Environment Bill [H.L.]

HL Deb 31 January 1995 vol 560 cc1337-98

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 Whitley

moved 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.

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 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 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 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 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. Amendment, by leave, withdrawn.

Clause 35 [Incidental general functions]:

Lord Carmichael of Kelvingrove

moved 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 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. 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 Chilworth

moved 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 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 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 Elvel

moved 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.

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 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 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 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 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 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 Greenway

moved 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.").

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. Amendment, by leave, withdrawn.

The Earl of Lindsay

moved 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 Hamwee

moved 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 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 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 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 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.

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. 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 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. 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 Mills

moved 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 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 Eggardon

moved 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 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.

Amendment, by leave, withdrawn.

Clause 36 [Delegation of functions by Ministers etc. to the new Agencies]:

Lord Lucas of Chilworth

moved 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 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 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 Mills

moved 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 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 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 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.

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. 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 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 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: 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. 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.

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. 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.

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? 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 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 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.

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.

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 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 Kelvingrove

moved 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 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 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 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 Ullswater

moved 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 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 Chilworth

moved 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 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 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 Lindsay

moved 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 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 Chilworth

moved 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 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 Lindsay

moved 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 Gisborough

moved 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. 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 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. 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 Haig

moved 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.

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.