or the environment. In an emergency situation, such consultation is likely to place a bureaucratic obstacle in the way of preventing such harm. I must therefore resist this attempt to remove that important safeguard.
Amendment No. 214BA seeks to extend the publicity requirements for directions that implement Community treaties or other international agreements to cover all directions issued under Clause 38. I understand the intention behind this amendment: that is why Clause 49(2) requires all directions—other than those whose disclosure would be contrary to the interests of national security—to be included in a new agency's annual report. But the additional publicity arrangements for

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directions made under Clause 38(2) are specifically necessary. They are required in order to meet Community requirements as to the level of publicity required in order to give the direction the necessary force and transparency. This is not the case for directions issued for domestic reasons, which may deal with more "nuts and bolts" issues. And, while those will be publicly available, I would suggest that they do not warrant the same level of publicity.
On that basis, I invite the noble Lord to withdraw the amendment.
6.45 p.m.
Lord Carmichael of Kelvingrove: The feeling that motivated the tabling of these amendments was disappointment. I refer to the Scottish White Paper, Improving Scotland's Environment, which promised a great deal more freedom and was well received, yet when the Bill was tabled it was felt that someone had got cold feet and Whitehall again had the whip hand. That is the reason for the disappointment.
The Minister's response seems very reasonable except that the power goes back to the Cabinet Minister, which enables him to thwart, if he wishes, action that perhaps should be left to the agency. This is one group of amendments that we shall be looking at carefully and possibly bringing back at Report stage. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 214AA, 214AB, 214B, 214BA and 214BB not moved.]
Clause 38 agreed to.
[Amendments Nos. 215 and 216 not moved.]
Clause 39 [Power to make schemes imposing charges]:
Viscount Ullswatermoved Amendment No. 216A:
Page 33, line 4, leave out ("supervising activities authorised by virtue of') and insert ("performing functions conferred by").
The noble Viscount said: Amendment No. 216A is consequential upon the amendment to Section 62 of the Environmental Protection Act 1990 which is made by Amendment No. 372B. Section 62 enables regulations to be made to deal with special waste; that is, dangerous or intractable waste. Section 62(3) (a) enables the regulations to provide for waste regulation authorities to supervise activities authorised under the regulations and to recover their costs. The amendment to Section 62(3) (a) is needed to make clear that the regulations may provide for the authorities to supervise all the activities to which the regulations apply and to recover all their costs of so doing. Those costs will be recovered in accordance with a charging scheme under Clause 39 once the agencies become responsible for waste regulation. Amendment No. 216A is needed to ensure that Clause 39 refers to the new wording of Section 62 of the 1990 Act.
Amendment No. 372B also substitutes a new Section 63(2) of the 1990 Act to rectify a flaw in that subsection, which has not yet been commenced. Waste licensing and the special waste regulations generally apply only to controlled waste. However, it was the intention that
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Section 63(2) of the 1990 Act should replicate the effect of an earlier provision in the Control of Pollution Act 1974 which made it an offence to deposit, without authorisation, non-controlled waste which had the hazardous characteristics of special waste. This is not achieved by Section 63(2) at present, and the amendment will ensure that the original intention prevails. I hope that your Lordships will agree that this amendment is desirable. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworthmoved Amendment No. 217:
Page 33, leave out line 15.
The noble Lord said: I beg to move Amendment No. 217 and speak also to Amendments Nos. 218 to 221. This group of linked amendments seeks to clarify the scope of the charging schemes which are to be introduced by the agencies. I reassure your Lordships' Committee that I do not question the intent of the clause or indeed the creation of these powers.
The constituent bodies that will be united into the agencies already operate a variety of charging schemes in respect of the various licenses, consents and so on which they all differently administer. Therefore, Clause 39 is sensible and welcome. As I read it, it is an attempt to harmonise the different provisions that exist in other previous legislation. However, we have to be careful that in trying to simplify these somewhat complex provisions we do not confuse matters even more. It appears to me the drafting of Clause 39(2) introduces duplication and some overlap of powers. For example, where an agency modifies a licence on its own initiative as part of its ongoing supervision of a licence activity a separate modification fee may be charged. On the face of it, this seems to be somewhat unfair. Surely, if the licence-holder has already paid a fee for the monitoring and supervision in the form of a subsistence charge he should not have to pay again.
As far as Amendment No. 218 is concerned, this goes a little deeper than the others in the group. The amendment is intended to prevent the repetition of an anomaly currently found in the charging scheme for waste management licences. At present licence holders are required to pay an annual fee for the waste regulation authority's ongoing supervision and monitoring. However, in practice a licence may be dormant. It may be some years before disposal commences on the site. Even when that happens there is nothing for the authority to inspect. Therefore, the fee for inspection and monitoring remains and, although there is nothing to inspect, it cannot be waived. That does not seem to be terribly fair. If we modify Clause 39 I hope that we shall not repeat the same mistake, because mistake I think it is.
Even if the words of my amendment fail to meet the intent, I hope that the intent will be recognised by my noble friend and will find favour with him.
Viscount Ullswater: In replying to Amendment No. 217, I should also like to speak to Amendments Nos. 219 to 221. These amendments redefine the matters in respect of which the agencies may prescribe charges in

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respect of environmental licences. They reflect provisions currently in force which relate to waste regulation.
The intention behind Clause 39(2) is to encompass the whole range of matters in respect of which charges for environmental licences may be prescribed. This is not to say that individual charging schemes will encompass them all. But our aim is to include all the matters in respect of which charges may currently be prescribed and, at the same time, give the agencies scope to develop charging schemes in ways appropriate to the manner in which they carry out their functions in the future, including, for example, a more unified system of charges than exists at present. We would not wish to restrict the agencies' freedom to propose new schemes in this way. The legislation does not, however, permit the agencies to charge for whatever, and however much, they like. Under the provisions of Clause 40 charging schemes will be subject to approval by the Secretary of State following consultation with those likely to be affected.
An amendment restricting the matters to those which now apply only to waste regulation would also cause particular problems for certain charges relating to other functions of the agencies. For example, the proposal to delete subsection (2)(b) would be inconsistent with provisions in the Water Resources Act relating to discharge consents under which the NRA, and in future the environment agency, might in certain circumstances grant or vary licences without an application. That said, our intention that the clause should cover all activities relating to environmental licences for which a charge may currently be made means that we shall consider carefully whether it should be amended to refer explicitly to applications for transfer, renewal or surrender of a licence, as well as the transfer, renewal or surrender itself.
The provisions of Clause 39 relating to subsistence charges encompass all the existing provisions in the various charging schemes for the different pollution control regimes. Amendment No. 218, moved by my noble friend Lord Lucas, would prevent a charging scheme from prescribing subsistence charges for environmental licences where the activities authorised by the licence had not yet commenced. It would thus reduce the scope for charging compared with the existing provisions.
In the case of waste management licences, the need for waste regulation authorities to supervise licensed facilities begins before the actual disposal or recovery of waste commences. High quality site preparation is essential to ensure that sites are able to meet their performance standards for pollution control; and Section 35(3) of the Environmental Protection Act 1990 provides that a licence may impose requirements which are to be complied with before the disposal of waste begins. That is why the agency will have a duty to supervise all licences which are in force. That duty needs to be reflected in its powers to prescribe charges. It is not for the Bill but for charging schemes made in accordance with its provisions to determine details such
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as the appropriate level of charge for a site where a licence is in force but where the authorised activity has not begun.
The particular issue raised by this amendment is being reviewed in the context of the preparation of a revised waste management charging scheme under existing legislation. We have received a number of representations on this matter, including one from the National Association of Waste Disposal Contractors, which we will take into account in this review. I hope that I have said sufficient to expect my noble friend to withdraw the amendment.
7 p.m.
Lord Lucas of Chilworth: I am grateful to my noble friend for his reply and I take some encouragement from his remarks on Amendment No. 217. He said that he will consider the matter carefully. I appreciate that the authority may need to carry out some pre-operational inspections—my noble friend suggested site preparation and the like—but the problem, which I do not think my noble friend has addressed, is that a licence may be applied for and be granted but no work of preparation or usage may take place for some years. Meanwhile, the subsistence fee cannot be waived and therefore is payable although there is no intent, perhaps for some years to come, to use the site. That is the purpose of Amendment No. 218.
As soon as an operator gives notice that he intends to use the licence and start operating—he may be talking on 1st February 1995 and say that he proposes to start operating in July 1995—I would expect the agency to set down the conditions of site preparation, access roads and so on, and the fees would then become payable. However, that is not what the Bill says. I rather think that my noble friend has missed that point. However, since he assures me that a consultation process is going on, I shall be happy enough to leave the matter there for the moment, but I shall probably want to come back at the Report stage. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 218 to 222 not moved.]
Clause 39, as amended, agreed to.
Clause 40 [Approval of charging schemes]:
The Earl of Lindsaymoved Amendment No. 222A:
Page 35, line 12, after ("to") insert ("Scotland or").
The noble Earl said: The first three amendments in this group would enable the Secretary of State for Scotland to recover his costs through SEPA's charging schemes in relation to the discharge of his new functions under the Radioactive Substances Act 1993. Provisions for these new functions are contained in Amendments Nos. 387 to 393. They ensure that the provisions which we are inserting into the Radioactive Substances Act 1993 relative to consultation on certain authorisations under Section 13 of that Act will apply throughout Great Britain.
At present, the Bill's provisions require the agency in England and Wales to consult the relevant Minister before granting or varying an authorisation in respect

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of the disposal of radioactive waste from any premises situated on a nuclear site. The amendments will require SEPA to carry out similar consultation with the Secretary of State for Scotland. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworthmoved Amendment No. 223:
Page 35, line 37, leave out from ("take") to ("for") in line 38 and insert ("all reasonable steps, in accordance with the appropriate procedure under section 39 above").
The noble Lord said: I apologise to my noble friend the Minister if I have confused him. I think that at one time Amendment No. 223 was grouped with the others. However, I took it out of the group as I felt that this matter was quite separate from the generality of charging schemes.
The amendment has a very simple purpose: to ensure that the regulations which the Secretary of State will issue and which will prescribe the steps the agencies must take before they revoke a licence will also set out the methods by which they should publicise the charging scheme. The Bill carries forward provisions in existing legislation which enable a licence to be revoked if the operator fails to pay the annual subsistence charge. Quite clearly, the non-payment cannot be condoned, and in no way should it be made easier to continue to be in operation without having paid the appropriate fee. However, mistakes sometimes happen. Mistakes happen by accident. Revocation is a serious matter and for a smaller operator can possibly lead to the complete loss of a livelihood. Therefore, any regulations which set out the steps to be taken and the procedures to be followed before this ultimate sanction is employed are a welcome solution. However, proper publicity for the provisions of the scheme and the consequences of non-compliance and non-payment would go a long way towards preventing problems in the first place. Prevention is better than cure. If the publicity surrounding a revocation for non-payment is made abundantly clear, that has obvious advantages for everyone concerned.
In the past there have been some rather hit and miss, ad hoc arrangements which by and large have worked. But the new agency will have a good deal more responsibility placed upon it than the old WRAs. I am not suggesting that the old WRAs did not carry out their responsibilities properly, but the new lease of life given by the formation of the agency will have a much greater impact.
I think that the amendment is drafted reasonably well. I hope that I have persuaded my noble friend the Minister of the advantages of having a formal procedure that can be understood by all and undertaken by the agency. I beg to move.
Viscount Ullswater: Amendment No. 223 seeks to change the basis on which a new agency shall bring the provisions of a charging scheme to the attention of persons likely to be affected by them. As it stands, the Bill requires the agencies to take such steps as they consider appropriate. The amendment would require them to take reasonable steps in accordance with a procedure prescribed in regulations by the Secretary of State—at least, I understand that to be my noble friend's
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intention. In fact, the amendment is rather more specific. It would require the agencies to take steps for publicising charging schemes in accordance with a procedure specified by the Secretary of State for revoking environmental licences, a procedure which is unlikely to be suitable for this purpose.
I listened carefully to what my noble friend said because his amendment attacks a slightly different prospect which I should like to consider further when I have had an opportunity to read in Hansard what he has said. I believe that the anxieties which I suspect underlie my noble friend's preference for the word "reasonable" are unfounded. As public bodies, the agencies will be under a general duty to act reasonably. That will apply when they are determining what steps it is appropriate for them to take in order to publicise the provisions of charging schemes. We do not think it necessary for such steps to be stipulated in regulations which could constrain the agencies' freedom to develop effective ways of publicising the provisions of schemes. With that explanation, I hope that my noble friend will feel able to withdraw his amendment.
Lord Lucas of Chilworth: I am grateful to my noble friend for his response. He is right is his second assumption. This is not a question of exchanging "appropriate" for "reasonable". The amendment intends to bring a new regime to bear alongside that which already exists. That which already exists has not proved satisfactory in a number of cases. This provision is intended to bring in an additional safeguard.
It is obvious that my amendment—and perhaps what I have said—has not found its mark this evening. However, the tone of my noble friend's response is such that I am encouraged to feel that we might have discussions about this matter before the next stage—
Viscount Ullswater: Perhaps I may interrupt my noble friend. I undertake to write to him on the substance of his amendment. If that is of any help, I hope that he will feel able to withdraw his amendment.
Lord Lucas of Chilworth: I am grateful to my noble friend and look forward to receiving his communication. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lindsaymoved Amendments Nos. 223ZZA and 223ZZB:
Page 35, line 41, leave out second ("the") and insert ("a new").
Page 35, line 49, after ("that") insert ("new").
On Question, amendments agreed to.
Lord Gisboroughmoved Amendment No. 223ZZC:
Page 36, leave out lines 5 to 8 and insert ("in accordance with the relevant charging scheme").
The noble Lord said: This amendment seeks commitment from the Government that the agencies' fees and charges will be fully transparent and properly attributed. As presently drafted, Clause 40(8) allows the Secretary of State to decide how much of the cost of work done by the Department of the Environment for the agencies can be received under the agencies' charging schemes. This is therefore an area where there is potential for less than transparent accounting.

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It is very important that the agencies' fees and charges are administered on a cost recovery basis. The agencies will need to make it clear how charges are derived and which activities they are funding. Cross-subsidisation must be avoided. Charge payers should not be covering the costs of services supplied to others. Clearly, any system of charging should satisfy the payers that they are getting value for money and that the service is being supplied efficiently and fairly. The agencies will be no exception and must give value for money in the carrying out of their functions. Their fees and charges must be calculated on an open and fair basis and developed through effective consultation with those who will be paying them.
Under Clause 40(3) as drafted, the Secretary of State can set amounts to be recovered by the new agency to meet "cost and expenses" which he
"considers it appropriate to attribute to the carrying out of"
those functions in relation to activities to which environmental licences relate. That seems to give scope to the Secretary of State for imaginative accounting and that is why reassurance that the clause will not give scope for charges to expand without transparency and clarification are sought.
In addition, at present the wording in Clause 40(4) (b) is such that charges can take account of
"the depreciation of, and the provision of a return on, such assets as are held by the new Agency".
Obviously, it would not be fair to make those paying the charges cover the cost of buying an asset—a capital cost —and the cost of the asset's depreciation in value.
Clause 40(4) (a) states that when the Secretary of State is determining which costs and expenses it is appropriate to attribute to the new agency's functions, or the Minister's functions or his own in relation to environmental licences, he should take into account the new agency's "financial duties" under Clause 41. Those duties may be set out in the financial memoranda to the agencies but there is no statutory provision for disclosure. It would therefore be useful to have an explanation of what is meant by the term.
Clause 41(3) allows the Treasury to recover any surpluses that the agency may have. However, deficits could still be recovered from future charges to business. That emphasises the need for transparency and efficient management. Obviously, business does not want to pay for the agencies' deficits while the surpluses are clawed back by the Treasury. Britain must receive the best possible return for its investment in environmental protection. It is imperative that the agencies are cost-effective and endeavour to provide good quality regulation at a reasonable price.
I would welcome the Minister's assurance that the Government will remove all areas where there is potential for doubt such as this. I beg to move.
7.15 p.m.
Viscount Ullswater: The amendment seeks to ensure that, where there is any question about which sums recovered by a new agency may fairly be regarded as being recovered for the purpose of meeting a Minister's
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expenses in relation to authorisations under the Radioactive Substances Act 1993 in respect of nuclear licensed sites, this question should be determined in accordance with the relevant charging scheme. Clause 40 as it stands provides that such questions should be determined by the Secretary of State together, in England, with the Minister of Agriculture, Fisheries and Food.
I understand my noble friend's intention in bringing forward this amendment, although I do not think it is necessary or desirable. His intention appears much broader than the area on which the provisions actually fall. Therefore, I shall not discuss the amendment on the very small class of authorisations because I believe that my noble friend wanted that on a much broader basis.
The amendment would require a provision to be built into any scheme relating to authorisations. The current charging scheme made under the 1993 Act expressly provides for the Minister to receive a sum equal to his costs and expenses incurred in relation to the authorisations. In such a case, there will clearly be no question of what sums are payable to Ministers, and subsection (8) of Clause 40 would not be necessary.
There are various ways in which a charging scheme might be formulated and we would not wish to constrain the agencies in this manner. Subsection (3) requires the Secretary of State, when considering whether to approve a charging scheme submitted by an agency, to do two things: first, he must consider representations and objections; and, secondly, he must have regard to the desirability of ensuring that the amounts recovered by way of charges will meet the relevant costs and expenses incurred by the agency and, where appropriate, by Ministers. It would be unduly onerous to require the scheme to include either a set formula for apportioning income or a provision for arbitration in the case of uncertainty or argument.
The clause as drafted will ensure that, if there is any doubt, it will be resolved by those who are concerned with both the proper financing of the agency and the recovery of their own department's costs. In this way a proper balance can be struck. We consider this to be a sensible arrangement.
I believe that the provisions for charging schemes that we have included in the Bill are flexible and fair. It has always been our intention that charging schemes should only recover the agencies' costs, in respect of those of their functions which are relevant to different types of environmental licences. The legislation does not permit the agencies or Ministers to charge for whatever, and however much, they like; under the provisions of Clause 40, charging schemes will be subject to approval by the Secretary of State following consultation with those likely to be affected. We expect the agencies, as we do all public bodies, to be efficient, well run organisations offering good value for money. It is too early to say what level of grant will be provided by government, but I can assure the Committee that we shall take full account of all their functions and the statutory duties that are being placed on them in determining the agencies' resources.

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I hope that those reassurances will enable my noble friend to withdraw his amendment.
Lord Gisborough: I thank my noble friend for that explanation. I was especially glad to hear him say that the charges do no more than recover costs. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 40, as amended, agreed to.
Clauses 41 to 43 agreed to.
Clause 44 [Grants to the new Agencies]:
Earl Haigmoved Amendment No. 223ZZD:
Page 38, line 4, leave out ("may") and insert ("shall").
The noble Earl said: The amendment seeks to ensure that the agencies will have the money to carry out their statutory functions. One disadvantage of the Bill is that it would distance clients at the local level from sources of revenue. Under the present system in Scotland, funding is channelled from the local authorities through the river purification boards which are in close touch with regional authorities. Even if money is needed at short notice to cope with emergencies, it can be provided without delay.
Under the Bill, financial sources would be more remote. Procedures would take time. Time lags may emerge. Ministers who would control the purse strings with the approval of the Treasury might ignore urgent appeals from agencies. Treasury constraints may well cause agencies to be underfunded and unable to cope with emergencies.
The amendment means that all finances would not be left just to the discretion of Ministers and to the Treasury, but some money would be kept up front ready to meet emergencies. Ministers would ensure that grants were adequate for the agencies to meet their commitments, but the arm's length principle would prevail over too much control by central government.
Without some qualification of Clause 44, there must be doubts about the level of damage limitation in the event of a crisis. Perhaps I may declare an interest as a Tweed riparian owner. Since 1955, when the Tweed Purification Board was set up, there have been several events which might have turned nasty had there not been a quick and successful response. Thanks to careful monitoring, the quality of the water has improved. Through this simple proposal, we would have some assurance that we will enjoy the security we have enjoyed in the past. I hope that my noble friend will accept the amendment. I beg to move.
Viscount Ullswater: Amendments Nos. 223ZZD and 223ZZE seek to ensure that the agency will have sufficient financial support from government to enable it to carry out its statutory functions.
Clearly it is important that the agencies should be adequately funded, and although the charging schemes will enable them to recover their costs in respect of many of their activities, we do not expect that either of the agencies is likely to be entirely self-financing in the foreseeable future. We expect that they will continue to be supported by government grant.
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The current precept system is based on seven river purification boards with boundaries broadly similar to those of the Scottish Regional Council. That system is not appropriate for a national agency. The provision in Clause 44, however, is modelled on the equivalent provision for the NRA in Section 146(1) of the Water Resources Act 1991 and is the standard wording for ministerial grant-making powers to non-departmental public bodies. I see no reason to change this. I hope that my noble friend will withdraw the amendment.
Earl Haig: I am disappointed that the amendment has not been felt worthy of consideration. I can do nothing at this stage but take it away. I should like time to think about whether to bring it back on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 223ZZE not moved.]
Clause 44 agreed to.
The Earl of Lindsay: I beg to move that the House do now resume. In moving this Motion perhaps I may suggest that the Committee stage resumes again at 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Historic Buildings: VAT on Repairs
7.28 p.m.
The Lord Bishop of Norwichrose to ask Her Majesty's Government whether they will support moves within the European Union to set a lower rate of VAT for repairs to historic buildings, including Grade I listed parish churches.
The right reverend Prelate said: My Lords, I am glad to have the opportunity to ask this Question, because it allows me to highlight an issue of great importance and widespread interest. I am grateful to the large numbers of noble Lords from all sides of the House who have expressed their concern over this issue, even though many of them were prevented from being here this evening. I am also grateful to the noble Lord, Lord Mackay of Ardbrecknish, for being here, and I look forward to hearing his response.
This is a subject which deserves thorough treatment—far more thorough than is possible within the confines of this evening's debate. The issue is timely because the European Commission is pledged to revise the transitional phase of VAT by the end of December 1996. Under the definitive phase which follows, member states will be authorised to apply, in addition to the standard rate, one or two reduced rates, which must not be less than 5 per cent., to a limited list of products and services.
The revision of that list will be undertaken shortly, and there is a considerable and powerful body of opinion throughout Europe which is urging that heritage items should be included. It is therefore important to encourage our government representatives, not least the

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Chancellor of the Exchequer, who will attend a meeting of Ministers in March, to support such moves, or, at the very least not to oppose them.
The Question embraces all historic buildings, but I wish to limit what I say to the buildings that I know best—our ancient parish churches, particularly those in rural areas. A similar case can be made for cathedrals, stately homes, and other public buildings. But parish churches focus the issue sharply, because they, unlike some other categories of building, depend very much on money raised locally, often in very small communities; but, like the others, they form an important part of our national heritage.
I speak from personal experience of nine years in a diocese where I have the care of some 650 mediaeval churches which are listed as of special architectural and historic interest. My brother of Lincoln has a few more churches than I have but the diocese of Norwich has more mediaeval churches per acre than anywhere else in the world. The city of Norwich contains more mediaeval churches than the cities of London, Bath and Bristol combined. The large majority of those buildings are in small communities; nearly half in villages with fewer than 300 inhabitants.
Of course, we must not forget the great things that have been achieved. The past 30 years will go down in history as one of the greatest ages of church restoration, far exceeding that of our Victorian forefathers. Taken overall, most of our ancient churches are in a better state of repair than since the Middle Ages and the quality of the work is such that it will last for generations. Of that we can be justly proud.
However, serious problems remain. Perhaps I might illustrate that by quoting extracts from the letters of two Norfolk parsons. The first states:
"We have just completed repairs to the church tower at a cost of over £30,000, thanks to the years of effort by the tiny congregation and generous grants. In another of my parishes with some 30 houses and a congregation that can be counted on the fingers of one hand, we faced repairs in excess of £40,000".
He concludes:
"the days when it is possible for tiny congregations to maintain ancient buildings together with the expenses of the ordained ministry, sadly appear to be numbered".
Those are the words of a hard-working, very experienced, imaginative and faithful country parson like whom, thank God, there are scores of others in all our rural areas. But we need to take seriously the reality that he and his parishioners face week by week.
The second letter relates directly to the Question that I am asking. He writes:
"We have just completed the repairs to our parish church. We are immensely grateful for the grant we have received from English Heritage. It just covers the bill for the VAT on the repairs".
That parson, little does he know it, was lucky because, taken overall, the grants received from the Government through English Heritage amount to less than half the total bill for VAT on the repairs to our church buildings. When we repair our ancient churches, the Government receive more than twice what they give. And that is true not only of church buildings.
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For years the churches have urged the Government to charge a lower or zero rate of VAT on repairs to church buildings. We have been met with adamant refusal. Ministers' replies to letters on this subject have been less than satisfactory. "You will appreciate", says one, "that a concession to one worthy cause raises expectations for similar special treatment from other equally worthy causes". The blandness of that reply evades the reality that there are very few causes where so much is undertaken by so few for so many. It is sometimes pointed out that extensions and alterations to churches are zero rated. True, but maintenance and repair involve 95 per cent. of our expenditure on church buildings and they attract the full rate of 17.5 per cent. VAT.
In recent years within the European Community there has been a growing and widespread opinion that concessions should be made for repairs to ancient buildings. The Maastricht Treaty of 1993 added to the provisions on Community policies a new title IX "Culture". In a single article (Article 128) it states,
"The Community shall contribute to the flowering of the cultures of member states".
It also states that,
"Conservation and Safeguarding of the Cultural Heritage of European significance",
shall be one of the priority action areas.
As far back as 1991 the Committee of Ministers of the Council of Europe advocated VAT relief among other measures in favour of the conservation of the architectural heritage. In addition, the Vienna Summit of Heads of State of the Council of Europe, meeting in October 1993, stressed the importance of the cultural heritage.
Our mediaeval churches are a rich inheritance which I believe we have a duty to care for. Parishioners in rural areas have raised millions. Those who are not regular churchgoers are also often generous in support of their building which is part of the whole community. In Norfolk, as in other counties, we have formed village church trusts, and we have the local support of the marvellous work of the Norfolk Churches Trust. But the size of the problem is enormous, and it is a problem which belongs to the whole nation because it concerns what is a significant part of our national heritage.
The Government recognise this in many of their public pronouncements and in the practical action they have taken in enabling grants to be made, notably through English Heritage. But much more needs to be done. It is not enough to point to the tax concessions made to individuals who give to charity. This is an issue which is beyond the scope of individual response; it is beyond the scope of small communities; it is beyond the scope of local trusts. It is an issue which belongs to us all and which is the responsibility of us all, including our Government.
I could have produced many more arguments, perhaps appealing to the Government's self-interest, by justifying the case in terms which would benefit the economy—concerning the importance of these matters in relation to one of our largest and growing industries, tourism; in relation to job creation; that it actually makes long-term economic sense. But I shall leave those

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arguments to noble Lords better qualified than I am. I wish simply to appeal to the Government's higher motives, and to what I regard as natural justice. It is a ludicrous and unjust state of affairs when the Government take back from those who guard the nation's heritage more than twice what they give to them.
This is not just an issue for the churches; it is an issue of our nation's heritage. The Government are fellow guardians with the churches and other groups of that heritage. We do not begrudge the money, time and energy that we give, but we do find it difficult to understand why the Government so far have been unwilling to look sympathetically at this issue. My hope is that the opportunity which is presented to us through new moves in Europe will encourage our Government to think new thoughts and make new commitments and perhaps to take a lead in Europe in a matter which is of immense importance to us and to the generations who succeed us.
The Government hath given and the Government taketh away. Blessed is the name of the Government that giveth just a little more than they taketh away.
7.37 p.m.
Lord Dean of Harptree: My Lords, I support the powerful case made by the right reverend Prelate the Bishop of Norwich. I was appalled to hear that, although the state gives certain contributions to assist the churches, it takes back substantially more in VAT. It is the old Whitehall trick; if you have to give with one hand, make sure if you possibly can that you take away more with the other.
The right reverend Prelate mentioned country churches. The church with which I am involved is a country church. There are three small villages with small populations and there are three churches. The treasurer tells me that normal maintenance—not large works—costs an average of £5,000 per year. Of course, VAT is added to that.
We must also take into account the fact that we in the Church of England are expected to raise larger sums of money in quota because less comes from the Church Commission. That is a new factor which I hope the Government will take seriously.
As was said by the right reverend Prelate, we have a rich and glorious heritage in our churches. We must maintain them in good order so that God may be praised in them for many centuries to come. Inevitably, repairs to churches involve specialist work, which is time consuming and therefore costly. Zero VAT rating, or at least a reduced rate, would be a great help. I hope that we shall receive a sympathetic and positive response from the Government.
7.39 p.m.
Baroness Nicol: My Lords, I am grateful to the right reverend Prelate for giving us the opportunity of this debate, even though it is very short and there is hardly time to say more than, "I agree with everything that he said". However, I shall do my best.
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It has been agreed generally so far that our churches are part of our heritage and that it is our duty to see that they are properly maintained. But by their nature, as the noble Lord, Lord Dean, has just said, they are expensive to maintain and repair. Although the heritage grants are extremely welcome, there is the disadvantage that they come with strings attached. Quite often the extra work entailed as a result of those strings adds considerably to the buildings costs. I do not blame English Heritage for that because I know that it must keep up its standards. Nevertheless, that is a factor which must be taken into account. As we have heard, the grant may be less than is paid out in VAT in some cases.
But the importance to the community of those churches cannot be overestimated, even though the congregations may be very small. That is no reflection of the feeling which local people have toward their church. I know that the congregations should be larger but they are not. However, whenever people are in trouble or want to get married or hold a christening, they turn naturally to the Church. It is only right and proper that that should be their feeling and that the church to which they go should be in a good state of repair.
Some congregations struggle very hard to keep up their churches. It seems to me quite wrong that the pennies that they raise by baking cakes and holding jumble sales, and all the other things which are done to raise money, should attract VAT. I hope that the Government will look kindly upon the request made this evening by the right reverend Prelate and that they will at least consider setting a lower rate of VAT if they cannot abolish it altogether.
7.41 p.m.
The Lord Bishop of Chester: My Lords, I am grateful to be able to intervene in the debate. I speak also as the chairman of the Committee for State Aid to Churches in Use. In that sense, we are grateful that over 10 years, English Heritage has given £90 million for churches. That is an average of £9 million per year. But in 1992, the bill for repairs and renovations was £112 million so that £9 million does not go far towards that, although we are grateful for it.
There are 16,364 Church of England churches of which 12,970 are listed Grade I or II buildings. They were built mostly in an age before mobility was easy. If the Church of England began today, it would not start from where it is. In view of the mobility in relation to supermarkets, medical centres and so on, we should probably build only one in 10 of our churches. But we have them and they are very much part of the nation's heritage, not just part of the Church's heritage. They crown the landscape all over our country and wonderfully so. In one town in my diocese, £100,000 was raised to prop up a tower which was about to fall down—a free-standing tower which used to belong to the church. That was done because it crowned the village. Without it, the village would never have looked the same. Therefore, there is a sense in which this is a national rather than a Church question.
Indeed, 40 per cent. of all that English Heritage does goes to churches. It estimates that that is the proportion of its heritage responsibility. The local community

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strains to continue with that work, as we know. It really is a fight for some small communities. There may be only 300 people in a community which has a large church. My diocese has many such churches. They are wonderful, beautiful buildings which are left rather like whales on the beach from a time when the community was all around. But they are there and the village people fight to maintain them. The last cruel blow is the 17.5 per cent. VAT on top of it all.
Now we have an opportunity for action. The European Commission recommending a review of VAT this year is, as I understand it, well persuaded by the strong heritage lobby in Europe that there must be an alteration to Annex H and, within it, there should be the possibility of a lower rate for the support and repairs of heritage buildings. If that is what is declared in a few weeks time—and I understand that it may be—that is the moment not for reaction but for action; it is not the moment for pathetic excuses or shilly-shallying. This is the moment that Britain should be a country of culture taking a lead to support that move. We should not drag our feet but should lead the way in Europe by setting a lower rate for the support of heritage buildings throughout Europe.
7.45 p.m.
Lord Montagu of Beaulieu: My Lords, I quickly declare an interest and go on to remind the House that there are half a million listed buildings and 14,000 scheduled monuments in England, all of which carry a repair duty of 17.5 per cent. VAT.
Sixty three per cent. of all listed buildings are domestic. They range from Blenheim Palace to humble cottages in Lincolnshire. The span of owners is similarly wide, from dukes to sometimes very poor retired couples on income support who own Grade II buildings. Of course, religious buildings represent the greatest number, but it is worthy of note that the Church of England, which is responsible for over 6,000 Grade I buildings, receives proportionately less public money per listed building than does the National Trust. Therefore, a reduction in the rate of VAT should certainly not be seen as a gift to the very well off.
The rise in VAT rates since its introduction has not been paralleled by any similar rise in government grants. Exact figures are almost impossible to come by, but the recent 2.5 per cent. increase in VAT represents about 10 per cent. of the total grant of English Heritage aid. There is no doubt that the Government are getting more back in VAT on repairs to historic buildings than they are providing in grant aid through English Heritage. That applies also to Scotland and Wales.
The impact of VAT on owners falls most heavily on those who have no opportunity to reclaim it. Those particularly affected include the owners of smaller historic houses and bodies such as the Church of England and charities. Commercial and business owners and those with major houses offset VAT on repairs against VAT charged on the services which they supply. The impact of VAT on historic building owners is thus not neutral but regressive.
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The campaign to achieve a lower rate of VAT for repairs to historic buildings has widespread support from building professionals. In England the Historic Houses Association and the National Trust, with English Heritage, have taken a lead with support from the major amenities societies, the Church and many other representative bodies.
The desirability of reducing VAT rates for repairs on listed buildings is the most important issue which concerns them. I am not arguing for a special regime for the repair of listed buildings in isolation, but I ask the Government to support the inclusion of repairs to historic buildings in the list of goods which attract a reduced rate of VAT in Annex H. It would not require the Government to introduce such a rate now in the UK, but would merely provide the opportunity for a future government to do so after 1997.
7.47 p.m.
Lord Bishop of Chelmsford: My Lords, I speak as chairman of the Churches Main Committee. The committee represents some 35 denominations and has, as part of its brief:
"to act as a liaison body between the churches and the machinery of government".
Most of the denominations that we represent have historic churches and all of them suffer from the burden of VAT on repairs to their church buildings.
For some 20 years now, ever since the introduction of VAT, we have been in communication with successive Chancellors requesting some relief in VAT on repair expenditure. But always we have met with total resistance. It is all very well for the Government to say, as they do, that the proper way of giving tax relief to charities is through income tax rebates rather than VAT reductions, thus enabling the charities to spend their money as they choose. But the Church has to spend a large part of its income on items which are subject to VAT. If the buildings were not maintained, they would cease to be usable and may even become structurally dangerous. It simply does not have any choice in the matter.
The Government recognise the importance of maintaining historic buildings as part of the national heritage. They make grants towards the upkeep of some of them. But ironically, the grants which they make towards the repair of churches are far outweighed by the VAT which the Government claw back. Is that really how the Government wish to treat parishioners who shoulder on behalf of the nation a major responsibility in the maintenance of buildings which are part of our national heritage? In 1991, the Church paid £35 million in VAT, compared with £8 million of grant aid received through English Heritage. Today, the VAT bill is nearer £50 million.
Our church buildings have a religious community and cultural significance. They are visited by vast numbers of people, they have become tourist attractions and their upkeep engenders a good deal of work. Therefore, in terms of the balance of payments and the creation of jobs, they have an added importance. The latter are

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among the criteria which have led the European Commission to adjudge some items as being worthy of a lower VAT rate.
On behalf of all the major denominations, I strongly urge the Government to make a clear statement that they will now commit themselves to early action along the lines suggested in tonight's debate.
7.50 p.m.
Lord Mountevans: My Lords, I am grateful to the right reverend Prelate for giving us the opportunity to debate VAT in the context of repairs to historic and listed buildings. The tourism industry, in which I declare an interest, would welcome European moves towards more sympathetic treatment.
The built heritage is a major part of our attraction as a tourist destination—70 per cent. of a recent sample of foreign visitors to London said that it was our greatest attraction. In another survey, 65 per cent. of foreign visitors to Britain stated that, in general, our cathedrals, historic houses and sites of historic importance were their main reason for coming here. Anything that we can do to enhance such attractions and their viability must add to our competitiveness in the cut throat world of international tourism.
To that end, the British Tourist Authority has set up a working party of relevant, major trade associations, including the Historic Houses Association, to look at the effects of VAT on our international competitiveness. As I understand it, Touche Ross is in the final stages of a complex study on the subject. The study aims to demonstrate that applying a reduced rate of VAT to a range of tourism products in the United Kingdom—and, in particular, to the built heritage and in line with our European partners—would have a positive or, at the worst, a neutral impact on Exchequer revenues because extra tourism business would be generated.
The working party has also been concerned to see the scope of the EU reduced rate list extended. Discussions are currently in progress in Brussels about this, as part of the moves towards agreeing the final or "definitive" VAT regime. Repairs to listed buildings is one of the items which the working party—and I repeat myself here—would most like to see included.
I very much hope that the Government will study very carefully the final report from the BTA working party and, in the negotiations on the final scope of the reduced rate list, campaign for the list to include repairs, among other things, to our ecclesiastical heritage but also to our built heritage in general. To do so would benefit not only our own lives but also our tourism industry immensely.
7.53 p.m.
Lord Walpole: My Lords, I should like to thank the right reverend Prelate the Bishop of Norwich, in whose diocese I live, for tabling tonight's Unstarred Question. He said that he had about 650 mediaeval churches in his diocese, of which 300 are in the countryside, with populations of less than 300 to look after them. But, incidentally, what he did not say is that there are more mediaeval churches in Norwich than there are in the city of Florence.
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I suppose that I am declaring an interest of some sort when I say that I am a church warden who is responsible for one of those small mediaeval churches which is situated right out in the country and listed Grade II*. Of the seven churches in our group, we have two Grade I and the rest are Grade II or Grade II*. I firmly believe that the lower rate of VAT should be applicable to all listed churches.
My concern is not only for the main structure of the church —indeed, I speak somewhat proudly because we have actually finished our roof and paid VAT on it—but also for the other parts of it which make the church so important, especially when they are listed. I refer to the interior. For example, we are at present trying to restore an organ which dates back to 1820, but VAT makes the bill for restoring it look quite horrible. The other monuments, bells and furnishings, when they are listed, should also qualify for the lower rate of VAT. Again, if one looks outside the church into the churchyard, the walls, gates, monuments and, as I am sure noble Lords will all expect me to say, its archaeological remains, together with the buildings and the tombstones, should also attract the lower rate of VAT when being repaired. Incidentally, those planners among noble Lords present this evening will know what I mean when I say that we had a tombstone which was declared a "building at risk". That was indeed so.
Churchyards are indeed an important part of the ambience of the church. They are havens for wildlife. We all know that that is so in the cities; but that is also the case in the countryside simply because that is one of the few areas where there are no chemicals to be found. They are also havens for people—people of all creeds and denominations. It is all part of our heritage which all taxpayers can support.
7.55 p.m.
Lord Suffield: My Lords, I should like to add my support to that already expressed for the right reverend Prelate the Bishop of Norwich. In Norfolk, in particular, we have inherited many churches built in times when local trade and financial support were more apparent than they are today. Such churches are now dependent on a small body of parishioners who are responsible for finding the quota to help pay the vicar's stipend but sometimes also have to find vast sums of money for repairs. I believe that a lower rate of VAT is fully justified and I urge that that be supported.
7.56 p.m.
Viscount Brentford: My Lords, I thank the right reverend Prelate for introducing the Question. I should like to urge the Government to accept the proposal that we are now considering. Like other speakers, I am most concerned about the listed parish churches which fill our countryside and also our towns. There are two points that I should like to make in that connection, while appreciating the grants that are made both to cathedrals, which I believe take the bulk of the cash, and also to churches from English Heritage.
First, as has been mentioned, those churches are often maintained by very small congregations and also by the local communities. The fact that they are accepted as a

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responsibility by the communities as well as the congregations is, I believe, evidence of the fact that it is the responsibility of the nation.
Secondly, parish churches are not money-making edifices. They are not like the Tower of London which receives a great deal of money from people who pay to visit it. Parish churches cannot afford the high rate of VAT. Therefore, I urge my noble friend the Minister to agree to accept the spirit of the proposal and to reconsider the position of the parish church as far as concerns heritage matters. If my noble friend is prepared to reconsider the latter, I should be most happy to write to him on one or two other factors that make parish churches suffer under the present heritage system.
7.58 p.m.
Lord Chorley: My Lords, I intervene tonight as chairman of the National Trust. The trust does not, in fact, have a serious VAT problem as regards its historic buildings. There is a simple technical reason for that which is not available to most private owners or, for that matter, to the Church. Nevertheless the trust strongly supports any move to reduce the VAT burden on the private owner. The reason is quite simple. Contrary to popular impressions, our sole purpose is to act as a long-stop should all else fail. We are not in the takeover business. We have long taken the view that the right way to preserve our heritage is through private ownership. A healthy private sector is all important to us; and, indeed, I would suggest, to the nation.
We strongly believe that the right way forward is that suggested in tonight's Unstarred Question—through the European Commission. The trust has been working strongly in Brussels over the past several years to that end.
It would be an enormous help to have the active support of the Government, or even merely an assurance that the Government will not oppose any moves by the Commission leading to a reduced rate. For example, a first stage, empowering member state governments to introduce the reduced rate at their discretion—I emphasise at their discretion —would be a great help.
I suggest that a reduced rate concession would be excellent value for the taxpayer's money. I see that as being in the nature of a fruitful partnership between the state and the private owner. After all, the private owner supplies the building which is open to the public. His huge expenditure of time and energy all comes for free.
We should not forget that stately home visiting is a hugely popular recreational activity. Nor should we forget—this point has already been mentioned—the importance of tourism as a foreign exchange earner. By contrast we have the ludicrous situation that in many cases the taxpayer pays the private owner as farmer to do nothing with part of his land—it is called set aside. That is, I suggest, an absurd state of affairs.
8 p.m.
Viscount Massereene and Ferrard: My Lords, the owners of historic buildings already have a heavy burden to carry. Not only are the buildings usually inconvenient and draughty to live in, or if they are not
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dwelling-houses the chances are they are equally inconvenient for the use they are put to. On top of that, anybody unlucky enough to be involved in a Grade I building is today hamstrung as to alterations and repairs. All building work, however trivial, has to be passed by the relevant department and has to be done in traditional materials in the traditional way, which usually costs over double what it would cost if the work was done in the modern way with today's materials.
Of course your Lordships will be aware that there are grants on occasions to help with this work, but in my experience even with the grant, which is usually 50 per cent., the work still costs more than if the owner was given a free hand to do the repairs as he thought fit. I am not necessarily decrying the rules on historic buildings or the grant system. In fact I think we look after our historic buildings very well in the UK, considering the large number that have been left to us. What I do feel most strongly is that charging VAT on repairs, considering all the impositions and disadvantages an owner of an historic building has, is adding insult to injury. I declare an interest in as much as I am chairman of the Friends of St. Ethelburga's, the mediaeval church in Bishopsgate which was blown up by the IRA. We have been quoted £2 million to restore that church. On top of that we have to add a smart £340,000 VAT.
8.2 p.m.
Baroness Strange: My Lords, when the right reverend Prelate suggested I might join in his Unstarred Question, I was delighted to do so, and even more now that I realise my contribution will have to be subliminal. If your Lordships yawn, you will miss it. I endorse entirely what the right reverend Prelate and other noble Lords have said. For some years now the Historic Houses Association has been campaigning for a reduced rate of VAT on essential repairs to historic buildings, houses as well as churches, because being old, like people who are getting on, they are in more need of repair than younger, newer ones.
We live in a beautiful country, and much of that beauty comes from the old houses and churches which punctuate the landscape. We want our grandchildren, and those who come after us, to share this beauty. But it can only be maintained by constant repair. Of course I have an interest to declare, living in a nest of ancient buildings, which all need repairing all the time. This winter for example, the roof of a 19th century dairy fell in in our courtyard, and also the roof of an 18th century gothic garden shed. Last year it was the 18th century wall which ran from the back door to the old laundry which fell down in the middle of the night, much to the dismay of the lady who lived behind it. We built that up. We will probably restore the roofs this year—at least we plan to. But without looking too far ahead, we are wondering what will fall down next year. To reduce the

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rate of VAT on repairs to historic houses, castles and churches, might help to prevent us all living in a countryside punctuated by ruins.
8.4 p.m.
Lord Eatwell: My Lords, it is evident from the debate this evening that there is deep dissatisfaction with the Government's approach to our national heritage. There has been a wealth of evidence presented by noble Lords on all sides of the House that buildings of vital importance to our nation's history and in our nation's cultural life are being allowed to decay, in some cases beyond repair. That is the issue which it is vital for the Minister to address this evening.
A powerful case has been made on all sides of the House for a lower rate of VAT on repairs. Of course the Government will not accede to the right reverend Prelate's request. It is impossible to imagine this Government willingly reducing any rate of VAT. As everyone in this House is well aware, the Government are VAT junkies. Every few years they need a new VAT uprating fix.
I suggest that the future of Grade I buildings is too important to be embroiled in the complexities of European Union tax law. It is all too likely that implicit tax subsidies would end up in many pockets which have little or nothing to do with any nation's heritage. Instead of leading noble Lords astray into the maze of tax legislation, the Minister should this evening be proposing practical steps to deal with Britain's heritage and in particular with the problems of repairs to our mediaeval churches. What new measures is the Minister prepared to announce this evening which will have immediate and practical consequences for the restoration of Britain's Grade I listed buildings? In particular what practical steps will he announce to deal with the problems of church restoration? Is he prepared to back the development of matching funds schemes to encourage those thousands of enthusiastic volunteers who spend so much of their time raising funds to help preserve our national heritage?
As many speakers in this debate have emphasised, the preservation of Grade I listed buildings is an important contribution to the tourist revenues which are one of this country's most important invisible exports. Are the Government, at very least, prepared to acknowledge this fact, and to make a commitment this evening to bring to this House for debate a proper study of the economic benefits which this country derives from our Grade I listed buildings?
Finally, given the obvious importance which Members of your Lordships' House attach to this question, are the Government prepared to provide appropriate time for a thorough debate of the economic and cultural issues involved in deciding upon an appropriate level of investment in the preservation of our national heritage?
8.7 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the House is clearly grateful to the right reverend Prelate the Bishop of Norwich for introducing this debate and
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giving your Lordships the chance to have two minutes and a little bit each on the subject. I think I have been subject to what might be considered in another context as short, sharp shock treatment. Certainly the fact that your Lordships' speeches were contained in two minutes did nothing to minimise the message which you were delivering to me and to the Government.
The right reverend Prelate the Bishop of Norwich said—I wrote this down—that in his area there were more mediaeval churches per acre than anywhere else in the world. Perhaps as we are talking about European directives that should have been translated into hectares. Nevertheless the right reverend Prelate will still have more mediaeval churches than anywhere else. That is certainly one of the joys of going to places such as Norfolk, which to a Scot appears pretty flat. However, the one redeeming feature—perhaps there are more than one—and the great beauty of Norfolk is the parish churches. Often they have sadly been left behind in the march of population. One asks oneself who is around in that area to use churches of that size. Clearly when those churches were built the rural areas were heavily populated.
I understand and appreciate the sentiments expressed by all noble Lords this evening that we should indeed preserve our unique heritage for the benefit of both present and future generations, and there is the important commercial need to preserve and enhance our historic buildings for the tourist industry which is so important to the economic health of the country. As my noble friend Lord Dean of Harptree rightly pointed out, we should preserve these buildings for their original purpose of worshipping and glorifying God. We should not omit that purpose from the list.
The Government remain fully committed to promoting a wider understanding of our country's built heritage. We provide considerable support both through tax reliefs and grants, to which I shall refer later.
The main question raised by your Lordships in the debate tonight is the Government's policy on positive reduced rates of VAT. I regret to say to the House that the position that I shall underline is the one that your Lordships probably expect but would prefer not to hear; the House would prefer to hear me say something different. We remain opposed to a variety of reduced rates of VAT as a matter of principle. We believe that they complicate the operation and administration of the tax and inevitably erode the revenue yield.
The Government have made it quite clear—and I have to do so again this evening—that we have no plans to have a reduced rate of VAT on anything other than domestic fuel and power. Our long-standing policy has been to favour a simple rate structure, with a single standard rate and a zero rate.
As noble Lords mentioned, the European Commission has just published a report on the approximation of value added tax rates having regard to the functioning of the internal market. The report also sought to establish whether distortions of competition between member states had arisen as a result of the operation of reduced rates in the single market. The review concluded that in the present circumstances there does not appear to be

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any justification for introducing major modifications in respect of the level and structure of the rate system or in the scope of the reduced rate list.
Turning to the situation in the United Kingdom, the total number of listed buildings is approximately 510,000. In England alone there are approximately 9,000 Grade I listed buildings, of which 4,100 are Anglican or Roman Catholic parish churches, 18,000 Grade II* listed buildings and 416,000 Grade II listed buildings.
The Department of National Heritage receives overall funding from the Treasury. It decides on the distribution of that money to bodies such as English Heritage, which in turn allocate those limited resources to individual projects on the basis of the greatest need. This year English Heritage will receive more than £104 million in government grant. Of that it will provide an estimated £44 million in grant assistance, of which £10.5 million will assist church restoration and £4.3 million will go to cathedrals. Assistance from English Heritage is usually restricted to those buildings which English Heritage considers to be of outstanding historic or architectural interest, which is reflected in their listed status as Grade I or Grade II* buildings.
In addition, Scotland, Northern Ireland and Wales received from the Government a further £18 million in grants, of which a substantial percentage was given to religious buildings. In Scotland, for example, about £12 million has been made available through the responsible agency, Historic Scotland, in the current year under the grant scheme for both secular and ecclesiastical listed buildings. Glasgow Cathedral, where I worship, is very grateful for the work of Historic Scotland in maintaining that building. Fortunately, it is in the ownership of Historic Scotland and not of the congregation, who would find it extremely difficult to maintain a building of that size and importance.
In Wales the grant budget is £4 million. Expenditure up to January this year was £2.25 million, of which approximately £500,000 was for churches. In Northern Ireland the grant for listed buildings amounts to £2.25 million, of which just over £250,000 is allocated to churches.
Local authorities are also empowered to offer grants for the repair of buildings, whether or not they are listed buildings. They give a total of the order of £11 million.
Lord Walpole: My Lords, does the Minister have figures as to how much VAT the Government have removed from those congregations at the same time?
Lord Mackay of Ardbrecknish: No, my Lords. Obviously that figure is not available. The VAT is paid by the building firms which do the work, both small and large. Their VAT returns include all the work that they do. Nobody prayed this point in aid, but those historic buildings which charge admission fees and run businesses—although cathedrals may not be in that category—may sometimes be in a position to reclaim at least some of the VAT. Therefore there is a possibility of reclaiming VAT in respect of some part of the built heritage. However, I concede that that does not cover
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those buildings where there is no admission charge and which are not businesses; and of course it does not cover parish churches.
There is one other future source of funds, although I am not entirely sure whether I should mention it in this context. That is the National Lottery and the National Heritage Memorial Fund. I believe it was William Booth of the Salvation Army who asked why the Devil should have all the best tunes. Perhaps the same should apply to the National Heritage Memorial Fund.
The fund is charged with the distribution of the heritage tranche of the lottery proceeds. Like other distributing bodies, it has drawn up guidelines for applicants for lottery funding. Churches of historic interest are among the bodies eligible to apply for funding from the National Heritage Memorial Fund for repair, conservation or restoration of buildings and for improvement to existing buildings to improve public access. Therefore, whether or not one approves of the lottery, a considerable amount of money will come forward in the next few years which will be available for the built heritage, including churches, in addition to the money already available from the taxpayer through the Treasury.
Lord Chorley: My Lords, I am sorry to intervene, but we have 15 minutes left. Does the Minister not agree that it has been made quite clear that lottery money will not be available for repairs?
Lord Mackay of Ardbrecknish: My Lords, I am told that money from the National Heritage Memorial Fund will be available for repairs, conservation or restoration of buildings. When I get back to my office I shall certainly ask whether that is right or whether the noble Lord is right. If the advice that I have received is wrong I shall certainly write to him. However, if the money is not available for repairs I am not entirely sure how one would define repairs as against conservation or restoration. It must be confusing when it comes to mediaeval churches or old buildings. Thinking on my feet, I do not think that that will be a great problem.
We recognise the financial burden borne by churches. The right reverend Prelates rightly drew our attention to that burden. It is a problem which many congregations face. Sometimes congregations are unlucky enough to have a modern church built 50 or 60 years ago which is not likely to stand the same test of time as mediaeval churches. The parishioners of those churches have a tremendous responsibility, as do the owners of houses of historic interest.
We fully appreciate the work of the churches and their important role in society. While I appreciate that there was a call for churches to be protected from taxation, I am sure that your Lordships will not be surprised to hear me say that no matter how valuable we consider the work that they and others do, it is not possible to protect certain groups from taxation which applies to everyone else. The number of people who would come forward, especially in relation to buildings, to plead that their cause deserved special VAT treatment would be considerable.

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Despite the suggestion of the noble Lord, Lord Eatwell, that we are VAT junkies, the fact is that VAT is an important part of the tax base. When I do not speak from this Dispatch Box on behalf of the Treasury I speak for the Department of Social Security, which requires a vast amount of taxpayers' money to assist many people whom your Lordships would rightly consider we ought to help. I do not think that we should run away with the idea that VAT can be discounted as being of importance to the Treasury as part of the tax take which we need in order to meet the competing demands on the taxpayers' money. Rather than going down the road which I am invited to follow this evening, our preferred way of helping churches is to encourage charitable giving by direct grants and by the grants through historic church buildings, consistent with what the country and the taxpayer can afford.
I know that all churches are keen to push charitable giving on people. I am amazed at the number of people who are reluctant to do that. They somehow believe that it will cost them something, whereas it will cost the taxpayer and the Treasury a little in addition to what most people will give Sunday by Sunday. Deeds of covenant, gift aids and payroll giving are all methods by which people can increase the amount of money that they give to whatever the good cause—in this case the church and church buildings.
In conclusion, the European Commission's report is perfectly clear: this is not the time to make changes in the reduced rate schedule. In its opinion, the present arrangements are working satisfactorily. Its next report will be in two years' time and will address any possible changes in the rate coverage against the Commission's conclusion on the definitive VAT system. We shall, of course, consider the position at that time.
Without ignoring the excellent cases that have been put forward by all noble Lords, I hope that I have made clear the Government's position on value added tax. I simply say that I do not believe that this is the right way to proceed with maintaining, as we should, this important part of our heritage.
Lord Eatwell: My Lords, before he sits down, I asked the Minister a number of questions, none of which he has attempted to answer. However, given the shortage of time and the considerable interest in this Question expressed on all sides of the House, despite the Minister's evident embarrassment, will he give a commitment to provide time for the subject to be debated at an appropriate and less hurried length?
Lord Mackay of Ardbrecknish: My Lords, that is not a matter for me but for the usual channels. I shall certainly draw their attention to the fact that the noble Lord would like to have a longer debate. But I do not believe that the case would be better made by having five-minute or 10-minute speeches than it has been by having two-minute speeches.
Lord Lucas: My Lords, I beg to move that the House do now adjourn during pleasure until half past-eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.22 to 8.30 p.m.]

Environment Bill [H.L.]
House again in Committee
Clause 45 [Borrowing powers]:
Baroness Hamweemoved Amendment No. 223ZA:
Page 38, line 28, leave out ("not exceeding £160 million,").
The noble Baroness said: I wish to speak to Amendments Nos. 223ZA and 223AA with which are grouped Amendments Nos. 223A and 223B. This is an entirely simple and straightforward point. In moving to delete the limits on borrowing, I seek to ask the Minister how those limits have been arrived at. £160 million is a little more than £150 million which was a good round figure, but it seems a slightly odd amount to pick out of the air. My point is as simple as that. I beg to move.
Lord Carmichael of Kelvingrove: Perhaps I may help by speaking to Amendments Nos. 223A and 223B which were grouped with the noble Baroness's amendments. I am also concerned about whether the new body will be able to function. The Minister may not be able to give us the figures now, although there is no reason why he should not have them somewhere. How do the total figures for borrowing relate to the amounts that can already be borrowed by the existing bodies? Is any new money involved or is it an accumulation from all the other bodies at present involved in environmental work? Does it all add up to the same thing?
Perhaps I should continue speaking until, as a famous Member used to say, the Seventh Cavalry arrives. If there is no new money for the new body, we will not get far because so much is involved. Perhaps we may have the figures from the Minister.
The Earl of Lindsay: Amendments Nos. 223ZA and 223AA, moved by the noble Baroness, Lady Hamwee, would remove the upper limits on the amounts that Ministers may specify, by means of a negative resolution order, as the total that the agencies may borrow.
I believe that if it were ever necessary for the agency to borrow sums in excess of £160 million for a major project, it is likely that additional enabling legislation would be required, for example, as was necessary when consideration was being given to the building of the Thames Barrier. I do not think that the limit, which is the same as currently applies to the NRA under the Water Resources Act 1991—and that may explain to the noble Baroness why the sum was chosen—will give rise to any difficulties in practice. Nor do I believe that the limit of £5 million for SEPA is likely to cause any difficulties, in particular because it will not be undertaking any major capital works similar to those at present carried out by the NRA. I hope that the noble Lord and the noble Baroness will feel able to withdraw their amendments.
The noble Lord, Lord Carmichael, moved Amendments Nos. 223A and 223B—
Lord Carmichael of Kelvingrove: I was not in a position to move them, I spoke to them.
The Earl of Lindsay: Yes. The amendments seek to increase SEPA's borrowing limits to bring them more

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into line with those of the environment agency. I suggest to the noble Lord that there is no need to do that since the environment agency's limit applies to both temporary and long-term borrowing. It includes any capital loans relating to flood defence. Since SEPA will not have the responsibility for flood defence works, it is not appropriate for its borrowing limits to be as high in equivalent terms. I am satisfied that the proposed limits are adequate.
In response to the noble Lord's specific question, the borrowing limits of existing bodies is disregarded for the purposes of the borrowing limits in Clause 45. I therefore ask the noble Lord to withdraw his amendments.
Baroness Hamwee: I thank the noble Lord for that reply and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 223A to 223B not moved.]
Clause 45 agreed to.
Clauses 46 and 47 agreed to.
Clause 48 [Provision of information by the new Agencies]:
[Amendment No. 224 not moved.]
Clause 48 agreed to.
The Earl of Lyttonmoved Amendment No. 224ZA:
Before Clause 49, insert the following new clause:
("Corporate plan of the Agencies
.—(1) Before the end of each financial year each new Agency shall prepare and publish a corporate plan setting out—

(a) its assessment of the overall effectiveness with which the Agency operates;

(b) its assessment of its performance against its objectives and targets;

(c) its proposed overall strategy for the forthcoming and two subsequent financial years, including the emphasis and resources which it proposes to devote to different areas of its work;

(d) the level of performance which it expects to achieve during the forthcoming financial year.

(2) In preparing the corporate plan referred to in subsection (1) above, each new Agency shall consult such persons and organisations as it considers to be appropriate.").
The noble Earl said: Published with the Bill was a draft management statement which set out many important criteria relating to the Government's expectations for the agency in England and Wales. It is felt by the CBI and others that many of the criteria are too important to be left simply to non-statutory regulatory or guidance purposes. In particular, there is a requirement in the draft management statement to prepare a corporate plan. The first point is that the document referred to in my amendment is already provided for in the draft management statement.
It seems to me that it is important that the new agency sets an example which can be assessed and appreciated by all those in the industry and elsewhere who have to implement its provisions. They include many stakeholders—the public, businesses and environmentalists. They all look to the provision of a
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body which provides a clear framework of priorities. In particular, it is important that it demonstrates that it is giving value for money.
In its report Environment Costs, the CBI shows that companies were better able to integrate environmental performance into their business strategies where they were making decisions based on a clear, externally set framework of priorities. So I feel that this is important. It is a probing amendment to find out what the intentions of the Government are. Are we going to have a clear and effective statement of strategies? Is there to be cost-effective regulation? Is there to be a degree of freedom of information?
For all its apparent length, this amendment does no more than say that the agency should publish the report which, in accordance with the management statement, it is due to prepare anyway. So the additional costs should be limited only to the costs of publication. I say "only"; obviously I do not have any idea of what those might be. However, it seems to me that this is an important pointer. I therefore commend the amendment to the Committee.
Lord Moran: I should say a word about Amendment No. 224ZC, which has been grouped with this one. As Members of the Committee know, we have been engaged for a considerable number of hours over four days in debating this Bill; but so far we have been singularly unsuccessful in securing other than minimal amendments, and that is somewhat dispiriting. This is perhaps an amendment which, as I hope, the Government will be prepared to accept—or at any rate to consider very seriously and perhaps bring back their own version on Report.
This amendment is to Clause 49 on page 40 of the Bill. That clause requires each of the two agencies to prepare a report on their activities during the year which they must send to Ministers. It requires the Secretary of State to lay a copy of the report before Parliament and to arrange for it to be published. That is very sensible and desirable. My amendment would add to subsection (2) of that clause a requirement that the reports which are already provided for in the Bill should contain an assessment of the aspects of the environment that are dealt with by the agencies and—this is extremely important—a statement of the agencies' priorities for addressing pollution of the environment in the coming year.
It would be very valuable, both to Parliament and to the public as a whole, to be given an indication of what the agency, which will be perhaps the principal environmental organisation in this country, thinks about the state of the environment and about the priorities. If, for example, it thinks that air pollution is the number one priority, it would be helpful for everybody to know that so that we can concentrate on it and see what can be done about it. I believe therefore that this amendment would be useful and sensible.

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My noble friend Lord Nathan, who unfortunately cannot be here at the moment but who was here earlier on, authorised me to say that he fully supports this amendment.
8.45 p.m.
Viscount Ullswater: Amendment No. 224ZA, moved by the noble Earl, Lord Lytton, would require the agency to prepare and publish an annual corporate plan. It would specify what that plan should cover and require the agency to consult during its preparation.
The corporate plan will be a key means by which the agency develops its future priorities, objectives and targets for consideration by Ministers. And we will indeed expect the agency to follow the NRA's practice by publishing its corporate plan. This will supplement the annual report on its activities for which the Bill already provides.
I believe, however, that the amendment is unnecessary and inappropriate: unnecessary, because corporate planning is a well-established practice for public bodies such as the agency, and the requirement to prepare a plan will be set out in the agency's management statement; inappropriate, because it seems inconsistent with the status of such plans. They are indeed plans, rather than final decisions on programmes and activities. They are submitted to departmental Ministers some time before overall government decisions on the public expenditure survey, and may have to be adjusted in the light of those decisions. Putting the agency's plan on a statutory basis risks confusion of this principle. Indeed, this is why many bodies do not publish corporate plans, and why the NRA's published plan draws attention to the possibility that figures may change as a result of the survey.
Amendment No. 224ZC, moved by the noble Lord, Lord Moran, seeks to introduce a requirement that every annual report produced by each of the agencies should contain an assessment prepared by that agency of those aspects of the environment which are relevant to its functions and a statement of the agency's priorities for addressing pollution in the coming year.
I fully appreciate the concerns that appear to lie behind this amendment. But in the case of the English and Welsh agency I believe it would represent a duplication of effort. The Department of the Environment publishes annually a digest of environmental protection and water statistics. This document presents a wide range of environmental statistics and explanatory text covering all areas of the environment, not just those for which the agencies will have responsibilities.
We would expect the new agency, like the NRA at present, to feed into these publications. But given the wide-ranging nature of the information provided, going beyond the areas of the agency responsibilities, we have concluded in the interests of efficiency and consistency that the department should produce the publication which gives an overview of the state of the environment and reports on progress and priorities. So far as concerns the agency, it will set out its priorities in its corporate plan.
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The situation in Scotland is somewhat different. The Scottish Office does not compile and publish environmental information on this scale. Because of that, the Government intends SEPA to publish an annual report on the state of the environment. My right honourable friend the Secretary of State for Scotland will use his powers under Clause 49(4) to require SEPA to publish as an annexe to its annual report a state of the environment report. That will be based on SEPA's duty to compile such information under Clause 31(2). Therefore, although we sympathise with much of what the amendment seeks to achieve, we do not believe that it is necessary. I therefore invite the noble Lords to withdraw their amendments.
Lord Moran: I am very grateful to the Minister for his reply to my particular amendment. I have no difficulty at all about the Department of the Environment rather than the agency being the body which publishes and submits to Parliament the assessments of the environment and priorities. However, the digest, although very valuable, is perhaps not the vehicle that I had in mind. Goodness knows, we all have a vast amount to read; and what we really want is something that highlights the view on the current state of the environment and above all the priorities for action. Although they may be there in the agency's corporate plan and in the Government's digest, if some way could be found to bring them vividly across to Parliament and to the public it would be very much in the public interest.
The Earl of Lytton: I thank the noble Viscount the Minister for what was a very helpful response. At least he confirmed that it is the intention that the agency will publish its corporate plan in some form, rather on similar lines to the NRA. It remains to be seen in what form that will come in. I very much echo the point that the noble Lord, Lord Moran, just made: it is to be hoped that this document will be meaningful and helpful. On the strength of what the Minister said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 [Annual report]:
[Amendments Nos. 224ZB to 224ZD not moved.]
Lord Elis-Thomasmoved Amendment No. 224ZE:
Page 40, line 27, at end insert ("including the publication of a report of the Agency's activities in Wales in a form which complies with the Welsh Language Act 1993").
The noble Lord said: The intention of this amendment is to pursue the debate that we had on 19th January about the specific role of the agency in Wales and the relationship between the England and Wales agency and its activity within the Principality, and in particular to highlight the need for a separate publication of the report of the agency's activities in Wales. Not surprisingly, I also propose that it should comply with the Welsh Language Act.
The intention of the amendment is to ensure that the environmental debate in Wales continues as a distinctive debate. That is because of two factors.

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The environmental role of the Secretary of State in the Welsh Office is clearly identified in the work of that department. Indeed, this very day the Secretary of State has published his environmental agenda for Wales which includes references not only to the natural environment and the need efficiently to maintain sites of special scientific interest and nature reserves but also to the whole issue of air quality, environmental quality and waste recycling. They are all issues which are relevant to the work of the agency and are all covered in different ways in the Bill. Therefore I should like to ensure that the agency itself makes a distinctive contribution to the level of the environmental debate within the Principality. As I indicated, that relates to an earlier attempt to strengthen the Committee for Wales. The Government were not prepared to accept that. However, I ask them to look at this matter and at ways in which the agency will provide information.
The second point requires me to repeat a declaration of my interest as chairman of the statutory Welsh Language Board. The board—certainly I—was concerned to see no reference to the 1993 Act in this Bill. We assume that the new environmental agency, being a new public body, is covered by the terms of that Act and that the policies for bilingual publication which were pursued very effectively by the NRA will continue. I know that it is preparing a language scheme which, it is to be hoped, will now be handed on to the agency. I should like confirmation that this area of environmental policy, like all other aspects of public policy, is covered. Is it the Government's intention that that should be so?
It is important that when new agencies are created it is made clear from the start that when they provide a service for the people of Wales, wherever they are placed, they provide that service within the terms of the 1993 Act. We do not want to repeat a situation in which additional costs may be incurred in "bilingualising"—I see that the noble Viscount likes that word—an institution which might previously have been unilingual. We do not want those additional costs to bear upon the administration of any new agency when they might have been absorbed in an integrated fashion from the start. I beg to move.
Viscount Ullswater: I can understand why the noble Lord, who is chairman of the Welsh Language Board, as he indicated to the Committee, should wish to emphasise the importance of the agency ensuring that reports on its activities in Wales are in the Welsh language.
I can assure him of the Government's commitment to the Welsh language in public life. I am sure that he will be aware that the National Rivers Authority, for example, already publishes its annual report in both Welsh and English. Through his position as chairman of the Welsh Language Board, he will also know that the board has issued for consultation draft guidelines on the use of Welsh by public bodies and that in due course a final version will be put by the Secretary of State for Wales before Parliament for approval. I have confirmed that the draft guidelines will be brought to the attention of the advisory committee of the agency.
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The noble Lord may also wish to know whether it is the Government's intention that the environment agency, when established, should be designated as a public body under Section 6 of the Welsh Language Act. In considering what bodies should be designated under that section, I can assure him that full consideration will be given to the position of the agency. If the agency is designated a public body under the Act, it will become susceptible to notification by the Welsh Language Board that it should prepare a Welsh language report. Doubtless the noble Lord will ensure that the agency's activities in Wales will be properly considered in that event.
In view of those remarks, I hope that the noble Lord will be reassured and will feel that it is not necessary to press the amendment.
Lord Elis-Thomas: I am indeed so assured.
Amendment, by leave, withdrawn.
Clause 49 agreed to.
[Amendment No. 224ZF not moved.]
Clause 50 [Local inquiries and other hearings]:
Viscount Ullswatermoved Amendment No. 224ZG:
Page 40, line 33, leave out ("a local") and insert ("an").
The noble Viscount said: It may be for the convenience of the Committee if I allow the noble Lord, Lord Moran, to address his amendment, Amendment No. 224A, which is grouped with this amendment. Then I can reply to him and also speak to the amendments in my name on the Marshalled List. I beg to move.
Lord Moran: I am grateful to the Minister. I can speak very briefly. At present, Section 213 of the Water Resources Act 1991 allows the Secretary of State to call for a local inquiry to be held in order, among other things, to prevent or deal with pollution of any controlled waters or in relation to any other matter relevant to the quality of any such waters. That is a very broadly worded provision. It allows the Secretary of State wide scope to call an inquiry where damage to the environment is threatened.
The Bill contains (on page 255) provision to repeal that section—Section 213 of the Water Resources Act 1991—and to replace it with Clause 50 of the Bill. Essentially, the new clause allows the Minister to call an inquiry in connection with any of the functions of the new agency or of his own functions in relation to the agency. I believe that that narrows the scope of the power to call inquiries in cases of environmental importance. My amendment adopts the broader wording in the Water Resources Act which I feel is better in the circumstance.
Viscount Ullswater: Clause 50 gives Ministers broad powers to hold local inquiries in connection with any of the wide range of functions of each new agency. It applies to such inquiries the provisions of the Local Government Act 1972, so that Ministers have powers to obtain papers, summon and cross-examine witnesses and deal with costs.
Amendment No. 224A, tabled by the noble Lord, Lord Moran, seeks to extend those powers to cover an even wider range of environmental matters, so that

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Ministers could cause a local inquiry to be held with a view to preventing or dealing with pollution or in relation to any other matter relevant to the quality of the environment.
In so far as these matters relate to a new agency's functions, they will already be covered by the provisions of this clause. Since each agency has functions in relation to integrated pollution control, water pollution, contaminated land and waste, this will include a great many cases in which Ministers might consider that an inquiry should be held.
As far as concerns cases not related to the agency's functions, Section 96 of the Control of Pollution Act 1974 gives powers to the Secretary of State to cause inquiries to be held with a view to preventing or dealing with pollution (other than air pollution) or noise at any place. Section 59(1) of the Clean Air Act 1993 makes a similar provision in connection with air pollution. Taken together, these provisions seem to me to give the Secretary of State all the powers needed to hold formal inquiries on environmental matters.
With that reassurance I hope that the noble Lord, Lord Moran, will feel able, in time, to withdraw or not move his amendment.
Amendments Nos. 224ZG, 224ZH, 224B, 224C and 224D all concern the provision for holding inquiries in connection with the functions of a new agency or the functions of a Minister in relation to a new agency. The amendments remove any doubt there may be as to whether the power to hold a local inquiry is wide enough to include power to hold a regional or national inquiry should that be appropriate to deal with any issue which arises in connection with the new agencies. I beg to move.
On Question, amendment agreed to.
9 p.m.
Viscount Ullswatermoved Amendment No. 224ZH:
Page 40, line 34, leave out ("a local") and insert ("an").
On Question, amendment agreed to.
Lord Moranhad given notice of his intention to move Amendment No. 224A:
Page 40, line 37, at end insert:
("() Without prejudice as aforesaid the appropriate Minister may cause a local enquiry to be held in any case in which he considers it appropriate for such an inquiry to be held—

(a) with a view to preventing or dealing with pollution of the environment; or

(b) in relation to any other matter relevant to the quality of the environment.").

The noble Lord said: I am grateful to the Minister for his comments. They were somewhat technical and I should like to study them in Hansard to see whether I too can be satisfied that the situation is all right. Having said that, I do not intend to move the amendment.
[Amendment No. 224A not moved.]
Viscount Ullswatermoved Amendments Nos. 224B to 224D:
Page 40, line 41, leave out ("local").
Page 41, line 6, leave out ("a local") and insert ("an").
Page 41, line 12, leave out ("local").
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The noble Viscount said: With the leave of the Committee, I shall move Amendments Nos. 224B to 224D en bloc. I beg to move.
On Question, amendments agreed to.
Clause 50, as amended, agreed to.
Clause 51 agreed to.
Clause 52 [Continuity of exercise of functions: the new Agencies]:
Viscount Millsmoved Amendment No. 225:
Page 41, line 36, after ("agreement") insert (", scheme of charges").
The noble Viscount said: I shall speak briefly on Amendment No. 225. The amendment seeks to allow any scheme of charges set up by former boards or authorities to be transferred to the new agency. As I understand it, that is not allowed for within the present Bill. The existing NRA charging schemes, such as those for abstraction licences and discharge consents, are not due to expire until after the agency has been set up.
I do not believe that the agency will be in a position to bring in new charging schemes effective from the transfer date. Any lack of continuity would create a hiatus during which no income-charging schemes would be in place. I am sure that that is not a situation that the Government favour, and the amendment seeks to prevent it. I must stress that it would not prevent amendment of charging schemes at a later date or indeed the introduction of new charging schemes. I beg to move.
Lord Moran: I rise briefly to support the amendment moved by the noble Viscount. He is an employee of the NRA and knows what he is talking about. If the facts are as he states them to be, then it is highly desirable that the new agency should be given the charging powers he mentions. We should listen carefully to what he says.
Viscount Ullswater: Amendment No. 225 seeks to continue in force the charging schemes made by the agencies' predecessor organisations. I recognise the anxieties that underlie my noble friend's amendment but do not believe that this is the correct way to proceed.
As matters stand, existing charging schemes will cease to apply once the agencies take over their statutory functions. Charges to be made by the agencies will be prescribed in schemes made by them under Clauses 39 and 40. I believe my noble friend is concerned that the agencies' charging schemes may not be in force by vesting day and I agree that we must avoid the situation he described.
However, it would not be sufficient merely to enable the schemes made by the predecessor bodies to continue. The agencies' charging schemes are required to be made under Clauses 39 and 40 instead of under the existing legislation. Therefore, while I believe that Amendment No. 225 is technically deficient and I ask my noble friend to withdraw it, I shall undertake to look

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again at the issue he raises and consider whether we should later bring forward a provision which would satisfactorily meet his anxieties.
Viscount Mills: I am grateful to my noble friend for his comments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 52 agreed to.
Clause 53 [Interpretation of Part I]:
Lord Carmichael of Kelvingrovemoved Amendment No. 226:
Page 44, line 24, at end insert ("and such date shall not be before 1 April 1997.").
The noble Lord said: Briefly, Amendment No. 226 could help the Minister if he is prepared to accept it. It seeks to say that the timetable given for the implementation of the Bill is unreasonable and unrealistic, particularly in view of the uncertainty and flux already being experienced by local authorities in relation to the implementation of the Local Government (Scotland) Act 1994.
It is not the perfect start for a body for which we have great hopes. In fact, I do not know whether the Government have anything else to do, but in relation to Scottish matters they seem to be pulling up the plant every two or three months and looking at the roots to see if it is still growing. I know the programme is well advanced but there will be many problems. Good, hardworking local people are going to be labouring all hours in order to try to set up the organisation. If the Minister cannot say that he accepts the amendment, then we hope that he can give us good reasons why not and that he can assure us that he will meet any difficulties. There is going to be an enormous amount of compulsory overtime for local authority employees. I beg to move.
The Earl of Lindsay: I agree with the sentiment behind the amendment. I especially agree with the reference to the "good, hardworking local people" who will be involved both in the local government reorganisation and in the setting up of SEPA.
However, the noble Lord, Lord Carmichael, raises concerns about the timetable of SEPA coinciding with the reorganisation of local government in Scotland. That is deliberate, and for very good reasons. There is a great advantage in transferring local authority functions to SEPA at the same time as local government is reorganised. The transfer can be taken into account by the new unitary authorities and they can be given a fresh start with their full new range of responsibilities.
The alternative would be for these new authorities to have functions on a temporary or mark-time basis. I do not believe that that would be the best solution either for the efficient discharge of these functions and therefore for effective pollution prevention and control or for the authorities concerned. We very much wish to avoid those factors. On that basis, I invite the noble Lord to withdraw his amendment.
Lord Carmichael of Kelvingrove: Obviously, in a perfect world, one can see the point of having the two changes taken together. However, with the upset caused
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by the new local government areas which will start in April, it will be very complicated. With the warning that I have given the Minister and the reaction that he is bound to get from local authorities in Scotland, I feel that I have done my bit. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lindsaymoved Amendment Nos. 226A and 226B:
Page 44, line 34, after ("1996") insert ("—(a)").
Page 44, line 38, at end insert ("; and
(b) in section 22(3) (a) (iv) above the reference to an islands council shall be construed as a reference to a council mentioned in section 3(1) of the Local Government etc. (Scotland) Act 1994.").
The noble Earl said: Amendments Nos. 226A and 226B are technical amendments. They ensure that, when changes in the designations of islands councils brought about by the Local Government Etc. (Scotland) Act 1994 take effect, provisions in the Bill still read correctly. I beg to move.
On Question, amendments agreed to.
Clause 53, as amended, agreed to.
Clause 54 [Contaminated land]:
Lord Northbournemoved Amendment No. 226C:
Page 45, line 7, after ("in") insert ("or").
The noble Lord said: I rise to move Amendment No. 226C and shall speak also to Amendment No. 226D. I should like to declare a possible interest, in that I have 20 per cent. holding in a private company which owns the freehold of the surface of one of the pits in the Kent coalfield, now closed, which is leased to the coal board. This small amendment raises two issues, the first of which is a drafting matter. Strictly speaking, "in the land" includes "under the land". Since the 13th century common law has defined land as everything up to the sky and down to the centre of the earth. Of course, that common law rule is limited by subsequent statutes, such as the coal nationalisation legislation.
The second purpose of the amendment is to probe what the Government really mean by "in, on or under the land". Is a landowner to be made responsible for whatever goes on under his land, however deep down? How can a landowner know whether a mine gallery is being driven 1,000 feet under his land—because a coal operative has a perfect right to do that under the coal legislation? How can he know if polluted water has come under his land in an aquifer hundreds of feet down? It does not seem to me sensible to place such liabilities on householders and small landowners. I beg to move.
The Earl of Lytton: As this amendment also has my name to it, I rise to say that I agree with the noble Lord, Lord Northbourne, and his succinct description of the problems. There are many instances where activities that go on on adjoining land, sometimes some distance away, can affect the substrata in a way that is outside the control of the landowner. I believe there is a very serious risk that knowledge of historical events may not be in the public domain and therefore may not be available to those who acquire or own land. If we are to

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have regard to the "polluter pays", we must address that particular problem. I strongly support this amendment in trying to ascertain the Government's views.
Lord Gisborough: I support this amendment. I live on an area of moorland beneath which are plates of rock. Pollution from ironstone mines comes from miles away and runs along the plates. I support the amendment.
Viscount Ullswater: Amendment No. 226C, moved by the noble Lord, Lord Northbourne, together with Amendment No. 226D, seeks to make a technical change to the definition of contaminated land. By removing the reference to substances under the land it would leave only those substances in or on the land. The Government's only intention in including the word "under" was to ensure that the definition was sufficiently broad and that there were no unfortunate and undesirable omissions. For example, the definition of land in the Interpretation Act 1975 includes land with water. We want to make sure that any contaminated silts at the bottom of streams and ponds, both of which may themselves be considered as land, can be dealt with under these provisions.
We also wish to avoid any doubt that the definition would include substrata beneath the soil, as we would need to address those in order to protect groundwater and aquifers. I am advised that the case law on the definition of land would leave some uncertainty as to whether all substrata were included in the meaning of "land" and so for the avoidance of doubt the reference to "under the land" must remain. That in any event reflects the definition of "land" in the Law of Property Act 1925, which refers to substances under the land. However, to make sure that we eliminate entirely any doubt on this question, I would not wish to accept the amendments.
9.15 p.m.
Lord Northbourne: My noble friend's reply has answered one question but it has created a good many others. While I am prepared to withdraw the amendment as it stands, there is a whole can of worms here about things that go on under the land which are totally out of the control of the owner of the surface of the land. We shall hope to raise those matters at a later stage of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 226D not moved.]
Lord Northbournemoved Amendment No. 226E:
Page 45, line 9, at beginning insert ("serious").
The noble Lord said: In moving Amendment No. 226E, I shall speak also to Amendments Nos. 226F, 226G, 228A and 228B. This is a further set of important amendments about the definition of contaminated land and they are intended to probe the Government's intentions. As the Government themselves stated in paragraph 2.6 of their policy framework:
"It would be neither feasible nor sensible to try to deal with all land contaminated by past activities at once. The wealth creating sectors of the economy could not afford to do so. The urgent and real problems should be dealt with, but in an orderly and controlled fashion with which the economy at large and individual businesses and landowners can cope".
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This approach requires remedial action only where, as the Government say in paragraph 2.4 of the framework document, the contamination poses unacceptable actual or potential risks to health or environment and there are appropriate and cost-effective means available to do so, taking into account the actual or intended use of the site.
As drafted, the definition in the Bill, together with the remediation duties, seems to cover all contaminated land, no matter what the level of risk to the environment or the degree of harm. It simply is no good for the Minister to say that we must rely on guidance proposed under new Section 78A(3) to limit the definition. It surely would be ultra vires if guidance purported to limit the scope of a duty imposed by Parliament on local authorities to remediate where any contaminated land is farmed.
The proposed amendments seek to restrict the duties laid on the agency and the local authority to dealing with harm which is both serious and requires immediate remediation. That is entirely in line with the intentions expressed in the framework. I beg to move.
The Earl of Lytton: I rise to support this group of amendments. Although my name is not attached to Amendment No. 226F, I should like to support that amendment as well. It is vitally important that we have some further clarification of the definition of "harm". In the 1990 Act, the definition is drawn very widely. It could include almost anything, however insignificant. Something needs to be done to bring this into line with the principles of BATNEEC on the one hand and the best practicable environmental option on the other.
If the small and insignificant can be picked up along with the large, not only, as the noble Lord, Lord Northbourne, said, will we not get a proper priority set out for the necessary clean-up of such sites but also resources will be devoted to dealing with what one might call small fry situations rather than the more serious ones. Thinking in countryside terms, where I ought to declare some kind of interest, it is almost impossible to imagine one's bullocks milling at the gate without causing some muck in the gateway. In theory, bearing in mind that on Exmoor, where I farm, we already have problems with the outwintering of cattle and the surface damage caused in that situation, particularly on open moorland areas, it would not take much for an authority to pick on this and say, "Right, you, Lord Lytton, have got to clean up your act and you have to stop causing this damage". That is the logical conclusion of the term "harm" as a stand-alone word. I strongly support the amendments.
Lord Stanley of Alderle: I am somewhat concerned about the amendment. I warned my noble friend that I would raise this point. I am sure that your Lordships will have noted the definition of "harm" on page 46. Subsection (8) states:
"'Harm' means harm to the health of living organisms or other interference with the ecological systems of which they form part and, in the case of man, includes harm to his property".
I hate to say this, but I am concerned about fly-tipping on private land, which I believe could increase because of the increased costs that have recently been imposed in relation to waste disposal. What is the position of the

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owner of land which has been subject to fly-tipping given that, as I understand the definition that I have just read out, that could lead to contamination. Is the landowner then liable? If so, that seems quite a problem.
The Earl of Kinnoull: I should like to support the amendments which stand in the name of the noble Lord, Lord Northbourne. There is a great deal of worry outside the House about the width of the definition and about why it is in such conflict with the Government's structure policy which was published only in November 1994. The noble Lord, Lord Northbourne, quoted part of it, but perhaps I may remind my noble friend that the policy recognised that where contamination poses an unacceptable risk to health—the word "unacceptable" is a limiting factor—the objective of the framework is not only to improve sites, as and when hazards need to be dealt with, but to encourage an efficient market in land which has been contaminated. That is a very practical point of view. Finally, the objective is to encourage the development of such land.
I hope that my noble friend will be sympathetic to the amendments because the definition, as presently drafted, could lead to authorities having to serve remediation notices on the smallest point. They would have no option but to do so. This is a serious issue and I hope that my noble friend will consider it.
Viscount Ullswater: The main aim of the amendments moved by the noble Lord, Lord Northbourne, is to change the overall definition of contaminated land in these provisions so that it includes only land causing, or likely to cause, serious harm or serious pollution of controlled waters such that immediate remedial action is required to ensure that its condition was suitable for its actual or likely use.
I am very grateful to the noble Lord for moving these amendments, as it provides an opportunity to expand on the Government's intentions in bringing forward the contaminated land provisions as a whole. As I said in our debate on the Second Reading of this Bill, these provisions are centred around our overall "suitable for use" approach to the issue of contaminated land.
In policy terms, this approach was described in our document Framework for Contaminated Land, as requiring remedial action,
"only where the contamination poses unacceptable actual or potential risks to health or the environment; and there are appropriate and cost-effective means available to do so, taking into account the actual or intended use of the site".
We believe the "suitable for use" approach deals with the genuine environmental problems presented by contaminated land, but does so without creating unnecessary financial and regulatory burdens. But how we convert that policy into statute is what underlies this current debate.
These amendments, and other comments and suggestions we have received from our continuing consultations and discussions with individuals and organisations outside Parliament, suggest that the definition of contaminated land currently contained in
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this Bill perhaps goes beyond our original policy intentions and could include sites not posing unacceptable risks.
I would suggest, however, that the test of "serious" harm or pollution and the requirement for immediate remediation which is set out in the amendment could suffer from the opposite problem of being too narrow and restrictive. The Government acknowledge that the question of definitions is critical to these provisions as a whole and if the noble Lord will agree to withdraw his amendment, we would welcome the chance to bring forward our own amendments at a later stage to bring the legislative provisions into better alignment with our original policy intentions.
My noble friend Lord Stanley gave me warning that he was going to bring up the problem of fly-tipping, and raised the question of land which has been contaminated as a result of fly tipping. Of course, not all fly-tipping will result in land becoming contaminated, as defined in the Bill. While illegal in itself, fly-tipping of a small amount of builder's rubble may not result in contamination. On the other hand, I appreciate that fly-tipping of more toxic substances goes on and could cause contamination.
The provisions in Clause 54 do not specifically identify land which has been contaminated as a result of illegal action, such as fly-tipping. The reason is that in many cases it is not possible to determine precisely how or when a piece of land became contaminated, or whether it was the result of such activities. Where fly-tipping is known to have occurred, remedies already exist under Part II of the Environmental Protection Act 1990. In particular, Section 33 enables prosecution of the person who deposited the waste; and Section 59 contains power to require removal of waste unlawfully deposited. I am sure that those provisions are adequate to deal with the problem of fly-tipping.
I understand the concern of the noble Lord, which was echoed by other noble Lords who spoke about the problem of the definition, and with my explanation I hope that the noble Lord, Lord Northbourne, will see fit to withdraw the amendment.
Lord Stanley of Alderley: Before the noble Lord, Lord Northbourne, replies, I was pleased to hear my noble friend's remark about fly-tipping, but he missed one important point which always arises with fly-tipping; that is, one cannot find the person who fly-tips. If one cannot find the person who fly-tips, and it is causing contamination, which it may well be, am I responsible?
Viscount Ullswater: As I said, the provisions of Clause 54 apply to land which has been contaminated as a result of illegal actions such as fly-tipping. To that extent, the owner of such land could be liable under those provisions. However, the owner could already be liable to deal with contamination under statutory nuisance and town and country planning legislation. So these provisions do not significantly change liability in that respect.
Lord Elton: Before the noble Lord, Lord Northbourne, decides what he will do, perhaps I may

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ask my noble friend to let me know—it might save the Committee's time if he does so at his leisure—whether the word "remediation", which is in the amendments, occurs here for the first time in the Bill or has been invented at some other time. If it is in the Bill, I should like to protest about it later.
Viscount Ullswater: I had better obtain advice upon that point and come back at another stage.
Lord Williams of Elvel: Is the noble Viscount not aware that "remediation of contaminated land" is a term of art? It is perfectly well understood in all professions that have to do with this.
Lord Northbourne: I most grateful to the Minster for what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 226F and 226G not moved.]
9.30 p.m.
The Deputy Chairman of Committees (Lord Lyell): I have to inform the Committee that if Amendment No. 227 is agreed to, I shall be unable to call Amendments Nos. 227ZA to 227B inclusive.
Lord Lucas of Chilworthmoved Amendment No. 227:
Page 45, leave out from beginning of line 15 to end of line 2 on page 46.
The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 229, 230, 231, 233A, 234, 237 and 245, all of which are consequential upon Amendment No. 227. I should like also to address a few remarks to Amendment No. 227ZA in the name of the noble Baroness, Lady Hamwee, and Amendment No. 227A in the name of the noble Lord, Lord Northbourne, because they are germane to what I have to say.
We are entering a new area; that of contaminated land. Its degree of seriousness is indicated by the number of amendments on the Marshalled List. The amendments tabled in my name seek to remove the special arrangements for landfill sites, which in all conscience fall within the wider category of contaminated land.
The definition of contaminated land in Clause 54 is welcome. It is defined as land causing or likely to cause harm or pollution of controlled waters. An introduction of the new provisions will remove some of the doubts and uncertainties that have arisen in the past.
It is not my intention to seek any favourable treatment for closed landfill sites. However, I am puzzled to see that separate arrangements are proposed for closed landfill sites. Even more puzzling is exactly what the special arrangements are designed to achieve.
Clause 54 proposes a straightforward procedure. Local authorities will identify contaminated land then issue remediation notices, according to the advice of the agency. As regards closed landfill sites, the process becomes more complicated. There are a series of notifications from the local authority to the agency, from the agency to the Secretary of State, from the Secretary
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of State to the agency and then to the local authority. If at that stage the site is designated special, the agency will prepare a remediation statement. If it does not, the local authority will do so. Nowhere in the Bill is it clear exactly what is the purpose of a remediation statement and its relationship to a remediation notice. One presumes that at the end of the day the net result will be a remediation notice.
There appears to be some obscurity behind the clause. One is driven to speculate whether it is designed to address the problem of old local authority sites which were never licensed. In that case, presumably the authority will be unable to serve a remediation notice on itself. Will private and public sites be treated in the same way? What exactly do the Government want?
Amendment No. 227 sweeps away the entire definition of landfill, leaving it purely and simply as contaminated land—which is what it is—unless it is cleared by the local authority. Why do we need to mess about? Why not call a spade a spade and have done with it?
In Amendment No. 227ZA the noble Baroness, Lady Hamwee, and the noble Lord, Lord Beaumont of Whitley, seek a different definition of a closed landfill site. No doubt they will explain the matter and say whether I am wrong or confirm that I am right. Their amendment appears to widen the definition to include all and any landfill sites from whatever time they became so. As I said, Amendment No. 227 effectively calls for landfill to be defined as contaminated or potentially contaminated. That is as it may well be determined by the agency.
Therefore, I am left in a good deal of confusion as to why a closed landfill site should be picked out separately from any other contaminated land. Frankly, there is no great mystery about a landfill site. It is either contaminated, potentially contaminated or it is not contaminated. That can be determined. Monitoring and inspections in relation to the use of the site will take place for years and years after it is closed. If my noble friend is able to help me, I shall know rather better how to proceed with my amendment. I beg to move.
Lord Gisborough: I should declare an interest because I have an old and a present landfill site on my land.
The amendments would provide a defence for a person to argue that at the time it was carried out, the activity which led to the land being subsequently deemed to be contaminated was entirely legal and represented the state of the art at the time. In its report in the 1993 EU Green Paper on the use of civil liability for remedying environmental damage, the House of Lords European Communities Committee argued that there should be a state of the art defence as a matter of equity to encourage people and companies to make their best efforts to minimise the risk of future pollution.
Lord Northbourne: Perhaps I may speak briefly to Amendment No. 227A. Its purpose is to exclude from the provisions of the clause sites where the deposit took place before the coming into force of Section 3 of the Control of Pollution Act 1974. That Act was the forerunner to the current controls over waste, and under

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Section 3 of that Act, it became an offence for the first time to deposit controlled waste on any land. This amendment clarifies the deposits which are covered and limits them to those which were regulated at the relevant time by excluding those which could not have been regulated at the relevant time. That is entirely in accordance with the preceding subsection.
The Earl of Lytton: I too should like to speak briefly to Amendment No. 227A. It seems to me that the problem revolves around the question of blight where old landfill sites of one sort or another have been subsequently built on in good faith and no doubt with the benefit of building regulations consent from the local authority and in the full knowledge and extent of the then state of the art for cleaning up the site.
We know that some cases have not been entirely successful. Migration of methane gas and putrescible material has been found under some of those areas. It is perhaps less of a problem on an industrial site. Although I have no direct personal knowledge, I believe that a number of residential sites have been affected if not directly then indirectly by proximity. Are those owners to be the people on whom remediation notices will be served? Will their equity be affected?
There is a case to answer here which the Government have not addressed. I am concerned that unless we have an indication from the Minister that there will not always be somebody standing to stop the bullet which is being fired in the name of remediation, we are in for a very serious time in relation to some of those hard cases.
In my view, it is not possible for government departments and the Treasury between them to say, "We want an entirely risk-averse situation". No such thing exists in life; we all run risks. Running risks based on our own past national performance and standard of doing things, and so on, is one of the occupational hazards of progress.
Therefore, in certain circumstances, it will ultimately have to be accepted that some things are a collective, public problem and that they have to be treated like that if we are to procure a collective, public benefit through the clean-up. There is a very important point involved. I am pleased to support Amendment No. 227A, tabled in my name and that of the noble Lord, Lord Northbourne.
Viscount Ullswater: In speaking to Amendment No. 227, I shall deal also with Amendments Nos. 227A, 227ZA, 227B, 229, 230, 231, 233A, 234, 237, 237ZA and 245. The amendments all address the way in which contaminated closed landfill sites are considered and dealt with within the overall provisions for contaminated land.
Amendment No. 227, moved by my noble friend Lord Lucas of Chilworth, would remove entirely the definition of "closed landfill sites". Other amendments tabled in the name of my noble friend would then replace references to closed landfill sites in particular with references to contaminated land in general. The Government's view is that an element of attention to some of the problems particularly associated with closed landfills is justified.
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From a technical point of view, closed landfills can give rise to particular types of problem from methane gas, noxious leachate or a diverse range of contaminants, as indicated by the noble Earl, Lord Lytton. That is not to say that they are necessarily more harmful than other kinds of contaminated sites, but in general the extent of contamination tends to be deeper and to present a certain type of engineering problem. Specific consultation with the agency, and in particular with its waste regulation side, which will inherit the wide experience of the waste regulation authorities, is therefore desirable to ensure that those sites can be dealt with in the best way.
In singling out closed landfills for a more tailored approach, we are reflecting the special emphasis given to such sites in much of Europe. We are also reflecting the concern expressed by Parliament during the passage of the Environmental Protection Act 1990, which led to provision for a special remediation regime for closed landfill sites, under Section 61. The section has not, in the event, been implemented, and the provisions of Clause 54 will replace it.
Amendment No. 227A, moved by the noble Lord, Lord Northbourne, is more limited in its intentions. It would remove explicitly from the definition of a closed landfill site any site in which waste was deposited entirely before the coming into force of the waste disposal licensing regime under Section 3 of the Control of Pollution Act 1974.
The Government do not support the amendment. Our intention was that those older sites should be included within the definition of closed landfill sites. We believe that that is implied by the reference to the deposit of controlled waste "without the authority" of a waste licence.
The Control of Pollution Act provided the first modern environmental regime for closed landfill sites. Prior to its introduction, those sites were regulated only through conditions set in planning approvals. As I explained a few moments ago, not all landfill sites will present problems. But, if anything, it is those older sites which pre-date the modern environmental regimes which are most likely to need the particular attention from the agency which the provisions set out for closed landfills provide.
Amendments No. 227ZA and 227B, tabled in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Beaumont of Whitley, seek to provide an alternative route through the question. They would remove the exhaustive definition of a closed landfill site that is currently provided, and replace it with a system by which a local authority would certify a site as being a closed landfill where it had been used for the deposit of waste.
This would appear to offer some simplification in comparison with the exhaustive definition currently in these provisions. But, in practice, I suspect that the effect of these amendments could be to add to the complexity of the procedures, as landowners might well wish to appeal against the certification of their sites as closed landfills, particularly in the light of the general concerns which exist about such sites being stigmatised even under the existing definition.

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The Government have a further particular concern with these amendments. As currently provided, only those closed landfill sites which are also contaminated land come within the scope of these powers. This important qualification is omitted in the proposed certification procedure. The Government see no justification for local authorities being required to identify and certify closed landfill sites which are not presenting any environmental problems.
Amendment No. 237, in the name of my noble friend Lord Lucas of Chilworth, and Amendment No. 237ZA, in the name of the noble Baroness, Lady Hilton, would extend the duty on local authorities to prepare remediation statements. As currently provided, this applies only to closed landfill sites and not to contaminated land generally. This restriction was deliberate. The intention behind the introduction of this distinct phase was to provide a public statement of the overall approach the enforcing authority intended to take for individual sites.
A remediation statement would not of itself require any specific action of anyone else. This would still be achieved through a remediation notice. We felt that this extra public stage was needed for closed landfill sites but not other sites, to reflect the greater likelihood that these sites would require more by way of long term remedial action and continued monitoring by the enforcing authority. This might particularly be the case where the site was generating landfill gas. Although public statements by the enforcing authorities about the remediation on individual sites might be helpful at some other sites as well, the Government do not believe that the preparation of such documents should be a statutory requirement in those cases. I therefore could not accept either of these amendments. I hope I have gone some way to explain the Government's position on these amendments and would ask noble Lords to withdraw their amendments.
9.45 p.m.
Lord Lucas of Chilworth: Of course I shall withdraw the amendment, because there is nothing else I can do tonight. But I shall come back again to it another day. I hope my noble friend will accept what I have to say in the spirit in which I say it, and bearing in mind our very long and friendly relationship. I find his answer totally ineffective. I view that answer as a series of excuses, born mainly out of the failure of the Government to implement the provisions of the 1990 Act.
My noble friend said that during the passage of that Act much concern was expressed by Parliament over landfill and it was therefore decided to make special provisions. If memory serves me right—and it may not—I think it is Section 60 of the 1990 Act which provides for that concern to be remedied. But that provision—I may be wrong on the number—has not in fact been enacted. That is why we have today a cobbling together of a number of provisions—HMIP, and those provisions relating to landfill, which together make certain aspects of this clause somewhat heavy going and which are not in fact dealing with the real problem. My noble friend said, as regards landfill in particular, that
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the extent of contamination is deeper than in other kinds of contaminated land and the engineering problems are more difficult and we therefore need a tailored approach. Much has happened since 1989 in terms of engineering of landfill sites. There is no great problem there.
My noble friend said that there has been stigmatisation of land which is a closed landfill site. I cannot think of any greater stigma than contaminated land, whether an old gas station—such as the one which seems to have reached the headlines in the press recently—or anything else. There is far more danger in old oil sites, old chemical sites and old gas sites than there is in the controlled environment of a closed landfill site.
I do not find my noble friend's answer reassuring or comforting. I shall return to the matter on another occasion. However, as I suggested at the beginning of my response, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 227ZA to 227B not moved.]
Lord Lucas of Chilworthmoved Amendment No. 228:
Page 46, line 3, leave out ("a closed landfill site") and insert ("an area of contaminated land").
The noble Lord said: In moving Amendment No. 228 I shall speak also to Amendments Nos. 235 and 236 in my name and Amendments Nos. 228ZA and 233B in the names of my noble friends Lord Crickhowell and Lord Mills.
The purpose of my amendments is similar to the purpose of the amendments of my noble friends but they relate to a wider issue, namely the treatment of landfill sites under the contaminated land provisions. Amendment No. 228 and its consequential amendments relate specifically to seriously contaminated sites.
Looking at the Bill as drafted, what are we to make of the curious phenomenon of "special sites"? Those special sites will only ever be closed landfill sites. However, the statistics which were presented to a parliamentary inquiry by the Department of the Environment in 1989 show that landfill sites are by no means the major constituent of contaminated land. Landfill sites account for just under 25 per cent. of contaminated land. An equivalent number of sites are spoil heaps from metal mines. What distinguishes closed landfill sites from those or old gasworks? My noble friend the Minister has not provided a satisfactory answer.
Landfill sites are subject to strict controls with respect to their initial location, preparation, operation, restoration and post-closure management. Since landfill sites will be regularly monitored by the operator until the agency is satisfied that harmful pollution is unlikely, one would think that of all the potentially contaminating uses of land, that is the least likely to cause problems, precisely because it is so regulated.
I hope that my noble friend the Minister will not suggest to the Committee that I am asking that landfill sites be treated more favourably than other contaminated land. Rather, I should like to see landfill sites—closed or otherwise—receive precisely the same treatment.

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I am worried that there is a hidden agenda here. If not properly maintained, closed landfill sites remain the subject of concern in the minds of the general public for some 20, 30 or 50 years. Quite rightly, the general public have exercised their rights to demonstrate, complain and lobby about matters which give them some concern. I suspect that they will be giving themselves the opportunity to demonstrate about the gas sites which are proposed to be sold to the public. No one knows too much about the level of their contamination.
I must ask my noble friend to give a better reason why a closed landfill site, decreed to be contaminated until such time as it is given a clearance certificate, should be treated any differently from any other contaminated land. The group of amendments follows that reasoning.
Lord Williams of Elvel: I do not know whether the noble Viscount, Lord Mills, will speak to one of the amendments in his name and in the name of the noble Lord, Lord Crickhowell. It is grouped with the amendment. If so, I should like to hear what he has to say because I wish to respond to it.
Viscount Mills: Although I support in principle the amendment in the name of my noble friend Lord Lucas of Chilworth, it is similar to amendments which my noble friend Lord Crickhowell and I propose in Amendments Nos. 228ZA and 233B. I believe that the deletion of all reference to closed landfill sites, and hence the need to prepare remediation statements for all contaminated land sites, is not necessary. I consider that a broadening of the definition of "special site" would be adequate and would focus resources on those sites which are most contaminated and therefore most likely to cause pollution.
Like my noble friend, Lord Lucas of Chilworth, I had in mind such sites as closed chemical, steel or gas works which can cause equally as serious harm or pollution as closed landfill sites. The amendment in the name of my noble friend, Lord Lucas of Chilworth, and my amendment—
Lord Williams of Elvel: I am sorry to interrupt the noble Viscount. I hope that he will not feel that he has to go over the ground that the noble Lord, Lord Lucas, has already covered. I had hoped that he would speak to his Amendment No. 245AB.
Viscount Mills: I shall do so, of course. As I was saying, the amendment in the name of my noble friend Lord Lucas of Chilworth and my amendment allow such contaminated sites to be designated as special sites and treated accordingly. Perhaps I may ask the Minister this question. Will it not assist the local authorities to deal with those other contaminated land sites by broadening the definition of special sites as proposed?
I wish to speak also to Amendment No. 245AB. I believe that the amendment highlights a specific problem. I hope to ascertain what the Government consider might be done to solve it. There is an inherent difficulty with the enforcement procedures with respect to contaminated land. I refer to contaminated land sites which are owned by local authorities. Those include
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both closed landfill and land which is to be used for redevelopment. In certain situations local authorities are required to serve remediation notices upon themselves. That includes setting out actions and the timetable for those actions to be carried out.
I am sure that most local authorities are active and responsible and have all the technical skills and expertise to deal with those contaminated land sites. However, I believe that other small rural district councils may not be staffed to deal with the complex problems that arise from pollution emanating, for example, from 19th century lead mines. That is not a criticism; it is merely a fact.
In those cases, it may be of assistance to the local authorities for the new agency to play a role. At this point I should like to make what I believe is an important distinction between derelict land and contaminated land, because the experience required to deal with the two is not the same. By way of example I should like to refer to a coke works in Nottinghamshire. The land on which an old coke works was situated was purchased by a local council, which extracted the top few meters of sand and capped the surface to prevent the flushing of further contaminants into the groundwater. However, no action was taken to protect already polluted groundwater, which has now spread out from the area of the site itself and lies in land adjacent to the original site. In a situation such as that the site was treated as derelict but I suggest that it was rather more contaminated land.
There is, I believe, a risk that local authorities could find themselves in a position where, through no fault of their own, they are unable to initiate an adequate programme of inspection, identification and remediation of contaminated land sites. In such cases, giving default powers to the agency to help deal with the problem may be one, but I suggest not the only, solution. However, I shall be interested to hear the Minister's reply—whether he considers that it is a problem, whether the Government recognise it as such and how they intend to deal with similar problems.
10 p.m.
Lord Williams of Elvel: I shall speak only to Amendment No. 245AB which is in the group and which the noble Viscount, Lord Mills, has just addressed. We are strongly opposed to the amendment. We believe that it is unnecessary because, despite what the noble Viscount implied, local authorities have a good record in the remediation of contaminated land. It is a threat to local democracy and we do not feel that an agency like the one outlined in the Bill should override local authorities and charge a levy in order to do so. A national quango, working through regional offices, is simply not the body to override local authorities. The agency is best placed to work with local government in determining appropriate standards. It is not, cannot and should not be placed to undertake the work itself. We are strongly opposed to the amendment which the noble Viscount has addressed.
Viscount Ullswater: All the amendments would affect the role of the environment agency and the

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Scottish environment protection agency in respect of the contaminated land provisions. Amendment No. 228, moved by my noble friend Lord Lucas of Chilworth, and the broadly equivalent Amendment No. 228ZA, moved by my noble friend Lord Mills, would have the effect of changing the definition of a "special site" such that it need not necessarily be a closed landfill site. Other amendments in the group are consequential on that.
The intention behind the creation of this category of special sites was to ensure that the particular skills and professional expertise of the agency could be brought directly to bear on the most serious closed landfill sites. The limiting of the category of special sites to closed landfills was not meant to imply either that closed landfills necessarily presented risks of serious harm or pollution or that other categories of site were by definition not serious. But closed landfill sites present a particular range of technical and engineering problems on which staff in the agency are likely to be well qualified by virtue of their responsibilities for the regulation of operational landfills.
So while the Government are willing to consider the question of expanding the range of sites which could potentially be designated as special sites, we would wish to have a clear idea of why the agency would be better qualified to regulate those other sites than would the local authorities. At present, the case has not been adequately made, and we would wish to retain the restriction of designation as special sites to landfills.
Amendment No. 245AB, moved by my noble friend Lord Mills, would seek to expand the powers of the agency in altogether more sweeping ways by enabling it to take over the regulatory functions of individual local authorities if it felt that they were not being properly exercised. Local authorities already have powers under the statutory nuisance provisions under Part III of the Environmental Protection Act to deal with the problems posed by contaminated land and many of them have used those powers extensively. We believe that these new provisions, which provide specific definitions of targeted procedures, will do much to improve the consistency with which local authorities deal with contaminated land. We strongly believe that these regulatory functions should remain with local government—I have to agree with the noble Lord, Lord Williams, on that point. Contaminated land is essentially a local issue, and these powers tie in closely with other local authority functions, in particular those concerning planning and development control.
In any event, I remind the Committee that local authorities will have the assistance of detailed guidance from the agency and the Secretary of State in carrying out their functions. I do not believe that there is any justification for including powers of the kind suggested in the amendment, which would allow the agency to take over the functions and the money of an elected
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local authority. I hope that I have perhaps said enough to persuade both noble Lords to withdraw their amendments.
Lord Lucas of Chilworth: As for the last amendment, I shall of course ask leave of the Committee to withdraw it. Again, there is nothing that I can do at this stage.
I am not persuaded at all by the Government's response to this amendment. I shall have to read very carefully what my noble friend said when he talked about the various categories that could then engage the special expertise and skills of the agency. We discussed this matter days ago when we talked about who would form the agency, what kind of people would be on the board of the agency and on the advisory boards. They should have wide enough skills and expertise to deal with all the problems that arise. It really does not matter whether you put it under the hat labelled "contaminated", "special" or "landfill". Those all present in their different ways hazards to the environment and to people. That is what we are concerned with—not a specialisation, one against another demanding special provisions. I am very disappointed that my noble friend cannot understand that simplicity in a Bill as complex as this one is a very desirable attribute which, certainly in Clause 34, we seem to be letting slip by.
Viscount Ullswater: Before my noble friend decides what to do about his amendment, it might just be useful if I pointed out to him the different categories, because I do not believe that he has really taken in the significance of my answer. We believe that there is a duty for the local authorities to look after the closed landfill sites and, when we come to remedial statements on the special sites, that those should be made by the agency since it has a particular expertise and the skill. That is the difference.
Lord Lucas of Chilworth: Although I am most grateful, I do not think that I did misunderstand. However, perhaps my noble friend will allow me to study carefully what our exchange has been all about. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 228ZA not moved.]
Lord Northbournemoved Amendment No. 228ZB:
Page 46, line 10, at beginning insert:
("(a) Subject to the provisions of paragraph (b) below,").
The noble Lord said: In moving this amendment I should also like to speak to Amendment No. 228BB. These amendments are about the definition of "harm". This is a serious issue, although my amendments are probing amendments. The definition of "harm" in the Bill seems to me to be highly unsatisfactory, because it says:
"'Harm' means harm to the health of living organisms or other interference with the ecological systems of which they form part and, in the case of man, includes harm to his property".
I think we are all fairly clear what we want to say: the difficulty is that I do not think that form of words says it. We have already debated the question on an earlier

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amendment of mine—the question of the seriousness of the harm. That is not what I am talking about here. I am talking here about the kind of harm—or, more precisely, the kind of personal thing to which that harm is done.
As drafted, this clause would include within the definition of "harm" every kind of harm to every kind of living organism or ecosystem. It would therefore designate as "harm" all activities such as pest control—rats and slugs, after all, are livingorganisms—dredging rivers and lakes, gardening, agriculture, forestry, road construction, cleaning up of pollution and many other activities. Clearly, that is not what the Government mean. The problem is that it is quite difficult to designate and to define the nasty things, such as pests and diseases, that we want to be harmed and the ones which we love and do not want to be harmed. It has to be admitted that the problem is complicated by the fact that one man's pest is sometimes another man's pet.
I acknowledge that my amendment is imperfect, but I wonder whether the Minister would be prepared to take the problem away and come back with a much better solution. I beg to move.
Viscount Ullswater: Amendments Nos. 228ZB and 228BB of the noble Lord, Lord Northbourne, seek to recognise that there are some living organisms which are themselves harmful—for example agricultural pests. It would indeed be perverse if these contaminated land powers prevented the appropriate use of pesticides.
These amendments are closely related to those dealing with the wider questions of the overall definitions of "harm" and of "contaminated land" and, as I indicated in response to those amendments, the Government already intend to bring forward their own amendments on these at a later stage. So, while I appreciate the intention behind the noble Lord's amendments, I would not wish to accept them now. Perhaps he will be good enough to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 228A and 228B not moved.]
Baroness Hilton of Eggardonmoved Amendment No. 228BA:
Page 46, line 12, after ("includes") insert ("offence to any of his senses or").
The noble Baroness said: I rise to move this amendment and speak to Amendment No. 238ZZA, which is grouped with it. Amendment No. 228BA is intended as a probing amendment, to ask the Minister why the definition is being changed from that in the Environmental Protection Act. In that Act,the definition of "harm" is:
"Harm to the health of living organisms",
and, in the case of man, includes offence to any of his senses or harm to his property.
The definition of "harm" in this Bill is almost identical but excludes any reference to any of man's senses. The reason for this anomaly is not immediately obvious. At this stage, therefore, the amendment is directed at asking the Minister to explain why there is a
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different definition of "harm" in this particular Bill, and whether it should include offences such as smell or odour which would offend human beings.
Amendment No. 238ZZA is an attempt to suggest that the future use of contaminated land is an important factor when deciding the extent to which it should be remediated. There is obviously a difference between land which is intended for use purely as a public car park and land on which it is intended to build houses, or to have a children's playground or a school. The intention therefore is to include in this clause and any consideration of the extent to which the land should be improved or pollution eradicated, the intended future use of the land. I beg to move.
Lord Renton: I believe that the amendment may be open to so many different kinds of interpretation that it would cause great difficulty when it came to be considered by the courts or applied in any way.
Lord Northbourne: I rise briefly to speak on Amendment No. 238B, which is grouped with Amendment No. 238A. It says more or less the same thing as the second amendment of the noble Baroness. The standard of remediation should be limited to the standard of "suitable for use". The arguments that guidance will limit it are not satisfactory. There seems to me to be no reason why a "suitable for use" approach should not be spelt out in the legislation.
10.15 p.m.
Viscount Ullswater: Amendment No. 228BA, moved by the noble Baroness, Lady Hilton of Eggardon, seeks to extend the definition of harm, and thereby of contaminated land, to include references to offences to man's senses. Amendment No. 372EB would also exclude premises which fell within that wider definition of contaminated land from all of the various categories of statutory nuisance set out in Part III of the Environmental Protection Act 1990. As presently provided, only those categories most directly relevant to contaminated land are excluded.
The Government quite deliberately omitted offences to man's senses from the list of possible harm which would define land as being contaminated. For example, we do not consider that land should be considered as contaminated on the basis of smells and odours which are not themselves harmful to health or the wider environment. The statutory nuisance powers will potentially still be available to deal as necessary with those other problems. I believe that that would meet the problem outlined by my noble friend Lord Renton. The Government therefore would not wish to accept those amendments.
Amendment No. 238ZZA, moved by the noble Baroness, Lady Hilton, would increase the possible requirements of a remediation notice by making it a positive requirement for an enforcing authority to consider potential uses of the land. By contrast, Amendment No. 238B, moved by the noble Lord, Lord Northbourne, would restrict the degree of any remediation required to that justified to make the land suitable for its actual or likely use. It is intended that the guidance on remediation standards which the agency

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would issue to local authorities should be informed by the "suitable for use" approach. But two important clarifications are needed.
First, any remediation notice also needs to consider those environmental effects which are not dependent on the use of the immediate site. Examples here could include any potential pollution of groundwater and, indeed, effects on health or property in relation to the use to which other sites nearby are being put. Amendment No. 238B would not allow those environmental issues to be addressed, and therefore I would not wish to accept it.
Secondly, it is not the intended role of this proposed regulatory system to make land fit for all of its potential uses. The powers have been quite deliberately structured around risks to health or the environment which are currently being caused, or are likely to be caused. In any event, planning authorities, in considering whether to grant permission for a new use of land, have powers to impose conditions to ensure that the development intended will not put future users or occupiers at risk if necessary by requiring improvements to the condition of the land before the development can be carried out. My department published a planning policy guidance note, PPG23, on Planning and Pollution Control in July of last year to advise local authorities on that question.
I hope I have said enough to convince the noble Baroness that both of the amendments to which she has spoken are not required and that she will be good enough to withdraw them.
Baroness Hilton of Eggardon: I am not wholly satisfied as to odours. It seems to me that if you are to build a school or some other place to which the public has access, rights under public nuisance law are not sufficient. Once the land has been developed in some way, if it continues to smell disagreeable it is too late to do something about it. I do not wish to press the point at this moment but I reserve the right to come back to it at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 228BB not moved.]
Baroness Hilton of Eggardonmoved Amendment No. 228BC:
Page 46, line 13, at end insert:
("() "Assessment" means the doing of anything for the purpose of assessing the condition of land which appears to the local authority to be contaminated.").
The noble Baroness said: I rise to move Amendment No. 228BC and speak also to Amendments Nos. 237AA and 239E which are grouped with it. These amendments are concerned with the assessment of land which may be contaminated. The Bill requires local authorities to inspect areas within their boundaries and identify contaminated land, closed landfill sites and closed landfill sites that may be candidates for designation as special sites.
If a local authority identifies contaminated land it must serve a remediation notice. However, in its present form the Bill suggests that a remediation notice may also be used to require assessment of the condition of contaminated land, which in a way makes the
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assumption that it is known in advance that the land is contaminated. It does not allow for the possibility of assessing land which the local authority does not know to be contaminated. The Bill does not provide for the assessment of land that has been suspected of being contaminated to see whether it is contaminated. The amendments are intended to introduce a more logical approach to land that may be contaminated but about which people are not sure.
In those circumstances, the amendments will allow the local authority to serve an assessment notice that requires the owners or occupiers to determine whether the land is contaminated. The intention is to amend the Bill in a helpful way and allow local authorities to identify contaminated land. I beg to move.
Lord Northbourne: I should like to speak briefly to Amendments Nos. 228C and 239C, both of which deal with the detail of remediation notices. Amendment No. 228C proposes that the authority should inspect land at the expense of the landowner. In my view, inspections should not be carried out at the landowner's expense. Local authorities ought to be able to back up their convictions at the initial stages with their own resources; otherwise, there is no reason why they may not carry out what may be called fishing expeditions at the expense of landowners. It would seem to me that to give a blank cheque of this kind to local authorities is entirely unjustified.
As far as Amendment No. 239C is concerned, it is felt that, where remediation has been carried out and costs incurred by virtue of a mistaken assumption or assessment that land is contaminated, those costs should be recoverable from the local authority.
Lord Carmichael of Kelvingrove: I should like to speak to Amendment No. 233. I do not believe I can agree with what the noble Lord has just said. That leads on to Amendment No. 233, in which we suggest that "on a regular basis" should be substituted for the words "from time to time", which in these circumstances strike us a totally meaningless. We suggest that the requirement for local authorities to inspect an area from time to time in order to identify contaminated land and landfill sites is far too weak.
Local authorities must have a statutory duty to inspect their area on a regular basis and only a systematic programme of inspection will identify all the relevant sites. It is not in the public interest for site identification to depend on local authorities making inspections on such a vague basis. If an incident involved contamination which spread disease or even a rash among children or people going across the land, a report which was made only "from time to time" could have been produced a year before, 18 months before or two years before. It just would not stand up in court. Whatever action the Minister takes on the other amendments, this amendment is an obvious one to accept. He may not like the wording but he must accept that the sentiment and the reasoning behind the amendment are quite clear and strong.
Lord Gisborough: Amendment No. 228C is grouped with Amendment No. 237AA, which addresses the

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situation where the person on whom the remediation notice is served wishes to suggest an alternative method of remediation. It allows the local authority and that person to consult in order to pursue such alternatives if it is practicable to do so. I support that amendment.
Viscount Ullswater: Amendments Nos. 228C and 239C, introduced by the noble Lord, Lord Northbourne, seek to ensure that the costs of any assessment work fall on the enforcing authority and not on the person receiving a remediation notice. Amendment No. 228C would amend the definition of remediation so that any assessment works were to be undertaken at the cost of the enforcing authority. Amendment No. 239C would, as an alternative approach to the same issue, enable the recipient of a notice to recover his reasonable costs from the enforcing authority for any required steps by way of assessment of the condition of the land if that assessment indicated that no further remediation steps needed to be undertaken.
Lord Northbourne: The noble Viscount has misunderstood the intention of the second amendment. It seeks to ensure that, if remediation was undertaken and it was subsequently found that it had been unnecessary, the costs could be recovered.
Viscount Ullswater: I accept the noble Lord's correction of what I said and I understand what he is addressing. I hope that my remarks will apply equally to what he has just said.
It is perhaps arguable that some provision of this kind is necessary to protect industry and landowners from predatory remediation notices based on little real evidence of contamination, but the existing provisions in the Bill and the basic principles of administrative law do not really support that line of argument. An enforcing authority must act reasonably in determining that any land appears to be contaminated. If it were to serve a remediation notice on scant or little evidence that the land was contaminated, or with disregard for the guidance as to the identification of contaminated land, the notice could be subject to appeal and the authority's decision could be subject to review. However, it would be reasonable for the enforcing authority, once it is satisfied that there appears to be harm or water pollution caused by contamination, to require the recipient of a notice to assess the full extent of the problems on the site and subsequently to take the appropriate actions to deal with them.
The amendments in the name of the noble Baroness, Lady Hilton—Amendments Nos. 228BC, 237AA and 239E—would, however, permit a local authority to serve a specific assessment notice on land which appeared likely to be contaminated. In the Government's view, that would open up the system to precisely the kind of problems which the amendments in the name of the noble Lord, Lord Northbourne, sought to prevent. The noble Lord talked about a fishing expedition. Therefore, I would ask the Committee not to accept those amendments.
Amendment No. 233, in the name of the noble Lord, Lord Carmichael of Kelvingrove, seeks to change the basis of the inspection duty of local authorities to be on
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a regular basis rather than from time to time as currently provided. I would have to agree that in modern-day language the formulation "from time to time" might sound old fashioned and so I can sympathise with the sentiment behind the amendment. However, the existing phrasing has a particular legal intention and effect which I hope that I can persuade the noble Lord is not met by his amendment.
Different local authority areas will inevitably face different levels of problems associated with contaminated land. That may result from different patterns of development and land use, and from technical considerations such as the underlying geology of the area. In addition, the problems associated with the individual sites will arise or develop at different rates. The local authority may need to inspect on a frequent basis, but not necessarily at regular intervals, a site which it believes might start emitting methane gas. But most local authorities will not have contaminated land and will not present potential problems as a result of past land uses, and so long as the current use of those sites or others nearby does not suggest that new contamination might be occurring, the local authority would discharge its duty by inspecting at appropriate frequency, whether regularly spaced or not.
Both of those factors suggest that there should not be a rigid approach to the timing of the duty to inspect for contaminated land. Requiring inspections on a regular basis, as is suggested in the amendment, could lead both to unnecessary costs for local authorities and, in the case of some sites, to inspections not being carried out sufficiently frequently.
The formulation already in Clause 54 would permit a proper level of flexibility to allow both regularly spaced inspections (where that is considered appropriate) and frequent but irregularly spaced inspections for other cases. As I dared to suggest, "from time to time" is a time-honoured legislative formula which I should not wish to disturb without good reason. I am sure that noble Lords would agree with me and, on that basis, I. wonder whether the noble Baroness would care to withdraw her amendment.
10.30 p.m.
Baroness Hilton of Eggardon: I am sorry that the Minister thinks that local authorities would indulge in fishing expeditions. Clearly, they might be activated by a desire to be sure that there was no pollution on old industrial sites, and it seems appropriate that they should have the powers to investigate. However, in the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 228C and 229 not moved.]
Lord Jenkin of Rodingmoved Amendment No. 229A:
Page 47, line 32, leave out from ("owner") to end of line 46 and insert:
("(a) ("in relation to any land in England and Wales, means a person who, is entitled to receive the rack rent of the land, or, where the land is not let at a rack rent, would be so entitled if it were so let, but does not include a mortgagee not in physical possession of the land or one who is in possession of the land only for the purpose of preserving,

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protecting, repairing, securing or selling it, or investigating the condition of it, and otherwise performs no operational function in respect of it; nor does it include a trustee who has no beneficial interest in the land;
(b) in relation to any land in Scotland, means the person for the time being who is entitled to receive, or who would, if the land were let, be entitled to receive the rents of the land, and includes a factor, guardian or curator and in the case of public or municipal land, includes the persons to whom the management of the land is entrusted, but does not include a person who holds a security over the land (whether heritable or otherwise) not in physical possession or who exercises it rights as security holder only for the purpose of preserving, protecting, repairing, securing or selling it, or investigating the condition of it, and otherwise performs no operational function in respect of it; nor does it include a bare trustee;
(c) in the Environmental Protection Act 1990, "owner" shall have the same meaning as in sub-paragraph (a) above and the definition of "owner" in section 81A(9) of that Act shall be repealed.").
The noble Lord said: In moving this amendment, I understand that we are considering also Amendments Nos. 238AA, 238D and 238E. My amendment is concerned with the potential liability of lenders of money (whether or not on the security of land) to a landowner whose land may well be contaminated.
When the Government published their document A Framework for Contaminated Land they stated quite clearly:
"the act of lending, whether secured or not, does not of itself open the lender to liability for meeting the costs of remedying any damage caused by the actions or omissions of the borrower".
When the banks and building societies, which are the main lenders in this country, read that, they were reassured. However, when they came to read the definition of "owner" in this clause, it seemed to arouse a good deal of anxiety. Two problems need to be addressed. First, under the present drafting, lenders could be held liable for environmental damage where circumstances forced them into possession of a mortgaged property. It is not unknown for someone whose business is in great difficulties to abandon the premises and drop the keys through the building society's letter box.
It could also happen that an owner abandons a site and the bank or building society, given that it is not getting any payment, needs to take some action to make the premises secure. We should bear in mind that we are talking not necessarily about large and potentially extremely damaging sites, but about small businesses, such as dry cleaners, printers, petrol stations, farms or suppliers of agricultural chemicals—virtually any company that happens in the course of its business to handle chemicals that are hazardous to the environment. Many such businesses rely upon borrowing from banks, or in some cases building societies, to be able to carry on the businesses.
In the circumstances I have described, that could turn the lender into an owner, and therefore liable to all the procedures contained in the Bill. He could have a remediation notice served upon him. He could then be under an obligation to take the action necessary to clean up the site. If he does not, he can be liable to fines, and substantial costs if the local authority itself does the work.
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What is a bank or building society to do in such circumstances with that risk hanging over its head? The right answer might be to walk away from the security, have nothing to do with it, and abandon it with no owner and no occupier. I cannot believe that that is what my right honourable friends intend by that definition of "owner" in the Bill.
There is a second circumstance which needs to be addressed—that is, under the Bill as drafted, trustees who hold just the bare legal title to the land, with no beneficial interest in it, may be caught by the definition of "owner", and so held personally liable for the consequences of the contamination by the owner. The suggestion in the amendment is that they should be liable only to the extent of any trust assets they control.
I have been rash enough to include in the amendment an amendment to the law of Scotland. I hasten to say that I know relatively little about the law of Scotland, although I was born in Edinburgh. I am advised that the position should be the same as in England and Wales, and that the drafting of the amendment achieves that. That is not the case at present. There is an exemption for the mortgagee in possession, but not for what I understand in Scots law is called a heritable creditor, which I understand to be the equivalent.
I recognise that my amendments may not be in the right form, but they raise an important issue. I hope that my noble friend will be able to offer some comfort to those who are genuinely anxious that they will find themselves saddled with a liability. The result will be that they will be infinitely less willing to lend. Businesses will be unable to raise the finance to keep going because of the potential liability hanging over the heads of the lenders. It is a serious point. I hope that my noble friend will be able to offer us some comfort. I beg to move.
Lord Boardman: I support my noble friend's amendment. I shall say just two things. First, the proposals put forward originally, as my noble friend said, in A Framework for Contaminated Land made it clear that lenders would not be faced with the liability that the Bill now imposes upon them. That is unfortunate.
My second point is that if the Government want people to lend money on land which could possibly become contaminated, by this clause they will prevent that wish being realised. Lenders will not lend money on land that may be polluted—under the Bill they would be required to monitor it to ensure that it was not being polluted for the whole time the security was held by them—because of the danger that they might be faced ultimately with a large bill. That would be fearful, so I hope that if the amendment is not accepted my noble friend the Minister will at a later stage introduce an amendment to reduce the real threat to those who would otherwise hope to borrow effectively for such investments.
The Earl of Lytton: Perhaps it would be helpful to the Committee if I now spoke to my Amendments Nos. 245AZA and 245AZB, which relate to insolvency practitioners. It is part and parcel of the same issue and it may be appropriate for the Minister to deal with it

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now. Often insolvency practitioners and other receivers deal with land that is subject to contamination. I remember some time ago being instructed to value a piece of land that had been used for scrap metal processing. I do not know what they did with the sump oil and so forth—perhaps they just tipped it on the ground. That is what it looked like!
It would be unreasonable for people acting as insolvency practitioners, whether appointed as receivers or in some other capacity, to assume personal liability under Part II of the Environmental Protection Act 1990, unless they were responsible for causing the harm, in which case they must accept liability.
Clause 54, which is to be inserted in the 1990 Act as Section 78P(3), seeks to limit the liability. However, the present wording refers only to insolvency practitioners and ignores other receivers. That is inequitable. I have spoken to representatives of the Royal Institution of Chartered Surveyors, some of whose members act in such a capacity. They are most anxious about the provision. Perhaps the Minister will consider the matter.
As regards lenders, if the situation comes adrift and the loan is called in they may well appoint a receiver. He represents the lender's interests in trying to realise the asset value. The purpose of my amendments is to extend to all classes of receiver the protection that is already built into the Bill.
Baroness Hamwee: I speak to Amendment No. 238AA, which stands in the name of my noble friend Lord Beaumont and myself. It is not such a macro amendment as that moved by the noble Lord, Lord Jenkin of Roding. Paragraph (4) at page 50 refers to the consent required by the person in occupation of land in the circumstances set out in the provision. The amendment addresses the point, although probably not adequately. It deals with what happens if consent is not given.
Lord Annaly: I speak to Amendment No. 238D, which is a probing amendment. Its object is to obtain a commitment from my noble friend the Minister that the principles by which liability can be transferred are stated in the Bill.
An efficient market in contaminated land, which encourages investment in remediation, depends on a clear and equitable division of responsibility for the land following sale and purchase. It is important for business organisations to have reasonable clarity as to the extent of their liabilities and not to be unfairly haunted by the past if they are to trade and borrow on an equitable basis. The right to transfer liability is a vital condition if the market for contaminated land is to operate effectively. The Government have made provision for that in the new Section 78E(3) but the conditions under which transfer takes place, and how liability under this part can be transferred, is not clearly stated.
This is a complex area of private and public law and uncertainty may mean that the provision does not have its intended effect. I am looking to my noble friend the Minister for an assurance that the principles by which liability is transferred are stated expressly in the Bill and not left solely to guidance.
10.45 p.m.
Baroness Hilton of Eggardon: I am speaking to Amendments Nos. 242B and 242C, which are in this group. They are probing amendments to ask the Minister what is meant by "hardship" when the authority is using its discretion in deciding what costs to recover. The local authority associations are extremely anxious about the provisions of Clause 54 which relate to hardship. Quite clearly they do not want the Bill to spell out a polluter's charter, such that responsibilities can be evaded, and some of the earlier amendments in the group seemed to suggest that people might seeks ways in which to evade liability for responsibility for pollution. But, on the other hand, local authorities recognise that an ability to exercise their discretion in the recovery of costs is an important local authority responsibility, and one which should be used only after considering a number of circumstances, of which hardship might be one factor.
Therefore, we are asking the Minister to outline what is intended by "hardship" and in what circumstances local authorities should be allowed to fund the clean-up of pollution.
Viscount Ullswater: These amendments all seek to make particular changes to some of the basic provisions concerning liabilities in respect of contaminated land.
Amendment No. 229A, moved by my noble friend Lord Jenkin of Roding, would change the definitions of "owner" used in the provisions for England and Wales and for Scotland, particularly as it could apply to financial institutions.
Following our overall review of policy on contaminated land and liabilities, and in particular the many responses we received to our consultation paper Paying for our Past, we have sought to clarify the potential liabilities of financial institutions. The Government are committed to the view that banks and others should not be treated as "deep pockets" to pay for the restoration of environmental damage for which they bear no real responsibility. The Government accept that any attempt to treat financial institutions in that way would serve only to threaten the supply of normal financial services to many sectors of the economy. In particular, the Government believe that the simple act of lending money should not of itself be considered as causing, or indeed knowingly permitting, the contamination of land which might arise as the result of the activities of those borrowing the money.
The issue of secured lending raises complex questions, however, as reflected in this amendment. In some cases, a lender could be acquiring a net liability if he took possession of contaminated land held as security, if the costs of necessary remediation exceeded the land's subsequent sale value. The Government consider that the lender should retain the right to walk away from his security in those cases, effectively limiting his financial exposure to the potential loss of the value of his loan.
The Government have noted concerns from the banking community, however, that in some cases the decision over whether to take possession of mortgaged property is effectively removed from the hands of the

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mortgagee, for example if the mortgagor hands over the keys to the property. It has been suggested that in those cases, the mortgagee could find himself potentially liable for contamination on the site without having any opportunity to exercise his right to walk away, as my noble friend indicated in his remarks. The Government are willing to consider this question further, and to examine whether changes to the definition of "owner" are justified to deal with the possibility of mortgagees finding themselves involuntarily in possession of land.
However, the Government do not accept the formulation set out in this amendment as being appropriate. It would provide an exemption from liability for a mortgagee in possession of a site, so long as he performs no operational function on the site and is in possession only for the ultimate purpose of selling it. That would serve in many cases to prevent prompt and necessary action to deal with environmental problems. It might also do little to protect the commercial position of the mortgagees, as they would still face the task of attempting to sell contaminated sites which would potentially be open to early action by the regulators requiring works to deal with the contamination.
This amendment raises the additional question of whether trustees with no beneficial interest in land should also be exempt from any liabilities. The Government would wish to consider that question further, particularly as the creation of an exemption of this kind could, if implemented in an inappropriate manner, create a possible route for unjustified evasions of liability.
Amendment No. 238D, in the name of my noble friend Lord Peyton of Yeovil, would amend the existing provision concerning the transfer of liabilities from the person who caused or knowingly permitted the contamination to the current owner or occupier of the land. The Government are keen to ensure that the polluter does not, in effect, pay twice. We consider that it would be inequitable for someone to have to accept a low sale price for land which had been contaminated, and then have to pay for the costs of action to remediate it. We therefore wish to provide that, where the original polluter has legally transferred the burdens and responsibilities associated with his property, including those relating to contamination, the regulatory system should also respect that transfer.
I am grateful for my noble friend's amendment and for all the comments and suggestions that we have received from elsewhere as regards how we might shape the statutory provisions necessary to bring about our policy intention. If the noble Lord, Lord Annaly, who moved the amendment would agree to withdraw it, the Government would wish to consider the question further and to bring back their own amendment at a later stage.
Amendments Nos. 238AA and 238E tabled in the name of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Beaumont of Whitley, seek to change the provisions which would apply in any case where the current occupier of contaminated land, who was not himself the appropriate person to receive a remediation notice, refused consent for the appropriate person to enter on to his land to carry out remediation. The
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amendments would provide for a court to issue a warrant authorising entry, with or without conditions, and order the appropriate person to pay such compensation as it sees fit.
The Government believe that it is essential that some mechanism exists to ensure that remediation can take place even if the current occupier of the land does not wish to give his consent to entry on the land. However, we are not attracted to the system of warrants proposed here, which would appear to be unnecessarily cumbersome.
In looking again at our own provisions, which provide that an occupier who refuses consent in those circumstances would himself become an appropriate person to receive a remediation notice, we note possible concerns that there is no explicit recognition that in some cases there may be reasonable grounds for consent to be withheld; nor is there any overt provision for any compensation to be payable. If the existing amendments are withdrawn, we would wish to re-examine those questions.
Amendments Nos. 242B and 242C would apply to the circumstances where an enforcing authority might be seeking to recover some, or all, of its reasonable costs incurred in carrying out itself the steps specified in a remediation notice which have not been carried out by the original recipient. The first of those amendments would make explicit that that is a discretionary power to recover costs, and that there is no obligation on the enforcing authority to do so. However, that sense is already present, as the existing provisions refer to an "entitlement" to recover costs and not a duty.
The second of those amendments would have the effect of removing the duty for an enforcing authority to consider questions of hardship which might arise from its recovery of costs. The Government did not intend that hardship should be the only ground on which enforcing authorities could decide not to seek to recover. their costs. However, we believe that enforcing authorities should be required to consider at least that question. I would therefore ask noble Lords not to accept the amendments.
The noble Earl, Lord Lytton, indicated that he would like the Committee to consider Amendments Nos. 245AZA and 245AZB which relate to the provisions to limit the potential personal liability of any insolvency practitioner. The issue of the liability of such practitioners was raised during our policy review. It was felt by many to be important that insolvency practitioners, and others acting in a similar capacity—such as the receivers of land referred to in the noble Lord's first amendment—should not be held personally liable for the costs of dealing with contaminated land. This is an area that again the Government would like to consider very carefully and on which they also intend to bring forward their own amendments at a later stage. It will probably be convenient to leave it at that. Having said what I hope is of some comfort to my noble friend Lord Jenkin, he may consider withdrawing the amendment.
Lord Jenkin of Roding: I would only say to my noble friend that he has undertaken to do an immense

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amount of reconsideration with this group of amendments. I assure him that I speak on behalf of all Members of the Committee who took part in this short debate when I say that we are very much obliged to him. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 230 and 231 not moved.]
[Amendment No. 232 had been withdrawn from the Marshalled List.]
[Amendments Nos. 233 to 237Z4 not moved.]
Lord Northbournemoved Amendment No. 237A:
Page 49, line 40, at end insert
("() The appropriate Agency or the local authority may consult with the owner of the land in the preparation of any remediation statement and also regarding any alternative action which that person might take to remedy the contamination on the land.").
The noble Lord said: In moving this amendment I wish to speak also to Amendment No. 237B. These are two further amendments about the procedures for remediation. The first relates to the fact that the Bill as drafted does not seem to make any provision for consultation between authorities and landowners so that agreement can be reached about the most useful and appropriate method of cleaning up. It merely provides for a remediation notice to be served, and when it has been served the Bill does not seem to provide any machinery for variation of the terms as a result of consultation between the parties. This amendment seeks to correct that position.
I regard Amendment No. 237B as important. It provides the local authority with a power rather than a duty to serve a remediation notice. As regards the Bill as currently drafted, where local authorities have identified any contaminated land in their area, they have a statutory duty to serve a remediation notice. They have no discretion to decide whether to serve a remediation notice. As a result local authorities will not be able to give priority to the most affected areas but will be obliged to deal with all cases of land deemed to be contaminated. However slight the degree of contamination is irrelevant. This is neither a sensible nor a practical approach and will put local authorities under unjustified strain, and it directly contradicts the Government's policy on priorities as set out in the framework for contaminated land. I beg to move.
Viscount Ullswater: Amendment No. 237A, moved by the noble Lord, Lord Northbourne, would give an enforcing authority the power to consult with the owner of a closed landfill site when preparing a remediation statement. It is certainly the Government's intention that an enforcing authority should, as a matter of best practice, consult with those concerned both when preparing a remediation statement for a closed landfill site or, indeed, when preparing a remediation notice for any contaminated site. It is expected that the agencies' guidance to local authorities will make this clear.
This consultation could usefully serve to promote better mutual understanding between the regulators and those being regulated and could provide an opportunity to encourage voluntary action to deal with
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contamination. However, the Government are not convinced that there is a need to specify on the face of the Bill that the enforcing authorities have a power to consult for this purpose.
Amendment No. 237B, spoken to by the noble Lord, Lord Northbourne, would replace the existing duty on enforcing authorities to serve a remediation notice for any contaminated land with a discretionary power to do so. The Government would be extremely reluctant to soften this aspect of the regulatory regime, particularly if the definition of contaminated land is to be amended to bring it into better alignment with our "suitable for use" policy. A softening of the duty to serve a notice would result in there being a discretion for enforcing authorities to allow land to remain in a condition in which it was unsuitable for use, and this could not be supported.
A further issue is that we wish to avoid the possibility that a local authority might hold back from serving a remediation notice if the potentially liable site owner appeared to have few resources. It would then serve the notice on any "deeper pocket" who subsequently became owner of the site, unaware that the local authority was lying in a regulatory ambush. That would clearly be unacceptable, and the Government also wish to resist that amendment.
Having said that, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Northbourne: With regard to Amendment No. 237B I shall await the noble Viscount's new definition of contaminated land. With that comment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 237AA not moved.]
11 p.m.
The Deputy Chairman of Committees (The Viscount of Oxfuird): I must advise the Committee of a printing error in Amendment No. 237AB on the Marshalled List. It should read "line 5" and not "line 4". In addition, the use of italics is incorrect.
Lord Peyton of Yeovilmoved Amendment No. 237AB:
Page 50, line 5, at end insert ("and has sought the advice of the appropriate Agency in accordance with section 78B(2), in particular as to whether the contaminated land poses an unacceptable actual or potential risk to health or the environment such that immediate remediation is required.").
The noble Lord said: In tabling Amendments No. 237AB and 238ZZB I am animated by the most respectable of purposes. First, I wish to understand the mind of the Government and, secondly, I wish to help them to achieve their purpose.
I should be grateful for my noble friend's confirmation that, since the Government themselves—for reasons which I understand perfectly—are not willing or able to clean up all contaminated land (and I avoid the term "remediation" even though I believe it finds favour with the noble Lord, Lord Williams of Elvel, because I do not like it), they wish to encourage potential improvers to do it for them. That being the case, I take it that they wish to ensure that land is

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saleable to those who wish to use it for a certain purpose and that it is made fit for that purpose. I hope that I have construed the Government's mind accurately.
I believe that we all agree that there ought to be a duty to act on all contaminated sites where there is an unacceptable risk to health or the environment. There are a great many contaminated sites which do not at present constitute such a menace. The cost of coping with all sites at once, regardless of risk, would be intolerable. Therefore, I hope that Amendment No. 237AB, which seeks to place some restriction on the freedom of local authorities immediately to identify as potentially dangerous any site as they see fit, will be helpful to the Government.
The second amendment suggests that regard should be had to the intended use of the land. There must be a vital distinction as to the use to which contaminated land is to be put. If it is be used for certain purposes then the land will have to be cleaned. For other purposes such a high standard of cleansing is not necessary. As I said in my opening remarks, it must be the Government's intention to promote a reasonably free and mobile market in contaminated land so that people who are willing to improve it have a chance to buy it on reasonable terms. That is all I need to say. However, I hope that my noble friend will be extremely grateful to me for the understanding that I have shown for his intentions and for the way that I seek to help him forward.
Viscount Ullswater: I hope that my noble friend will be equally grateful for my reply.
Essentially, the amendments go back to the discussions we had on earlier amendments both in terms of the overall definition of contaminated land and the importance of the use of the land in determining any remediation requirements. As I stated earlier, it is the Government's intention that remediation should be based on the suitable for use approach and that the definition of contaminated land should reflect the policy intentions we expressed in our document, Framework for Contaminated Land. The issue of whether any land in fact presents unacceptable actual or potential harm should be covered in the revised definitions which I have already suggested that the Government will introduce at a later stage. I also suggested earlier that any remediation notice also needs to consider those environmental effects which are not dependent on the use of the immediate site, in particular water pollution and the effects on neighbouring sites.
Perhaps on that basis I may ask my noble friend to withdraw his amendment.
Lord Peyton of Yeovil: I wish to consider carefully what my noble friend said, rather quickly. I am not all that quick at picking up the points at this hour of the night. However, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 237B to 238ZZB not moved.]
Lord Northbournemoved Amendment No. 238ZA:
Page 50, line 29, at end insert:
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("() A remediation notice shall not be served where the state of scientific and technical knowledge at the time when the substances were permitted or caused to be present in or on the land was not such that a person who caused or permitted them to be present in or on the land could have reasonably foreseen that their presence there could result in the contamination of that land.").
The noble Lord said: Amendment No. 238ZA refers to what might be called the state-of-the-art defence. I know from reading the Framework document that the Government are not well disposed to this concept.
The argument is that the liability for remediation must be limited by the liability which the owner of the land or the polluter undertook when the pollution took place. If at the time Brussels had not invented the particular contaminant to which the remediation notice relates, how could the person concerned have known that he was doing a wrong thing when he allowed that contaminant or substance to be deposited on the land?
It is worth noting that in its report on the European Green Paper on the use of civil liability for remedying environmental damage your Lordships' Select Committee on the European Communities argued that there should be a state-of-the-art defence as a matter of equity and people in the companies should be encouraged to make the best efforts to minimise pollution. As drafted, the Bill clearly is in conflict with the principles of equity and natural justice.
In the document Framework for Contaminated Land the Government point out that the common law rule in Cambridge Water Company v. Eastern Counties Leather plc established that a plaintiff must establish that the specific damage complained of was reasonably foreseeable at the time of the polluting act or emission.
I wish to ask the noble Viscount two questions. First, does the rule established in Cambridge Water Company v. Eastern Counties Leather plc apply to remediation notices served by a local authority or by the agency? Secondly, what in practice is the difference between the state-of-the-art defence which is proposed in the amendment and the defence that pollution was not reasonably foreseeable arising out of the common law rule established in Cambridge Water Company v. Eastern Counties Leather plc? I beg to move.
Lord Jenkin of Roding: This is as good a peg as any on which to hang a question to my noble friend about the meaning of the words "permitting or knowingly permitting". In his reply to me a few moments ago, my noble friend used the phrase "knowingly permitting". I think it is important for us to give consideration to what is meant by it, because it is a fairly loose term. Although, as I understand it, there is no substantive case law dealing directly with lender liability in the context of "knowingly permitting", a number of legal commentators have identified that lenders have a potential liability for knowingly permitting pollution with respect to activities of the borrower. Under the present drafting, therefore, as with the previous amendment, the risk remains that lenders could be held liable as appropriate persons, merely because they "knowingly permitted" substances which have

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contaminated land, to be on or under their land. I suggest that that might well be a matter which my noble friend may wish to consider.
Of course, lenders recognise that the environmental performance of their borrower may be one of the important factors when they come to make the loan and one may have loan documents which give lenders certain rights to check up that a borrower is performing his duties in relation to the pollution of the land. There may be circumstances in which a lender has a right to demand payment or immediate repayment or for the borrower to take corrective action if environmental performance is not up to scratch.
The fact remains that most banks and building societies are not experts in the field and they should not be held responsible for the acts or omissions of their borrowers merely because they happen to take what may be regarded as responsible steps to try to assess the quality of a borrower's environmental performance, requiring and monitoring environmental loan conditions. Again, there is the same problem. If the lenders are to be held liable in those circumstances, then lenders will not lend, business will suffer and the economy will suffer in consequence. There is an argument here as to what is meant. How far does the liability go and what do the words "permitted or knowingly permitted" mean in those circumstances?
Lord Lucas of Chilworth: I wish to follow my noble friend Lord Jenkin, but not quite down the same line as he took. My Amendments No. 238A and 372A, which is consequential, are grouped with Amendment No. 238ZA by the noble Lord, Lord Northbourne. As regards Amendment No. 238ZA it is, as the noble Lord described it, a state-of-the-art defence. In the circumstances which he described, I can see that it would be apt and fairly reasonable to accept the amendment.
Turning to the "appropriate person" with whom my noble friend Lord Jenkin was concerned, in the Bill the appropriate person is the one who caused or knowingly permitted the relevant substances to be in, on or under the land. But when we come to landfill, we find ourselves in something of a muddle. The waste regulation authority which licensed the site originally and which has monitored it and so on, has knowingly permitted the materials to be deposited. It not only permitted that to take place, but specified the types and quantities. So in a manner of speaking, it is the one who caused or knowingly permitted the contamination. If that is so, clearly the local authority cannot serve itself with a remediation notice. What then is to happen? Perhaps my noble friend will tell us.
A solution may well be, on the basis of the polluter pays principle, to ask who the polluter is. The polluter is probably no one single person. In relation to landfill, it is probably society in general. Therefore, if we designate authorities to administer these strict rules, we have to impose penalties on those who break the rules.
How do we impose penalties upon society at large? One might say that the interests of society at large have to be looked after by the public purse. There are a
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number of anomalies, as I read the Bill. We are all polluters. Once we have established the rules and had them properly applied and enforced, any further responsibility should be on society as a whole; that is, of course, on the public purse. I am not quite sure that my noble friend the Minister will accept that argument, but I would be grateful if he could clarify in the instance that I have briefly outlined just who is to be responsible.
11.15 p.m.
The Earl of Lytton: I rise to support the amendment of the noble Lord, Lord Northbourne. I should like to make three points, the first of which has been partly covered by the noble Lord, Lord Lucas. It raises the question of what might be regarded as contributory negligence. The point that really raises my concerns is the idea of serial legal action between owners of land and those who licensed the previous fill, and lenders, if that be the case. A great many things start breaking down if we set off down that road without having some sort of cut-off point. So, first, there has to be some element of containment of the social and economic (as it were) ill effects of any new legislation.
My second point is that there needs to be some sort of reciprocity of standards when we are talking about "fit for use". By that I mean that material considerations as to whether you have an old landfill site in one location and you want to put a housing estate in another location nearby must cut both ways. In other words, the position of the original landfill site must take into account as relevant considerations the proximity of other interests that could be affected. And by the same token, with the passage of time, new development must take into account the old sites. It cannot be otherwise. Therefore reciprocity of standards is extremely important.
I asked a learned acquaintance of mine the other day about "knowingly permitting" things. He said, "Yes, it has a long heritage in the area of health and safety". But I was unable to get an answer—and I do not know whether the Minister can help me—on this point. It seems to me that health and safety legislation relates primarily to a controlled workplace. By the very nature of the animal, we are dealing with something that is not totally in control. Either we do not have it properly contained, or we do not know enough about it. It is in some way out of control. I would like to know just how "knowingly permit" is to be interpreted in this instance.
Viscount Ullswater: These amendments seek to introduce exemptions from liabilities and defences against remediation notices in particular cases, and to require the local authority to act itself to deal with any contamination where these exemptions apply. The Government do not, as a matter of principle, accept any of these amendments.
These issues were considered on a general basis in our review of policy on contaminated land. It was argued by some that there should be a general regulatory compliance defence whereby polluters would be exempt from liability if they had acted in accordance with the consents and authorisations required for their particular activity. It was pointed out, however, that the general

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effect of such provisions could well be positively damaging to industry because it would encourage greater and often excessive caution on the part of regulators simply to protect themselves against potential future financial liabilities.
Introducing exemptions from liability of this kind would run clearly against the widely accepted "polluter pays" principle. As regulatory action under these provisions can be required only to deal with cases of risk to health or the wider environment, the exemption could only have the effect of transferring the necessary costs of remediation to someone else, whether another person or the public at large.
My noble friend Lord Jenkin of Roding asked me to go back to basics. He asked what the words "permitting" and "knowingly permitting" meant. There is no evidence that the case law on that phrase, which is taken from previous environmental legislation, such as the Water Resources Act 1991 and the Environmental Protection Act 1990, has led to the kind of interpretation that my noble friend sought to put on it. There is no reason to believe that the use of the phrase in these provisions will be interpreted any differently or as widely as has been suggested by some noble Lords.
Amendment No. 238ZA, moved by the noble Lord, Lord Northbourne, and spoken to by the noble Earl, Lord Lytton, would prevent a remediation notice being served on the basis that the contamination of the land could not have been reasonably foreseen at the time when the substances were caused or permitted to be present in or on the land, as a consequence of the then state of scientific and technical knowledge.
While this might appear to reflect the same test of "reasonable foreseeability", which was recently established in the common law through the decision in the Cambridge Water case, the Government do not believe that the comparison is justified. Common law and statute law in this area do not have the same purposes. Actions at common law seek to provide remedies for private persons in respect of a variety of tortious acts; this proposed statute seeks to establish a regulatory framework to remove risks to health and the environment without introducing any notion of compensation. Given those essential differences, it is reasonable for the two systems to diverge.
In practical terms, the availability of this exemption would leave almost any attempt by the enforcing authorities to deal with any contamination open to litigation attempting to prove the state of knowledge in the past. Another perverse effect could be to provide an incentive to hold back developments in the state of science, as greater understanding could result in greater future liabilities.
Amendment No. 238A, moved by my noble friend Lord Lucas of Chilworth, seeks to introduce into these provisions an exemption from any remediation notice in respect of contamination caused by waste in a landfill for which a certificate of completion has been issued under the waste management licensing regime in Part II of the Environmental Protection Act. The unimplemented provisions in Section 61 of that Act, which we now propose to repeal, did include that specific exemption from the then proposed regulatory
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regime for closed landfills. However, that exemption would not necessarily have provided any protection against all potential actions under the statutory nuisance powers. In any case, following our policy review, we no longer consider that an exemption of that kind can be justified.
A certificate of completion for a closed landfill site is granted where it is:
"unlikely to cause pollution of the environment or harm to human health".
The certificate means that the licence can be surrendered and the operator is no longer subject to the regime of conditions, monitoring and charging which goes with a licence.
It is not, however, meant to be a guarantee that no harm would arise at any stage in the future. Clearly, it is to be hoped that none would occur. But our regime needs to address who should be liable if it does occur. We can see no reason of equity why, in this particular set of circumstances, the liability should pass from the polluter to the public purse. No such transfer of liability occurs, for example, where other potentially polluting land uses come to an end.
Having such an exemption could result in the environment agency (which will take over the responsibilities of the waste regulation authorities) holding back from the grant of completion certificates, as they would have the effect of transferring liability to the public purse.
Amendment No. 372A would, in effect, place a duty on a local authority itself to carry out remediation works at its own cost where as a result of an exemption it was unable to serve a remediation notice. As I have already indicated, the Government do not believe that such exemptions should exist, nor that liabilities should transfer to the public sector in that way. Therefore, I ask the Committee to reject these amendments.
Lord Northbourne: I am profoundly disappointed by the noble Viscount's answer to my amendment. I believe that if the Government really want, as they state in paragraph 2.5 of their framework document, an efficient market in brownfield sites, they will certainly need something like the amendment. No business in its right mind will set up on a brownfield site with this sword of Damocles hanging over it when at any moment somebody may find a new contaminant and the company may be up for millions of pounds of remediation.
With that comment and the fact that I shall be coming back to the matter at a later stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 238A, 238AA and 238B not moved.]
Lord Peyton of Yeovilmoved Amendment No. 238BA:
Page 50, line 48, at end insert:
("(5) When an enforcing authority has served a remediation notice in accordance with this section, it shall be the duty of the authority to take appropriate steps to satisfy itself that the requirements of that

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notice have been complied with, and, if they have been, to issue and serve on the persons on whom that remediation was served a certificate of compliance with that notice.").
The noble Lord said: The proposed new Section 78(D) of the Act requires local authorities to serve notice on any site requiring restoration and to put a copy on the register. If we are to have a register, it would seem to me to be common sense that it should be kept up to date. Therefore it would be desirable that the same authority which serves the original notice requiring the restoration —I use the word advisedly—should, first, satisfy itself that the work has been done; secondly, put an entry on the register to that effect.
Amendment No. 238BA is a simple one. It does not need a long reply. I hope my noble friend will merely say that he will give it serious consideration.
Lord Northbourne: I wish to speak to Amendment No. 243A. I am happy with the solution to the problem of the noble Lord, Lord Peyton, and would not press the matter further unless the Government prefer our solution to his.
Viscount Ullswater: I listened carefully to what was said by my noble friend Lord Peyton of Yeovil. Looking again at the provisions with respect to registers, we feel that something needs to be done with respect to the sites that have been right through the regulatory process. We wish to consider in more detail, in the light of the comments from my noble friend and the noble Lord, Lord Northbourne, how we might do that. Though we are not attracted to the idea of deleting the sites altogether, we feel that the register should contain information in addition to that already specified in the provisions, specifically recording the nature and extent of any remediation works. We would look to bring forward an amendment at a later stage to plug that gap.
Included in this group is Amendment No. 244, in the name of the noble Lord, Lord Carmichael of Kelvingrove. It seeks to make explicit a requirement that a register of regulatory action as maintained by the various enforcing authorities should be available for public inspection and that facilities should be provided for the public to make copies of entries. It is certainly the Government's intention that the register should be public and should be available for inspection in much the same way as envisaged in the amendment. In developing the provisions we believe that that was already implied by the effects of other legislation such as the environmental information regulations 1992. However, if the noble Lord will consider withdrawing the amendment, we will undertake to consider the question again and, if necessary, bring forward our own amendment at a later stage. It shows that sometimes silence is golden.
Lord Carmichael of Kelvingrove: I think tonight it is platinum gold. I am very grateful to him for the help he has given on my amendment.
Lord Peyton of Yeovil: I am grateful to my noble friend for his assurance and beg leave to withdraw the amendment.
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Amendment, by leave, withdrawn.
11.30 p.m.
Lord Northbournemoved Amendment No. 238BB:
Page 51, line 10, leave out ("be in, on") and insert ("come into, onto").
The noble Lord said: In moving Amendment No. 238BB I shall speak also to Amendment No. 238C. Amendment No. 238BB relates to the question of exactly what subsection (2) means. It refers to a person who has knowingly permitted any of the substances by reason of which the land is contaminated to be in or on the land. It implies that any person who is on land which has at any time in the past had such substances on it or has substances which have come on it in the past is liable. The purpose of the amendment is to put into words what I assume the Government mean, that the person who is liable is he who allows such substances to be brought on to the land, or to come on to it.
Amendment No.238C raises a substantive issue: the innocent party who is asked to pick up the can. I do not seek to argue with the principle that those who have caused contamination, including landowners who have caused or allowed contamination or who have knowingly benefited from a discounted price in purchasing land that has been contaminated, should bear the cost of remediation to a standard fit for use.
However, Clause 78E goes far beyond that. In effect, the landowner becomes the scapegoat or long stop if the agency cannot find anyone else, even if he is completely innocent of blame and has had no benefit from the activity that has caused the contamination. The effect of subsections (2) and (3) is that, where the appropriate person cannot be found, or where liability has been transferred directly or inadvertently—thout necessarily the purchaser's knowledge or consent—the owner or occupier will be required to bear the costs of clearing up the contaminated land. That treats the landowner as a deep pocket, in exactly the way that the noble Viscount and the noble Lord, Lord Jenkin of Roding, suggested was inappropriate for lenders.
The deletion of subsection (3) will protect only innocent landowners or occupiers. New subsection (3) says that, where a person who polluted can show that he transferred the liability to the present owner or occupier, it is that person who is liable and the polluter is no longer liable. The transfer must be expressly made. The reference to "directly or indirectly" is deleted. Such a phrase is a recipe for uncertainty and litigation. In (3) (a), if the polluter has explicitly transferred the liability to a person who has failed to transfer it on to the next owner or occupier, it is that person who remains liable, not the polluter or his successor. In (3)(b), where a person refuses entry on to land to do works or otherwise prevents any person to deal with contamination, that person becomes liable.
I should like to ask the noble Viscount two questions. First, how hard will the local authority have to try to find the polluter before it finally falls back on the unhappy and innocent landowner - assuming he is an

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innocent landowner? Secondly, what about the case where the polluter can be found but cannot pay? I beg to move.
Viscount Ullswater: The underlying concern shown by this amendment, and also expressed elsewhere, is that the test of "knowingly permitting" can spread the net of liability too wide, particularly as it can encompass knowingly permitting the continued presence of contaminating substances. Amendment No.238BB moved by the noble Lord, Lord Northbourne, seeks to resolve that perceived problem by restricting the application of the test so that it applies only to the original polluting act when the substances came into or on to the land.
We consider that the effect of the amendment is to exempt too many categories of people who should be held responsible. We believe that it would be reasonable for somebody who has had active control over contaminants on a site, for example when redeveloping it, to become responsible for any harm to health or the environment that may result, even if he did not originally cause or knowingly permit the site to become contaminated. This amendment would exclude such a person from liability.
The Government appreciate that there are anxieties expressed about the existing test and are considering the issue carefully but do not accept some of the wider constructions being placed by others on the words "knowingly permitting" since this is not reflected in the judgments of the courts. We recognise, however, that this is a question of potentially great significance and we may wish to return with further clarification at a later stage.
Amendment No. 238C, in the name of the noble Lord, Lord Northbourne, seeks to amend the provisions by which liability might pass from the original polluter to the owner or occupier of the land. This, too, is an area in which the Government would wish to consider further the comments made both in this debate and elsewhere, and to bring forward a revised formulation at a later stage. The structure of liabilities set out in these provisions is intended to reflect the polluter pays principle that primary liability falls to the person who caused or knowingly permitted the contamination. In addition to the notion of a transfer of liabilities, the Government believe that where the original polluter cannot be found, it is justified that the current owner or occupier of the land should be held responsible for its condition and for any works needed to deal with the contamination. It is not a new concept. It was the position under the statutory nuisance powers in Part III of the Environmental Protection Act and also reflects principles in the common law. However, this amendment would mean that this principle would not be reflected in the contaminated land provisions. The Government believe that this would be wrong. However, I think I have indicated that the Government would wish to consider further the comments made in this area, and I would ask the noble Lord to withdraw the amendment.
Lord Northbourne: I am most grateful to the noble Viscount for what he has said. I beg leave to withdraw the amendment.
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Amendment, by leave, withdrawn.
[Amendments Nos. 238C to 238E not moved.]
Lord Stanley of Alderleyhad given notice of his intention to move Amendment No. 238F:
Page 51, line 20, at end insert:
("() Subsection (3) above shall not apply where compulsory powers exist to compel the owner or occupier to grant any interest in the land related to the activity or activities which gave rise to the contamination of the land, whether or not such compulsory powers were used.".").
The noble Lord said: I listened carefully to my noble friend's reply to the noble Lord, Lord Northbourne. Bearing in mind that my noble friend is taking the matter away and looking at it very carefully, at this stage I shall not move my amendment and shall wait until my noble friend comes back, I hope on Report, with an answer to the noble Lord, Lord Northbourne.
[Amendment No. 238F not moved.]
[Amendment No. 239 had been withdrawn from the Marshalled List.]
Lord Northbournemoved Amendment No. 239A:
Page 51, line 32, leave out ("guidance") and insert ("regulations").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 239B, 239D and 242A. This is mercifully the last of my groups of amendments. Amendment No. 239A imposes a more appropriate framework of regulations rather than guidance. It is suggested that it is unconstitutional that onerous liabilities worth millions of pounds should depend on administrative guidance rather than on legal principles.
With regard to Amendment No. 239B, a person who simply appears to have caused or knowingly permitted contamination would be caught but for this amendment as well as a person who had done things. That is tantamount to saying that a person who looks guilty is guilty. The definition of "appear" in new Section 78F(6) makes it clear that the decision is to be an entirely subjective judgment by the authority and presumably not subject to appeal. Amendment No. 239D introduces a defence that the best possible practicable means had been used to prevent pollution. Amendment No. 242A enables appropriate persons to seek a contribution from any other appropriate person who caused the presence of contaminating substances in the land. In other words, where the authority goes for one person, that person can recover an appropriate part of the cost from other polluters, if he can find them. I beg to move.
Baroness Hilton of Eggardon: I rise briefly to address Amendments Nos. 240 and 241, which are intended to be helpful. They suggest that the regulations which relate to appeals against the serving of remediation notices should be subject to regulations which make clear on what grounds those appeals may be made so that people know that information when they appeal and do not make mischievous appeals. The amendments provide that there shall be uniform procedures and generally attempt to tighten the grounds

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upon which regulations are made. They are intended to be helpful and to prevent appeals being too widely and mischievously drawn.
Lord Annaly: I rise briefly to support Amendment No. 242A in the name of the noble Lord, Lord Northbourne. In its present form, new Section 78E(4) relies on the Secretary of State's guidance as to whether the enforcing authority should serve a remediation notice on two or more owners. That raises the spectre of joint and several liability under which deep pockets may be unfairly forced to pay for damage caused by others. In order to promote the best investment in remediation, it is important for business to have reasonable certainty about the chain of responsibility where there is more than one appropriate person. At the very least, the principles by which a contribution to the costs can be recovered should be expressly stated in the Bill.
The noble Lord's amendment provides for a reasonable apportionment of costs so that a person is liable only to the extent of the damage for which he had responsibility. That is an equitable principle which is stated in the legislation. The Government's assurance is sought that the principle of apportionment of costs will be stated in the Bill and not left exclusively to guidance.
Baroness Hamwee: Amendment No. 243 in the names of my noble friend Lord Beaumont and myself is one to which I can speak far more briefly than may appear from the length of the amendment. It is essentially an anti-avoidance provision and seeks to deal with a situation where a disposal site is run through a company which is then wound up voluntarily, for instance as soon as the last load of waste is deposited on the site. It would make the owner liable for any remediation expenses—recovery could be quite expensive—and seeks to deal with the use of a shell company as the owner of a site in similar circumstances.
Viscount Ullswater: Amendments Nos. 239A and 242A, both of which were moved by the noble Lord, Lord Northbourne, relate to circumstances where two or more people may be responsible for the contamination on a single site.
Amendment No. 239A would replace guidance from the Secretary of State with regulations. The Government understand the concern that questions of this importance as to the determination of the potential liabilities of individuals and companies should be set out in guidance. That is why the provisions already include the strict requirement that the enforcing authorities act in accordance with such guidance and that it be subject to parliamentary scrutiny in its draft form through a negative resolution procedure, before it can come into effect.
The number of different circumstances which the guidance will have to address is potentially so great, however, that the Government believe that it would be all but impossible to frame it in the form of regulations.
We can at this stage give some indication of the basic principles which will underlie the guidance. First, where different people have separately contributed to the
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problems on a contaminated site, liability should be shared among them in proportion to their share of the overall responsibility for the contamination. This would be an explicit rejection of an approach based on joint and several liability, in which all of the liability could pass on to the shoulders of a smaller group of those responsible, or even on to one person. Similar principles could also apply where two or more owners each owned a part of a contaminated site.
The second overall principle would be that, where effective control over the same contamination had passed from one person to another, for example from the person who caused it to be present to another who knowingly permitted it to remain, liability should rest with the person who most recently could have exerted control over the contamination.
Those principles should give some comfort in respect of the concerns which appear to lie behind Amendment No. 242A. That would enable a person who has complied with a remediation notice to recover contributions to his reasonable costs from anyone else who caused the contamination to be present. However, as the provisions currently stand, any of those other persons would in any case be themselves potentially appropriate persons. That would mean that the Secretary of State's guidance would apply, and would govern the apportionment of the liability where that was necessary. If the recipient of a remediation notice thought that the system had not been followed correctly, he would be able to appeal against that aspect of the remediation notice.
Amendments Nos. 240 and 241 relate also to the question of regulations, in this case concerning appeals against remediation notices. Amendment No. 240 would make it a duty on the Secretary of state to make regulations with respect to the grounds for, and procedures on, such appeals. I point out that in any event the right of appeal against a remediation notice is not conditional upon such regulations being made. The effect of the amendment would also be to remove any discretion over whether the regulations had to set out any particular procedures for appeals. In most instances, those would be to the magistrates' courts, and there may be no need for new procedures to be established to deal with such appeals.
Amendment No. 241 would have the effect of making the indicative contents set out in the Bill for the scope of these regulations into required elements. It is important to maintain some discretion, particularly in respect of the contents of the regulations, so that the Government are not required to make regulations which may, at some time in the future, be deemed unnecessary.
The list of items for possible inclusion in these regulations, which is provided in the proposed new Section 78G(5) is deliberately drawn very widely, both to indicate what general issues are intended to be covered and to ensure that problems of vires do not arise. However, it might be neither necessary nor sensible in some circumstances to include provisions in the regulations dealing with all of the areas identified in that subsection. Amendment No. 241 would remove the necessary discretion to make that decision.

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Amendment No. 243, moved by the noble Baroness, Lady Hamwee, would enable the court to declare that any director or officer of a body corporate which was dissolved to avoid liabilities in respect of contaminated land could himself be treated as the appropriate person to receive a remediation notice. The court could also declare that an enforcing authority could recover its costs or expenses from a holding company where it had set up a subsidiary company to avoid liability for contamination caused or knowingly permitted by the subsidiary company.
Like the noble Baroness, Lady Hamwee, the Government wish to ensure, so far as is practicable and reasonable, that people and companies are not able to evade what should be their responsibilities under this clause. However, the Government have severe reservations about the precise effects which would be brought about by this amendment.
The provisions in the first subsection could, for example, place individual directors in an impossible position if potential liabilities in respect of contaminated land were threatening the solvency of their companies. If they kept their companies in business, they could be found guilty of "wrongful trading" under the provisions of the Section 214 of the Insolvency Act 1986. But if they put those companies into voluntary liquidation in order to avoid questions of wrongful trading, they could be held personally liable for the costs of any remediation work required under these contaminated land provisions.
The second subsection would clearly "pierce the corporate veil", and run against the fundamental principles of limited liability for company ownership. The effect of the amendment would be to make shareholders, in this case holding companies, legally responsible for some of the liabilities of the companies in which they held shares.
I hope that I can reassure the Committee, however, that errant directors will not escape completely under the existing provisions of this clause. The new powers in respect of contaminated land which we are discussing here will, of course, sit within the wider provisions of the Environmental Protection Act 1990. Section 157 of that Act provides that where any offences under the Act are committed with the
"consent or connivance of, or are attributable to the neglect of, any director, manager, secretary or other similar officer"
those persons shall be themselves guilty of the offence and thus liable to be punished accordingly.
Amendment No. 239B, spoken to by the noble Lord, Lord Northbourne, is somewhat simpler. It seeks to replace a reference to someone appearing to have caused or knowingly permitted contamination with a stronger test of their having done so. This would reflect the wording used elsewhere in the provisions.
Rather than seeking to dispute the issue, the Government suggest that there may be a small number of other instances in the proposed new Section 78F to which the amendment applies. Having had these brought to their attention, they would wish to bring forward their own amendments to correct them at a later stage.
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Amendment No. 239D, also spoken to by the noble Lord, Lord Northbourne, is similar. I ask Members of the Committee to withdraw their amendments.
Lord Northbourne: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 239B to 241 not moved.]
Lord Williams of Elvelmoved Amendment No. 241A:
Page 54, leave out lines 18 to 47.
The noble Lord said: It is with the greatest pleasure that I move Amendment No. 241A, which comes from the Opposition. We have listened to all kinds of arguments from the other side of the Committee and I wish to put forward an argument on our own. The Committee will be aware that the Delegated Powers Scrutiny Committee of your Lordships' House has looked at the Bill and reached certain conclusions. I refer the Committee in particular to paragraph 8 on page 2 of the report. The committee points out that the memorandum from the department justifies the negative procedure under the new Section 78H—which is azx Henry VIII power to increase a fine at random—by stating that the power,
"is necessary to ensure that the real value of the fine can be left constant".
However, the new section does not state that that is the purpose.
The Delegated Powers Scrutiny Committee accordingly draws the attention of the House to new Section 78H(3) in Clause 54. That committee would be happy if the Minister were to give an undertaking which could be referred to in the courts. As a result of Pepper v. Hart, undertakings by Ministers can be referred to—
Viscount Ullswater: I hesitate to interrupt the noble Lord but I wonder whether he is addressing Amendment No. 241A, which leaves out lines 18 to 47, or whether he is addressing Amendment No. 242, which changes the resolution of each House of Parliament.
Lord Williams of Elvel: I was under the impression that I was addressing Amendment No. 241A, which leaves out new Section 78H. However, on the advice of the Minister, I shall look at that. Yes, I am addressing Amendment No. 241A. That leaves out, as the amendment on the Marshalled List points out, a clause which is to be inserted, the rubric of which reads:
"Offences of not complying with a remediation notice".
The section is new Section 78H. The subsection of that section to which the Delegated Powers Scrutiny Committee took exception is Section 78H(3), which the Minister will find at line 31 on page 54. Therefore, my remarks are relevant to the report of the committee and, indeed, to what I have been saying hitherto.
The report of the Delegated Powers Scrutiny Committee states that the section as it stands
"does not state that this is the purpose",
that is, to keep the real value of the fine constant,

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"and the House may consider that the Minister should be invited to give an undertaking on this issue, which could be invoked by the Joint Committee on Statutory Instruments if the power were used to increase the real value of the fine".
That is what your Lordships' Delegated Powers Scrutiny Committee has said. That is why I move the amendment; in order to obtain such an undertaking from the Minister.
The Minister may think that I am referring to something else. The noble Baroness has tabled an amendment which relates to the same report. I am referring specifically to Clause 54 and the words which I say in my amendment should be left out. We need an undertaking from the Minister along the lines which the Delegated Powers Scrutiny Committee asks for. I beg to move.
Baroness Hamwee: It may be for the convenience of the Committee if I speak also to Amendment No. 242, to which the noble Lord, Lord Williams, has added his name.
I am making the same point. The amendment seeks to provide a greater safeguard in the application of subsection (3) of new Section 78H and to seek an affirmative resolution in the case of an order to increase the maximum amount of the fine. It would clearly be helpful if the Minister were able to give the undertaking which the noble Lord seeks as to the purpose of the use of the power being to keep the real value of the fine constant. If the Minister were able to give that undertaking, it could be invoked by the Joint Committee on Statutory Instruments, if the power were used.
Viscount Ullswater: Perhaps I may be permitted to address Amendment No. 242 in the first instance. That may answer the question, about which I have become rather confused.
Amendment No. 242, in the names of the noble Baroness, Lady Hamwee, and the noble Lord, Lord Williams of Elvel, would impose an affirmative resolution procedure on any order made by the Secretary of State to increase the maximum level of fine for non-compliance with a remediation notice in respect of industrial, trade or business premises.
The provision which this amendment seeks to change has also attracted comments from the Select Committee on the Scrutiny of Delegated Powers, who described it as a Henry VIII clause. In our memorandum to that committee, the Government stated that our intention in providing a power to raise the level of the fine was to ensure that the real value of the fine can be left constant. I am happy to confirm on the record in your Lordships' House that that is indeed the Government's only intention in respect of that power.
However, in the light of the obvious anxieties over the operation of this particular power, I am happy to accept Amendment No. 242, and to have the power subject to an affirmative resolution procedure, although we shall have to come forward with a consequential drafting amendment to Section 161 of the Environmental Protection Act 1990 later in your Lordships' proceedings. Having said that, I could address myself to other points contained in the
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amendment moved by the noble Lord, Lord Williams of Elvel. However, I believe that what I have said may have satisfied the point for him.
12 Midnight
Lord Campbell of Croy: As the only member of the Select Committee on delegated powers present in the Chamber (which has the duty of drawing attention to such matters), I was very glad to hear the response just given by my noble friend the Minister.
Lord Williams of Elvel: I find the situation very odd. The Minister has just agreed with what the Select Committee requested. Indeed, he went further than that: he not only agreed with what the Select Committee asked for, but he went on to say that that should be subject to the affirmative resolution procedure. I am perfectly relaxed about that fact. It does not bother me. However, I should have been perfectly happy with an undertaking from the Minister that the point of Section 78H was to keep the real value of the fine constant. But, if the Minister likes to go further, then that is his problem. I am just rather surprised and taken aback by his response.
Nevertheless, if the Minister is willing to go further, I shall wish to draw attention on Report to paragraph 9 on page 2 of the report of the delegated powers scrutiny committee as regards other matters for which the committee might prefer the affirmative rather than the negative procedure to apply. I have not done so to date, but in the light of the Minister's remarks I shall certainly grasp one-and-a-half loaves rather than half a loaf. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamweemoved Amendment No. 242:
Page 54, line 47, at end insert:
(" (5) No order shall be made under subsection (3) above unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.").
Lord Harris of Greenwich: I should like to say a few gracious words to the noble Viscount for having accepted my noble friend's amendment. The fact that he has done so will be widely approved by Members of this Chamber.
On Question, amendment agreed to.
[Amendments Nos. 242A to 245A not moved.]
The Earl of Lyttonhad given notice of his intention to move Amendment No. 245AZA:
Page 58, line 45, after ("practitioner") insert ("or as a receiver of land (not being an insolvency practitioner)").
The noble Earl said: I should just like to say that I very much appreciate the response that the Minister gave earlier. On that basis, I shall not move the two amendments tabled in my name.
[Amendment No. 245AZA not moved.]
[Amendment No. 245AZB not moved.]
[Ámendment Nos. 245AA and 245AB not moved.]
Clause 54, as amended, agreed to.
Viscount Addisonmoved Amendment No. 245B:
After Clause 54, insert the following new clause:

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("Old mineral planning permissions
After section 22 of the Planning and Compensation Act 1991 there shall be inserted—
"Old mineral planning permissions.
22A.—(1) For the purposes of this Act "old mineral planning permisssion" means any planning permission for development—

(a) consisting of the winning and working of minerals; or

(b) involving the depositing of mineral waste,

which was deemed to have been authorised after 1st July 1948 and before 22nd February 1982.
(2) Any person with an old mineral planning permission to win or work minerals or to deposit waste shall, within 5 years of the date of the coming into force of section (Old mineral planning permissions) of the Environment Act 1995, apply to the relevant mineral planning authority for approval of the environmental conditions to which the permission is subject.
(3) An old mineral planning permission shall—

(a) if no application for the registration of the permission is made under this section, cease to have effect on the day following the last date on which such an application may be made; and

(b) if such an application is refused, cease to have effect on the day following the date on which the application is finally determined.".").

The noble Viscount said: The above amendment and Amendment No. 247B tackle the environmental problems created by old mineral planning permissions granted between 1948 and 1981, and prior to the 1981 minerals Act. I am aware that these amendments are widely welcomed outside the Chamber and have the support of several environmental groups as well as the Countryside Commission.
I highlighted some of the problems of old mining permissions in national parks at Second Reading, but the issues go much wider than this. It is clear that some of our finest landscapes and wildlife sites are now threatened by minerals extraction which was given the go-ahead 30 or 40 years ago, when concern for the environment was much less than it is today. Many old mining permissions are out of step with the environmental standards now required of new permissions, and also of the pre-1948 permissions—the so-called interim development orders—which have recently been updated as a result of the Planning and Compensation Act 1991.
These permissions are therefore anomalies in the mineral planning system. They often lack proper working conditions such as noise limits and frequently contain no requirement for the restoration of sites. By operating to lower standards than those applied to other mineral planning permissions, they also introduce distortions in the market. Many of these permissions are currently in operation and it is estimated that around the country 1,600 old permissions currently lie dormant, creating an environmental time bomb waiting to go off. Some of the worst problems lie within our national parks. There are believed to be at least 118 non-active sites across the national parks. In the Brecon Beacons and Pembrokeshire Coast there are 24 million tonnes of rock reserves waiting to be worked at currently dormant sites, amounting to nearly half of all rock reserves in these two national parks.
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It is widely recognised that these old mineral planning permissions are in urgent need of review. The Government have already made a number of welcome statements outlining their commitment to tackle the issue and to introduce the legislation needed to improve the situation. This commitment was most recently reiterated in the consultation paper on the review of old mineral planning permissions issued by the Department of the Environment last summer. We should not forget, however, that this issue was recognised as urgent by the Stevens Committee nearly 20 years ago and the Government have promised action since their first environment White Paper in 1990.
Amendment No. 245B would introduce a statutory time limit of five years for mineral operators to register their old mineral planning permissions with the mineral planning authority for the approval of modern working conditions. This issue was originally tackled in the 1981 minerals Act, which placed a statutory duty on mineral planning authorities to review mineral sites in their area. The measures set out in that Act have failed, however, as they establish no time limits on this duty. Consequently very little progress has been made in reviewing damaging permissions.
My first amendment, by requiring mineral operators to register their old permissions with the mineral planning authority for review within five years, would ensure that real progress could be achieved. The Government's recent consultation paper on reviewing old mineral permissions indicated their support for the introduction of a statutory time limit along the lines set out in my amendment. I hope my noble friend the Minister can give this amendment a fair wind.
My second amendment tackles the problem that many mineral planning permissions remain valid for too long. Currently, permissions granted before 1982 are valid until the year 2042, or 60 years. It is widely acknowledged and accepted by the Government that this period is too long. The purpose of my second amendment is to shorten the period until 2012 —30 years. It should be recognised that under current legislation a mineral planning permission granted in the 1950s could be valid for nearly 100 years! During this time the weight of importance attached to the environment, changing attitudes and the needs of society are likely to have altered greatly. In addition, a site could remain dormant for years and years and be reactivated with no notice, much to the concern of local residents and with potentially serious environmental consequences. It is now generally accepted that this is an overly generous period and that 30 years should be ample time to allow any investment to be recouped. Any mineral remaining in the ground after the investment had been written off would not have significant value and could not have significant value until further investment had been committed to mine and process it.
I believe that the amendment strikes the right balance between reducing the time for which damaging old mineral permissions may remain valid and allowing ample time for mineral operators to secure a return on any investment. It is therefore a reasonable approach to

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this difficult issue and would greatly help to reduce the lurking environmental threat posed by old mineral planning permissions. I beg to move.
Lord Campbell of Croy: I have put my name to the amendment. My noble friend has explained its purpose admirably.
I am concerned about permissions for extracting ironstone, which is a narrower subject within the terms of the amendment. Those permissions were mainly in Northamptonshire, other parts of the Midlands and Lincolnshire. The permissions are now out of date and superfluous as regards ironstone, which was used in the steel industry but has not been needed since 1979. The local environment is much affected and could continue to be affected if action is not taken.
The ironstone has lain below other minerals, chiefly limestone and clay. Those had to be removed before the ironstone could be extracted. The permissions allowed that, but since ironstone has no longer been needed those other minerals are those which are being extracted. The permissions now have the effect of allowing the extraction of substances which were not the objective at the time the permissions were granted. That time was soon after World War II, when ironstone was essential for our steel industry, especially in the area of Corby. That was 40 years ago and more. Those permissions were reserved for central government, which took the decisions, not local authorities.
In those immediate post-war years, the urgent requirement to assist the development of our industries, including steel, meant that the conditions attached to the permissions did not have as much regard to environmental considerations as would be normal today.
The permissions extended for many years and are not due to expire until 2042—nearly 50 years' time. In the meantime, heavy lorries are causing damage and operations are encroaching on villages. While observing fully and correctly the conditions—which are lax—the mineral companies are causing problems to rural villages and communities. Those troubles are likely to increase. Furthermore, there are few, if any, requirements to restore the land after use. That laxity seems very strange today, but it was not strange in the early 1950s.
I know that the Government's views on ironstone are similar to those which I have just expressed, because they are set out in the press release and discussion document which was issued to local authorities in the spring of last year. I hope that I am pushing at an open door in the case of the past mining of this particular mineral, which is no longer needed or extracted.
I have every wish to encourage and assist the minerals industry, and there is no shortage of suitable sites for extracting those minerals which are still needed. I understand that the local communities are not opposed. It is a matter of bringing the system up to date, especially in respect of the environmental arrangements.
Providentially, last week the CBI sent me its latest publication, Living with minerals. In that document the CBI says that:
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"the UK minerals industry is now a creative and sensitive agent in the conservation and restoration of the environment —our common heritage. While mineral extraction by definition involves a permanent depletion of a natural resource, in land use terms mineral working is compatible with the principles of sustainable development. Mineral companies accept their special responsibility to follow best practice. They work to integrate mineral development with conservation, to maintain natural wildlife habitats, and, where desired and practicable, to return land to a natural state".
It seems therefore that the operators will understand what is needed now—it has just been described—as opposed to over 40 years ago and will co-operate.
The simplest reform with regard to ironstone—I commend it—would be to revoke the permissions on a future date giving all concerned plenty of time. However, companies which are interested could apply in the meantime for permission to extract minerals such as limestone, clay and other substances. Their workings would then be re-established on a proper, modern basis. I understand that revocation would require primary legislation. The Bill presents that opportunity; the primary legislation is before us.
The amendment covers a much wider field than the problem relating to ironstone to which I referred. We shall listen with attention to what the Minister says in reply. However, I understand that the Government agree that the ironstone permissions should be revoked. Why wait? It might be two, three or even more years before other primary legislation can be introduced.
I have not found it easy to draft an amendment for revocation neatly and correctly. The Government could certainly draft and table an amendment to the present Bill if they wish to save valuable time. I hope that at a later stage, or in another place, a government amendment will appear in due course.
12.15 a.m.
Lord Howie of Troon: I am sorry to detain the Committee. I know little about ironstone. The subject has been argued persuasively by my old colleague, the noble Lord, Lord Campbell of Croy. However, the amendment goes much further. I have been approached by the British Cement Association and the British Aggregate Construction Materials Industries to oppose the amendments. I have no doubt that the noble Viscount, Lord Ullswater, and my noble friend Lord Williams have separately received the same information as I have. I shall, therefore, not dwell on it in any detail at this late hour. However, the amendments are the only items among the proposals before the Committee which seek, single-mindedly, to damage an industry—the extraction of aggregates industry.
The permissions already granted to those industries represent their assets. The retrospective nature of the proposals in the amendments are, I believe, out of order. The two proposed amendments are potentially extremely serious for the aggregates industry. In their different ways they both attack the asset base and the economic generation of the quarries. This is an important point. No other land use whatever is subject to retrospective withdrawal of planning permission without full compensation and, as I understand it, no element of compensation is proposed in the amendments before us tonight.

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In terms of the asset base of the companies involved in the aggregate extraction industry, the mineral in the ground is the tangible asset, the security against which capital investment is justified. If we reduce the life of the mineral from 60 to 30 years, the asset base of the companies would then be affected, with a likely consequential effect on their ability to undertake the very environmental propositions which are demanded. The removers of aggregates already accept the duty to restore the environment to as near the condition as that in which they found it. It will not be quite the same but will be rather better than a hole in the ground.
All that remains for me to say is that for some time discussions have been in train between the Government and the industry. They are continuing and it would be quite improper to pass amendments of this kind at this stage before they have reached a conclusion. I hope that the Committee will turn the amendments down.
Baroness Hilton of Eggardon: The Committee would not wish me at this late hour to make a speech, but I wholeheartedly support the amendments of the noble Viscount, Lord Addison. Of particular anxiety is the removal of large quantities of stone from some of our most beloved parts of the country for use often in building motorways and other constructions where substitute materials could be used. It is one reason again for welcoming the slowing down in the road programme that perhaps not quite so much in the way of crushed rock and stone will be needed to build up our roads. I merely wish at this stage to record that I wholeheartedly support the amendment.
Lord Desai: I support the amendment and wish especially to correct the impression given by my noble friend Lord Howie on what capital assets and values are about. Earlier today we heard some interesting fallacies about the polluter pays principle. People spoke as if the fact that one cannot identify one polluter or that the polluter did not anticipate consequences lets the polluter off. I do not think that that is true. We must take the view that the aggregate industry and whichever firms exist have in the past polluted and not paid the proper cost, when most of them made excess profits. From that point of view their current asset values are inflated. To the extent that we say that the rules must be complied with, the amendment would force the market to take account of the appropriate costs of correcting for pollution, which have so far been neglected. So rather than being harmful to the industry, I agree that asset values will fall, but the problem is that asset values are currently exaggerated. They will return to their proper values. After all, that is what we want.
Lord Howie of Troon: The last thing I wish is to disagree with my noble friend because he knows much more about economics than I do. However, he has overlooked the fact that the aggregate industry is already involved in putting back into the environment at least as much as it has taken out. The current discussions between the industry and the Government are intended to accelerate and increase that progress.
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I hope we are not going to have a dialogue at this late hour. My noble friend is never wrong, but on this occasion he is not wholly right.
Viscount Ullswater: I am grateful to my noble friend Lord Addison for raising the environmental issues relating to old mining permissions and to my noble friend Lord Campbell of Croy for raising the problems of the ironstone permissions. The Committee will understand that these are not easy issues to resolve. They have concerned the Government for some time and I should like briefly to tell the Committee of the steps my department has taken so far to facilitate reforms.
After the success of the Planning and Compensation Act 1991 in dealing with the problem of interim development order permissions granted between 1943 and 1948, we turned our attention to other old mineral permissions granted in the 1950s, 1960s and 1970s. We followed the issue of an options paper in 1992 with a series of reform proposals in March of last year. That paper, The Reform of Old Mineral Permissions 1948–1981, attracted a considerable response and a summary of the views of those who wrote to us has been deposited in the Library.
Subsequent to those responses, departmental Ministers and officials have conducted a series of bilateral meetings with environmental and amenity groups, with the different operational sectors of the minerals industry, with the ironstone landowners and the minerals planning authorities. Those meetings have been generally constructive.
These are very important issues which the Government have a long-standing commitment to take forward as indicated by our consultation paper on proposals for change last year. It is a complex matter, as our discussions this evening have indicated. It is complex to get the right balance between the rights of those who hold long-standing valid mining permissions and the proper protection of the environment and amenity. I shall want to give the most careful consideration to these amendments and to the other representations that have been made in response to our consultation exercise and to make a statement on the Government's conclusions on Report. In the meantime, I hope that my noble friend will feel able to withdraw his amendment.
Viscount Addison: I am greatly encouraged by my noble friend's reply. I understand his concerns and other concerns with my amendments as they stand. But I am grateful that he has supported in principle the points that they raise. It is extremely important that progress is made before the Bill goes to the other place. With this in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 [Abandoned mines: England and Wales]:
Lord Beaumont of Whitleymoved Amendment No. 246:
Page 60, line 40, at end insert:

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("() It shall be the duty of the operator of the mine to publish any notice given under subsection (1) above in one or more newspapers circulating in any area that may be affected by consequences of the abandonment.").
The noble Lord said: At this hour of the night we approach the problem of abandoned mines. The matter is extremely serious, as all Members of the Committee will know. It has very great and grave consequences for the environment. The amendment in my name and in the names of the noble Lords, Lord Ezra and Lord Moran, seeks to extend the duties of the operator of the mine in giving notice of his intention to close a mine.
The Bill as presently drafted says that he shall inform the agency, and that is absolutely right. It goes on to say that the agency shall inform the local authorities, and that is right. In that way the matter comes into the public domain. But this matter is so important, and affects so many people who live round about the area of a mine, that it is right that we should try to short-cut the process by making it the duty of the mine owner to give public notice by publishing his intention in the newspapers that circulate in the area. That is the reason for this amendment. I hope that the Government will see fit to accept it. I beg to move.
Lord Mason of Barnsley: I rise to support the amendment. This concerns the wider dissemination of information concerning the planned abandonment of mines.
Before the passing of this Bill—that is, at this moment —a mine operator is under no duty to give any notice of intention to abandon the mine. But the wording of Clause 55 will improve the situation in that an obligation is imposed to notify the agency in advance of abandonment. That is helpful but by no means sufficient. Although this particular notification procedure is welcomed, it does not provide a procedure where other interested parties who will be directly affected by the abandonment will be so informed. Of course, I support the amendment to the effect that the local press should be informed.
But what of the owners of fishing rights? Their enterprise may well be adversely affected by a mine abandonment, the pumping of mine water likely to cease, rising mine water levels, the fear of mine water seepage and of pollution. Also, within the area of a mine closure, should not the regional fisheries committees of the National Rivers Authority be informed, thereby being enabled to take whatever precautions are necessary should they anticipate a flooding or pollution problem of the rivers or still waters of their area? I believe too that it is also sensible to alert the national office of the Salmon and Trout Association, so that its branches can be alerted in the vicinity of the abandoned mine.
The Salmon and Trout Association is the senior game angling organisation in Great Britain. It is the governing body of the sport in England and Wales. It is concerned with the wellbeing of all waters, and in particular those that hold stocks of salmon, sea trout, trout and grayling. It is the only organisation in England and Wales that monitors all applications for licences for abstraction and
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consents to discharge made to the National Rivers Authority. As a result, branches in all regions are watchful for any pollution problems.
Pollution from abandoned mines is certainly a concern. Valuable salmon rivers and their stocks could be at risk. The Minister will know that the River Wear in the County of Durham is a classic example. With regard to the general area of concern about pollution—that is what everyone concerned with the environment, pollution and pure waters is worried about—I would want the headquarters of the Anglers' Conservation Association, which incorporates the Pure Rivers Society, to be informed in advance of pit closures and abandonment of mines.
The Anglers' Conservation Association is a national organisation of high repute in the angling world. Its individual membership and that of its angling clubs cater for about 250,000 anglers throughout England and Wales. It exists mainly to fight the polluters of our inland waters, rivers, lakes and reservoirs. It is the one major organisation with 40 years of experience of taking the polluters to court and making them pay, having lost only two cases in that time. Therefore, for the benefit of its membership and the wider knowledge of any likelihood of pollution problems arising from abandoned mines, the ACA too should receive prior notification of pit closures and abandonments.
I do not feel that it is sufficient for the agency, having been informed of a proposed abandonment, in its turn to inform the local authority. The matter should not rest there. As I pointed out, there are other interested bodies which need to be notified, with some of whom the local authorities will not be in touch.
The newspapers circulating in the area, having broken the news to the locals—if the Minister accepts this amendment —will help to plug some of the gap of concern. But I hope that some thought will be given to specific organisations being informed, at least those that I have mentioned. The Minister may not be able to give me a full reply at the end of this debate on the amendment, I hope that he will give the matter some thought and give us some more information at Report stage.
12.30 a.m.
Viscount Ullswater: This amendment, moved by the noble Lord, Lord Beaumont of Whitley, is concerned with the new requirements for mine operators to give the agency at least six months' notice of any proposed abandonment of a mine. It proposes that any such notice should be published in newspapers circulating in areas which may be affected by the consequences of the abandonment.
The noble Lord, Lord Mason of Barnsley, exemplified the anxieties that many of the fishing interests, including the Anglers' Conservation Association, would have as regards the concept of the abandonment of mines.
The purpose of requiring mine operators to give prior notice is to allow the agency to assess fully the likely impact on the water environment of a proposed abandonment and to identify any steps which may need to be taken in order to protect water quality. The matters

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to be considered will be of a technical nature. I am satisfied that there would not be any reason at this stage for a mine operator to publish a notice in the local press of a proposal to abandon a mine. In addition, this would place a further, unnecessary, burden on industry.
However, we have taken account of the need to inform local authorities in some circumstances of a proposal to abandon a mine. Where the agency receives notice of an abandonment and considers that harm or water pollution will be caused in the area of a local authority by water from the mine, it must inform the local authority of the abandonment.
I should point out that, if a consent is required for a discharge which will be caused in consequence of the abandonment, the Water Resources Act 1991 will require the application for that consent to be advertised in the manner prescribed by the Secretary of State. I know that that does not go as far as the noble Lord, Lord Mason of Barnsley, would like me to go. However, I shall consider carefully what he said this evening to see whether further action should be taken. In the meantime, I hope he will agree that adequate notice will be given to those concerned.
Lord Beaumont of Whitley: That is an extremely disappointing reply. It does not meet any of the arguments put forward by the noble Lord, Lord Mason, and myself. When the noble Viscount reads tomorrow what he said in Hansard he will probably agree with me. To say that the publishing of an intention to close a mine in one or more newspapers circulating in the area is,
"a further, unnecessary, burden on the industry",
is ludicrous. It is a most unsatisfactory reply and we shall certainly come back to this matter at Report stage. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hilton of Eggardonmoved Amendment No. 247:
Page 61, line 17, at end insert:
("() any county council").
The noble Baroness said: This is a simple amendment. It seeks to include county councils within the definition of local authorities. It may be that when the Bill was drafted it was assumed that there would no longer be county councils. Of course things have changed since then and the amendment seeks to include county councils within the local authority definition.
Viscount Ullswater: This amendment seeks to add "county council" to the definition of "local authority" in proposed new Section 91B. It is really a technical point. The local authorities to be informed of a proposed abandonment are those which will have functions with regard to contaminated land in Clause 54. There will therefore only be a need to inform a county council when it is the council of an area for which there are no district councils. That is reflected in the definition of "local authority" in proposed Section 91B as currently drafted. I hope that that indicates that if the county council is the council in the area, it will be notified.
Lord Harris of Greenwich: Were the noble Baroness to decide to challenge the Minister's view,
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there would be no quorum in the House when the Division took place. The Chamber has now been sitting for over 10 hours. The noble Viscount will be aware, as a former Chief Whip, of the discussions in the Procedure Committee about hours of sitting of the House. I must say to him quite bluntly that it is wholly unreasonable that we are discussing matters of this importance at this time of night, particularly when we adjourned consideration of this Bill at 7 o'clock last Thursday evening.
I do not propose to press this matter any further. However, I wish it to be placed on the record that in the future my noble friends and I will not accept procedures of this sort.
Baroness Hilton of Eggardon: I do not intend to press the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
The Earl of Kintoremoved Amendment No. 247A:
Page 61, line 29, at end insert:
("Mine operators to notify Agency of proposed transfer of ownership.
It shall be the duty of the operator of a mine to inform the Agency of any proposal to transfer the ownership of a mine which is to, or which may, become an abandoned mine at any time after the expiration of the initial period".").
The noble Earl said: In moving Amendment No. 247A, I shall speak also to Amendment No. 247D. These amendments are intended to ensure that the agency in England and Wales, (in Clause 55) and SEPA (in Clause 56) are informed about any proposed change of ownership of any mine as soon as possible after the Bill becomes an Act. We feel that there is a danger of a rogue mine owner trying to evade his future responsibilities by a quick sale or disposal. I beg to move.
The Earl of Lindsay: The amendment moved by the noble Earl, Lord Kintore, seeks to place a duty on the operator of a mine to notify the agency or SEPA of any proposal to transfer the ownership of any mine which is to be abandoned, or may be abandoned. The wording of the amendment will require proposals to transfer the ownership of any mine which is, or may become, an abandoned mine at any time from six months after the transfer date to be notified to the agency or SEPA. Such a requirement could add to the bureaucratic workload of the agency and SEPA without materially improving their ability to control water pollution.
I understand the thinking behind the amendment of the noble Earl. However, in our view the provisions already in Clauses 55 and 56 will significantly enhance the powers of the agency and SEPA to anticipate and prevent water pollution from abandoned mines. We do not believe that the proposed amendments make any further contribution of substance to that aim. On that basis, I invite the noble Earl to withdraw the amendment.
The Earl of Kintore: I thank the noble Earl for his answer. At this time of night, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
Clause 55 agreed to.
[Amendment No.247B not moved.]
Clause 56 [Abandoned mines: Scotland]:
The Earl of Lindsaymoved Amendment No.247C:
Page 62, line 35, at end insert:
("(4) This Part extends only to Scotland.").
The noble Earl said: I beg to move this minor technical amendment.
On Question, amendment agreed to.
[Amendment No.247D not moved.]
Clause 56, as amended, agreed to.
Clause 57 [Amendments to sections 89 and 161 of the Water Resources Act 1991]:
Baroness Hilton of Eggardonmoved Amendment No.248:
Page 63, line 38, after ("apply") insert ("to the Coal Authority or").
The noble Baroness said: Amendments Nos.248 and 250 seek to ensure that somebody is responsible when mines are abandoned and by the turning off of pumps water overflows from mine workings and pollutes rivers. At present the situation is wholly unsatisfactory. If a mine is abandoned it is not clear who is responsible. We have asked questions in this House about who will maintain the pumps and keep them running. This amendment seeks to ensure that the Coal Authority is responsible for maintaining the pumps so that polluted water does not escape and run into rivers. The amendment is closely associated with Amendment No.249 and the following one that seek to change the timescale. I shall be addressing those amendments in due course. This amendment is an attempt to pin responsibility clearly on somebody to ensure that mine waters do not pollute rivers or drinking water supplies. I beg to move.
Viscount Ullswater: The amendment moved by the noble Baroness, Lady Hilton, seeks to remove existing statutory protections from the Coal Authority with respect to water pollution from abandoned mines. The amendment will prevent the existing defence against prosecution for pollution, and the existing exemption from recovery of expenses, where water from an abandoned mine is only permitted to pollute controlled waters, from applying to the Coal Authority. The removal of the defence and exemption would apply to discharges permitted by the Coal Authority from abandoned mines, regardless of when such mines were abandoned, or by whom.
We believe it to be right that the defence and exemption should be ended. Clause 57 would have that effect for all mines abandoned after the end of 1999. We have thought carefully about this change in the course of a lengthy review of the legal framework for discharges from abandoned mines and have reached several conclusions. Discharges from abandoned mines vary widely in their impact on the water environment. Some result in no pollution while others are more serious. Outright removal of the defence and exemption as
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proposed in the amendment would require the Coal Authority to seek discharge consents for all discharges, regardless of the degree of pollution, and to comply with them. That would not be justified in many cases and would place a heavy burden on the public purse.
We should not in any case distinguish between different types of mines or discharges permitted by public or private sector bodies. There is no reason to treat such discharges differently. We believe it would be wrong to withdraw suddenly those statutory protections which apply now to all abandoned coal mines for which the Coal Authority has responsibility. The Government have already said that they would expect the Coal Authority to go beyond the minimum standards of environmental responsibility which are set by its legal duties and to seek the best environmental result which can be secured by the use of the resources that are available to it. We must accept that the Coal Authority, like all public bodies, has limited financial resources. The amendments would destroy the careful balance of the Government's proposals between protecting the environment and safeguarding the public purse. Having said that, I hope that the noble Baroness will see fit to withdraw her amendment.
Baroness Hilton of Eggardon: I find that a disappointing response. It is still not at all clear who is responsible for maintaining the pumping from mines, whether they be old coal mines or other mines. We had hoped that the amendments would ensure that responsibility was clearly defined. However, in the circumstances, I beg leave to withdraw the amendment but reserve the right to return at the Report stage.
Amendment, by leave, withdrawn.
12.45 a.m.
Lord Stanley of Alderleymoved Amendment No. 248A:
Page 63, line 38, leave out ("if the mine in question") and insert ("to the owner of any land unless he was also the operator of the mine in question and that mine").
The noble Lord said: With this amendment, I should like to speak also to Amendments Nos. 249B, 250A and 251B. As I understand the way the Bill is written, the liability for clearing up any contamination and, indeed, stopping further contamination from a mine would rest in the end on the owner of the land. The abandoned mine could well be on adjacent land yet surface on an innocent landowner, with the liability then resting on that innocent landowner. That is clearly unjust. The amendment would exonerate the innocent landowner.
In the great majority of cases the abandoned mine will be a coal mine. As I understand it, there is a danger that it will be extremely difficult—perhaps impossible—to find anyone liable for mines abandoned after 31st December 1999, in which case, unless the amendment is accepted, the innocent landowner may well end up carrying the responsibility. I do not think that that conforms with the statement of the Minister for Energy in the House of Commons on 22nd March 1994. Having referred to the Water Resources Act 1991, he said:
"The legislation is there in that form because when the Bill was introduced and the Act debated it was felt to be unreasonable to place an absolute obligation in respect of environmental damage on

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a landowner who may never have been responsible for mining at all and who may have bought the land without being aware that it was undermined".—[Official Report, Commons, 2213/94; col. 207.]
That principle applies equally to contaminated land. I beg to move.
Viscount Ullswater: As I indicated, Clause 57 removes the statutory protections for discharges permitted to flow from mines abandoned after the end of 1999. We have proposed that change because we believe that the existing framework is anomalous and treats discharges from abandoned mines differently from all other discharges. The amendments would maintain the defence against prosecution for pollution of controlled waters and the exemption from cost recovery by the agency where water is only permitted to flow from an abandoned mine in the case of landowners unless they were the operator of the mine and the discharge was a result of the abandonment of the mine.
In putting forward the provisions in Clauses 55 and 57, we have tried to strike a balance between protecting the environment and creating a regime which is workable. My noble friend's amendment would introduce further anomalies and would also make it a simple matter for mine operators to avoid their responsibilities by selling mines on abandonment to another person who could then benefit from the maintained protection. I am sure that my noble friend did not intend that effect, but I think he should consider the wider repercussions of the amendment and I therefore ask him to withdraw it.
Lord Stanley of Alderley: If my noble friend is right, I did not intend that course, but I did intend what I said—I do not believe that an innocent landowner should pay. I shall read carefully in Hansard what my noble friend has said to see whether I should return with this amendment at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hilton of Eggardonmoved Amendment No. 249:
Page 63, line 39, leave out ("31st December 1999") and insert ("the transfer date").
The noble Baroness said: This is a further attempt to ensure that somebody is responsible for dealing with pollution from abandoned mines. For some strange reason, although the Government are minded to address the problem, they have inserted a date which is nearly five years hence which gives people the opportunity to abandon mines or in some other way to get rid of them in the meantime without having the responsibility for dealing with the pollution pinned upon them. I do not understand why there should be such a long delay in removing the exemption from prosecution for pollution.
The amendments in the group insert "the transfer date" as the appropriate date and give a date next year. Both provisions seek to make clear who should be responsible and that that should be forthwith rather than in five years' time. I beg to move.
Lord Mason of Barnsley: I rise to support the amendment. It is most important to me, coming as I do from a mining community. The amendments seek the
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immediate abolition of the defence available to the owner of an abandoned mine under the Water Resources Act 1991 and are to ensure that that defence should not continue for another five years.
On page xiii of the introduction to the Bill, headed "Abandoned mines", the Government freely admit that the reason for the delay in abolishing the defence is to reduce the possibility of an,
"adverse effect on proceeds to the Government"—
that is, the proceeds of the privatisation. Presumably it is believed that leasing mines would be less attractive to the private sector if the defence were removed immediately. Therefore, a five-year safeguard has been given. That is incredible. It shows a blatant disregard for the environment and the likely pollution problems caused by the abandonment of mines.
Many organisations have already expressed concern. Indeed, the National Rivers Authority in my region of Yorkshire and Northumbria has already informed me that,
"In relation to future mine abandonments, Clause 57 of the Bill removes the existing defence against prosecution for pollution and exemption from recovery of expenses where water from an abandoned mine is permitted to enter controlled waters. However, the change would only apply to mines abandoned after 31 December 1999".
The NRA finds that incredible and supports amendments bringing the date forward to 1st April 1996.
The NRA report Abandoned Mines and the Water Environment which was published in March last year stated that in England and Wales alone 200 kilometres of rivers, streams and brooks are already affected by varying degrees of pollution from abandoned coal-mines. In the Scottish coalfield there are 134 kilometres of surface waters which are polluted from 110 discharges in the Clyde and Forth catchment areas alone. The Coalfield Communities Campaign has been very concerned about this and believes that the timing of the proposed measure is directly related to the Government's intention to maximise the proceeds from the sale of the coal industry and not—I emphasise the word "not"—to the need to protect the environment of the mining areas. It also seems relevant that the Coal Authority, which is at present continuing pumping operations in areas such as Durham and South Yorkshire where mines have already been abandoned, might become criminally liable if it stops pumping, whereas it might not if there is a five-year delay in abolishing the defence.
Neither in the Coal Industry Act nor the Bill have the Government made any attempt to clarify responsibility for environmental pollution that is the legacy of Britain's coal mining industry.
The existing abandoned mine defence ought to be abolished immediately. If existing pumping by the Coal Authority were to stop before 31st December 1999, the length of polluted rivers would increase greatly and threaten rivers of national importance. Looked at in that light, it is again clear that the Government are concerned more with raising revenue than with protecting the environment.

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The Bill still fails to address the problem of long abandoned mines where pollution is occurring already. That is a problem, and a worrying one too, facing the mining communities. The legal loophole is to be removed, but only for mines abandoned after the end of 1999. There are about 23 former British Coal mines left, but dozens of pits have been closed in recent years, with all the worries about the continuation of pumping.
On abandonment, the Bill does not demand that mine operators contribute to environmental protection costs for their abandoned mines, or even to take account of the environment when they abandon a mine; £1 billion has been raised from the sell off of the coal industry. Why cannot some of that money be diverted to clear up years of unchecked pollution in the mining areas?
The Bill contains no proposals for co-ordinated action to deal with the legacy of coal mining. I ask the Minister: will the Coal Authority act as the custodian of abandoned mines, and, with the Department of the Environment, prevent and control minewater pollution? Minewater pollution, with its severity, its extent, and its occurrence, is difficult to predict, and so it needs constant monitoring to avert pollution disasters. In the coalfield areas we have had more than our fair share of environmental degradation, burning muckstacks, opencast coal mining, tipping sites and industrial pollution. That of course is where the abandonment of mines and pollution is likely to happen.
I hope that the Minister is prepared to look sympathetically upon the amendments. It is essential that we get the defence removed now, and do not wait another five years.
Viscount Mills: Given the hour, I do not intend to move my amendment. I support the principle of the amendment moved by the noble Baroness, Lady Hilton of Eggardon.
Viscount Ullswater: The amendment moved by the noble Baroness, Lady Hilton, and spoken to by the noble Lord, Lord Mason, and my noble friend Lord Mills seeks to prevent the defence against prosecution for pollution of controlled waters and the exemption from costs recovery by the agency where water is only permitted to flow from an abandoned mine, from applying in the case of mines abandoned after the transfer date, or 1st April 1996 (our current intention is that the transfer date will be 1st April 1996). The provisions of Clause 57, as drafted, would take effect for mines abandoned after the end of 1999.
Our decision to remove the defence and exemption was taken in the knowledge that that would be a step of great significance not just as a means of improving the quality of discharges from mines abandoned in the future, but with the practical and financial implications for the current owners and operators of mines.
The effect on revenue from coal privatisation was only one of a number of issues considered in deciding that the statutory protections would be lifted at the end of 1999. The Government wanted to allow all mine owners time to adapt to the change. In addition, the
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agency will have powers to clean up or to prevent pollution if it considers that necessary under the Water Resources Act 1991.
The measures in Clause 55, which define abandonment and require mine operators to notify the agency six months before abandoning a mine, will take effect from the transfer date. They are designed to work as a precursor to the removal of the defence and exemption. However, we have taken the view that it would be right to allow those involved a period until the end of 1999 in which to adjust to the proposed changes in the existing regulatory regime because of the obvious practical and financial implications. In this way, we hope to ensure that the provisions are effective in practice. That intention would not be helped by these amendments and I ask the noble Baroness to withdraw them.
1 a.m.
Baroness Hilton of Eggardon: That is a deeply disappointing response. It is not at all clear where the responsibility will lie in the next five years. It is not at all clear who will be responsible if pollution occurs. However, we shall return to the matter on Report and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 249A to 251B not moved.]
Clause 57 agreed to.
[Amendment No. 252 not moved.]
Viscount Millsmoved Amendment No. 252ZA:
After Clause 57, insert the following new clause:
("Powers to require polluter to "clean up"
After Section 161 of the Water Resources Act 1991, there shall be inserted—
Powers to require polluter to "clean up".
"161A. Without prejudice to section 161 above, where it appears to the Agency that any poisonous, noxious or polluting matter or any solid waste matter is likely to enter, or to be, or to have been, present in any controlled waters, then the Agency may, by notice, require the person on whom the notice is served to carry out the following works and operations, that is to say—

(a) in a case where the matter appears likely to enter any controlled waters, works and operations for the purpose of preventing it from doing so; or

(b) in a case where the matter appears to be, or to have been, present in any controlled waters, works and operations for the purpose—

(i) of removing or disposing of the matter;

(ii) of remedying or mitigating any pollution caused by its presence in the waters, or

(iii) so far as it is reasonably practicable to do so, of restoring the waters, including any flora and fauna dependent on the aquatic environment of the waters, to their state immediately before the matter became present in the waters,

and in either case, the Agency shall be entitled to carry out investigations for the purpose of establishing the source of the matter and the identity of the person who has caused, or knowingly permitted, it to be present in controlled waters or at a place from which it was likely, in the opinion of the Agency, to enter controlled waters.
(2) Subject to subsection (5) below, a notice under this section may be served on any person who, as the case may be—

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(a) caused or knowingly permitted the matter in question to be present at the place from which it was likely, in the opinion of the Agency, to enter any controlled waters; or

(b) caused or knowingly permitted the matter in question to be present in any controlled waters.

(3) A notice under this section shall—

(a) state that the Agency is of the opinion that works and operations are needed;

(b) specify the nature and location of the matter in question and its point of entry into controlled waters, or its likely point of entry;

(c) specify the steps to be taken by way of works or operations to be undertaken;

(d) specify the period within which those steps must be taken.

(4) Any person who fails to comply with any requirement imposed by a notice under this section shall be guilty of an offence and liable—

(a) on summary conviction to a fine not exceeding £20,000 or to imprisonment for a term not exceeding three months or to both; or

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.

(5) A notice under this section requiring works and operations may not be served on a person in respect of water from an abandoned mine which that person permitted to reach such a place as is mentioned in subsection (2) above or to enter any controlled waters unless the mine in question became an abandoned mine after 1st April 1996.
(6) In this section "controlled waters" and "mine" have the same meaning as in section 161 above".").
The noble Viscount said: I do not wish to try the Committee's patience for more than a few moments. However, I should like to obtain a brief response from the Minister to the amendment. It proposes that the agency should be able to require polluters of controlled waters to carry out clean-up works themselves. In my view, the amendment could have two benefits. The first is that it could allow more clean-ups to occur and the second is that it would provide a constant approach to polluters of both land and water.
I believe that there are already powers under the contaminated land provisions of the Bill to require the polluters of land to clean up. I beg to move.
Viscount Ullswater: Amendment No. 252ZA would give the agency a new power to serve a notice requiring anti-pollution works to be carried out by a polluter or potential polluter of controlled waters. These works could include the removal of polluting matter, remedying or mitigating pollution, or, so far as reasonably practicable, restoration of the waters to their state before the pollution occurred.
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Under existing legislation, the NRA has a power to carry out such anti-pollution works and then to seek to recover from the person who caused or knowingly permitted the pollution to occur the expenses which it incurs. The intention of the amendment is that the agency will have the opportunity to require the polluter to take action before having to undertake and initially pay for such work itself. I am sure that the proposers see this as a way of ensuring more directly that the polluter pays.
In setting up the agency, we are seeking to achieve a degree of consistency in the measures which will be used to control different kinds of pollution. The notice procedure set out in the amendment is, in many respects, similar to the enforcement procedures proposed in respect of contaminated land. However, it departs from those and other measures in some significant respects. I am anxious, for example, because no right of appeal against a notice is envisaged, as it is proposed that a failure to comply with the requirements of a notice should be an offence for which the maximum penalty proposed would be imprisonment. While it may be open to a person upon whom a notice has been served to seek relief from the courts on the ground of unreasonableness, I find it difficult to accept that such a person should have no statutory right of appeal, in particular if his case is that the agency had no power to serve notice on him as he did not cause or knowingly permit pollution to occur.
A notice procedure would also be a significant change to the existing law which would have implications for industry, including the water industry. Those implications, together with some very important issues concerning the precise provisions of any such power, including the right of appeal, require very careful consideration. Therefore, we cannot take the amendment forward at this stage.
Nevertheless, I recognise that the underlying principle that the agency should be able to require polluters to take action to remedy water pollution and pay for that action merits further consideration. In the meantime, I ask my noble friend to withdraw the amendment while we undertake that consideration.
Viscount Mills: I thank the the Minister for his response, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Lindsay: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at five minutes past one o'clock.