Lords Sitting of 15 February 1999

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

EU Tax Harmonisation Proposals
Lord Barnett Lord Barnett asked Her Majesty's Government:
What European Union tax harmonisation proposals they have agreed or propose to agree.
Lord McIntosh of Haringey: My Lords, since the UK joined the Community indirect tax measures have been agreed at EU level in most years in line with relevant treaty provisions. We shall continue to judge every tax proposal according to the national interests. We shall not support any aciton at European level that threatens the competitive position of British business or harms investment and jobs in Britain. Europe's priority is the promotion of employment reforms and competitive markets to achieve higher employment and prosperity.
Lord Barnett: My Lords, I am delighted to hear my noble friend's reply. My noble friend has always been very helpful in these matters. As regards harmonisation to combat tax avoidance in Europe, which I assume everyone in your Lordships' House favours, with perhaps the odd one or two exceptions, did my noble friend read a recent Answer given by his noble friend Lord Williams of Mostyn in which the House was informed that £150 billion was invested in the Channel Islands? While some of that investment is helpful to the UK, much of it will be part of the tax avoidance industry. Can my noble friend assure the House that he will not allow the fact that the Channel Islands are Crown dependencies to prevent action being taken whether on a harmonised or any other basis?
Lord McIntosh of Haringey: My Lords, my noble friend may be aware that the Foreign and Commonwealth Office is preparing a report on the status of the overseas territories. That report will be available shortly. In the meantime, the Code of Conduct Group of the European Union is looking at dependent territories. I hasten to assure my noble friend, however, that that group is doing so within the framework of its constitutional arrangements.
Lord Higgins: My Lords, does the Minister recognise that the delay in killing the withholding tax proposal is damaging to British interests? If the Government are saying to their European partners the same as the Minister is saying to this House why is this matter dragging on? As to the list that is being considered by Ministers and to which the noble Lord has just referred, if the Government favour open
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government why are they not publishing that list so that British interests that are affected can make representations?
Lord McIntosh of Haringey: My Lords, there is no delay in killing the withholding tax. There is no firm proposal for either a withholding tax or the alternative of an exchange of information that we prefer. There is no question of any delay. As to the list, we have published the five tax measures in this country that are being considered by the code of conduct group. We have fulfilled our responsibilities as far as concerns open government and it is up to the other European nations to do the same if they wish; it is not up to us.
Lord Shore of Stepney: My Lords, it is reassuring to hear my noble friend's reply, but perhaps he can comment on two points. First, does my noble friend agree that Article 99 of the treaty commits us to the principle of harmonisation of indirect taxation? Although there is a veto attached to it, its use is not always an easy matter. It is known that we hate to be isolated and on our own against the general thrust of majority opinion. Secondly, what does my noble friend have to say about the immediate threat to the London art market where VAT is about to be doubled from 2.5 per cent. to 5 per cent. and a new tax that I have never heard of before—droite de (or whatever). which I understand to be a levy rather than a tax—will have a very adverse effect? Can my noble friend assure the House that he has both the will and the ability to stop those increased tax measures taking effect?
Lord McIntosh of Haringey: My Lords, my noble friend's first question is about indirect taxation. I have made it clear that indirect tax measures have been agreed in most years since we first joined the European Community. Indeed, since May 1997 two indirect tax measures have been agreed by this Government: one in March 1998 (the FISCALIS Programme) and another in October of that year (the special scheme for investment gold). Neither of these matters, although of substance, is of great political importance (if I may put it that way). However, since May 1997 the Government have not agreed any harmonisation measures as regards direct taxation.
I did not answer my noble friend's second question. We are concerned about VAT in the art market. We still seek to persuade our fellow member states that the existing derogation should be continued after 1st July; or that all other countries should come down to the same figure. That issue has not yet been resolved.
Lord Lawson of Blaby: My Lords, my noble friend rightly raised the matter of the common European withholding tax. Does the Minister realise that it is not enough simply to say that we would prefer an exchange of information? Of course we would; that is right. But he must also make clear that we would not concur in any way with a common European withholding tax, because unanimity prevails. Leaving the subject of tax avoidance aside—the noble Lord, Lord Barnett, is the greatest expert on that subject—will the noble Lord state clearly that having a lower rate of tax is in no sense unfair tax

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competition—the other concept put forward by the European Community?
Lord McIntosh of Haringey: My Lords, it is right that having a lower rate of tax is not in itself unfair tax competition. I can confirm the noble Lord's point that we have a veto. If the final draft directive from the European Commission were to be in the form of a withholding tax, and in particular a withholding tax which included eurobonds or any tax which affected our economic interest and our financial markets, we have the right to, and would, veto it.
Lord Newby: My Lords, given the misinformation and media hysteria about tax harmonisation, can the Minister assure the House that the British Government will press governments of other member states to adopt the same degree of openness about those measures of tax harmonisation which they are considering so that the debate in Britain and elsewhere can be on measures which are being considered?
Lord McIntosh of Haringey: My Lords, the noble Lord confuses two different issues. Where other states are not giving examples in public is not related to tax harmonisation but to special measures which might be considered by the code of conduct group. I do not think that it is up to us to advise other member states on how they make voluntary announcements about their policies.
Lord Tebbit: My Lords, does the Minister accept that many in this House and in the wider world have some sympathy with tax avoidance, even through the Channel Islands. Will the Government refrain from any vindictive measures in that regard against, for example, Mr. Geoffrey Robinson, a Member of another place? Will the Minister say whether the Government agree with what Herr Schroder said in the Hague on 19th January that,
"the times of individual national efforts regarding employment policies, social and tax policies are definitely over"?
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for drawing my attention to Herr Schröder's remarks at the end of last week. It was helpful to have prior notice. Herr Schröder's remarks were widely drawn. However, our view is that tax measures to deal with tax evasion are of benefit to all members of the European Community.

The Prison System
2.46 p.m.
The Lord Bishop of Lincoln The Lord Bishop of Lincoln asked Her Majesty's Government:
What plans they have to ensure that by the year 2000 the prison system is less stretched and better able to rehabilitate prisoners.
The Minister of State, Home Office (Lord Williams of Mostyn): My Lords, the latest projection suggests that pressures on the prison population by the
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year 2000 will be lower than previously forecast. The central projection for the average prison population in 2000 is 64,600, 7,600 fewer than previously.
As a result of the Comprehensive Spending Review settlement £226 million has been allocated to deliver our commitment on constructive regimes. This money will lead to an expansion of offending behaviour and drug treatment programmes, as well as education.
The Lord Bishop of Lincoln: My Lords, I thank the Minister for that reassurance. Will Her Majesty's Government consider marking the millennium with an amnesty for selected non-violent prisoners in order that the Prison Service can begin the new millennium with a more manageable prison population and build on the reassurance that he has given?
Lord Williams of Mostyn: My Lords, amnesty is not a traditional remedy in this country. I believe that there are serious objections to it as a matter of principle. However, as always I shall transmit the right reverend Prelate's suggestion to the Home Secretary.
The Earl of Dundee: My Lords, within two years of their release from prison 75 per cent. of young men are reconvicted. Does the Minister agree that one of the key challenges facing the prison system is to reduce recidivism by improving the management of rehabilitation within prisons? Does the noble Lord accept that plenty of evidence demonstrates that some programmes and methods adopted within prison work considerably better than others? Will he encourage the UK Prison Service to identify and develop such best practice in order to achieve much more in this country and to set a useful example for other states in Europe and elsewhere?
Lord Williams of Mostyn: My Lords, the noble Earl is right in everything he says. In fact, the new education contract which came into effect in January of this year means that education for a prisoner will be an integral part of the sentence plan throughout. There is no doubt that education of prisoners, job opportunities, home connections and ties in the community are the best positive indicators against recidivism.
Lord Acton: My Lords, have the Government taken any action on the finding of the Chief Inspector of Prisons that many women are remanded in custody for brief periods, only to be given bail on a second court appearance without any fresh information?
Lord Williams of Mostyn: My Lords, the treatment of remand prisoners within the prison estate has concerned me. Accordingly, I have asked the Chief Inspector of Prisons to carry out a thematic review of all remand prisoners within the prison estate.
Lord McNally: My Lords, the Minister spoke some pious words about education in prisons. Is it not a fact that education provisions have fallen by one-third in the past four years? Furthermore, is there not a great deal of leeway to make up within the Prison Service? Rather

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than dismissing suggestions such as those made by the right reverend Prelate, is there not a need for an open mind on how to break into the vicious upward spiral of the prison population? In terms of crime and punishment, it is clear that prison is not the only solution and in some cases it is not the best solution.
Lord Williams of Mostyn: My Lords, I have not said anything pious and therefore I am not suggesting that the right reverend Prelate has—
The Lord Bishop of Lincoln: My Lords, not on this occasion!
Lord Williams of Mostyn: My Lords, the right reverend Prelate obviously holds on to his day job! What I said was not pious or platitudinous. We are devoting a substantial amount of new money, £226 million, to improve the regimes. We have to attack the cancer of drugs either in the community or in prisons. We have to find more positive regimes. I have visited prisons to see them working and I know that miraculous work is being done with limited resources. It is not only cash that is required; it is intelligence, imagination and determination. I pay full tribute to those in the Prison Service who fully exhibit those qualities.
Lord Cope of Berkeley: My Lords, have pressures on the Prison Service eased as a result of fewer people being convicted, shorter sentences or earlier releases?
Lord Williams of Mostyn: My Lords, a complex series of causes bring about an easing on the prison regime. One easement has resulted from the success of the home detention curfew. Since 28th January, 775 prisoners have been released and only 14 have been recalled. There are 749 still on tag and others have successfully completed that useful scheme. I believe that everyone recognises that until we get prison numbers at a manageable level, one way or another, we will not be as productive as we all hope in ensuring that people do not reoffend. Training them properly and giving them structured prospects is of profound assistance to them.
Lord Laming: My Lords, can the Minister indicate the Government's response to recent inspection reports of young offender establishments which has been critical of the reduction in training and education opportunities for young offenders? Is it possible that the contracts to which the Minister has referred apply also to young offender establishments?
Lord Williams of Mostyn: My Lords, yes we will set particular targets so that we can ensure that by 2001 50 per cent. of those who leave will have at least level 2 literacy and numeracy qualifications. That is the bare essential required in order to have sensible prospects of work opportunities.

Supermarket Pricing: OFT Report
2.54 p.m.
Lord Razzall Lord Razzall asked Her Majesty's Government:
When they anticipate that they will receive the Office of Fair Trading report on supermarket pricing.
Lord McIntosh of Haringey: My Lords, the decision to undertake an inquiry into supermarket profitability was taken independently by the Director-General of Fair Trading. It is a matter for him how and when be makes his findings public. I understand that the Office of Fair Trading will announce its conclusions within the next month.
Lord Razzall: My Lords, I thank the Minister for that Answer, which was anticipated. Does he agree that the issue touched on by the inquiry goes significantly wider than competition-related issues? Does he also agree that, in addition to consumer interests, other interests are involved? I refer to the interests of farmers, who as we speak are bleeding from the reduction in costs; the interests relating to genetically modified food, which we read about during the weekend; and planning issues? Irrespective of the OFT report, would it not be appropriate for the Government to set out a clear statement of policy, including action points, so that we know that the issues can be dealt with?
Lord McIntosh of Haringey: My Lords, of course the noble Lord is right. A wide range of issues is involved, including the issue that he raised in the Question. However, surely it is right, first, to receive an answer from the Office of Fair Trading about the competition issues, to link that with the introduction of the competition Act in March next year, and then to take into account all the other issues he rightly raised.

Dartford-Thurrock Thames Crossing: Toll Charges
2.56 p.m.
Lord Dixon-Smith Lord Dixon-Smith asked Her Majesty's Government:
What is their latest estimate of the date on which the Dartford-Thurrock crossing of the River Thames will become toll-free.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the current legislation provides for tolling to continue for the purposes of meeting the financial objectives of the concessionaire and allowing a further year in which the Secretary of State may establish a maintenance fund. After engineering assessments have established the need for substantial maintenance work to be carried out by the concessionaire, it is now predicted that these purposes will be met by September 2002. This is about nine months later than the estimate we gave last June.

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In the integrated transport White Paper, A New Deal for Transport: Better for Everyone, published last July, the Government stated that they would consult on whether and how continued charging at the Dartford-Thurrock crossing could contribute to integrated transport objectives.
Lord Dixon-Smith: My Lords, does the Minister agree that the financial arrangements for that crossing, which mirror those for estuarial crossings throughout the United Kingdom, have been a justification for using specific revenues to provide infrastructure which would otherwise not be attainable? Does he not further agree that having achieved those financial objectives there is a moral obligation in that the original intentions of those who created the crossing—Essex and Kent County Councils under the then existing legislation—was to allow it to become toll-free?
Lord Whitty: My Lords, as regards the noble Lord's first point, I agree that the crossing has been a great success in the financial terms set out at the time. My congratulations to Essex and Kent County Councils would be appropriate. Although I said that the estimate we gave last June has been put back for nine months, the original time estimate for meeting the financial obligations has been brought forward by three years.
Further tolling has become part of a wider assessment. We are examining whether tolling would be appropriate on motorways either for new constructions or more generally in terms of road-user charging. At an appropriate point, we will consult on that in relation to Dartford and more generally.
Baroness Masham of Ilton: My Lords, could we go back to the prison Question as we have time left?
Noble Lords: No!
Baroness Seccombe: My Lords, does the Minister agree that it was a specific intention of the Bill that there would be a maximum of 20 years before there would be toll-free passage for everyone travelling over the bridge and through the tunnel? Does he further agree that if that were not to be adhered to it would be a breach of trust unless legislation was brought before both Houses of Parliament and agreed to?
Lord Whitty: My Lords, were we to go down the road of future tolling on the Dartford-Thurrock crossing or anywhere else, this House and another place would have to consider new legislation. It would not be possible, nor would the Government intend, to extend tolling in any such circumstances without bringing forward new legislation. We will consult on that in relation to the Dartford crossing and elsewhere.
Lord Islwyn: My Lords, will the Minister consider the very heavy tolls on the Severn bridges. Both bridges are oversubscribed and apparently the required revenue will be raised 12 years before it was originally
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anticipated. Bearing in mind that the Severn bridges carry motorways, is not the same principle involved here?
Lord Whitty: My Lords, as I understand it, the same principle does apply in relation to the Severn bridges. However, we are considering—as did the previous administration—the possibility of extending some degree of tolling more generally on the motorway network, either for new projects or in pursuit of our general objective of reducing road traffic and providing an incentive for more appropriate modes of transportation. Both would require new legislation.
Lord Wallace of Saltaire: My Lords, will the Minister consider using any excess revenue from the bridge tolls to improve education in prisons?
Lord Whitty: My Lords, that was a good try! I suspect these are matters of virement and therefore matters for the Chancellor of the Exchequer in another place. However, I doubt that it will happen in this period of comprehensive spending review.
Lord Mackay of Ardbrecknish: My Lords, I wonder whether the Minister can help me. I was under the impression between 1979 and 1997 that the Labour Party was opposed to tolls on bridges. Am Ito take it from the reply I have just heard that it is now in favour of them?
Lord Whitty: My Lords, no. We are looking at the possibility of using tolling—as were the previous regime—in our town centres as has been reported at some length both in this place and in another place in relation to the integrated transport policy. The motorway network, including bridges, tunnels and other stretches, may be subject to tolling in those circumstances. However, we would wish to use tolling not as a general revenue raiser but as a means of providing an incentive to divert traffic to more appropriate modes which, unfortunately, was not an objective pursued by the previous government over their whole period of office.
Lord Dixon-Smith: My Lords, the Minister discussed the possibility of charging for the use of roads. Perhaps I may press him a little further. We are led to believe that when the issue of congestion charging and, more importantly, car park charging is introduced in urban areas it will be with the specific intention that those revenues should be used to improve public transport so as to encourage people, other than the non-inducement of the actual tax, to use public transport. Will not the Minister therefore develop that idea a little further to the point where, if no further improvements can be made to "public transport", there should be no further charge?
Lord Whitty: My Lords, we have a long way to go before sufficient revenue has been raised for all the infrastructure required to improve our public transport system to the extent that a major diversion would take

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place from our roads. Wherever charging might be contemplated, the intention would be to plough it back into the transport infrastructure in one form or another.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Williams of Mostyn will, with the leave of the House, repeat a Statement that is being made in another place on severe personality disorders.

Pollution Prevention and Control Bill H. L.
3.4 p.m.
Lord Whitty: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.— (Lord Whitty)
On Question, Motion agreed to. House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Regulation of polluting activities]:
The Deputy Chairman: Before I call Amendment No. 1, I must tell the Committee that if Amendment No. 1 is agreed to, I shall not be able to call Amendments Nos. 2 to 4 inclusive because of pre-emption.
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 1:
Page 1, line 6, leave out from beginning to ("for") in line 11.
The noble Lord said: I should explain that my noble friend Lady Byford should have been taking these amendments through the Chamber. Sadly, she went home last weekend to a family tragedy and cannot be with us this afternoon. That is the reason I find myself standing here today. I am sure that all noble Lords will sympathise with her in her predicament and understand why she is not able to be here.
Noble Lords: Hear, hear!
Lord Dixon-Smith: There are two reasons I regret that my noble friend is not here; first, I am not as charming as she; and, secondly, I am not as knowledgeable as she is on this subject. However, I hope that the Committee will allow me to do my best. It may be for the convenience of the Committee if I speak to all the amendments tabled in the name of my noble friend as they have a common purpose.
The Bill as drafted is too open ended. Since our Second Reading debate we received the report of the Select Committee on Delegated Powers and Deregulation. The report is profound. At paragraph 6 it says,
"We are bound to report to the House that as at present drafted this is a 'skeleton' bill and so is an inappropriate delegation of secondary powers".
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It continues,
"If the House shares our concern it will no doubt wish to consider whether the Bill can be saved by amendments which specify with more precision the ambit of the legislation and the criteria to be taken into account in making regulations. The following issues could fall for consideration: Whether the legislation should be limited solely to matters provided in Schedule I. Whether there should be a clear indication of the ambit of powers which may be delegated. Whether the categories of person to whom powers can be delegated under the regulations to determine matters which could have been provided in the regulations should be specified. Whether the legislation should provide in terms that conditions and regulations should always be based on the use of the 'best available techniques', including cost/benefit assessments as the Explanatory Notes contemplate. Whether the bill should provide that no regulation should be made without proper consultation. The Explanatory Notes record consultation about the implementation of the Directive and state that 'A third consultation paper, including a draft of the regulations which the Secretary of State proposes to make under the Bill, is due to be published before the end of 1998'".
That document has been placed in the Library. In paragraph 8 the report goes on:
"Whether or not the substance of the bill is amended we are concerned that the regulations should be subject only to the negative procedure. We consider that in the first instance of their use the regulations should be subject to the affirmative procedure. We also consider that any subsequent regulations which create new offences, or increase penalties for offences created under the initial regulations. should be governed by the affirmative procedure. In the light of the width of the Henry VIII power, we consider that any regulations which amend or repeal an Act of Parliament should be subject to affirmative procedure".
At the end of its recommendations, the Select Committee said:
"The Committee would also wish to add that, even if the House accepts the bill with any such amendments as being justified for the reasons which the DETR give for proceeding by such wide-ranging enabling legislation, the Committee would not wish this bill to be regarded as a precedent for the future. It remains important that the purposes and ambit of legislation, together with any important governing criteria, should be clearly specified within primary legislation and not simply left to the exercise of delegated powers".
That is a damning indictment of the Bill as drafted. The amendments in the first grouping seek to put right some of the criticisms which are made in that report.
The amendments seek to limit the power to be granted to the Secretary of State and to ensure that the decisions that he makes are subjected to an appropriate level of scrutiny. As at presently drafted, the Bill gives the Secretary of State carte blanche to impose costly regulations on businesses on the flimsiest of pretexts. There is no requirement on him to bring those matters to the attention of Parliament. The onus will be on Members of this House or another place to raise the matter. With such sweeping powers, that is clearly unacceptable. The problem is not that the Secretary of State will have too much power to benefit the environment, but because of the way in which the Bill is drafted it will give him power to do great damage in the name of the environment without being exposed to the normal cautionary voices that your Lordships and Members in another place might offer.
I believe that it should be incumbent upon the Secretary of State to demonstrate that any regulations that he makes under the Bill should address a specific, significant problem. The amendments allow him to define that term, but require that the definition is laid before the House in advance. Any future measures could

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then be laid against the standard laid out in the order issued by the Secretary of State. There would be a point of reference that would be debated in advance, with which regulations made under the Bill would be required to comply. If they did not, it would be up to the Government to justify that before Parliament. If businesses are forced to operate under conditions of great uncertainty in the legislative framework, that will not contribute to environmental practice.
A problem with regulation in general is that it tends to encourage organisations to adopt a culture of minimal compliance. In other words, they comply with the letter of the regulation and then cease to make any further effort. They look to the Government to provide the definition of what constitutes responsible environmental practice. If they are faced with an ever-changing vista of law and regulation, they do not know where they stand. What is an acceptable environmental practice one day can, under this Bill, become unacceptable subsequently. In that situation, otherwise responsible management will tend to give up. The amendments, which stand in the name of my noble friend Lady Byford, seek to put some of that right, as I have said. I beg to move.
3.15 p.m.
Lord Jenkin of Roding: I would like to associate myself with the expressions of regret that my noble friend Lord Dixon-Smith has voiced concerning the reasons for the absence of my noble friend Lady Byford. I want to support the amendments tabled in her name and make one or two remarks about the report of the Select Committee on Delegated Powers and Deregulation.
As students of the constitution, we are all accustomed to talking about checks and balances in the constitution. The role of Parliament is to hold the Executive to account and there are many instruments, conventions and institutions which are intended for that purpose. When the numbers of Members in the parties in another place are fairly evenly balanced, that function can be effectively exercised by Her Majesty's Opposition and other opposition parties. If members of the governing party, who support the Executive, decide that the Executive is not behaving properly, there is a real risk that the Executive will be defeated. When there is a very large majority for one party in another place that process, as we have seen over recent months, becomes a great deal more difficult. It is in those circumstances that the remaining checks and balances come into their own.
I have come to regard the Select Committee on Delegated Powers and Deregulation as one of the most effective weapons in Parliament's armoury. It acts as a check and a balance and helps to hold the Government to account. The third report, under the chairmanship of my noble friend Lord Alexander of Weedon, to which my noble friend referred, seems to be a textbook example of the role and effectiveness of the Select Committee. I do not recollect having read quite such a sweeping condemnation of a Bill presented to Parliament. I shall not delay the Committee by reading
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again the passages which my noble friend Lord Dixon-Smith has already quoted, but they represent a stinging rebuke to the Government for having presented a Bill to Parliament in this skeletal form.
I acknowledge at once that with the two amendments tabled in the name of the noble Lord, Lord Whitty, they have moved part of the way—but only part of the way—to meet the Select Committee's strictures. Much more needs to be done to make the Bill acceptable and, paraphrasing the words of the Select Committee, an appropriate delegation of secondary powers. The amendments that we shall be discussing this afternoon—we may have to return to some of them on Report—aim to do just that. As my noble friend Lord Dixon-Smith said, this group of amendments is aimed at restricting and defining the scope of matters to be covered in the regulations. That clearly lies at the heart of the Select Committee's strictures about which, as yet, the Government have done nothing. In the government amendments there is no limitation on the scope of the provisions. All we have is a letter from the noble Lord, Lord Whitty, sent to a number of noble Lords, dated 4th February, in which he said:
"in my letter of 21st January to Lord Alexander of Weedon, I explained why we had not limited the powers in the Bill to the matters listed in Schedule 1. I do, nevertheless, take very seriously the suggestions of the Delegated Powers Committee and the concerns which were expressed at the meeting last week-.
A number of us were given the opportunity to discuss those issues with the Minister. It was a limited, but useful meeting. In that letter of 4th February, the noble Lord continued:
"I am, therefore, looking again carefully at the scope of the Bill and discussing with my colleagues in Government whether the Committee's recommendation can be accommodated without making for a less effective regulatory system".
Nothing on the Marshalled List reflects that hope. That is why I am asking the Minister whether it will happen. When can we expect the Government to come forward with further proposals? That question lies at the heart of the Select Committee's criticisms and I sure that the Minister will want to answer it.
Perhaps I may express from the Back Benches the view that, as the Select Committee pointed out, so significant is the need to limit the scope of what is to be covered by regulations—not only with regard to Schedule 1 and provisions to be extended as the Secretary of State may decide—that I believe that we should return to this matter and express our clear view to ensure that the provisions which the Select Committee required are, indeed, in the Bill when it goes to another place. That is my view. It will be for others to decide whether that would be an appropriate course in the circumstances. However, it seems to me that if we do not exercise our role as Parliament in holding the Government to account on this matter, we are yet again ceding powers to the Government and losing powers for Parliament.
I return to my first point. Why did Ministers ever allow a Bill in such a form to come before the House? Even at the very first stage, after the publication of the Select Committee's report and after Second Reading,

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the Government have found it necessary to table two substantial amendments. One rejoices at the sinner that repenteth, but how did the Government ever get to this stage in the first place?
Those of us who have had the honour and privilege to serve in government realise that most of one's advisers in the Civil Service will always want the widest power of delegation and, where possible, sub-delegation. Every department tries to persuade its Ministers that it would be appropriate to have the fewest limitations on the scope of regulations and the minimum use of the affirmative resolution procedure. I have no doubt that the Minister will, if he wishes, be able to show convincing briefing explaining why such provisions are crucial to achieving the Bill's objectives. Such briefing always ends, "My Lords, the Bill's objectives are very widely shared by all parties and therefore there should be no fuss". Well, there is a fuss and hope that the noble Lord, Lord Whitty, recognises that.
I hope that Ministers in the present government will emulate those who, in the previous government used to say to officials, "Look, I don't think that Parliament will accept this. Go away and think again", or, "We'll certainly find it very difficult to get this through Parliament. Is there no other way of doing it?", or, as I have said, as officials will confirm, "Do you really expect me to stand up in the House and try to justify what you are asking me to do because I won't?". That knocks them back--and they then produce provisions that are a good deal more sensible.
The Minister owes the Committee an explanation of how he imagined that he and his colleagues could ever get away with this. At the end of today, the Bill will contain some useful amendments. However, they will not be nearly enough and we must pursue the rest of the Select Committee's objectives with vigour and perseverance.
Lord Peyton of Yeovil: I have tabled two amendments which fall within this group, and before referring to them briefly I should like to repeat paragraph 6 of the Select Committee's report because I do not think that I have ever seen its like. It states:
"We are bound to report to the House that as at present drafted this is a 'skeleton' bill and so is an inappropriate delegation of secondary powers".
I am sure that the very last thing in the minds of members of the Select Committee was that they had discovered something new. If I interpret their minds correctly, members of the Select Committee were profoundly shocked at a piece of audacity which was without parallel and for which I can see no cogent excuse.
Perhaps I may make a few other points. First, although my understanding of this is extremely hazy, we understand that the Government have undergone some sort of conversion. In charity, one must always salute and welcome such surprising events with gratitude and thanks. However, as my noble friend Lord Jenkin said, I hope that we shall soon see the evidence that this is not merely a superficial device, but a real conversion and that the Government are determined not to
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perpetrate such awful offences in the future and that they will do something serious and fundamental to amend the Bill; otherwise one must conclude that the measure of conversion so far shown is simply a device with which to fob off Parliament.
This Bill has also made me think—I was unaware of it before—that at the end of each Parliament memory is totally erased. I am not talking about the Minister's memory, but about those who advise him and the parliamentary draftsmen. I have not yet participated in a Parliament—either in the other place or in this House—in which I have not heard people of far greater eloquence than I can manage condemning the abuse of delegated powers.
Will the noble Lord, Lord Whitty, put this point to his advisers? Let us suppose that his advisers had come to me and that I had accepted their instructions and had produced a single-clause Bill, stating, "In order to check, prevent or terminate any supposed pollution, the Secretary of State may make any regulation he thinks fit". That would save a lot of time! However, for the life of me, I cannot see any real distinction between a simple one-clause Bill, such as I drafted then in a matter of seconds, and this Bill, which presumably took the parliamentary draftsmen a little time. I have a simple question, echoing what my noble friend has just said. It is a very simple question indeed—I do not want to interrupt my noble friend's communications because I am sure that they are very much more important than anything that I have to say—and I repeat it: why did the Government produce a Bill of such length? I can assume only that it was to offer some sort of disguise.
My next question relates to my point about memory. I simply cannot believe that somewhere in the building in which the noble Lord, Lord Whitty, works, there is not someone with some fragment of memory causing a bell to ring somewhere, urging that person to remind the Minister, "Parliament is a very boring institution and there are some very tiresome people there who will get a bit sick about this sort of thing. They have repeatedly objected to it in the past and they will do so again". This particular measure is one of the more naked breaches of established custom and of what is desirable that I can remember.
I wish to put on the record the words which I do not like, and which my amendments seek to remove from the Bill. The only way that I can do so is to read them out to the Committee. In passing, I hope that this will give not only the Minister but also his advisers and, indeed, the draftsman some cause to blush and feel just a little uncomfortable at what they are seeking to put through.
I turn, first, to Clause 1 (1), which says:
"The Secretary of State may by regulations make provision—
(b) otherwise for or in connection with the prevention or control of any such pollution".
That is bad enough, but my Amendment No. 10 proposes to delete lines 28 and 29 on page 1 of the Bill under Clause 1 (4) (a) (i). The subsection says:
" (4) Regulations under this section may—
(a) make provision—
(i) for anything that could be provided for by the regulations to be determined under the regulations".

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What the draftsman was saying—and I am sure that he was just obeying his instructions—is, "Just in case we've missed anything out and just in case we've given those idiots in Parliament a chance to criticise this legislation and put in something which we had not expected, let us have a good sweep-up sentence". There it is: it is both ugly and offensive.
I shall not go into the detail of the Minister's amendments, which I am sure are very well meant; indeed, we are to have a degree of consultation. However, that is not a lot of comfort. I hope that the Minister will take this Bill away. I also hope that he does not return with little tiny amendments; but that he will show real regard for the total condemnation dished out by the Select Committee of this House. Anything short of that will be tantamount to saying, "Well, the House of Lords won't give us much trouble, and, as for the House of Commons, we know how to handle them. We have a huge majority and a very powerful party Whip. They will do as they always do: what they are told".
I do not believe that I have ever seen a Bill which shows more manifestly a deep and profound contempt for Parliament. I acquit the Minister of any of this nastiness, but I hope that he will accept it as his duty as regards the constitution to take effective measures either to rewrite the Bill or so drastically to amend it that neither its parents nor anyone else who had anything to do with its conception will eventually be able to recognise it.
3.30 p.m.
Baroness Hamwee: It is perhaps a pity that we are not able to start the debate this afternoon by discussing the Minister's amendments which, to my mind, deal most interestingly not only with the parliamentary processes but also with the processes of consultation with interested parties. Speaking only for myself, I suspect that the latter will have far more to contribute to the technical matters with which the Bill deals than I can possibly do.
As has been said, the Select Committee's report is damning. Although I shall not spend very long in commenting on it, I do not in any way discount the significance of the report. One aspect of it which interests me, although I realise that it is outside the ambit of this afternoon's discussion, is how this Chamber can contribute to parliamentary scrutiny and generally to debate of what our society needs. It is a very good model for what this Chamber might do in the future. However, as I said, that is outside the debate this afternoon. Nevertheless, I have to add that I cannot help recalling why the committee was formed in the first place. We do not have amendments about pots and kettles on the Marshalled List this afternoon, so I shall not go any further into the matter. But I am sure that other noble Lords will also have recollections of why it has been so important to have this Select Committee in place to comment on the inappropriate attempts at grabbing power of which any government must be capable.
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However, at this point we are debating a number of amendments tabled in the name of the Conservative Front Bench. Interesting though those amendments are, I am concerned that they do not in my view achieve the balance of environmental protection, certainty for business and industry and constitutional propriety with which this little Bill has to grapple. I shall comment on just one matter; namely, the use of the word "significant".
Amendment No. 2 proposes that the Bill's powers should extend to "significant activities", while Amendment No. 4 provides that the word "significant" should have,
"such meaning as the Secretary of State may by order prescribe".
I believe that that would lead us into even further difficulties than those that we face at present. It is important for us to concentrate on the activity. There will of course be degrees of activity; in other words, it is not the adjective which is important, it is the subject itself which is central to the issue.
I shall not detain Members of the Committee for long at this point. I look forward to analysing the Minister's amendments to see how they can best improve the problem that we are all facing—
Lord Jenkin of Roding: Before the noble Baroness sits down, I wonder whether she recognises that this group of amendments deals with Schedule 1 and the scope of the Bill's activities. The Minister's amendments, with which we shall deal later, deal in the first instance with consultation and in the second instance with the procedures for delegated legislation. Therefore, it seems to me that it is quite a sensible division to have an initial debate about the scope of the legislation and separate debates later about other matters.
Baroness Hamwee: Of course I recognise the differences involved. However, it seems to me that one of the difficulties is the scope of the Bill. Indeed, that is central to how the whole matter is approached. For example—just to take one point—when dealing with a schedule to primary legislation or, as it may be, with secondary legislation which is subject to an affirmative resolution, I just wonder how one deals with the precise processes in an age of considerable and fast-moving technological advance. I am not happy with leaving on one side a whole area of activity and not spelling it out, but I do recognise the difficulty of achieving the balance to which I referred.
Lord Renton: The Government have got themselves and Parliament into a very unfortunate position by putting forward this Bill. It has for centuries been a part of the sovereignty of Parliament that, when passing Acts of Parliament, we state the principles in the clauses of the legislation and then, if there are any details which require direct parliamentary approval so that the Bill can effectively be put into operation, they are put into schedules.
However, power given to Ministers and, in effect, to civil servants (for whom Ministers are responsible) to make subordinate legislation has, by tradition, been left

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in a way which does not interfere with the sovereignty of Parliament and does not in any way run the risk of conflicting with the broad intentions of Parliament as stated in the clauses and schedules. But here we have a Bill which offends against all the constitutional certainty upon which in our parliamentary democracy the people are entitled to rely so that they can make sure that their representatives in another place, with the help of your Lordships who have the power to ask another place and the Government to think again, really have exercised the sovereignty which the people have given to them.
Here we have a Bill in which quite frankly the intentions are obscure, as is pointed out by the Delegated Powers Committee. Personally, I would have preferred to see this Bill totally recommitted so that the Government could think again in the light of what my noble friends have said. I fully agree with the amendments moved by my noble friend Lord Peyton to the extent that they make a modest improvement in the Bill arid to some extent bring it within the ambit of what the Delegated Powers Committee would prefer. However, I must say I would have preferred to see this Bill completely redrafted. One knows the Government's desire to put this very important matter forward in a way that will enable the Welsh Assembly and the Scottish executive to deal with it. However, I really think in view of what has been said, and in view of the inadequacy of the Bill, that the Government should do what I have said. I shall, of course, listen to what the noble Lord has to say in reply to these amendments, but I hope that he will be as accommodating as he possibly can.
The Countess of Mar: In the absence of any support or criticism from this side of the Chamber, while I do not align myself with his party I ask the noble Lord to listen carefully to what has been said by the Benches opposite. I think that they and the scrutiny committee have highlighted some large defects in this Bill. I tend to agree with the noble Lord, Lord Renton, that the Bill should be taken back and rewritten.
Lord Lucas: I hesitated to rise earlier because I was hoping that someone would appear from the Government Benches. In my day as a Minister civil servants treated this Chamber with respect because they knew that on my Back Benches I had the likes of the noble Lord, Lord Peyton of Yeovil, who would give me a great deal of trouble if I started trespassing in the way suggested in this Bill. I am astonished that the Benches opposite, which throughout this debate have held some distinguished Members, do not find themselves moved in the cause of liberty of the citizen or the rights of Parliament to make any comment on this extraordinary Bill.
I merely want to add one note to what has been much better said, principally, by my noble friends, and that is to draw attention to the extraordinary width of what we are dealing with in tits Bill. The definition of pollution is not included in this Bill. I take it to mean something which in earth. water or air is out of place. But that, apparently can include too much carbon dioxide. Carbon dioxide is a perfectly natural constituent of the air, so it can mean anything which alters in some minor way the
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balance we would expect to find in the air, in the water or in the earth. As such, as defined in this Bill, it would seem to me to stretch to cover such matters as planning, because clearly if you put a building on the earth you are polluting it or potentially polluting it. It would include breathing as one is clearly putting pollutants into the air by breathing. It would include any emission of light. It would include radio waves. It certainly specifically includes radio waves, from what is written here, and that would mean governing the entire matter of cellular telephones, emissions from power lines and any other matters which the Department of Trade and Industry may feel it has governance over. It would include cows' flatulence, which as the Minister knows is a major source of methane; perhaps the major source of methane as a greenhouse gas on this planet. It would include smoking; this is an anti-smoking Bill we have here. It would give the Minister power to ban smoking on the ground that it causes pollution. It would certainly include talking. There is a great deal of pollution in this Chamber alone from that. It would extend to cover my presence here which many Members opposite consider to be an extreme form of pollution!
3.45 p.m.
Lord De Ramsey: I should like to comment on the amendments which have been spoken to by my noble friends Lord Dixon-Smith, Lord Jenkin and Lord Peyton, concerning the width of powers conferred by the Bill. First, however, I must declare an interest. I have been the chairman of the Environment Agency of England and Wales since its formation in 1995. This agency will be responsible for much of the regulation foreseen by the Bill. My observations are based on my experiences during this time.
The amendments take into account the points raised by the Select Committee on Delegated Powers and Deregulation. Under these circumstances I can quite understand probing amendments being put forward. None of us wish to see regulations made under the powers of this Bill which go beyond legitimate environmental protection. However, I see no dark motives in the Bill before us, and I welcome the purpose behind it. First, the Bill is to provide a sound legislative platform for the implementation of the European Community's directive on integrated pollution prevention and control—or IPPC, which is yet another acronym to try to remember. This directive was negotiated by the previous government and is modelled to a large degree on the British system of integrated pollution control, or IPC, which was also introduced by that government. It is an example of Britain leading the way in pollution control in Europe. In fact we are in danger of becoming the clean man of Europe.
The powers provided in the Bill should enable Britain to maintain this lead by implementing the directive effectively. Needless to say the agency is fully behind this. For example, a quarter of the team in the European Community's IPPC bureau, which is producing the reference documents for the whole European Union, is seconded from the Environment Agency of England and Wales. It is a good example of how to ensure we get the best out of EU legislation instead of standing

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ineffectually on the sidelines booing or the touchline. Equally importantly, the Bill will allow all processes presently regulated under IPC, not just those covered by the new directive, to be regulated under the one system. The Environment Agency and, I might add, the overwhelming majority of respondents to government consultation, support this wholeheartedly. It will produce a clear regulatory system which will improve the efficiency of our domestic pollution control arrangements and make them easier to understand. Without the flexibility provided by the Bill we would end up with a fragmented regime of two slightly different systems. This would be a "dog's breakfast", as the noble Lord, Lord Whitty, so succinctly put it during the Second Reading of the Bill. This must be avoided.
We need a regime which is powerful yet flexible enough to take account of many factors together, ranging from the broad goal of sustainable development, through to the pursuit of detailed environmental quality standards, such as those set by the national air quality strategy. The Pollution Prevention and Control Bill must provide the means to achieve this. The UK system of IPC has brought about a significant advance in the way that much of British industry thinks about pollution control, seeing it now as part of its business, not something added on as an afterthought. It is based on the sound principle that if waste is minimised at source, there is less waste to pollute the environment. Equally, saving waste and energy is never bad for business. However, we cannot rest on our laurels. The new system of IPPC is the next stage in this evolving process. It offers advantages over the present regime, as it deals with energy efficiency, noise and site protection.
As noble Lords know, the details of the directive will be brought into operation by regulations made under powers provided by the Bill. The Government have been open about their intentions here. They have published two consultation papers asking for comments on their plans for IPPC. We now have a third, as we have already heard, which explains how the Government intend to use the powers in the Bill and ask for comments on the remaining issues involved, including the content of draft regulations which might be made under the Bill. A further consultation paper is promised in the spring.
This Bill provides a sound foundation for protecting our environment in the future. It will make sure that we can benefit to the full from the European Community's IPPC directive by providing for a sound system of regulation that is efficient and easy to understand. But, at the same time, it will also provide a flexibility for the system to respond to and work alongside other important developments. As we consider these amendments, it is essential that we retain sufficient flexibility in the Bill to allow us to meet the environmental challenges that are undoubtedly ahead of us.
Lord Whitty: First, I echo the words of the noble Lord, Lord Dixon-Smith, and regret very much that the noble Baroness, Lady Byford, cannot be with us for tragic reasons. The good wishes of all sides of the House go to her.
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As to the debate, it is somewhat at odds with the Second Reading debate when, in general terms, the objectives of the Bill were well received on all sides of the House. The idea that we should have a comprehensive and systematic approach to all aspects of pollution control was broadly accepted. We are now talking about the means of implementing the Bill. The idea that we need to go back to the drawing board and redraft the entire Bill completely misses the objectives of the Bill, to which all parties in the House were committed.
I obviously recognise and respect the views of the Select Committee on Delegated Powers and Deregulation. It has given us something to think about. We have thought about parts of it—and amendments will come later this afternoon which deal with that. There are other parts which we will need to consider further, and we will also need to consider the remarks of noble Lords. I hope that we will allay most of the anxieties at a later stage.
As the noble Baroness, Lady Hamwee, has already indicated, the slightly Byzantine way in which we reach groupings—and I am not complaining; it usually benefits me—means that there are no government amendments in the first grouping. Therefore, strictly speaking I could not participate earlier in the debate. I would have preferred to have responded to the totality of the views of the Select Committee prior to noble Lords making their views known. With the leave of the Committee, I will do that now.
In its report, the committee invited the House to consider, in particular, whether to limit regulations under the Bill to matters listed in Schedule 1, and whether to limit the ambit of power which might be sub-delegated and the category of person to whom it might be sub-delegated.
First, I shall deal with the scope of the Secretary of State's powers to make regulations, which is the crux of this clause. Those issues are also the subject of Amendments Nos. 1 to 5 in this group. I reiterate what the noble Lord, Lord De Ramsey, has just said about the genesis of this legislation. Contrary to what the noble Lord, Lord Peyton of Yeovil, has suggested, the scope of the Bill is not to confuse but to clarify. We were bound to introduce a new regulatory system which meets the requirements of the EC directive, agreed by the previous government, on integrated pollution prevention and control. Although in normal circumstances one could argue that that directive could have been implemented under the European Communities Act 1972—which of course, whatever one thinks of that procedure, would have meant rather less parliamentary accountability than we are proposing under this Bill—if we had done that, it would have meant that the new system arriving from Europe would be operating alongside and over-lapping our current system of integrated pollution control, our local authority administrated local air pollution control and waste management licensing. The noble Lord, Lord De Ramsey, reminded me that I had described that as a potential dog's breakfast. It would lead to bureaucratic confusion. At the very least, the Committee should recognise that the government objective is to

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provide a coherent, systematic and understandable system, given that the directive requires us to introduce the new system this year.
The genesis is that we were aiming to ensure a consistent and flexible system applied across the board. That requires that sufficient powers must be delegated to enable the new regulations to be applied and adapted in a coherent way, not only to those activities under the directive, but also to those which fall outside the directive and are currently covered by the existing UK regime.
In so far as Clause 1 allows for any polluting activity—I will not go into great detail about the definition of "pollution"—the whole approach is not dissimilar to the powers on pollution provided under Section 2 of the Environment Protection Act, which the Bill replaces. We are using very similar language to that used in the legislation introduced by the previous government.
Amendments Nos. 2 and 4 deal with significant pollution activities, to which the noble Baroness, Lady Hamwee, has already referred. If we were to go down that route, I fear that Amendments Nos. 2 and 4 would not be compatible with the EU directive. We would therefore fail in our ability to transpose that directive. The directive must apply to all the installations listed in its annex, whether or not those installations discharge significant pollution, however defined. I can reassure the Committee that we have no intention of applying pollution controls to installations with trivial emissions, any more than is required by the directive. We have proposed in the draft regulations to retain a test of triviality for those installations to which the directive does not apply.
To obtain a proper view of the powers proposed in Clause 1, taken together with Schedule 1, it is quite common practice—certainly in a number of pieces of legislation, in this field and others, produced by the previous government—to set out a general enabling power, followed by a without prejudice list of specific powers, as we have done in Schedule 1.
Lord Renton: This all started with the Clean Air Act 1956. I mention that not because I was a junior Minister helping to pilot it but because it laid the foundation of our attempts ever since to prevent pollution, especially in our large towns and cities. It was very necessary legislation because of the smogs that were killing cattle and people. But that did not merely state intentions for Ministers to fulfil; if the Minister looks at that Act he will find that Parliament directed immediately what Ministers should do.
Lord Whitty: I will consult the context of that particular piece of legislation. However, I was relying in my remarks on slightly more recent pieces of legislation which relate to environmental pollution and other matters, where very wide, specific powers, and the ability to delegate such powers, are specified. We are not creating an enormously new precedent in this field.
Having said that, I recognise what noble Lords have said this afternoon and what lies behind the concerns of the Select Committee--that basically the powers that
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can be delegated should only be delegated for matters specified on the face of the Bill. I am considering how to come forward at Report stage with government amendments to limit the powers of the Bill to matters which are listed in Schedule 1. Having said that, it must be remembered that the drafting of Schedule 1 was not originally made for that purpose. At that point it was not meant to be an exhaustive list but an indicative one. In order to ensure that the coherence of the new system is maintained, I will require by Report stage to make some consequential amendments to Schedule 1 to ensure that it is a comprehensive list, as recommended by the Select Committee and several noble Lords this afternoon.
I hope the Committee will recognise the sincerity of our intention in that respect. I believe that some of the more hostile remarks made this afternoon will be, in part at least, ameliorated when we come forward at the next stage of the Bill, with general consent, with a proposition along those lines.
4 p.m.
Lord Simon of Glaisdale: If that is the noble Lord's intention, can he say why he has not tabled the amendments at this stage, which is the proper time?
Lord Whitty: The nature of the Bill has involved substantial consultation on regulations. We promised that at Second Reading. We have circulated those draft regulations. We have as yet not fully taken on board the results of that consultation, which may itself impact on the former Schedule 1. There are a number of aspects, to which no doubt noble Lords will refer at later stages of the debate, which likewise could impact on Schedule 1. If we were to make the change to the clause without altering Schedule 1 we would be subject to greater criticism if later in the progress of the Bill we were to make subsequent amendments to Schedule 1. I therefore think it is more logical for us to present the totality at a later stage of the Bill.
Amendment No. 6, which stands in the name of the noble Lord, Lord Peyton of Yeovil, would delete certain words from the Bill which make it clear that it may apply to installations which deal solely with waste management—municipal waste incinerators, landfill sites or those sites which dispose of hazardous waste. We have a legal obligation to include them in the new regime. Therefore, were the noble Lord to press his amendment it would be contrary to the intentions of the EU directive, so I ask him to consider withdrawing his amendment.
Perhaps I may go a little further on the issue of sub-delegation and the subjects raised by Amendments Nos. 10 and 11. As noble Lords have indicated, the new system needs to be applied to a wide variety of installations and activities. That ranges from oil refineries to soft drinks' makers. It is important, therefore, that the regulatory system has some flexibility to be specific, appropriate and, above all, fair in differing circumstances so that it can be enforced efficiently and by the appropriate bodies with the understanding of the sectors concerned.
Lord Jenkin of Roding: I am grateful to the noble Lord for giving way. He will remember that at the

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beginning of his speech he referred to the recommendations of the Select Committee. The second of those recommendations, in paragraph 7, concerned whether there should be a clear indication of the ambit of powers which may be delegated. The noble Lord said "sub-delegated". I wonder whether he was interpreting that recommendation of the Select Committee as being directed towards the issue of sub-delegation or whether, in dealing with Amendments Nos. 10, 11 and 12, that is the subject to which he is now addressing himself. Does he think that that is what the Select Committee recommended?
Lord Whitty: If I said "sub-delegated" earlier, I recognise the view of the Select Committee on delegation and sub-delegation. What I am addressing now is both the ability to sub-delegate and the nomination of the bodies to which one should sub-delegate, which indeed is the subject of Amendments Nos. 10, 11 and 12.
Two of the essential ingredients of achieving a fair and effective regulatory system are, first, consistency of approach and, secondly, flexibility of application. It is the responsibility of government to ensure the former by establishing and maintaining a clear framework at the national level, which is the intention of the Bill. But to apply that to specific circumstances requires a degree of professional judgment. technical expertise and local knowledge, which noble Lords tend to advocate in these circumstances and which I think is rightly advocated in relation to the powers envisaged in the Bill.
Hence the power to sub-delegate responsibility is crucial and would allow, for example, conditions implementing the regulations to be determined by those best placed to do so. It is quite clear what the Government's intentions under these sub-delegation powers are. For land-based installations, the appropriate body would be the Environment Agency and local authorities in England and Wales and the Scottish Environment Protection Agency in Scotland. Off-shore, it would be the responsibility of the Department of Trade and Industry.
In the absence of such a provision on sub-delegation, emission limit values would have to be set in stone in the regulations themselves with no room for sensible case-by-case discretion. Another perhaps trivial example arises in relation to application forms. We could prescribe forms under the regulations but it is possible that different forms may be appropriate for different types of installations and sites. If no sub-delegation were allowed, we would lose the power to enable the Environment Agency, for example, to draw up specially tailored standard forms in discussions with sectors of industry.
I can assure the Committee that it is the Government's intention that only those powers which are best determined by the regulators should be sub-delegated and only to those best placed to make those decisions. However, if we were to delete the general delegation power, there is a clear danger that if
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the Bill failed to specify absolutely all the cases where sub-delegation was sensible regulators would be left with no scope for exercising their judgment.
In relation to general delegation and the scope of the regulation-making power of the Secretary of State, I simply repeat my previous contention that, although we will take into account the views of the Select Committee and the views expressed by noble Lords today, we are doing nothing particularly new. I refer, for example, to the Environment Act 1995, where a similar form of words is used in order to allow some degree of flexibility in coverage and scope of regulations. A section of that Act dealing with a sub-delegation provision indicates that provision for anything may be prescribed by the regulations, to be determined under the regulations, and for anything falling to be so determined to be determined by such persons in accordance with such procedure and by reference to such matters and to the opinion of such persons as may be prescribed in regulations. Although we have a slightly more succinct form of words, nevertheless the principle of such general delegation of regulation-making power has existed in previous legislation under previous governments and has, by and large, met with the approval of this House and of Parliament as a whole.
We are not doing anything quite as radical and as dismissive of the responsibilities and rights of this House and of Parliament in general as has been suggested today. In so far as we accept that problems have been referred to and anxieties have been aroused by our proposals, we will by subsequent amendments and by our commitment to look at Report stage at some of these aspects have shown that we are sensitive to these requirements. I should like to end my remarks by repeating that the objectives of the Bill as a whole were widely approved of by this House, that the requirements under European legislation make it necessary for us to provide wide powers and that the requirements of making the Bill understandable to industry and consumers require us to put in a consistent system of regulation. We are doing all of those things. I believe that we can do so with a system of accountability to Parliament that will meet your Lordships' objections.
Lord Peyton of Yeovil: The noble Lord asked me whether I would be willing to withdraw my amendment. It has always been my ambition to give Ministers pleasure and I can assure him that on this occasion I shall not press my amendment to a Division. However, I beg him to understand that in nothing that I said is there any objection in principle to what is in the Bill. The purpose of the Bill is unchallenged. We all want to deal with pollution. The worry is that not all of us share the respect and total faith that junior Ministers and their officials have to show in Ministers of State. Secretaries of State are human.
Noble Lords: No.
Lord Peyton of Yeovil: I know that is a generous thing to say. Being human, they are exceedingly subject to error. We are putting on the face of the Bill powers

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not merely for the present Secretary of State—who may be a marvellous person and I say nothing against him—but all future Secretaries of State who may deal with the problem. The Minister did not answer my point. Why not have a one-clause Bill empowering the Secretary of State to make any regulations concerning pollution that he sees fit? That would achieve the same. That is our objection, and I hope that the Minister is clear.
4.15 p.m.
Lord Renton: The Minister referred several times to the need to comply with the European Union directive, which is made abundantly clear in the explanatory notes. However, by the method used there is no compliance. The first line of Clause I states:
"The Secretary of State may"—
not must—
"by regulations make provision"
and then mentions several matters. The Minister cannot claim that is compliance.
Lord Simon of Glaisdale: The Minister always puts his case for the delegated power most attractively—but not today. Of the noble Lords proposing the amendments one is a former Secretary of State and the other a departmental head, speaking with exceptional authority. The Minister says that the Bill has wide approval. So it has in the sense that we all deplore pollution and want it effectively controlled. That is not the question. The issue is whether we should proceed to that objective by the normal parliamentary principle of an Act of Parliament or revert to executive government by decree. I say "revert" because at one time in our history--under the Stuarts—that was the mode of legislation.
A few years ago we celebrated with acclaim what is called the Glorious Revolution, which asserted parliamentary government as opposed to executive government by executive decree. Not for the first time, we are reverting to that. During the 1920s and early 1930s, we saw the growth of government by decree. That aroused considerable apprehension. That was perfectly natural because, as Alton said, power tends to corrupt. The first corruption is the quest for greater power. Bureaucracies are particularly prone to that, as we are seeing today.
The growth of executive decree in the 1920s and early 1930s led to the Donoughmore-Scott report, which placed some hindrance on what had been happening before. Governments became much more cautious—I say governments because I am not speaking of one party--about arrogating to themselves the right to government by executive decree.
In the 1940s, there was again a surge forward of bureaucratic government by decree. The Franks Committee was established to deal with it and again there was hesitation as a result.
This is not the only Bill in question. The Access to Justice Bill has also been subject to extremely strong criticism by the Select Committee on Delegated Powers and Deregulation. My noble and learned friend took note, however belatedly, and recently there were extensive amendments reinstating parliamentary control
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in place of virtually uncontrolled bureaucratic decree. Those responsible for the Bill now being discussed have not learnt that lesson. The Minister indicates that he will make certain concessions by amendment on Report. But this is far too important a constitutional moment to allow that. The only proper course is for the Minister to assert his undoubted authority as the Minister in charge, withdraw the Bill, and present it again in a form that he concedes would be more acceptable.
If the Minister does not do that, the propel- course would be to carry the widest amendments. We can see then what the Government propose in their place. This matter is of profound constitutional importance. Are we to surrender on such a matter parliamentary government to bureaucratic government by decree? Nothing in the European legislation compels us to proceed that way and we should not do so.
Lord Shepherd: The noble and learned Lord, Lord Simon of Glaisdale, has made that speech on numerous occasions and it has, by and large, been supported by the House. I was one of the original members of the Select Committee on Delegated Powers and Deregulation. I am delighted that under its present chairman—the noble Lord, Lord Alexander of Weedon—it has the same virility and perspicacity in looking at matters of parliamentary importance, particularly the way Bills are drafted.
I, too, have been rather anxious during my years in this House about the degree in which delegated powers have been sought. One has to recognise, too, that legislation has become infinitely more complicated than it was in my early days. Therefore, given the manner in which the provisions are used, it clearly becomes more useful, and at the end of the day more under the control of Parliament, if it is done by delegated legislation.
Delegated legislation is, and always has been, a problem for this place but not for another place. If Ministers take and use powers that are unacceptable, it is for Parliament to say: no, we shall not pass the legislation. The noble and learned Lord, Lord Simon of Glaisdale, suggests that this matter should be taken away for consideration. I suggest that there is another approach. The Minister made some graceful noises as to the sympathy that the Government have, particularly in regard to the report of the Delegated Powers and Deregulation Committee.
The noble and learned Lord was rather angry that the Minister had not produced amendments. Although I do not see him in his place, I remember my old friend, the noble Lord, Lord Short, when he was Lord President and I served under him on the Cabinet Committee that dealt with legislation. The Lord President was grumbling mightily about the delay in the presentation of a certain Bill. I was rather surprised at the way in which the parliamentary draftsman retorted to the Lord President, who is someone of distinction, "Well, Lord President, it is very simple. If you want the Bill now you can have it, and it will be a bad Bill. If you want a good Bill, you have to wait for it". If the Government had wished to respond in that way on what is a technical and difficult matter, clearly they could not have done so between Second Reading and Committee.

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I suggest that we should simply allow this matter to proceed. This has been a useful debate. I make one suggestion to the Committee and to the Minister. The Bill has only just begun its passage. I am sure it will receive a great deal of further examination both here and in another place. Perhaps we could do some useful work, and not only in pursuing these matters in this Chamber. If the Minister were willing, let us say, to see the chairman of the Delegated Powers and Deregulation Committee and Members of this House to have a broad discussion as to the Bill's drafting, to see whether it can meet the parliamentary requirements, that would be far better than voting the Bill down and in effect destroying it, then having to start again and introduce a new Bill, possibly with the same problems. I suggest that we resist the temptation placed before us by the noble and learned Lord, Lord Simon of Glaisdale, and that we proceed, on the understanding that if the Minister is willing he will invite the noble Lord, Lord Alexander of Weedon, and other Members who may wish to discuss the matter with him to see whether the problem can be resolved off the Floor of the House.
Lord Renton: Before the noble Lord sits down, at what stage does he suggest that the discussion between the Minister and the noble Lord, Lord Alexander of Weedon, should take place?
Lord Shepherd: As soon as possible.
Lord Dixon-Smith: When I introduced this first group of amendments, little did I expect to stir up such a hornets' nest. We have had a good and instructive debate, from which I suspect all of us have lessons to learn.
I hope that I can give the Minister one small reassurance. It was not the intention of any of us on this side of the Chamber to force the withdrawal of the Bill. It was rather to seek to amend it in the light of the Select Committee's report and to put it into an acceptable form. That intention remains.
However, the fact of the Select Committee's report was bound to change the tenor of the discussion. It could not be helped. The Select Committee could not report until the Bill had received a Second Reading, and its report is strongly critical. We now have the Minister's assurance that he will consider what further amendments he needs to bring forward in an attempt to make the Bill more compliant with the Select Committee's criticism that, as presently drafted, it takes too much away from the proper supervision of Parliament. That is the lesson that we need to learn from this debate.
That said, I am happy to await the next stage of the Bill and see what amendments the noble Lord brings forward in this regard. I beg leave to—
Lord Renton: Before the amendment is withdrawn, several points were put to the Minister by my noble friend Lord Peyton and myself on the question of non-compliance with the European Community
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directive on which it seemed the Minister was about to reply. I hope that, before my noble friend withdraws his amendment, we may hear that reply.
Lord Simon of Glaisdale: I agree. We have heard the important suggestion by a former Leader of the House, the noble Lord, Lord Shepherd, that discussions should now take place between the Government and the Joint Select Committee. It would be helpful to hear the Minister's reaction before we take any decision about the withdrawal of the amendment.
Lord Whitty: I normally try to avoid extending the flexibility of Committee stage too far. However, I believe the Committee deserves an intervention before the noble Lord withdraws his amendment.
First, I wish to thank my noble friend Lord Shepherd for making those suggestions. I had been open to discussions with noble Lords prior to this stage of the Bill. I should be happy to discuss with the noble Lord, Lord Alexander, or others how best we can meet the anxieties raised by the Select Committee and others. Perhaps I presume too much; the Select Committee reports to the House and does not negotiate with Ministers. We therefore must observe the proprieties. Nevertheless, I am happy to have those discussions, preserving the role of the House in this respect.
In response to the noble Lord, Lord Peyton, I do not think that it is extending government policy too far to say that we recognise that Secretaries of State, past and present, are human; and that we therefore recognise that Parliament has the right, indeed the responsibility, to place some constraints on what they can do. Prior to this debate I believed that we were making some provisions for ensuring that Parliament had a say through introducing an affirmative procedure for a large number of the key regulations. I have also given a firm commitment to bring forward an amendment on Report. I hope to reassure the House that we intend to take on board the views of both the Select Committee and your Lordships on these matters.
I do not wish to reply in great detail to other noble Lords. While some of these anxieties have been slightly exaggerated, they nevertheless represent a real constitutional concern. There is an obligation on the Government to take note of that concern. We shall take note, both in the continuing debates today and at Report stage. I hope that we can meet as many of those anxieties as possible.
In response to the point made by the noble Lord, Lord Renton, as to whether we are complying with the European directive in introducing the Bill, as is normal in these circumstances the ability of the Secretary of State to make regulations with the term "may" provides a means for complying. The regulations themselves will be the form of compliance with those directives, as I believe is the case in other such circumstances.
In presenting this Bill, we had no intention of taking away the role of Parliament. Our intention was, as distinct from simple transposition of a European directive, to provide both Parliament and, equally important, industry with a systematic regime which had

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consistency, fairness and comprehensibility across the board. I hope that by the time the Bill has completed its passage in this House, and certainly by the time it has completed all its parliamentary stages, that intention will be fulfilled. In the meantime, I assure the Committee that I shall consider all the points made by Members during the debate.
Lord Ampthill: The Minister has indicated that he will table a substantial number of amendments at Report stage. Is he prepared to contemplate a recommitment of those amendments?
Lord Harris of Greenwich: Before the Minister responds to that question, perhaps I may say that I believe that he has responded in a very positive way to the concerns that have been expressed in this Chamber. I am concerned with the timetable for the tabling of amendments by the noble Lord before Report stage. Will he ensure that he gives us a reasonable amount of time between the day on which he tables those amendments and the date of the Report stage?
Lord Whitty: As the Committee will know, that is not primarily a matter for me. However, I shall use my best endeavours to ensure that that happens. Were that to be the case, I do not believe that there would be a need for recommitment. That option has to be borne in mind, but I hope that we can proceed as intended, with due notice of all such amendments.
Lord Dixon-Smith: I apologise to any Members whom I got ahead of in not permitting the Minister to respond to the points which they had raised. I hope that they will put it down to the fact that I am surprised to find myself here this afternoon and also to the fact that we are on somewhat unusual ground which, fortunately, is rarely covered. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Baroness Farrington of Ribbleton: My Lords, before the House moves to the Statement, I should like to remind noble Lords that questions to the Minister should take the form of a brief question or comment and that noble Lords who speak at length do so at the expense of other noble Lords.

Severe Personality Disorders
4.32 p.m.
Lord Williams of Mostyn: My Lords, I beg leave to repeat a Statement made by my right honourable friend the Home Secretary in another place.
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"With permission, Madam Speaker, I should like to make a Statement on new measures which my right honourable friend the Secretary of State for Health and I are proposing in order further to protect the public from dangerous people in our society.
"Up to now we have dealt with those who are capable of committing acts of a serious sexual or violent nature in one of two ways: by conviction and imprisonment through the criminal courts or by detention on the recommendation of doctors under powers in the mental health Acts. There is, however, a group of dangerous and severely personality-disordered individuals from whom the public at present are not properly protected and who are restrained effectively neither by the criminal law nor by mental health provisions.
"Their propensity to commit the most serious sexual and violent acts may be well known and well recorded. They may, however, only have been convicted of crimes carrying a limited determinate sentence and will have to be released from prison at the end of their sentence, even though they may themselves have warned staff of their certainty of recommitting serious offences on release. These people are plainly suffering from what the public would understand as the most serious personality disorder. But because current mental health legislation prevents the detention of even a person posing the highest possible risk to the public unless doctors also state that the condition is one which is treatable, these people remain at large and without the benefit of any attempts at clinical intervention unless and until they commit an offence and there is sufficient evidence to secure a conviction. In a limited number of cases they may not have come to the attention of the criminal justice system at all.
"As successive governments have recognised, this situation is plainly unsatisfactory. As long ago as 1975 an official committee—the Butler Committee—recommended that indeterminate, reviewable sentences be introduced for some of these individuals. Much more recently, legislation enacted by this and the previous government does mean that increasingly effective conditions can be imposed on offenders as they are being released from prison into the community. Post-release supervision is compulsory for prisoners serving one year or more. Those who breach their licence conditions can be immediately recalled to prison.
"Section 2 of the Crime (Sentences) Act which came into force in October 1997 provides for a mandatory life sentence for those convicted of a second serious sexual or violent offence.
"The Crime and Disorder Act introduced extended supervision of up to an extra 10 years for sex offenders and gave the police powers to apply for a sex offender order to protect the public from any sex offender whose behaviour in the community is giving cause for concern.

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"However, not all of these powers can apply to people who were sentenced before 1992. In recent months we have seen dangerous offenders such as Robert Oliver and others released with no conditions imposed on what they did or on where they lived.
"In these circumstances the contribution of people working on the ground in the police, prison, probation, health, education, housing and social services is essential. I should like to pay tribute to them today for their work. Multi-agency risk panels are now widespread. As honourable Members on both sides of the House are aware the information-sharing and planning arrangements of these panels are protecting victims' interests and dealing effectively with dozens of people who would otherwise undoubtedly pose a serious risk to the public.
"But effective arrangements are beyond the capacities of local agencies alone. Central government action is also needed. I can therefore tell the House today of both what we are proposing for the short term and also of our legislation for the medium term. For the short term we are putting in place an early-warning system so that local agencies and central government have the maximum possible time to prepare for a dangerous person's re-entry to the community. Prison and probation services are being asked to provide this information to the Home Office's Probation Unit. Similar arrangements are being made through the NHS with hospitals which treat patients detained under the Mental Health Act 1983. A support group within the Home Office Probation Unit made up of staff from the operational services will be there to assist local agencies to deal with particularly difficult cases.
"These changes will help the system deal with dangerous people now. But a new legislative framework for the system is long overdue. As I have explained, under current legislation—based upon the provisions of the mental health Acts—only some of these severely disordered people can be detained and then only if,
'treatment is likely to alleviate or prevent a deterioration of their condition'.
"There is a continuing debate about what treatments, if any, are effective in dealing with personality disorder. But the protection of the public cannot wait for the outcome of research which may take many years to complete. Society cannot rely on a lottery in which, through no fault of the courts, some dangerous severely personality-disordered people are sent, for a limited time or indefinitely, to prison or to hospital but others remain in the community, or return to it, with no interventions whatsoever.
"The Government therefore propose that, subject to parliamentary time being available, there should be new legal powers for indeterminate but reviewable detention of dangerously personality-disordered individuals. These powers would apply whether or not someone was before the courts for an offence. But the powers would be exercised by the courts—and not
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by the Executive—where it could be established that the individual had a recognised severe personality disorder and was a grave risk to the public.
"Depriving individuals of their liberty in such circumstances is a very serious step. The key aim is to protect the public while meeting the health needs of individuals. So we will ensure that the process of ordering detention involves a robust system of checks and balances covering both legal and clinical issues. Once in a detention, there will be regular quasi-judicial reviews of the justification for continued detention. And the individuals concerned must have the best possible chance of becoming safe to return to the community. We therefore propose to establish a range of specialist programmes and a new approach to managing the detention of all those detained under the new power. This approach will involve close operational links with the existing services.
"I have outlined for the House today what the Government believe is needed. But because of the complexity of this area and the seriousness of creating the kind of detention powers I have described it will be important to consult more widely. This will enable us to ensure both that we have not overlooked any options and that the action we take is effective and measured, commands broad support and is compatible with our obligations under the European Convention. My right honourable friend and I therefore propose to publish in the spring a consultative document which will outline in more detail the nature of the problem and the options for the new framework within which these powers will operate. In the light of responses to that document we will take final decisions later this year.
"We also need to find out why some people develop severe personality disorders and how this can be prevented. We are therefore funding further research (nearly £1 million over three years). But we know already that severe personality disorder is often associated with large, broken families where abuse has been rife and children may have been taken into local authority care or received community-based mental health treatment before embarking on drug abuse and criminal careers. These problems of course need to be dealt with in any event.
"In conclusion, a number of honourable Members on both sides of the House have had to deal with the consequences in their own constituencies of the release of such dangerous, severely personality-disordered offenders. I am extremely grateful to them and to local police, probation and health services for the sensitive and responsible way in which they have handled cases in their constituencies involving offenders to whom these measures relate, often in the face of serious and alarmed public concern. I hope that this constructive all-party approach will continue and that these proposals will receive wide support inside and outside this House".
My Lords, that concludes the Statement.
4.42 p.m.
Lord Cope of Berkeley: My Lords, we are most grateful to the Minister for repeating to this House a Statement approximating to that made by his right honourable friend the Home Secretary in another place. We all recognise this to be an extremely difficult area of policy within a difficult portfolio, and the long history of the matter which was partially recited in the Statement demonstrates that. As the Statement made clear, to deprive people of their liberty, particularly indefinitely, when they have completed prison sentences for offences that they have committed, is a most serious matter and, and even more serious when no further offence has been committed. Our obligations under the European Convention on Human Rights are a recognition of that seriousness.
The Government are, however, right to say that the safety of the public and the prevention of further offences is the most important consideration. While we shall want to consider the details of the consultative document and, subsequently, the proposed legislation, we support the Government in continuing to develop policy in this area.
I should like to raise a number of points, although I realise that the Minister may be unable to answer them today. They may be dealt with in due course by the consultative document, but it would be helpful if the Minister could provide guidance at this stage. First, I am not clear as to how all this fits into the ongoing review of sex offences that is now being carried out within the Home Office. Secondly, if I have correctly understood the Statement, the new powers apply to those unconvicted and to those convicted before 1992. Is it intended to treat those convicted since 1992 in the same way, because I understand that the position is not quite the same as in the current legislation. I understand that approximately 300 to 600 people are considered likely to be affected, although that is very much an estimate.
Thirdly, which courts are expected to be asked to handle this matter? I take it that it will not be dealt with by either magistrates or juries and that the decisions will be taken by judges. Subsequently, where will appeal lie? Will it lie to the mental health tribunals, as it does under part of the present legislation, or direct to the courts? Sometimes the vital questions may be essentially medical ones. Is the patient treatable or not? If they are treatable obviously they will fall under the existing legislation. That is essentially a medical rather than a judicial judgment; but at other times obviously points of law will arise. Where the matters are for judges to decide is it anticipated that medically qualified people will assist them in assessing the cases before them?
Fourthly, who is it proposed will run the new system of detention? Will it he run by the Prison Service, who look after some people at the moment, or National Health Service hospitals; or will new institutions be created for the purpose in either the public or private sector? Lastly, it would be helpful to know when the Minister considers that spring will arrive because that is when the consultation paper is due to be published. Can the noble Lord give any further idea about when any legislation is likely to find a slot in the legislative programme?
4.47 p.m.
Lord Dholakia: My Lords, I wholly endorse the sentiments expressed by the noble Lord, Lord Cope. We are grateful that the Government have now made this Statement. We welcome the fact that the Government seek arrangements for better diagnosis and an improved system to deal with people suffering from personality disorders. We all agree that at present people are inadequately and inappropriately dealt with by both the penal system and the health system. We therefore welcome the proposed consultation. We also welcome the emphasis in the Statement on the fact that most people with personality disorders do not pose a serious risk to the public. The majority of them are not ex-murderers in waiting. Will the Minister affirm that properly funded community care arrangements, as opposed to the inadequately financed system of community care which has operated for too long, provide the best way to deal with the majority of people who suffer from mental disturbance?
We also welcome the emphasis on early intervention and prevention. If we can give a high priority to improving the diagnosis of young people with personality problems and provide them with the help that they need this will prevent the problem from developing with far worse disorders at a later stage. We also welcome the short-term proposal for better arrangements to identify dangerous offenders in the prison system before release and to provide well planned and co-ordinated release arrangements for them. Can the Minister provide further details of the agencies or departments from which staff will be seconded to the Home Office Probation Unit to form the new support group that will oversee these arrangements?
Many of the current problems arise from the fact that psychiatrists are split over the treatment of people with personality disorders. One psychiatrist will regard an individual as untreatable while another will be prepared to accept the same person for treatment. It is therefore often a matter of chance whether someone ends up in hospital or in the prison system. If a person goes to prison, often he leaves at the end of his sentence just as dangerous as when he went in.
We agree that there is a strong case for a new, indefinite reviewable order for dangerous people with personality disorders. In relation to mentally disordered offenders, a recent report by NACRO, which I chair, entitled Risks and Rights, drew attention to the gap in current powers which the proposal would fill. However, there are two important provisions. First, use of the new power must be based on strong and tested evidence of dangerousness and subject to rigorous judicial procedures to ensure that people are not detained unnecessarily or in an arbitrary manner. Secondly, alongside an emphasis on protecting the public, there must be an equally strong emphasis on rehabilitation and providing those mentally disordered people with the care they need for their mental condition.
We believe that the best way to achieve that would be to set up a new and separate system of units, distinct from the prisons and special hospital systems. The current system has failed people with personality

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disorders as well as failing the public and we need a clean break from it. The new units should provide a positive regime based on education, psychological input and rehabilitation. This would be the best way to protect the public while ensuring that those mentally disturbed people are not written off or dumped in institutions without hope. We shall, of course, scrutinise the legislation with the utmost care. The Government would receive co-operation from this side of the House on condition that every effort is made to ensure that there is no miscarriage of justice in the implementation of those measures. We should like to know what safeguards and help are available to courts in such matters.
We know the inadequacy of special hospitals. We know that the review of the Mental Health Act is now taking place. It is also appropriate to ensure that medium and long term strategies are part of the Mental Health Act review.
4.51 p.m.
Lord Williams of Mostyn: My Lords, I am truly grateful for the generous bipartisan spirit in which the noble Lords, Lord Cope and Lord Dholakia, approached the matter. I do not think that we can begin to hope for a successful outcome unless we regard the issue essentially as a deeply worrying social problem which has nothing to do with party political advantage or posturing. I am most grateful that none has been illustrated.
The noble Lord, Lord Cope of Berkeley, put a number of questions. The review of sex offences is currently going on because I think that it has been well recognised that sexual offences are the product of historic accretions. Very often they are not well defined; and often there is a difference of penalty which is regarded as inappropriate. Despite the fact that the label may be too lenient, the sentence available is often not sufficient. That is quite distinct. We are not simply dealing with those who may commit sexual offences, but with those who are seriously personality disordered. It is a wider point.
The noble Lord asked which courts might be concerned. There are a number of possibilities. Plainly the magistrates' court, which has a maximum jurisdiction of 12 months, would be wholly inappropriate. If it is to be a reviewable sentence passed on a finding and conviction of crime, then one would have thought that it would be the appropriate criminal court. If one has a sentence in the criminal jurisdiction, then one would have thought, subject to consultation—we genuinely want fully informed consultation—that it would be in the usual way.
If one has the power to take away liberty without a finding of guilt, one would be looking to bodies such as the mental health tribunals which, by and large, have had good public confidence and support. However, I stress that we have come to no absolute conclusions. When we speak of a consultative document, that is truly what we want.
Judges are well equipped to deal with medical issues at present. They have to give directions to juries in cases of diminished responsibility. They have to make rulings; and often they have to pass sentences based on the medical evidence before them. I take the noble Lord's
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point. It is not simply a legal or judicial question. It requires the input of medical expertise. I entirely agree with the noble Lord, Lord Dholakia. One cannot find unanimity of clinical perception about precisely what the disorder is, or whether it is treatable. That is one of the fundamental gaps in the present law.
The question was posed: where are these people to be kept? At present, 400 dangerous severely personality disordered people are detained in hospitals, and about a further 1, 400 are held in prison. That is one of the specific questions to which we have to put our minds. A point arising from the question posed by the noble Lord, Lord Dholakia, is this. Are we to have distinct units? Are we to cater for those in hospitals? Have some of them still to remain in a secure prison regime? That is a question on which, again, we wish genuinely to consult.
The noble Lord, Lord Cope, asked me when spring was to come. As soon as I give a date, there will be floods, blizzards and national disasters. But we hope to have the consultation paper out before Easter.
Legislation is a matter for parliamentary time. It is not an easy question. I think that it is better to try to get the matter right on the widest possible basis of consultation.
The noble Lord, Lord Dholakia, asked me about the general areas in which we would look for seconded staff. Essentially we would be looking to professionals with expertise and experience in health, social services, prisons and probation. One does not want to be too prescriptive on that but I believe that he would support our suggestion that we should tap into those sources of expertise. The noble Lord is right. NACRO provided a helpful, measured report, as I saw it, which recommended the reviewable sentence. It is helpful to have the support of such a reputable body.
I hope to set at rest any suggestion that one is simply locking up people without proper justification. There is ample justification in a public protection context and in the fact that many people who have serious disorders are simply not treated, as the noble Lord said, because we have no effective sanctions or mechanisms to deal with them. I take the noble Lord's point that if one is to deal with some badly affected people in the community, it must be properly resourced.
Again one needs distinct limits; and one needs to be cautious about taking away liberty from our fellow citizens except on abundant, persuasive material. The review of the Mental Health Act continues under the review set up by my right honourable friend Mr. Dobson. That casts a wider net than the specific question that we deal with here.
I have answered all noble Lords' questions. I repeat my grateful response for the way in which the Statement has been dealt with. I repeat again that we genuinely want an inclusive process of consultation. There are few people involved, but the public dangers are quite significant.
4.58 p.m.
Lord Ackner: My Lords, the reviewable sentence was first raised in a report provided by Lord Butler to

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the Home Office, the subject matter of the report being dangerous offenders. Are these proposals very much on the lines of the recommendations in that report; namely, that a sentence be reviewed every two or three years by a medical committee, it having initially been imposed because of the position of the accused and the likelihood that he would be dangerous if let out at the end of his sentence?
In this Chamber, to my knowledge, we have raised the desirability of a reviewable sentence for at least the past six years. I have nagged the noble Lord since he became the Minister; and I nagged his predecessor when we debated the Crime (Sentences) Bill. Why has it taken so long to appreciate that a new indeterminate sentence is absolutely vital? To what extent is the present decision the result of the inquiry presided over by His Honour Peter Fallon QC?
Lord Williams of Mostyn: My Lords, the noble and learned Lord never nags me. He will remember that when my party was in opposition I spoke in part on home affairs. He frequently raised the issue of the Butler proposals and has done so since we have been in Government. I can fairly say that on every occasion I have stated my own conscientious view that there was a lot to be said for an examination of them.
Obviously, we take into account the Fallon report, but the problem was identified previously. After all, Judge Fallon dealt with the problems of a particular institution—and wider questions, too, I readily concede—but essentially there is legitimate informed public concern about this issue.
The Statement does not entirely follow the Butler recommendations. There will be a reviewable sentence in the context of a finding of guilt and an allegation of crime, as the noble and learned Lord, Lord Ackner, pointed out. However, we are making it wider than that because we are saying that in some circumstances, with care, caution and safeguards, it may be that some of our fellow citizens will have to be managed by having their liberty taken away, even though they have committed no crime. Therefore, the Statement is wider than the Butler proposals, but it builds on them in the sense that one has a reviewable sentence.
The noble and leaned Lord asked about the possibility of a review every two or three years. That is the kind of scheme we have in mind, but I stress that there are sound arguments for a period shorter than three years. We want to discuss that when the consultative paper goes out.
Lord Clinton-Davis: My Lords, will my noble friend indicate whether anyone appearing before the courts in this regard will be entitled to legal aid? What will be the position when there are no court proceedings as such? Will legal aid be available to challenge evidence which might be given in support of continued detention? In relation to either situation, will disbursements incurred in order to procure expert evidence be allowable, even if legal aid is available?
Lord Williams of Mostyn: My Lords, my noble friend raises an extremely important question in the
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context of what I was specifying; care, caution and proper safeguards. There will be legal aid for people facing an order for indeterminate reviewable detention. There will also be legal aid for the periodic quasi-judicial reviews.
Specific disbursements would, in the usual way, be a matter for the authority of the legal aid board. However, if one is dealing with difficult areas of say, medical expertise, one would expect it to deal favourably with such requests. I am happy to give your Lordships the assurances that the noble Lord invited me to give.
The Earl of Mar and Kellie: My Lords, the House will be aware that in Scotland there used to be a sentence called preventive detention which was last used in the 1950s. It is similar to what the Minister is proposing. Has the Home Office consulted the Scottish Office about the reasons why preventive detention was abandoned in Scotland?
Lord Williams of Mostyn: My Lords, we used to have preventive detention in England and Wales, too, but we are not speaking of the same beast. Preventive detention was a weapon of sentencing open to the courts when serious criminals were being dealt with. I stress again that the order of reviewable indeterminate detention will be available to those who have committed no crime, but who can be demonstrated to be severely personally disordered. So preventive detention, although it had its opponents and critics, has nothing to teach us about this new sentence.
Lord Beloff: My Lords, I wish to ask the Minister a question that has been worrying me since the proposal was trailed a few hours ago. How is it proposed to identify individuals who have committed no crime, but are thought to be dangerous to their fellow citizens and therefore to be considered for some form of detention and treatment?
If I walk along the street, see someone who is behaving oddly and think that he may have a personality disorder, am I to go up to the nearest police constable and say, "Take him into custody and have him looked into"? I can see what happens once you have detained the person, but with 50 million people I do not know how one identifies such people who, by definition, have committed no crime.
Lord Williams of Mostyn: My Lords, I hope that one will not start in quite so cavalier a way as the noble Lord suggests, otherwise our numbers in this House might be severely diminished almost overnight! I recognise that the noble Lord asks a serious question. Police officers may well have been alerted when no crime has been committed. Members of social services may have had professional dealings with such unfortunate people. There may well have been contact with the Probation Service or other public statutory agencies. I cannot stress too strongly that one does not want to over-exaggerate the numbers involved; they are relatively small.

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I realise that the noble Lord put his case strongly in order to draw attention to an important aspect, but one does not want the "witches of Salem" tendency. Plainly, there must be a careful mechanism before any hearing is set up. I anticipate that the kind of bodies which would bring such cases to the attention of the appropriate tribunal would be those I have specified. However, we are more than happy to have the assistance of anyone who wishes to offer their views on the consultative process.
Lord McNair: My Lords, perhaps I may press the Minister on the nature of the research. Who will carry it out? As it will be under the Home Office rather than the Department of Health, presumably that will have a bearing on the matter. Is it not true that most, if not all, the people to whom the Statement refers have had, in addition to their involvement with the criminal justice system, some considerable involvement with the psychiatric system and the mental health services?
Does the Minister agree that we need to discover the role which psychiatric treatment may have played in the lives of such people? We have had psychiatric treatment for 80 years and the problem does not seem to be getting better. Why are there still so many such disturbed people?
Lord Williams of Mostyn: My Lords, in 1997 we established a network of 11 universities and hospitals for the basis of research. It is called the Virtual Institute for Severe Personality Disorder. We are funding a programme of research which will cover diagnosis, treatment and prevention. I do not believe that I am in disagreement with the noble Lord's approach.
I am thrown back to what I said to the noble Lord, Lord Dholakia; there is an extraordinary disparity of view among informed professionals about causation. We can find indicators—I mentioned those in the Statement—such as large families and abuse in childhood. However, we cannot wait until research gives us perfect answers because there is a continuing danger for a relatively small number of people both to themselves and the wider public. That is why we must deal with the matter in this way.
Lord Rowallan: My Lords, I strongly support the proposal. Not only does it help victims and potential victims for the first time in a long time, but it also saves offenders and potential offenders from themselves. It has taken 24 years to come to life and I hope that the Minister can assure the House that the autumn will not be too late. We must make an effort to ensure that more people are not hurt by those suffering from this problem.
My second question relates to Scotland where we too have people who have severe personality disorders. This provision does not cover Scotland and Scotland will be a devolved issue. Can the Minister give us an assurance that something will happen north of the Border?
Lord Williams of Mostyn: My Lords, a number of inquiries are continuing in the rather different context of
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the Scottish legal system. I anticipate that some legislative alteration will happen in the Scottish context also. The law is different in Scotland but there are a number of committees of inquiry roughly paralleling what has been done in the rest of the United Kingdom. I agree entirely with what the noble Lord, Lord Rowallan, said. The Government have indicated that we treat this matter with enormous seriousness. If we put out a genuinely consultative document we have to approach the conclusions with an open mind and legislative time will be the bugbear.
At present there are people who are in prison on determinate sentences who insist to the prison staff—this is partly a response to the noble Lord, Lord Beloff—that they intend to commit further, more violent crimes when they come out. When they come out and their licence period has expired, they have to be approached as non-convicted people for the purposes of this new order because they are not receiving the reviewable sentence directly related to the finding of guilt. They are sometimes a danger to themselves and sometimes a danger to the community. As a government, we cannot justify saying to members of the community that we have done nothing about this because a lot of time has passed since Butler. We are looking afresh at Butler and are not constrained by it. I take the noble Lord's point and know that he will return later in the year to remind me about what I said in February.
Baroness Gardner of Parkes: My Lords, there is a strong case for the reviewable sentence. I listened carefully to what the Minister said and I agree that we cannot establish psychiatric views firmly one way or the other. I have seen cases of people who, we were told, were not at risk of committing suicide and yet within an hour had killed themselves. All that is very real and people live in fear of someone who nearly killed them being released. I am told that when they are released they cannot be checked or supervised by the police. I agree therefore with the concept of reviewable sentences. My concern is the point raised by my noble friend Lord Beloff in relation to people who have never been known to be a problem. I think back to all those women who spent lifetimes in asylums often because they had simply had an illegitimate child. That does not apply today of course; we have a different view of these matters. However, I should like to be assured that there is no way in which a completely innocent party will lose their liberty for a lifetime.
Lord Williams of Mostyn: My Lords, I agree with the noble Baroness. There were and may still be people who entered a custodial regime for what we would regard as no proper reason and what should then have been identified as no proper reason. One can think of the example the noble Baroness gave, or petty theft, or backwardness at school, or just being unduly mischievous. That is why, when we talk of indeterminate sentences, we must attach the fellow adjective "reviewable".
I take the point of the noble Baroness and that is why I was happy to stress, in so far as I could, in my response to my noble friend Lord Clinton-Davis, the necessity to

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have independent legal advice so that where a proper case for release or non-continuance of the reviewable sentence can be made it is properly and professionally made as opposed to leaving it to an individual who, in the nature of things, will not be able to make his or her case as persuasively as a qualified lawyer.

Pollution Prevention and Control Bill [H.L.]
5.15 p.m.
House again in Committee on Clause 1.
[Amendments Nos. 2 to 6 not moved.]
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 7:
Page 1. line 25, at end insert—
(" ( ) Regulations under this section shall require individuals or bodies responsible for carrying out such activities as are referred to in the regulations to employ the best available techniques not entailing excessive cost to be used for minimising the pollution which may be caused to the environment as a whole by those activities.").
The noble Lord said: Amendment No. 7 seeks to reintroduce to the Bill the concept of the need to prevent imposing excessive costs on industry when it complies with the idea of best available techniques. That concept, under the hideous acronym of BATNEEC, was written into the Bill and because best available techniques should have a profound impact on the economic prospects of individual enterprises we felt that it was worth introducing some concept of economic validity into the Bill as in the previous one. I beg to move.
Lord Jenkin of Roding: This is an important amendment. It stands in its own right. Whereas the previous amendment dealt with the scope of the legislation, this amendment seeks to deal with the standards that Parliament should establish as guidance to the draftsman of the regulations and the regulators enforcing them.
Of course there are unpleasant acronyms. The noble Lord, Lord Whitty, mentioned BPEO—I do not believe that was ever shortened into a word—which means "best practicable environmental option". Two others that one comes across in this field are ALARA—as low as reasonably achievable—and ALATA—as low as technically achievable. But in recent years what has emerged in this country as the preferred standard is "best available techniques not entailing excessive cost".
My noble friend Lord Whitty explained to the chairman of the Delegated Powers and Deregulation Committee, my noble friend Lord Alexander, when he wrote on 21st January 1999:
"The concept of 'best available techniques' with the associated balancing of costs and benefits, will, as the Committee suggests, be at the heart of the new regime".
He then goes on to address the question which the Select Committee raised as to whether there ought to be exceptions to that in the sense that costs should not enter into the issue; that the effect of pollution is so serious that it ought to be dealt with using the best available
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techniques, period. That is an issue which we debated in this Chamber in earlier legislation and it has always been recognised that there could be extreme cases where, in the last resort, the pollution has to he abated at almost whatever the cost.
The directive on which all this is based is quite interesting. There is a definition of the best available techniques in paragraph 11 of Article 2:
"Best available techniques shall mean the most effective and advanced stage in the development of activities and their methods of operation which indicate the practical superability of particular techniques for providing in principle the basis for emission limit values".
It then goes on to talk about techniques and "available", about "best" and finishes:
"In determining the best available techniques special consideration should be given to the items listed in Annex 4".
What is interesting is that it is only when one gets to Annex 4 that the directive contains any reference to costs and it does so in an oblique and parenthetical way. It states,
"Consideration is to be taken into account generally or in specific cases when determining best available techniques as defined in Article 2 (11), bearing in mind the likely costs and benefits of a measure and the principles of precaution and prevention".
It goes on to list a number of specific "best available techniques".
I detect the hand of British Ministers and officials during the negotiations of that directive when I see the insertion of the requirement that costs and benefits should be taken into account. Hitherto that has not been the practice of the European Commission. I also detect the hand of the Commission in making sure that if that provision has to go in, it will go in obliquely and parenthetically in the last annex.
To my mind, that may or may not be effective. It is certainly much less clear and much less transparent than the concept of "best available techniques". In seeking to explain that, the Government have referred to what is now in the Bill and in the directive as "a similar concept"—that is referred to in paragraph 5 of the Explanatory Notes—or in a letter to my noble friend Lord Alexander of Weedon as not dissimilar to "best available techniques". That must mean much the same.
The Minister, in his reply to the Select Committee, was seeking to justify the use of more restrictive conditions than the normal application of the BAT or BATNEEC principle would provide. As I have said, that may be appropriate in certain circumstances. To my mind, the central problem at which the amendment is aimed primarily, is that the Bill does not spell out the required standards either as BATNEEC, or using the words of the directive, BAT and Annex 4.
As my noble friend has said from the Front Bench, BATNEEC is a concept familiar to most of those affected by this legislation. It has been embodied in UK legislation in the past. It is familiar to those who are charged with enforcing it and to those who have to make regulations under earlier legislation. The directive is not a community regulation that is directly applicable. I certainly support the Government in not trying to bring

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this in under the Act of 1972. It is left to member countries to decide how to implement the requirements in the directive.
In supporting the amendment I firmly express the view that to incorporate BATNEEC into our regulations will be to implement the directive. Therefore, I have two questions to put to the Minister. Do the Government consider that the combined effect of Article 2 paragraph 11, and the words that I read from Annex 4, are more or less demanding than BATNEEC? If the answer is "not dissimilar; they are much the same; they are similar to", my second question is this. If Parliament were to decide to prefer the words which have been used in legislation in this country for more than a decade and with which, as I said, everyone is familiar, do the Government believe that we would face a challenge in the European Court for not implementing the directive properly? If the answer to that is no, why can we not have the words that we are used to, rather than having to incorporate what, in effect, are different words, with the same meaning, from the European directive? BATNEEC is what everyone understands and it should be in the Bill. I support the amendment.
Baroness Hamwee: My Lords, perhaps I may use the amendment to ask a question on the same topic, but arising from the draft paper on implementation which is currently out for consultation. Draft Regulation 3 defines "best available techniques", which are said to be those which have been developed on a scale allowing implementation in the relevant sector,
"under economically and technically viable conditions".
As I understand the word "viable", it means capable of supporting life independently. I am worried that the term "economically and technically viable" may find its way into the draft regulation because it suggests to me that the environmental standard may be lower than many would want to see. Perhaps I am at a different point in the spectrum from noble Lords who have already spoken. So often it can be argued that it is not economic to carry out a particular process, to apply a particular type of prevention, and so on. I would be grateful if the Minister could help the Committee at this point on the thrust of the definition within the draft regulations. Whatever the outcome of the debate on what is contained in the Bill, there will be regulations and they will not be amendable, so I wish to ask the question now.
Lord Whitty: My Lords, I regret that in relation to this amendment we do not follow the recommendations of the Select Committee on Delegated Powers and Deregulation for a specific reason that has not been mentioned by any speakers directly so far.
In response to the questions on the definitions of BAT and BATNEEC, in our view the concepts are indeed very similar. I have no means of knowing whether it was British influence that brought in the reference to costs in Annex 4, which is reflected in regulation 3 and in Article 2 (11). With BAT as well as BATNEEC the intention is that cost is taken into account. I take the point of the noble Baroness that "viable" in this context
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may not be the appropriate word. Nevertheless, the draft regulation 3 (1) (a) does relate to importing costs into the assessment.
The old techniques, BAT, will be at the heart of the new regime, as the directive ensures. The reason why we cannot be as absolute as the amendment would require is that there are circumstances in which we would need to be more restrictive than the BAT provisions would allow in order to comply with European or other international obligations. Clearly, the most obvious example—although it would be rare in practice—would be where European Community environmental quality standards, such as those for air quality, would be breached by the emissions from an installation which had otherwise complied with the BAT provisions. In those cases, more stringent conditions than those based on BAT would have to be applied in order to conform with the other directive. That is not dissimilar to the provisions of the Environmental Protection Act 1990, in particular Section 7 which enables the Secretary of State to specify in a direction the conditions to be imposed. In those circumstances, such direction would have overridden the BATNEEC requirement. Directions have been used under that provision to implement European directives such as the hazardous waste incineration directive where emission limit values have to be imposed under European law, even though they went beyond the previous BATNEEC provision.
We accept, as do the regulations and the directive, that BAT, as now defined, would apply in the vast majority of cases unless overridden by other international or similar obligations entered into by Her Majesty's Government. In the areas of air quality and hazardous wastes, BATNEEC of itself would probably not be sufficient to meet those standards. Therefore, we need a little latitude in this respect. I hope that with that explanation the noble Lord will feel able to withdraw the amendment.
Lord Dixon-Smith: I am grateful to the Minister for that explanation in which he has given us additional information which we shall clearly need to study. I hope that he will understand that and that we may need to return to this at a later stage. In the meantime, I beg leave to withdrawn the amendment.
Amendment, by leave, withdrawn.
5.30 p.m.
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 8:
Page 1, line 25, at end insert—
(" ( ) Before making regulations under this section, the Secretary of State shall—

(a) consult individuals and businesses involved in activities proposed to be subject to those regulations; and

(b) publish the result of that consultation.").

The noble Lord said: This amendment seeks to introduce a degree of consultation with the relevant parties to Clause 1. It is grouped with a government amendment which seeks to do the same thing, but in rather a better way. I shall need an assurance from the Minister that Clause 2 applies to Clause 1.
However, the matter is not straightforward and I should like to be sure of the ground on which I am standing. My noble friend Lord Lucas, who is not in his place, has tabled an amendment to Amendment No. 8 and subsequent amendments have been tabled to the Government's amendment, Amendment No. 13, which may require discussion if the Government choose to press their amendment. It is essential that in making the regulations all the relevant parties are consulted and their views taken into account before any regulations are made. That is not to say that the effect of the consultation should mean that the views of the consultees should be predominant. Clearly, there is a much wider interest. However, consultation is always useful and helpful points may arise from it. That is why we think that consultation should be on the face of the Bill. I beg to move.
Lord Jenkin of Roding Lord Jenkin of Roding moved, as an amendment to Amendment No. 8, Amendment No. 9:
Line 5, after ("regulations;") insert—
(" ( ) publish all submissions made to him as part of that consultation, and all relevant expert reports and opinions commissioned by him;").
The noble Lord said: In the absence of my noble friend Lord Lucas, I beg to move his amendment, Amendment No. 9. I wonder whether it might be for the convenience of the Committee if the Minister spoke now to his amendment so that we could then discuss the amendments to his amendment. I hope that that will be within the rules of order.
Lord Renton: Before the Minister does so, I hope that it may be helpful rather than unhelpful if I mention something about Amendment No. 8 which has slightly puzzled me. The amendment would require the Secretary of State to,
"consult individuals and businesses involved in activities proposed to be subject to … regulations".
That seems an impossible task to impose on the Secretary of State because not only hundreds, but possibly thousands, of individuals and businesses may be affected.
Line 10 on Page 2 of the Bill states—I refer to Clause 1 (4) (c)—that the regulations may,
"make different provision for different cases, including different provision in relation to different persons, circumstances, areas or localities".
I can understand that circumstances, areas or localities could be dealt with in different ways, but it seems somewhat unrealistic to mention in the regulations a vast number of "different persons". As those words are already in the Bill, it is not entirely surprising that in Amendment No. 8 my noble friends refer to the need to consult "individuals and businesses".
Lord Dixon-Smith: My noble friend Lord Renton has introduced a justifiable criticism. However, I remind him that the Bill not only requires the making of regulations, but that the regulations can then lead to further downward delegation. Although I entirely agree that it would be impossible for the Secretary of State to undertake appropriate negotiations with every
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interested party, it is to be hoped that consultations will take place at the point where the regulations will apply.
In moving the amendment, I said that I thought that in some ways the Minister had tabled a superior amendment. We have not yet reached that amendment, which is why my noble friend Lord Jenkin suggested that it may be right for the Minister to speak now.
Lord Whitty: I am sorry to be so bashful in coming forward. It may indeed be sensible for me to speak now. The noble Lord, Lord Renton, raised a point which to a large extent applies to both my amendment and to that of the noble Lord, Lord Dixon-Smith. Although some flexibility is required in relation both to the Secretary of State's ability to determine who should be consulted and, further down the line, to the delegated authorities, perhaps that issue needs some consideration in terms of the noble Lord's query.
I am sure that the Committee will recognise that when we produced the third document on the regulations, we were engaged in a pretty wide consultation exercise in a complex area. Such consultation is what we intend in future. I have sent copies of the draft regulations to those who have shown an interest in the 13ill and have placed a copy in the Library. In the spring, we intend to hold a final round of consultations on the remaining issues, such as the timetable and the phasing. The Department of Trade and Industry will shortly be consulting on the separate issue of the proposals for regulating offshore oil and gas installations.
The proposals in the amendment were, in broad terms at least, widely welcomed—and not only by this Committee. On Friday, I received a letter of support from the CBI as regards the Government's amendment on consultation and the subsequent amendment that we shall shortly be debating. Therefore, I hope that the spirit behind the amendment will he accepted.
A significant number of other amendments have been tabled to my amendment which may make today's debate a little complex. Noble Lords may wish to speak to some of those amendments and any points raised may need to be considered by the Government. In general, I am unhappy about accepting any of the amendments as they stand. Noble Lords should realise that point and decide accordingly how to proceed. However, in case the noble Lords responsible for those amendments want to press them, perhaps I may advise the Committee that it may be more sensible to consider my amendment, the points just raised, and the amendments to my amendment in the round. We may then come forward with a firm amendment on Report, covering all those points. I do not want to curtail debate or prevent those who wish to pursue particular points raised in their amendments from doing so. However, if that course of action were generally acceptable, I would be prepared not to move my amendment at this stage on the grounds that its principles will re-appear on Report when we shall

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have had the opportunity to take into account other points already raised—or which may be raised once I have sat down.
Lord Dixon-Smith: I am most grateful to the Minister; indeed, I can only regard that as an extremely helpful reply which I welcome. I am sure that other Members of the Committee will do likewise. I believe that I have tripped up again and now I do not know which bit of ground I am standing on. I thought that I was in a position where I could withdraw Amendment No. 8.
Noble Lords: Not yet!
Lord Jenkin of Roding: I have not spoken to Amendment No. 20, which is the last amendment in this grouping. I, too, very much welcome what the Minister said in relation to Amendment No. 13. The noble Lord referred to the forthcoming draft regulations for the offshore oil and gas industry. My only concern in tabling the amendment was the fact that that industry has had some informal talks with the DTI, which is its regulator; it is not regulated by any of the agencies responsible to the Minister's department. The industry has not seen any draft regulations as yet, though no doubt it will have taken note that they will be forthcoming. But it expects full consultation to take place on such regulations.
I am sure that the Minister can give that assurance, but the purpose of my amendment was to make it absolutely clear that the discussions which the industry has already had will not be relied on as complying with the subsection in the Minister's amendment so that it will be said, "Oh, we have talked to them already. That was consultation". However, the answer is that it would not be consultation that would comply with the Minister's regulations if it happened after the Bill became an Act. That was my sole purpose for tabling the amendment.
Lord Whitty: For the sake of clarification, I can confirm that "consultation" in these terms means consultation on draft regulations. We have had substantial discussions with the offshore oil industry, but it will also need to consult on the regulations which, I understand from my colleagues in the DTI, will shortly be forthcoming.
Lord Dixon-Smith: I beg leave to withdraw Amendment No. 8.
Lord Jenkin of Roding: I beg leave to withdraw Amendment No. 9.
Amendment No. 9, as an amendment to Amendment No. 8, by leave, withdrawn.
Amendment No. 8, by leave, withdrawn.
[Amendments Nos. 10 to 12 not moved.]
Lord Whitty Lord Whitty had given notice of his intention to move Amendment No. 13:
Page 2, line 11, at end insert—
(" (4A) Before making any regulations under this section, the Secretary of State shall consult—

(a)the Environment Agency if the regulations are to apply in relation to England or Wales;

(b)he Scottish Environment Protection Agency if the regulations are to apply in relation to Scotland;

(c)such bodies or persons appearing to him to be representative of the interests of local government as he may consider appropriate;

(d)such bodies or persons appearing to him to be representative of the interests of industry as he may consider appropriate; and

(e)such other bodies or persons as he may consider appropriate.

(4B) Consultation undertaken before the passing of this Act shall constitute as effective compliance with subsection (4A) as if undertaken after that passing.").
[Amendments Nos. 14 to 20, as amendments to Amendment No. 13, not moved.]
[Amendment No. 13 not moved.]
5.45 p.m.
Lord Whitty Lord Whitty moved Amendment No. 21:
Page 2, line 12, leave out subsection (5) and insert—
(" (5A) The power to make regulations under this section shall he exercised by statutory instrument.
(" (5B)A statutory instrument containing regulations under this section, if made without a draft having been laid before, and approved by a resolution of, each House of Parliament, shall be subject to annulment in pursuance of a resolution of either House.
(5C)But no regulations to which this subsection applies shall be made unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.
(5D)Subsection (5C) applies to—

(a)the first regulations to be made under this section which apply in relation to England;

(b)the first regulations to be made under this section which apply in relation to Wales;

(c)the first regulations to be made under this section which apply in relation to Scotland;

(d)regulations under this section which create an offence or increase a penalty for an existing offence.").

The noble Lord said: This amendment and the others in the group deal with the procedure of making regulations. I believe that the principle of my amendment has been widely welcomed and, in my view, it would meet the suggestion of the Delegated Powers and Deregulation Committee that regulations we bring forward should be subject to the affirmative procedure when they are first made, rather than as specified in the original Bill, and that the affirmative procedure should apply to any amendments in the future to regulations which create new offences or increase penalties for such offences.
The Delegated Powers and Deregulation Committee also called for the affirmative resolution procedure to apply to any regulations which amend primary legislation. As I understand it, that is the aim of Amendment No. 23 (an amendment to my amendment), tabled in the name of the noble Lord, Lord Jenkin of

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Roding. Most of the impacts on primary legislation are identified in Schedules 2 and 3. However, if any more become apparent as the regulations are finalised, we shall endeavour to deal with them in the first set of regulations which would, if the amendment were to be carried, be subject to the affirmative procedure.
It is always possible that some impacts may only arise from subsequent changes to regulations. If these are minor and consequential, I am sure that most noble Lords would agree that it would not be proper use of parliamentary time for them to have to follow the affirmative procedure. Therefore, Amendment No. 21 gives the Secretary of State discretion in those circumstances to use whichever procedure seems appropriate—a choice which will in fact be available for any type of amendment to the regulations or any new regulations.
If we were required to use the affirmative procedure in every case, the pressures would be substantial and would inevitably lead to delays in parliamentary procedure. I should point out that the amendments tabled in the name of the noble Lord, Lord Jenkin, would lead to some slight difficulty of interpretation in terms of the drafting. As it stands, I hope that the use of the word "But" at the beginning of subsection (5C) of my amendment helpfully indicates that this subsection qualifies the choice of procedure provided for in subsection (5B) by introducing the important exceptions where the affirmative procedure would still apply. The deletion of the word would remove that clarification.
Once again, because we have two amendments tabled to my amendment, it might he appropriate for us to look at the implications involved to which noble Lords may wish to speak shortly. Thereafter, because the principle of Amendment No. 21 is broadly acceptable, perhaps we may proceed on the basis that we will actually vote on it on Report, having taken into account any remarks which other noble Lords wish to make today in pursuit of the two amendments to my amendment. I believe that that would be a tidier way to proceed. Incidentally, it would enable me make clear on Report the totality of our response both to the report of the Delegated Powers and Deregulation Committee and to any subsequent discussions which we might have on the basis of that report, as we discussed when dealing with the first group of amendments earlier today. I beg to move.
Lord Jenkinof Roding moved, as an amendment to Amendment No. 21, Amendment No. 22:
Line 8, leave out ("But").
The noble Lord said: In moving the above amendment I shall speak also to Amendment No. 23. Amendment No. 22 seeks simply to remove the word "But" from subsection (5C) of Amendment No. 21. One of the things that I was always brought up to believe is that you do not start a sentence with the word "But". I understand what the Minister said, but I wonder whether it really does help with the understanding of the clause. It would be better English and provide exactly the same meaning if the sentence started with the word "However", followed by a comma. It is rather unusual to find that in primary legislation and I suspect that the right answer is not to have what I believe to be an
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adverb included in the subsection but simply to move straight into the wording. Nevertheless, I shall not spend any more time on that detail.
Amendment No. 23 is infinitely more important. It is aimed at the Henry VIII clause. I understand what the Minister said; namely, that he hopes that all the substantive matters will come in the first set of regulations, which will he covered by the affirmative procedure. He also indicated that new offences and other such matters would also be subject to the affirmative procedure. He then invited us to agree that minor and consequential changes in Acts of Parliament that have passed through the whole process should be undertaken by the negative procedure. It is well known that this Chamber has always objected to that procedure. Indeed, there have been votes in that respect: sometimes they have gone one way and sometimes they have gone the other way.
This is a matter which is eminently suitable for discussion in the forum suggested by the noble Lord, Lord Shepherd, some time ago. I ask Members of the Committee to recognise that the Government seek a power to amend parliamentary legislation by statutory instrument, subject only to the negative procedure. I believe that that requires a very substantial justification. Indeed, if I may say so, in a week during which Members of the House of Commons have been sent home, I find arguments about there being insufficient parliamentary time to be a hit thin. If the matter is sufficiently important to require a debate, time must be found. That is absolutely at the heart of our parliamentary constitution holding the Government to account. It is part of the checks and balances to which I referred earlier. However, let us discuss it in the forum.
I very much welcome what the Minister said about not moving his amendment at this stage. We can look at it in the round at another stage. However, I warn him that I shall wish to press this matter fairly hard in any discussions that we may have that I may be privileged to attend and when we return to the matter again. There may be others who take the same view. I beg to move, as an amendment to Amendment No. 21, Amendment No. 22.
Lord Renton: I have such admiration and respect for my noble friend Lord Jenkin of Roding and such a friendly attitude towards him that it is with the greatest diffidence that I dare to express a doubt about anything that he has ever said or done. However, on this occasion when he is proposing a Henry VIII clause which does not appear to me, nor so far to the Government, to be necessary—
Lord Jenkin of Roding: I am not proposing it.
Lord Renton: What about Amendment No. 23?
Lord Jenkin of Roding: I beg my noble friend's pardon. I seek to insist that the affirmative procedure should apply to any Henry VIII clause. That is the effect of my amendment. If it does not do that, I am afraid my drafting is singularly inauspicious; it is riot right.

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However, I think that is what it does. It makes sure that the exceptions which require the affirmative procedure should include any Henry VIII clause. I am sure that my noble friend and I are absolutely at one on that.
Lord Renton: I am pleased to hear that, but I must say that that was not the way that I read the provision. But I am not saying that my noble friend is wrong. He has perhaps given much deeper thought to the matter than I have. At any rate, on the face of it that is what it seemed to be. If it had that effect, of course I would oppose it. But if my noble friend assures me—I must say I would need a little assurance because that is not the way I have read it—that it does not add to the powers of the Government to amend or repeal existing Acts of Parliament, whether they are to be subject to affirmative resolution or not, I hope I may be forgiven for perhaps misunderstanding his intention, although I must say that on the face of it I did not think I had done.
Lord Jenkin of Roding: The proposed new Subsection (5C) of the Government's amendment states,
"no regulations to which this subsection applies shall be made unless a draft".
That is to say, it introduces the affirmative procedure. The proposed new Subsection (5D) states,
"Subsection (5C) applies to—

(a)the first regulations … which apply in relation to England;

(b)the first regulations … which apply in relation to Wales;

(c)the first regulations … which apply in relation to Scotland;

(d)regulations under this section which create an offence or increase a penalty".

I have sought to insert the words,
"include provisions to amend or repeal any Act of Parliament or which".
I am making certain that anything which seeks to amend an Act shall be subject to the affirmative procedure. That is how it works. I hope that my noble friend is reassured.
Lord Renton: It had not occurred to me that the Government were taking power to amend or repeal an Act of Parliament, but if they are, my noble friend is fully justified in moving his amendment.
The Earl of Mar and Kellie: In Clause 2 we learn that this legislation will be pre-commencement legislation. I am obviously about to ask a question about Scotland. The Minister's proposed new Subsection (5D) (c), states,
"the first regulations to be made under this section which apply in relation to Scotland".
Will the Minister explain to us at what point this legislation would be transferred to the Scottish parliament? In some respects does paragraph (c) imply that the Scottish parliament will not receive this legislation until this United Kingdom Parliament has made the regulations?
Lord Whitty: I think the answer to the noble Earl, Lord Mar and Kellie, is that it is hoped that this legislation will be pursued—although the speed which we anticipated may be slightly modified by the action of Members of the
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Committee today—in the coming two or three months and the regulations will therefore follow from the legislation. The primary legislation will be a matter for the United Kingdom Parliament. The first regulations under that would be subject to the same procedure as elsewhere, but thereafter the Scottish parliament would make the regulations. I hope that that is clear to the noble Earl; if not, I can clarify the matter further in writing. In view of the difference in interpretation between the noble Lords, Lord Jenkin and Lord Renton, and the query of the noble Lord, Lord Jenkin, with regard to the parliamentary draftsman's grammar, I had better withdraw the amendment, consider the points that have been made and I hope return with a watertight amendment at Report stage that will meet with general approval.
Lord Jenkin of Roding: I beg leave to withdraw Amendment No. 22.
Amendment No. 22, as an amendment to Amendment No. 21, by leave, withdrawn.
[Amendment No. 23, as an amendment to Amendment No. 21, not moved.]
Lord Whitty: I beg leave to withdraw Amendment No. 21.
Amendment, by leave, withdrawn.
[Amendment No. 24 not moved.]
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Renton: I wish to make a short point. In view of the splendid attitude of the Minister in deciding to reconsider the drafting of really the whole of this clause and in view of the constitutional and practical importance of the matters contained in it, I think it would be in accordance with our usual practice for the amendments to be recommitted or, if it is decided to withdraw the clause as a whole—which I would very much hope the Government would do as a result of our discussions—for the new clause in place of Clause 1 to be subject to a recommittal. Then we can consider this complicated and important matter in detail with greater freedom at a later stage. I do not ask for an answer now, but I hope that the noble Lord, Lord Whitty, will seriously consider doing that because it would then be in accordance with our usual practice.
Lord Whitty: I am not sure I concur that it is in line with normal practice in these circumstances. Earlier I indicated that I would consider whether any or some of this Bill should be recommitted. However, for the moment I wish to resist the noble Lord's proposal and perhaps we can consider it in the same context as the other matters.
Clause 1 agreed to.
Schedule 1 [Particular purposes for which provision may be made under section 1]:
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 25:
Page 4, line 24, leave out ("or guidance").
The noble Lord said: I shall speak also to Amendment No. 26. This is a short point, but I hope that the Minister will regard it as an important one. Paragraph 3 of the schedule enables the Secretary of State,
"to give directions or guidance which regulators are to comply with or have regard to".
The draftsman may have said that one is not allowed to use Latin now, but the relevant phrase used to be, "redendo singula singulis"; namely, that you applied each part of the thing to the appropriate second part. But I think that that is confusing because the provision we have here gives directions with which regulators must comply and gives guidance to which they must have regard. I believe that these powers are sufficiently different that they ought to be kept separate. The schedule as drafted does not make this clear enough.
Indeed, IPPC is designed to be a flexible, site specific regime that gives the regulator scope to apply regulations that best suit the local environment and the nature of the operation. Here again, this is a case where the European Union has been persuaded to accept British principles which have applied for many years.
Guidance is therefore meant to be non-prescriptive. My amendment makes clear that the regulators need only have regard to guidance, not comply with it. This is a British system which really goes back to the alkali Acts in the middle of the last century. If I may put it in the vernacular, it has always been horses for courses. In general, conditions for being allowed to operate a plant or a process are tailored to the precise circumstances of that plant or process.
Of course the powers to regulate must be flexible enough to allow this—hence, in some cases there has to be a power to give directions to regulators and in others simply to give guidance. They need to be kept distinct, and my two amendments seek to achieve that. I beg to move.
6 p.m.
Lord Whitty: I recognise the intention of the noble Lord to distinguish between direction and guidance. Guidance is not intended to be prescriptive in that sense; it is there for the regulator to have regard to. The effectiveness and efficiency of the control system is, to a large extent, dependent upon the regulators' ability to use their judgment on a case-by-case basis. The noble Lord is correct to say that it should be non-prescriptive. It was never the intention of this drafting to imply otherwise.
I shall perhaps surprise the noble Lord by saying that on this occasion his drafting makes matters clearer. We can perhaps have one decision this afternoon: we are prepared to accept Amendments Nos. 25 and 26, and we urge the noble Lord to pursue them this afternoon.
Lord Jenkin of Roding: I am very much obliged. I do not think I need to say more.
On Question, amendment agreed to.
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 26:
Page 4, line 25, after ("or") insert ("guidance which regulators are to").
On Question, amendment agreed to
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 27:
Page 4, line 43, leave out ("particular") and insert ("appropriate cases").
The noble Lord said: I am much encouraged to express the hope that perhaps the Minister may be persuaded similarly on this amendment.
I said a moment ago that IPPC is in general a site-specific form of regulation and it is very good that this has now been adopted by the European Union. The standard permit conditions may be acceptable in some cases, but this needs to be handled with care. It is only appropriate for standard permit conditions to he applied to sectors where activities are homogenous from site to site. This might include agricultural activities, such as intensive pig and poultry farming, where effluent, I suspect, is fairly standard across the sector. In these cases, the use of a standard permit condition would reduce the administrative burden on the operator and the regulator.
This would be particularly welcomed by small and medium-sized enterprises which do not always have the specialised staff to handle complex IPPC matters. In industry, standard permit conditions might be appropriate in processes such as paint spraying or other similar processes using solvents. It would not be appropriate to apply standard permit conditions to complex processes such as those undertaken in the chemical industry or where the processes or emissions vary from site to site. To try to apply general conditions would be contrary to the site-specific approach which is at the heart of IPPC.
Certain standard permit conditions have been shown to work in other areas outside IPPC. For example, the existing arrangements between the Environment Agency and the water industry cover discharges under the urban waste water treatment directive. The standard clause may require a waste water effluent plant to install 6rrim fine screens at the outlet to a works. Standard clauses like this should only be used in sectors where it is clear that a blanket approach may be necessary to achieve environmental quality standards through engineering solutions.
The purpose of the paragraph is to give guidance to the framers of the regulations. The Bill, as drafted, refers only to certain cases "in particular". With great respect, that gives no guidance at all to those who have to draw up the regulations. My amendment suggests that instead we use the words "in appropriate cases". That 'will focus the draftsman's attention on the need to ensure that the powers apply only where it is appropriate that they should do so. It would give the ability to challenge a regulation or a general permit condition on the ground that for a particular operator's installation the general condition is not appropriate. It is hard to see how the words "in particular" in the Bill could achieve those purposes. I think my amendment is an improvement and I hope that the Government will be able to accept it. I beg to move.
Baroness Farrington of Ribbleton: The noble Lord makes a point with Amendment No. 27 about the importance of site-specific determinations. However,

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there are some sectors where operators are particularly homogenous and where it makes sense to develop standard permit conditions. It would allow for a quicker determination of "best available techniques" in those sectors and should lead to a lower cost of regulation. The proposals have been welcomed by respondents to our consultation exercises who might benefit from them.
Nevertheless, the site-specific principle will remain paramount and the use of standard procedures will always be optional on the part of both regulator and operator. There will also need to be a certain level of support within a particular sector for standard conditions to be considered. These safeguards will ensure that they are only ever used when appropriate.
As the Bill currently stands, the sub-delegation power in Clause 1 (4) (a) which was considered earlier would confer a discretion on the regulators to come up with conditions which are appropriate in each case and to use standard conditions only where appropriate. I can assure the noble Lord that the Bill protects the current flexibility of the regulators to determine permit conditions, which we both wish to retain. In urging the noble Lord to withdraw Amendment No. 27, we will obviously consider carefully before Report stage the detailed points he has put forward.
The Duke of Montrose: Perhaps the Minister will clarify at this stage what the introduction of these permits will mean to people on the ground. As has been drawn to your Lordships' attention earlier, this is a skeleton Bill—and perhaps I am going into rather more detail than I should at this point—but can the Minister say something about how the permit implementation might be introduced?
The notes on the Bill say that it will take the place of Part II of the Environmental Protection Act. As a farmer, I have to declare an interest in rural and agricultural pollution. The Department of the Environment is currently issuing permits using the previous legislation under the ground water regulations. It is suggested that authorisation gained under this ruling might be accepted as a permit under the new IPPC regulations when they are introduced. Is it the Government's intention that this method of excluding the necessity for further application should be carried forward? Another question for those involved in an industry as complicated as farming is whether multiple disposals require multiple permits.
Baroness Farrington of Ribbleton: If Clause I (4) (a) were removed from the Bill, which has been pressed on the Government as a response to the Select Committee on Delegated Powers and Deregulation, we would need to amend Schedule 1 carefully to retain the flexible approach which has been sought in the consultation with industry. With regard to the specific question on the application for farming and whether a groundwater permit will count for IPPC, no, it must cover all modes. That is my understanding, but if that is incorrect I shall
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write to the noble Duke. In the light of those replies, I hope that the noble Lord will feel able at this stage to withdraw his amendment.
Lord Jenkin of Roding: I am grateful to the noble Baroness, who seems to be as forthcoming as her colleague in undertaking to consider what we have said. I can understand that all the respondents are pleased with the way that this is being carried out in general, but it is up to us to make sure that we get exactly the right words. The noble Baroness used the word "appropriate" three times in her speech, indicating that "appropriate" really is the most appropriate word. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 28:
Page 5, line 6. leave out ("Restricting") and insert ("Controlling").
The noble Lord said: We are dealing here with changes in operations or changes to plants. Article 12 (2) of the directive lays certain duties on member states, including the duty to take steps to ensure that,
"no substantial change is made without a permit".
By using the word "restricting" in the corresponding paragraph of the Bill the draftsman is implying that changes are bound to damage the environment and that therefore they have to be restricted. In practice, of course, many changes may well reduce emissions or improve the quality of discharges or even eliminate some emissions altogether. If we were ever to move to an effective system of tradable permits, many changes would achieve just that. Therefore, to use the word "restrict" would not be appropriate in the circumstances. Of course a fresh permit or a permit variation would be required but that would not be to restrict the making of changes. It would be part of a system of controlling changes.
The main purpose of the directive, of the Bill and of the regulations is to protect the environment. Appearing to restrict beneficial innovations would be bizarre and counterproductive. That is why my amendment proposes the word "controlling" instead of "restricting". I hope that the Government may feel able to take a sympathetic view. I beg to move.
Lord Renton: It is not often that one word replaced by one other word has such vital importance. I warmly support my noble friend on his amendment. I think it is worthy of support from the Government.
Baroness Farrington of Ribbleton: I must resist this amendment. The directive, for good reason, requires that a regulator should have the power to restrict, if necessary, changes which an operator wishes to make to an installation. This is not a new power. It is also an essential tenet of the current system which must be maintained. The directive requires that no change can take place without the regulator first being notified. For substantial changes to the substances or amounts emitted from an installation the operator must first obtain the regulator's authorisation to change the permit conditions.

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Having said that, it is not the intention that the pollution prevention and control system should handicap industry by imposing unnecessary delays or restrictions. The flexibility of the system means that any proposals for changes can be assessed sensibly and on a case-by-case basis. The general presumption in the vast majority of cases is of course that, if a change is compatible with best available techniques, it can go ahead. That would be overridden only if there were some other good environmental reason for preventing the change; for example, if it would result in a breach of European Community environmental quality standards, such as the standard set for local air quality.
We must remember that we are talking here about a fundamental feature of pollution control which the noble Lord's amendment would remove. The regulator must be able to decide whether to allow a change to proceed which would have an effect on the environment. If an operator is not prepared to offer to carry out a change in a manner compatible with best available techniques, the regulator must have the ability to refuse to allow the change. The amendment is not compatible with our obligations under the directive or with a credible system of pollution control. Therefore, I ask the noble Lord to withdraw it.
6.15 p.m.
Lord Jenkin of Roding: I shall want to study that reply rather carefully. I can see no reference to the word "restrict" in the Council directive. It may be there. It is a long document and perhaps I have not looked at the right paragraph. The noble Baroness is right to say that the regulator must have the power to refuse a permit for a change. None of us would quarrel with that. However, I still maintain that there is art unhappiness about the word "restricting" which "controlling" does not convey. There may be a better word still. I shall want to study with my advisers what the noble Baroness has said and see whether we can come up with a better solution. In the meantime—
Lord Renton: Before my noble friend withdraws his amendment, I would just mention that the word "restricting" is entirely negative in its effect, whereas the word "controlling" can be positive if necessary.
Baroness Farrington of Ribbleton: I do not know whether it will help the noble Lord, Lord Renton, but the sentence included the words "have the power to restrict" rather than "always restrict".
Lord Jenkin of Roding: I shall study the noble Baroness's words. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 29:
Page 5, line 24, leave out from ("substances") to ("how") in line 25 and insert ("and of').
The noble Lord said: In moving this amendment, perhaps I may speak also to Amendment No. 34. We now come to the question of charges on operators for the cost of regulation. Paragraphs 9 and 10 of Part I of the schedule deal with schemes for charging fees and charges to cover the cost of the regulation process. Paragraph 23 in Part II is supplementary in requiring, inter alia, that the fees and charges shall cover specified expenditure. These two paragraphs raise a serious issue which deserves airing in a substantially more populated environment than we have today.
Under the Environmental Protection Act 1990 there are already powers to make changes to charges of this kind, so the power which is being sought in the Bill is not of itself new in principle. However, in the past few months, if I may coin a phrase, under this Government, arguments have broken out over what costs it is proper to cover by charges to operators and what costs should be met from public funds. Clause 8 of the Environmental Protection Act 1990 was limited and quite specific. It states:
"The Secretary of State may … make … a scheme prescribing—

(a)fees payable in respect of applications for authcrisations:

(b) fees payable by persons holding authorisations in respect of, or of applications for, the variation of authorisations; and

(c) charges payable by such persons in respect of the subsistence of their authorisations".

Those words are quite specific—authorisations, variations and subsistence, which is to say on-going costs. That is not present government policy and it ought to be recognised that there has been a substantial change.
Last November, the Director General of the CBI, Adair Turner, wrote to my noble friend Lord De Ramsey—who, as he reminded us earlier, was chairman of the Environment Agency—to complain about increases in the charges. I think that it would be proper to read Mr. Adair Turner's letter virtually in full:
"The CBI has recently come upon a paper … from the Agency's Finance Director. It advocates increases in charges which in all cases exceed inflation and, in some, of up to 15 per cent. This statement of intent follows increases of up to 14 per cent. in the current financial year.
"The paper lists the factors driving the increases. It assumes inflation of 3 per cent., which is above current levels, and asserts that business chargepayers should support higher pension contributions by the Agency, following the removal of tax credits, and further year 2000 compliance expenditures. There is no justification of why business chargepayers should pay for items which are arguably part of central overheads, nor is there any indication of how big a contribution business is called upon to make in relation to that coming from the Agency's grant in aid.
"At a time when the economy is likely to slow and parts of manufacturing are in recession, a further year of increases in charges on the proposed scale is unacceptable. I urge you and your colleagues to challenge the proposals and rein them back. If the Agency is bidden to assume new responsibilities, they should be borne by the taxpayer, not by very heavy imposts on business
"I am copying this letter to Michael Meacher and John Battle."
That was followed by a much longer and more detailed letter from the CBI to the Environment Agency's finance director, Mr. Huntley. The Committee will be

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relieved to know that I do not propose to read the whole of it. However, I must quote one passage, on page 2:
"The letter accompanying the consultation document indicates that by far the greatest proportion of the increase of 15 per cent. is due to a shift"—
I ask the Committee to hang on to the word "shift"—
"of the funding of chargeable activities from Government grant-in-aid to charges; i. e. of the 15 per cent. 11 per cent. is due to the shift, with 4 per cent. due to the expected rise in Agency's costs. The consultation document notes that this shift from grant-in-aid to recovery occurred as a result of a review by the Government and its Agencies under the Comprehensive Spending Review. The polluter pays principle is well understood by business but there is totally inadequate explanation of what element of cost of services provided to business were not being borne by business. Until there is far greater transparency on the part of the Agency in terms of its cost structure, and the actual items that are chargeable to IPC operators. there will be no confidence that these Agency charges are appropriate. It is not a foregone concept to business that licensing and authorisations to operate within a framework of high legal and environmental standards is a value-added service provided by regulators."
We find ourselves with the concept of a shift. That letter argues in effect for the two amendments that I tabled. If the Government are abandoning—as appears to be the case, although I have detected no public announcement to that effect—the specific and limited charging regime in Section 8 of the 1990 Act, what are the new limits?
Paragraph 10 adds three new heads— (a), the testing or analysis of substances; (b), validating such testing; and (c), assessing how the environment is affected by any substances. It goes on to say that charges for those may be included in the scheme.
Sub-paragraphs (a) and (b) may be acceptable, provided they are limited to substances that are actually used by applicants or those with permits but (c) appears totally open ended. It goes far wider and could force industries to pay for other regulatory activities that have nothing to do with those industries.
The polluter pays principle is sound. The issue is what the polluter should be expected to pay. Amendment No. 29 is inelegantly drafted but the intention should be clear. Its purpose is to limit assessing under sub-paragraph (c) to substances tested under (a) or validated under (b). The charges levied by regulators should be ring-fenced and spent only on defined regulatory activities, not used to subsidise other, unrelated activities outside the context of process authorisation. That was the position under the 1990 Act and should remain so under the Bill. If that is not done, increases of 14 per cent. or 15 per cent. per annum of which the CBI has complained are yet another surreptitious tax increase, about which we have not been told.
The second complaint is lack of transparency. Industry does not know the costs that it is required to pay. The CBI believes that there is a serious lack of transparency surrounding the charges that the Environment Agency and SEPA—the Scottish body—levy on business. The agencies do not publish sufficient information to enable business or other interested bodies to judge the proportion of costs of regulating environmental licences that the agencies are recovering
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from industry. Nor do they disclose how that income is spent. That is a matter of widespread business concern, following the substantial increases to which I referred.
The CBI's opinion is that the Environment Agency in particular has failed adequately to justify the reasons for the increases and that it is impossible for businesses to make a judgment as to whether those charges are set at the appropriate level because of the lack of clear, published accounts. The CBI strongly recommends that that situation is not allowed to continue. Enforcing authorities should be required to publish proper accounts of their income and the Bill should specify how it is to be spent.
My second amendment requires the regulators to publish separate annual accounts for every scheme so that each is ring-fenced. Given the profound anxiety that the huge increases have created and the Minister's repeated profession of the wish to engage in open government, that is the least they should do.
If those accounts show that the shift referred to in the correspondence that I quoted means that industry is expected to pay far more than the direct cost of being regulated, as was the case under the 1990 Act, Ministers must come clean. They must acknowledge that it is in reality a tax increase introduced at the instance of the Treasury.
Section 8 of the 1990 Act was clear, specific and limited, and was acceptable. This legislation seems to give the Government an open-ended licence to allow the regulators to charge what they like. The shift described in the letter that I have quoted demonstrates all too clearly that that is what they want to do. It is up to Parliament to expose this for what it is and to put limits on this new power to tax industry. My two amendments may seem a modest step in that direction, but they bring to light a serious situation. I beg to move.
6.30 p.m.
Baroness Farrington of Ribbleton: The Government are under an international obligation to introduce a mandatory scheme to control the use and discharge of chemicals into the marine environment by the offshore oil and gas industry. Under the scheme, which is already accepted by the industry on a voluntary basis, individual chemicals and mixtures of chemicals must be assessed for the potential harm that they might cause and the limits put on their use.
The purpose of paragraph 10 of this schedule is to enable the costs incurred by authorities as part of the permitting process to be recovered. It is not intended that the costs of general research or work which is not in anticipation of or in connection with an authorisation should be recompensed.
An example may serve to illustrate the use to which these powers might be put. Under the required mandatory scheme it is intended to reduce the cost to industry by keeping a register of categorised chemicals, thereby avoiding the need for the impact of a chemical to have to be demonstrated each time a permit is applied for. The categorisation will be made by the regulator or person authorised based on the results of standard tests undertaken on behalf of the manufacturer at independent

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laboratories. Clearly there needs to be a means of recovering the small cost of perhaps a few hundred pounds associated with categorisation.
When issuing a specific permit, the regulator would use the register as input to his assessment of the impact of the risks associated with using the specific cocktail of chemicals proposed. That assessment would take the form of applying analytic techniques as against further laboratory testing or research. Again, provision must be made to recover the moderate costs involved in that assessment.
As I hope that example illustrates, there is no intention to use these powers to recover the costs of general research even if it is in the same broad area as the use to which the permit is to be put. Indeed, my understanding of the current wording of the paragraph is that it would specifically prohibit such an exercise.
The second amendment tabled by the noble Lord, Lord Jenkin, relates to the transparency with which the regulators set charges for permits. I entirely agree with the sentiment behind the amendment. Companies which pay charges to the Environment Agency and the Scottish Environment Protection Agency should be able to see how those charges are justified. The agencies' pollution control charges are made currently in accordance with Sections 41 and 42 of the Environment Act 1995. Each charge relates to the particular purpose or function for which it is raised, and income from one charge is not to be used to subsidise charges for another. The agencies' pollution prevention and control charges will be made under the same existing legislation and not under the provisions in this Bill.
The Government will be asking the agencies to provide in their corporate plans greater clarity and detail in their charging proposals. To make that clear, we shall ask that the objective of transparency in the presentation of expenditure plans charging proposals is included among the 10-point action plans which form the heart of the corporate plans. We do not need to have the powers provided by this Bill in order to do that. The noble Lord's amendment is therefore unnecessary. We shall nevertheless be acting to ensure that its intentions are fulfilled. For that reason I shall urge him to withdraw the amendment.
The noble Lord, Lord Jenkin, raised the issue of increases in agency charges. Regulators are required to recover in full from permit holders the costs incurred to monitor and administer the pollution control system. The Government's Comprehensive Spending Review last year found that the Environment Agency was not doing so in the case of an integrated pollution control system and that the taxpayer, through the agency's grant-in-aid, was subsidising permit holders by around £3 million a year. Far from being a tax increase, this is the withdrawal of the subsidy. The Government propose to address that deficit in a way that would minimise the impact on industry, in particular by phasing the increases over two years. The increases were well foreshadowed in advance of the agency's corporate plan and were explained in consultation exercises. The Environment Agency's proposal for a 15 per cent
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increase this year represents the final stage of the recovery of the subsidy. My department is currently considering responses to the consultation exercise.
The noble Lord also raised the issue of pension costs. The charges share a proportion of the agency's administrative costs and overheads with grant-in-aid from the taxpayer. A proportion of the agency's administrative costs are part and parcel of its function in controlling pollution and should rightly be passed on to the polluter. Every effort is made to reduce overheads using total administrative cost control. In fact, TAC is continuing to fall, as is the proportion of the agency's costs, due particularly to increases in efficiency and rationalisation of accommodation. The Environment Agency envisages year on year efficiency savings of £12 million—about 2 per cent. of its running costs.
The Scottish Environment Protection Agency currently prepares a summary in its accounts of each of the charging schemes. I suspect, however, that industry is much more likely to be interested in the contents of the agency's charging proposals rather than looking at figures after the event. The accounts are a rather formal device and may not allow the flexibility required to meet the information needs of industry. Responding to specific points with appropriate tables may be of more value and more appropriate.
Should there be any particular points that the noble Lord wishes to raise in detail which I have not covered in my reply, I shall of course write to him. But in the light of my reply, I hope that he will feel able to withdraw his amendment.
Lord Jenkin of Roding: I am grateful to the noble Baroness for a full and considered reply. I recognise that she and her advisers have clearly understood the purpose of these two amendments.
To take the second amendment first, the provision of annual accounts was in a sense a peg on which to hang the argument about transparency. I wish to study the Minister's words carefully. As I understood her, she appears to accept the argument that there is a need for much greater transparency. She also appears to accept the argument that the fees paid by an operator should relate only to the costs incurred by the regulator in regulating that operator. If that is indeed the case, much of my argument has been met. I merely point out to the noble Baroness that the main industrial representative body, the CBI, indicated as recently as last month--in the letter that I quoted earlier from Dr. Janet Asherson, who heads the environment section—that it has as yet absolutely no confidence that it has the information that would enable that process to be monitored in any way. It seems sensible that there should be an early meeting between representatives of the CBI and representatives from the noble Baroness's department so that its concerns can be aired.
It is interesting that in her letter Dr. Janet Asherson states that the CBI is extremely concerned that there appears to be "inadequate mechanism" for dialogue between the agency and business in respect of charges and that the CBI would expect a fuller explanation of the justification for the proposed increases. That does

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not apply only to the Environment Agency; there are no doubt other regulators as well. It therefore seems that the least the Government ought now to be able to do is to follow this matter up and see that these deeply felt concerns are properly aired.
The noble Baroness's opening words were reassuring. It is not intended to cover the general costs of the Environment Agency in the charges. She made that clear. As I understood her, it is to be only in relation to the regulation process. That is reassuring.
We shall want to look carefully at the rest of what the noble Baroness said. She read a carefully prepared statement which was technical and went into some detail and I am not sure that at this hour of the night I was capable of absorbing it. I ask her to believe that out in the country there is considerable concern. People have faced two years of substantial increases in charges for which they appear to have had no sufficient justification. The noble Baroness's speech appeared to offer some justification. If there was indeed a subsidy, it may well be right that it should be dealt with. However, the people have no information as to whether or not that is true; they have to take it on trust. Therefore these two amendments hang together and we shall want to consider the matter very carefully. Having said that, I beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
Lord Luke moved Lord Luke moved moved Amendment No. 30:
Page 5, line 38, at end insert ("including, in particular, the impact of any regulations on the agricultural and food industries").
The noble Lord said: This amendment seeks to ensure that food manufacturing and agriculture receive as much advance warning as possible of regulations under the new regime which may affect them. I hardly need to say that farming is in very poor shape generally and any new impositions by way of extra costs could cause some operations, at least, to close altogether.
As has been said by several Members of the Committee, this is a skeleton of a Bill and I should therefore like to ask some questions and briefly give detailed examples to give point to the anxieties widely felt, particularly in agriculture.
As a matter of definition, does pollution of the air in the countryside mean "smelly"? I take it as such as applied to sewage farms and the laying of shoddy and slurry. Is it proposed that large dairy operations or large flocks of sheep should be included under regulations? As the Minister knows, regulations already exist to prevent livestock units becoming a "nuisance". Is that another word for pollution through smell, noise, flies, rodents and dust?
Manure is to be incorporated immediately into the soil, except on grassland. Is the Minister aware that this makes very little sense in that units providing livestock manure are cleared out on to arable land, usually in September and in October? It is impossible to follow a spreader at the same speed as not only are good soil conditions for spreading not good conditions for preparing a seedbed but also the tractor doing the
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spreading is often the same tractor that will be used for incorporating by pulling a plough or cultivator some time later.
While incorporating manure into the soil rapidly may minimise the release of ammonia into the air, it will not minimise the smell, which comes from the spreading of the manure, and rapid incorporation will increase the amount of ammonia going into the groundwater.
With poultry units the best way to regulate smell and create dry manure is to use cages, which, by virtue of the high density of the birds, maintain a high house temperature, but they are to be banned. On the other hand, barns and free-range poultry farming create much more smell and much more ammonia. Where does the priority lie—with prevention of pollution or with animal welfare?
I am sorry that some of this is rather detailed and technical, but I think it shows how important proper communications are between the regulatory authorities, whether at national or local government level, and the farming industry.
I could give examples from the food industry, but I shall spare the Committee that except to remind Members that if heavy new manufacturing costs are incurred as a result of the new regulations, they are bound to affect the price of food to the consumer. I beg to move.
6.45 p.m.
Lord Whitty: I never have the temerity in this Chamber to claim to be an expert on agriculture. I think we need to concentrate only on those areas where there are agricultural and food installations to which the regulations will apply and to which regulations have not previously applied.
As I understand it, we are bound under the directive to include within the pollution control system intensive pig and poultry units above certain thresholds. Those thresholds are quite high. We expect about a thousand of the larger pig and poultry farms in England to be affected, as will certain parts of the food industry, slaughterhouses and renderers which exceed prescribed thresholds. Apart from those fairly large operations, there is no extension into the other areas to which the noble Lord referred. Installations of that size are substantial, with significant potential to pollute land, water and air and it is right that they should be regulated in the same way as other industries with similar potential.
We agree, particularly in the present state of the agricultural industry, that any regulatory regime should seek to minimise burdens and costs while still remaining effective. The agriculture and food and drink industries will be subject to the same requirements of "best available techniques" as other sectors. The Ministry of Agriculture and the Environment Agency have been assisting the agriculture and food and drink industries in considering measures for minimising emissions which might fall within the new pollution control regime. We are also looking at what is done in other member states to ensure that, as far as possible, we retain a level playing field for our industry, though it is the case that

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prior to this directive some member states already had strict controls in place on the storage and spreading of manure and slurry
The regime is not intended to exclude all country smells. It applies to intensive farming and to large installations and therefore is aimed at dealing with the greatest inconvenience to both country dwellers and others, but it is not intended to restrict the distinctive odour of many parts of our countryside.
When dealing with new regulations, particularly when they apply to sectors which have not previously been covered, we are committed to publishing regulatory appraisals of all proposals which will have an impact on businesses, and that includes the agricultural business. We have published a regulatory appraisal of the Bill and in the documentation there is a draft regulatory appraisal of the regulations we propose to make. Those are already out for public consultation. However, it is axiomatic with a pollution control system based on a flexible concept such as "best available techniques", where what is required varies site by site as well as industry by industry, that there is little that is specific which one can say in advance about the impact the system will have. As far as industry is concerned, and the agricultural industry in particular, it faces a choice between up-front, explicit emission levels, which can be costed in advance, and a flexible, site-specific system, which by definition cannot be costed in advance.
Industry will, oi' course, be fully consulted as the guidance is drawn up. So far, all indications are that the agricultural industry and the food and drink sectors, which are affected for the first time, prefer the latter approach— a site-by-site approach—rather than an a priori laying down of emission standards, even though the preferred approach involves some degree of uncertainty. We are involved, and will continue to be involved, in consultation with, and providing information to, the sectors concerned. It may be that in the light of that consultation certain changes to our approach will be necessary, but the noble Lord can be assured that that process is taking place and therefore I believe that his amendment is not necessary.
The Duke of Montrose: I thank the Minister for reassuring the Committee that in the matter of smells the Government are moved to consider merely large pig and intensive poultry units. At this stage we are not sure what the Government mean by "large", but obviously the noble Lord has a specific level in mind in referring to the numbers that may be affected. Even so, the issue in agricultural terms is not entirely clear because the third consultation paper relating to the IPPC directive covers industries that produce significant levels of biological and chemical oxygen demand (BCODs). These are listed as not being trivial emissions under the IPPC regime. One of the difficulties for agriculture is that a great many of the activities produce matter that can be considered as biological and chemical oxygen demand material. The phrase that is used is "emits
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significant quantities". One would like to know at what level the Government pitch their idea of "significant quantities".
Lord Whitty: As I understand the situation, the established thresholds are a read-over from those in other sectors. It is therefore that which has led us to say that only about 1, 000 pig and poultry units will he directly affected by the regulations. I understand that the approximate figure for pigs is 2, 000 production pigs or 750 sows. The approximate threshold for poultry is 40, 000. If there are more complicated read-overs than that I am afraid that the noble Duke will have to await clarification in writing.
Lord Luke: I am grateful to the noble Lord for his reassurance on the several matters that I raised. I believe that my noble friend the Duke of Montrose is also happy. In those circumstances, although I reserve the right to pursue this matter at a later stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 to 34 not moved.]
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 35:
Page 7. line 22, at end insert—
("Restrictions on disclosure of information
. Sub-paragraphs 12 (b) and (c) do not require the disclosure of commercial information the disclosure of which would significantly harm the legitimate business interests of the business from whom the information was initially obtained.").
The noble Lord said: Amendment No. 35 raises the question of commercial confidentiality. My central point is that this should be in the Bill and not left to he dealt with as currently proposed. In the Environmental Protection Act 1990 Section 22 refers to the exclusion of confidential information. Section 20 (1) of that Act imposes a duty on an authority to maintain a register containing matters prescribed in regulations. The subsequent regulations which introduced the register (SI 1991 No. 507) direct the authority to maintain particulars subject to Section 22 of the Act. I believe that this provision should also be in the Bill.
This matter is raised with me at the instance of the offshore oil and gas producers whose industry is regulated by a different department. I believe that they are legitimately anxious. The regulator will need to have a good deal of information, including accounting and technical information. It is very important that the regulator recognises that some of this information may give rise to considerable intellectual rights of commercial value that must be protected. I give an example. If an operator is to justify a decision to modify an offshore power generation plant the regulator will require significant levels of detail of the technical and economic state of the installation, the reservoirs from which it gathers its fuel and the power plant itself. This will inevitably contain information of intellectual and commercial value, particularly to the power plant supplier, and information about the performance of the oil or gas reservoirs that feed the installation. The regulator must be aware of this and take action to protect

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the information which the industry advises is confidential. Such information disclosed by the operator should not be held in registers that are open to the public. My amendment is intended to make that perfectly reasonable requirement a statutory obligation in the same way that has been done in earlier legislation. I beg to move.
Lord Whitty: I trust that I can reassure the noble Lord in one respect. I appreciate that his example relates to the offshore oil industry. However, referring to the draft regulations that have already been produced, Regulation 29 uses a form of words that in effect, reflects Section 22 of the Environmental Protection Act 1990 to which the noble Lord referred. It is obvious that in ensuring that the public have access to information the presumption must be that details about emissions are as full as possible. However, it may well be necessary to exclude information that the operator deems, and the regulator agrees, is commercially confidential and to give a right of appeal to the Secretary of State in cases where the operator and the regulator take a contrary view.
That provision is clearly reflected in our draft general regulations. I have every reason to believe that it will be similarly reflected in the DTI's system that applies to offshore installations. I hope that in the light of that reassurance the noble Lord will feel able to withdraw his amendment.
Lord Jenkin of Roding: I am not wholly satisfied. The previous government thought it right to deal with this important matter in primary legislation. It would be perfectly simple to include it in this Bill. I shall study carefully what the noble Lord said, but as I listened to him I saw absolutely no reason why this matter should be left to regulations. It is a sufficiently important matter that applies across the board to be within the main body of the legislation. Perhaps the Minister is prepared to go a little further and say that he will look at it again. This is regarded as of enormous importance by industries of all kinds. I believe that that is the least that they can reasonably expect.
Lord Whitty: In the spirit of this afternoon, noting the noble Lord's point that he reflects the widespread view of industry, I am certainly prepared to look at it again. However, I would have hoped that the good intentions of the Government were already clear from the draft regulations that are available, which I have every confidence will be repeated elsewhere. As indicated by my earlier comments, all new regulations will be subject to the affirmative procedure of the House in any case. I shall however undertake to consult my colleagues in relation to the noble Lord's request.
Lord Jenkin of Roding: I am most grateful to the noble Lord. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 36:
Page 7, line 39, at end insert—
("Matters pending appeal
Where an appeal has been brought under paragraph 19, the operator may continue to operate an installation until the appeal has been heard and determined.").
The noble Lord said: I beg to move Amendment No. 36. The intention of the amendment is to try to avoid the problems that arise which can be quite serious if a plant or operation is required to be shut down pending an appeal. In the case of a dispute regarding enforcement notices businesses should be reassured that additional and unnecessary costs will not be imposed upon them. The noble Lord himself indicated at Second Reading that the Government wished to implement a system that minimised the burden of compliance. I believe that this amendment is therefore entirely in tune with the Minister's wish.
It is possible to envisage that an over-zealous regulator may require business to adopt costly changes that may not be justified and should be challenged. The cost of suspending operations could be substantial in monetary, and probably employment, terms and could also introduce safety aspects. In the extreme, it could result in the closure of the installation. Again this is a matter which particularly affects the offshore oil and gas industry. It has no desire to see pollution continue while it drags out an appeal. That is not the spirit in which that vitally important industry conducts its business. Where it is obvious that significant environmental damage could be sustained, the industry would expect regulators to act robustly. But there are situations where there might be differences of view of the level of impact of emissions from, say, a power plant; and it is important that the plant should be allowed to continue to operate until the appeal is heard.
These are continuous processes, closely integrated with all parts of the plant. To require one part of it to close down might well involve the closure of the whole. It could imperil the safety of the whole plant and it could lead to the situation where it might never be able to be reopened. If one is extracting, perhaps in the secondary or tertiary phase, oil from a deep oil reservoir, and one has complicated arrangements to ensure that the oil comes to the surface, once one stops one probably cannot start again. It seems to me that account needs to be taken of that kind of situation. It could have serious consequences for the industry if a regulator required closure pending appeal.
There may be serious health and safety aspects for operating personnel, not only offshore but also onshore. The chemical industry has made a similar point. Many of its plants operate continuously and can be shut down carefully in a programmed manner with plenty of notice so that it can be done safely and properly.
The amendment proposes statutory provision for those circumstances. I hope that the Government are prepared to consider it sympathetically. I beg to move.
7 p.m.
Baroness Farrington of Ribbleton: In speaking to the amendment, perhaps noble Lords will forgive me if

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I thank the noble Lord, Lord Jenkin, for his earlier comment on the detail of the response made available by the department. The department always wishes to respond fully to points made at any stage in a Bill when amendments are moved, not only because it wishes fully to inform members of your Lordships' House but also because of the level of knowledge among noble Lords. The noble Lord, Lord Jenkin, is one clear example of that.
Under Section 15 of the Environmental Protection Act 1990, operators are able to appeal to the Secretary of State against decisions taken by the regulator; and that right will remain under the new regime. The detail of the appeal system is to be included in the regulations for which the Bill provides. Our intentions are set out in Regulation 23 in Schedule 8 of the draft regulations consultation which ends on 28th February. They largely reflect the current position which I think it is important for me to outline briefly.
If an operator appeals against a decision to revoke the permit—the most serious action which the regulator could take short of prosecution—the revocation would not take effect until the appeal was finally determined. I hope that that reassures the noble Lord.
Where a variation, enforcement or prohibition notice has been served against an operator, bringing an appeal does not currently prevent the notice from taking effect. We propose to maintain that provision.
A prohibition notice is served where there is imminent risk of serious damage to the environment. That emergency safeguard would be ineffective if the notice were to be suspended while an appeal was heard. In the case of a variation notice served, for example, because a cleaner piece of technology had become available, the operator should also comply pending any appeal. The alternative invites wholesale abuse of the appeal system with appeals likely to be lodged as a matter of course.
The system has worked well and we see no need to change it. I hope that the noble Lord, Lord Jenkin, will feel able to withdraw the amendment.
Lord Jenkin of Roding: The noble Baroness has argued a case which we shall wish to examine carefully. On the face of it, it seems to deal reasonably with the alternative situations: first, where it would be perfectly reasonable to expect a plant to operate pending an appeal; and, secondly, the wholly exceptional emergency prohibition notice required to deal with the serious risk of damaging pollution. Somewhere a line has to be drawn.
We shall study carefully what the noble Baroness said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1, as amended, agreed to.
Clauses 2 and 3 agreed to.
Schedules 2 and 3 agreed to.
Clause 4 [Short title, interpretation, commencement and extent]:
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 37:
Page 3, leave out lines 16 to 19.
The noble Lord said: We are nearing the end of a marathon Committee stage which seems to have gone on for three times as long as anyone anticipated. I claim my share of the blame for that.
This is a probing amendment. I have already referred to the offshore oil and gas industry in a number of earlier amendments. I do not seek to argue that it should not be subject to environmental controls. Indeed, the UK offshore oil and gas industry already complies with over 200 environment regulations, 35 of those international, 48 derived from the European Union, and 159 UK regulations.
It would be helpful to clarify whether it is the Government's legal advice that the offshore industry comes within the terms of the directive. I also wish to probe the Government's intentions about their plans for the environmental regulation of the industry.
I have studied Directive 96/61/EC from beginning to end and I can find no reference to the industry. A great many other industries are described and mentioned in the various annexes, in particular, Annex 1. There is nothing about the offshore oil and gas industry.
The European Commission's Large Combustion Plant directive (88/609/EEC), which broadly has the same objective but is limited to atmospheric conditions, specifically excludes the offshore industry. I have already noted that the industry is directly regulated by the DTI, and that it has as yet seen no draft regulations.
However, there are other worrying indications. I am advised, for instance, that Denmark has indicated that it will not implement the IPPC directive offshore. What about other countries? The British Government's position reflects the stand they took with regard to the Environment Impact Assessment Directive. In 1998 the UK Government introduced regulations requiring consideration to be given to carrying out environmental impact assessment before undertaking certain offshore oil and gas activities. Those British regulations are applied to all drilling activities on the UK continental shelf. Virtually all other EU member states take the view that the directive does not apply to exploration drilling but only to development drilling after hydrocarbons are found. If the UK is going it alone and imposing more intensive environmental control on the offshore industry, will not this have significant serious implications for UK competitiveness? On Second Reading, the noble Lord, Lord Whitty, said that the Government wished to implement legislation in a way that minimises the burden of compliance. The industry very much welcome that, but it is concerned that there is a differential between the way in which the UK Government and others are interpreting the directive. It could be a very serious matter. When one thinks in terms of the enormous economic importance of the offshore oil and gas industry, one would have thought that the Treasury might have been concerned too.
It is clear from recent press reports that the oil industry is facing major structural changes in order to meet the challenges which exist under the current difficult trading conditions. Only last week a major oil company published its first ever major quarterly loss. It is having to meet the challenges of current difficult trading conditions in order to remain competitive into the next century. A recent report from Wood MacKenzie suggested that investment committed to new projects in 1998 was only £1.5 billion, compared with more than £4 billion in 1997. That is mirrored by a 35 per cent. decrease in drilling and exploration of appraisal wells last year. Therefore, a sustained period of low oil prices will not provide a reasonable or adequate rate of return for investors and we could see investments being channelled to other lower cost and less regulated provinces overseas.
The effect of that would be devastating on jobs in north east England, Scotland and London. What is the Government's plan to ensure that all EU countries have comparable levels of environmental regulation in this very important area? If this is not going to happen, and countries such as Denmark are simply going to go it alone, what will the Government do to safeguard the competitiveness of the UK industry?
I am aware of the initiative which the Government are taking to investigate, through the Government and the oil and gas industry taskforce, the means by which the life of the UK Continental Shelf can be extended and can survive current low oil prices. I am sure that Ministers will recognise that this laudable objective will not happen while at the same time the Government are imposing heavier regulatory burdens on the British industry than are being imposed by partner countries on its competitors. Can the Minister indicate the current status of the work of the taskforce? Is consideration of the impact of IPPC regulation on the industry being included in its work? Will the industry's regulators be obliged to take account of the recommendations of the taskforce?
I hope that I have said enough to indicate that the industry has very real concerns and I look forward to the Minister's response. I beg to move.
Lord Whitty: I wish to reassure the noble Lord that the Government recognise the importance of preserving the competitiveness of the North Sea oil and gas industry. However, our legal advice in relation to the activities listed in the directive, and the legal advice of the Commission, is that it should apply to the continental shelf and beyond territorial waters unless there are indications to the contrary—and there are none—in the IPPC directive. The directive clearly applies to large combustion plants which are listed, and it applies onshore and offshore. Our legal advice indicates that this applies to those offshore within and beyond territorial waters. Therefore, our legal advice stresses that all member states have a legal obligation to comply with the directive and this is our way of ensuring that the UK does so. If the noble Lord is correct that another member state has indicated that it does not intend so to do, our legal advice is that it runs
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the risk of infraction procedures. I am sure that would be pressed on us by the British industry and would be taken up by the British Government in those circumstances.
It is true that other member states will have different and precise ways of implementing the directives, depending on their own current underlying regimes, but that is a different matter. The directive and its end result are obligatory on all member states. As the noble Lord indicated, the offshore regulation is the responsibility of the DTI rather than my department. However, I can assure the Committee that the draft regulations which apply will be published before the Report stage.
The DTI's stated objective is to maximise the economic benefit to the UK of its oil and gas resources, taking into account the environmental impact. That is why we intend to implement IPPC efficiently. It is also true that in addition there are other important improvements for protecting the environment which we shall need to make. It seems sensible, as we are doing for land-based installations, to use the powers in the Bill where appropriate to set up an efficient, coherent and consistent regime across the board.
Those other changes include improvements to the regime for the use and discharge of chemicals offshore, which the UK is required to introduce this year under the OSPAR international agreement. If recollection serves me correctly, I saw that agreement through this House when I was spokesman for the Foreign Office. We shall also need to consider the recommendations on dealing with oil spills and discharges in the review of the noble and learned Lord, Lord Donaldson, on salvage and intervention following the "Sea Empress" disaster.
I understand that discussion between the UK Offshore Operators Association and the DTI has been substantial and that my honourable friend the Minister for Energy and Industry, John Battle, had a positive meeting with it. That will continue to inform the way in which we prepare the regulations. The noble Lord asked specifically about the taskforce which is looking specifically at environmental regulations. The DTI Minister who chairs that group may be able to give in writing further information on its progress.
We consider that there is a legal obligation. We are using this opportunity to provide the basis for establishing a regulatory framework which would include dealing with other international obligations and obligations which might arise elsewhere. I hope that the discussions already undertaken by the DTI with the offshore operators association will lead to some degree of consensus on the regulations and the way in which they will be applied.
Lord Jenkin of Roding: At this hour, it would be wrong to go into the Minister's answer in detail. I seek to make only two points. It is not just the way in which different countries will administer the regulations:if most other countries do not apply the environmental impact directive to exploratory drilling but only to development drilling, whereas we are applying it to both, it is not a difference in the way of applying but it is ignoring half the regulations. The Government need

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to take the issue seriously. The case for having Europe-wide regulations is that the burdens are the same on everyone. There cannot be different systems with different burdens, costs and standards. If that does not happen under the regulations, one can understand why people become very cynical about them.
Secondly, Ministers in the Department of the Environment, Transport and the Regions, have been extremely forthcoming during the course of the debate. Large parts of the Bill have been rewritten. If, at a later stage, we return to issues connected with the oil and gas industry, perhaps one of their colleagues in the DTI will come along and take part. Perhaps there would not then need to be such urgent consultation. As a former Minister I would recommend that course when asked questions to which one does not know the answer. I leave that thought with the Minister. It is the Environment Minister's Bill, but the industry comes under the regulation of the DTI. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn. Clause 4 agreed to.
[In the Title]:
Lord Jenkin of Boding Lord Jenkin of Boding moved Amendment No. 38:
Line 1, leave out ("new").
The noble Lord said: With the leave of the Committee, I shall move Amendment No. 38 on behalf of my noble friend Lord Peyton of Yeovil.
This really is a "new" Bill—or will be by the time we have finished with it. I understand what my noble friend had in mind, but he is not here to make his points. It is right for me to say from the Back-Benches that we have had some extremely valuable and productive debates. Those who follow these matters from outside will recognise the value of parliamentary debate as a back-up to any amount of consultation between departments and industries. We are often able to achieve changes which those other channels cannot. We saw that in the course of today. I beg to move.
Lord Renton: I agree with my noble friend Lord Jenkin of Roding. We have had extremely valuable debates. I, and I am sure my noble friends, are extremely grateful to the noble Lord, Lord Whitty, for the way in which he responded to our complaints. He said that he will reconsider virtually the whole of Clause 1.
As to whether the Bill introduces a new system is doubtful. If we look at the second schedule the changes made in existing legislation, which at present controls pollution in various ways, are slight. The two most important references are to the Environmental Protection Act 1990--with one amendment being made to Section 9—and the Clean Air Act 1993 where there will be two minor amendments.
The existing system therefore is to continue. The Bill does not impose a new system; it adds to the present system by incorporating what is in the European directive and providing that special provision shall be made for consideration by the Welsh Assembly and the Scottish Executive. One hopes that they will find the existing system as modified as little as they require. My
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noble friend Lord Peyton of Yeovil was therefore well justified in suggesting that it was not really a new system; it is a new system to be adapted.
Baroness Farrington of Ribbleton: If this is the length of time it takes for minor, non-new modifications to be made to an existing system, I wonder how many hours we would have spent had it been totally new.
To describe our intentions for this Bill as ''new" or "not new" is a somewhat subjective choice. On the one hand, we are replacing pieces of existing legislation, including all of Part I of the Environmental Protection Act 1990, with a new pollution control regime; on the other, the replacement is broadly similar, albeit with a few new elements—for example, a regard for energy efficiency and application to some new sectors.
We have already debated at length the purpose of the Bill and made it clear that it arises only from the need to implement the IPC directive in a way which fits coherently into other regulatory requirements. We promised to consider amending the Bill to restrict its scope for the purposes set out in it. We published draft regulations and will do so shortly for offshore installations which describe in detail how the provisions in the Bill will be used.
I hope that, with those assurances and safeguards, the noble Lord, Lord Jenkin, on behalf of the noble Lord, Lord Peyton, will not feel the need to press the amendment.
Lord Jenkin of Boding: I should like to associate the noble Baroness, Lady Farrington, with the kind words my noble friend Lord Renton addressed to the noble Lord, Lord Whitty. Both Ministers have been extremely responsive to all points made from all parts of the Chamber and will be seen eventually substantially to improve the Bill. I do not intend to press the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
House resumed: Bill reported with amendments.

Development Commission (Transfer of Functions and Miscellaneous Provisions) Order 1999
7.25 p.m.
Lord Whitty Lord Whitty rose to move, That the draft order laid before the House on 27th January be approved [7th Report from the Joint Committee].
The noble Lord said: My Lords, the purpose of this order is to achieve a number of things. First, it seeks to create the new countryside agency by renaming the Countryside Commission the "Countryside Agency"; secondly, to transfer the Rural Development Commission functions to the countryside agency; thirdly, to provide for appropriate Rural Development Commission property, rights and liabilities to be transferred to the countryside agency; and, fourthly, to enable the Countryside and Urban Regeneration Agency

531
(known as English Partnerships) to provide specialised services, particularly information technology systems, in support of the RDAs.
This order is part of the process of implementing certain provisions of the RDA Act. In particular, it will put into effect the decision to create the countryside agency from the merger of the Countryside Commission with the parts of the Rural Development Commission which are not being transferred to the regional development agencies.
Rural regeneration, currently carried out by the Rural Development Commission, will be an integral part of the RDAs' remit. The comprehensive spending review covering countryside and rural policy concluded that bringing together the remaining work of the RDC and the Countryside Commission would consolidate their work and create a powerful new champion for rural England. The merger was announced by my right honourable friend the Deputy Prime Minister on 27th March last year during the passage of the RDA Bill.
The combined experience and expertise of the Countryside Commission and Rural Development Commission in the new countryside agency will provide a national source of research and advice about countryside and rural issues. Its coverage will be social, economic and environmental and it will promote and help others to develop policies and programmes to overcome rural disadvantage.
In my opening I should perhaps mention one other matter for the record. It relates to the treatment of the staff at the various agencies. The staff transferring to all the new agencies will do so on their existing terms and conditions, with no detriment to any of their employment rights and with continuity of employment. As is usual in such cases staff will be offered broadly comparable pension provision, in this case through membership of the principle civil service pension scheme—a scheme with identical provision to that operated by the RDC. The transfers involved have been worked out by a series of steps. The trade unions have been consulted throughout and plans to overcome the mismatch of jobs have been pursued. A number of staff opted to take on new responsibilities and others took redundancy. However, most posts will be filled by this process.
This order will be of great benefit to the development of our countryside and rural policies. I beg to move.
Moved, that the draft order laid before the House on 27th January be approved. [7th Report from the Joint Committee].— (Lord Whitty.)
Lord Montagu of Beaulieu: My Lords, as a former member of the Development Commission I welcome amalgamation with the Countryside Commission. I am sure that the new body will do extremely well for the countryside. However, we should not let this moment go without pointing out that the Development Commission is Britain's oldest quango. It was founded in 1909 by Lloyd George and it contained the road board which had the wonderful idea of spending on the roads
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all the money taken from motorists in road tax. Unfortunately, that money was raided by Winston Churchill, and such hypothecation no longer happens, but many of us wish that it did. I think one ought to make the point that the commission has been doing a good job for a long time and I am glad that the staff will be properly looked after.
Lord Whitty: My Lords, I echo what the noble Lord, Lord Montagu of Beaulieu, has said. I would like to join him in paying tribute to the work of the RDC over the years and the Countryside Commission. The longevity of the RDC and the various purposes to which the RDC has been put over most of this century indicate the value of the work delivered by its personnel and its leadership. I wish to be associated with a tribute to those achievements. However, I believe that the new structure will be more effective in the present changed circumstances, as the noble Lord recognises.
On Question, Motion agreed to.

Scotland Act 1998 (Transitory and Transitional Provisions) (Finance) Order 1999
7.30 p. m
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel)The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel) rose to move, That the draft order laid before the House on 4th February be approved [8th Report from the Joint Committee].
The noble Lord said: My Lords, this order is a significant step in the implementation of devolution for Scotland. The next financial year will be a particularly special one. At the start of the year the allocation of spending to individual services will be within the control of this Parliament, but by the end of the year it will be a matter for the Scottish Parliament. We have to provide for transitional arrangements to ensure that this historical transformation takes place as smoothly as possible and with the minimum of disruption to public services in Scotland.
Of course this order does not itself deal with the allocation of funds to individual services. That is solely a matter for the other place. That other place approved last week a draft of another order with a long and indigestible title, which I shall refer to as the appropriation order.
The order deals with the framework for the spending, accounting and auditing of money from the Scottish Consolidated Fund. That fund is being established from the beginning of the financial year in order that the payments from it can be authorised for the full year. The order provides for the transfer of the spending authorisations granted under the appropriation order from the Secretary of State to the Scottish Ministers.
Under Sections 65 and 70 of the Scotland Act 1998, the Scottish Parliament will have to legislate to put in place the detailed arrangements for the approval and spending of public money, including the accounting and auditing arrangements.
A great deal of work has already been done to prepare the ground. In particular, the cross-party Consultative Steering Group has agreed a report from the Financial Issues Advisory Group which makes detailed proposals for all the necessary budgeting, monitoring, accounting and audit arrangements. That group, incidentally, included in its members Professor David Heald, a former colleague of mine at the University of Aberdeen, as was Dr. Michael Dyer, known to the noble Lord opposite. Professor Heald is a specialist adviser to Select Committees in the other place, and an acknowledged expert on public expenditure matters. He, like the other members of the group, gave freely of his time and knowledge. I would like, with your Lordships' permission, to place on the record our thanks for all the work they did. They rendered a considerable service to the public of our country.
The order before us deals with the financial year 1999–2000. It takes us, during the course of that year, from a Westminster public expenditure regime to one that is determined by and the responsibility of the Holyrood Parliament. It does so in the context of a financial year when spending responsibility will fall to the Secretary of State for Scotland in the first part of the year and from 1st July to the Scottish Executive.
In essence, the order puts in place, for the transitional year, arrangements governing the spending of and accounting for money paid out of the Scottish Consolidated Fund that are similar to provisions in a host of Acts of this Parliament, ranging from the Exchequer and Audit Departments Act 1866 to the National Audit Act 1983.
The order sets down the conditions under which sums may be paid out of the Scottish Consolidated Fund during the transitional year. It puts in place arrangements to ensure that any payments from the fund relate to functions that are or will be devolved and that they have the necessary legislative authority.
The next main provision transfers spending authority for those unspent balances at the date of devolution from the Secretary of State to the Scottish Ministers (and in certain cases to the Parliamentary Corporation). That is especially important, because it enables funding for public services to be approved for the entire transitional year and for allocations to move seamlessly from the Secretary of State to the control of Scottish Ministers without further approval.
While these provisions of the order concentrate on the spending of public money, others make sure that funds are properly accounted for. The order specifies accounting arrangements for the transitional year in some detail. In essence, it requires the Secretary of State to prepare accounts for transactions that take place prior to devolution and places an identical obligation on Scottish Ministers for the period after devolution. Both sets of accounts are to be audited by the Comptroller and Auditor General. They will be laid before this Parliament and the Scottish Parliament respectively. The Comptroller and Auditor General will also retain responsibility for examinations of economy, efficiency and effectiveness throughout the transitional year. The
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order enables him, if necessary, to complete those studies he has started but not finished during the transitional year.
The question of accountability clearly does not end with the specification of suitable financial accounting and value for money arrangements. We also need to make more general provisions, to ensure that Ministers and officials remain accountable until the Scottish Parliament has put its own arrangements in place. Therefore, the order requires the appointment of accounting officers in both the pre- and post-devolution periods.
While much of this order rightly concentrates on matters associated with the use and management of the Scottish Consolidated Fund, it also makes arrangements to continue the payment of certain designated receipts into the UK Consolidated Fund. Those receipts mostly relate to fines and to interest payments and are presently paid into the UK Consolidated Fund. They do not form part of the Scottish Office budget. The order ensures that these arrangements continue.
The majority of receipts are not subject to these special considerations and the order provides for these, so far as they relate to functions that are or will be devolved, to be paid into the Scottish Consolidated Fund or, more usually, appropriated in aid.
The final main provisions of the order are of a relatively technical nature. They allow the continuation of the Registers of Scotland Trading Fund for the remainder of the transitional year. Thereafter, it will be for the Parliament to decide on the financial and control arrangements for this body. It also allows the payment of a salary to the Auditor General for Scotland, thus allowing the Parliament to fill the post quickly, so that the incumbent can get on with the necessary planning work and be in a position to take up his full duties on 1st April 2000.
The order also caters for the possibility that it may be necessary to make contingency payments from the fund during the transitional year. Here too, the order builds on existing procedures. The effect is broadly similar to that of the Contingencies Fund Act 1947. As a result. there will be clear limits to the payments that may be made by Scottish Ministers.
The order, together with other provisions, particularly the appropriation order, sets out financial provisions for the transitional year. That procedure has allowed local authorities and the like to draw up their budgets for the year 1999–2000; it allows the Scottish Parliament to revisit the proposed allocations later in the year, but, above all, it provides a springboard for full and effective financial devolution for the future.
The order is an integral and critical part of the transition to the devolved Scottish parliament. I beg to move.
Moved, That the draft order laid before the House on 4th February be approved [8th Report from the Joint Committee].— (Lord Sewel.)
Lord Mackay of Ardbrecknish: My Lords, first, I should like to thank the Minister for his explanation of the order which deals clearly with the transitional year.

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I was intrigued by the noble Lord's description of the accounting procedures given that we spent many happy hours in Committee and on Report discussing exactly that. I was interested to note that, at least in the transitional year, the Treasury may "direct". Indeed, Article 17 (1) states,
"the Treasury may direct and in such form and manner as the Treasury may direct".
I recall trying to persuade the Government that after the transitional year the Treasury should still have an interest in how such matters are dealt with, but I failed. However, when the Treasury gets a feel of this in the next financial year, I am sure that it will want to keep in contact for the following year.
We also spent many happy hours discussing the Comptroller and Auditor General and whether he would have an impact after the transitional year. I am pleased that progress has been made with regard to how the Scottish Parliament should account to, and be held to account by, its equivalent of the Comptroller and Auditor General. I welcome that. Assurances on that were given to me by the noble Lord, Lord Sewel, and I am always glad to be able to tick off assurances given and delivered as the days pass before the parliament begins its work.
With regard to Article 3 (1), am I right in thinking that "the principal appointed day" is 1st July, or is there another such principal appointed day? I hope that the Minister will be able to confirm that it is, indeed, 1st July.
As this is the first of a large number of such orders, can the Minister say how we are proceeding with consideration of them? Are the Government satisfied that all the necessary orders will be in place? I know from a letter which the noble Lord was kind enough to send to my noble and learned friend Lord Mackay of Drumadoon that a significant pile of pieces of secondary legislation awaits our consideration. As this is the first to be considered in your Lordships' House, I wonder whether we are on track and whether all the secondary legislation will be in place by, I presume, 1st July.
Article 4 (1) refers to the Lord Advocate. I should have thought that the Lord Advocate and the Solicitor General for Scotland would be in place before 1st July because they will be part of the Scottish Executive. I am not sure why we need that belt and braces, but I shall not go much further into that matter because it strays into legal fields and, as the Minister will recall, by and large I left such matters to my noble and learned friend Lord Mackay of Drumadoon when we considered the Bill.
However, perhaps I may consider just one legal matter. When we considered the Bill, I recall discussing at some length what is now Section 64. Unfortunately, such is the size of the pile of Hansards on that Bill that I have found it impossible to find the actual discussion. We discussed exactly which receipts would be returned to the Consolidated Fund. I now see that the order refers to fines, forfeitures and fixed penalties. I understand from press reports that they will amount to some £22 million. If the Scottish Parliament is to be
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responsible for making the laws—indeed, it is—which will result in people being fined, and if I am right in thinking—no doubt the Minister will correct me if I am wrong—that the courts will be funded from the Scottish block—that is, by the Scottish Parliament—it seems a little unfair and unusual that such a sum should be returned to the grasp of the Treasury and cannot be used by the Scottish Parliament to offset some of its expenses in paying judges and sheriffs and running the courts.
That is my only substantive comment on this piece of secondary legislation. It certainly looks about right and deals with the issues that we know will arise during the transition. We can only hope that the Government have not omitted anything and that nothing now omitted will emerge later in, say, June or July. I would be amazed if in June or July we did not find arising something that we have not covered in a piece of legislation of this size and in a shift of power of the size that is envisaged in the devolution proposal.
7.45 p.m.
Lord Steel of Aikwood: My Lords, I entered the Chamber in listening mode and from listening to the Minister I had hoped to discover two points. First, I wonder whether the Minister can explain—he did not do so in his opening speech—the difference between "transitory" and "transitional". Why do we have both words? That defeats me. It may well defeat the Minister also, but it seems an extraordinary piece of drafting.
The more substantive point was that just mentioned by the noble Lord, Lord Mackay of Ardbrecknish. I cannot understand why the fines, forfeitures and fixed penalties cannot be paid right away into the Scottish Consolidated Fund on day one of the Scottish Parliament coming into being. The Scottish Parliament will be responsible not only for the administration of the courts, but also for Scotland's entire prison and judicial service. The only explanation which the Minister could offer was that such matters are not at present part of the Scottish Office budget. Perhaps I may point out that plenty of things will be happening in the future which are not now part of the Scottish Office budget. It seems odd that the proceeds from Scottish crime should go to the Westminster Treasury rather than to the Scottish Administration. The Nationalists used to say, "It's Scotland's oil" so perhaps we can say, "It's Scotland's crime and we should have a share in the proceeds".
The Duke of Montrose: My Lords, perhaps I may intervene for a moment on a point beyond the transitional matters, but still very much relating to Scottish finance. I thank the Minister for some answers that he gave me earlier in writing in response to my questions about agriculture when he said that the Scottish Parliament will have full responsibility for agriculture.
The other day I came across something that sparked off a thought in my mind. We have been talking about fines, forfeitures and fixed penalties. The European Union has a way of imposing fines on other governments, and the United Kingdom has just been asked to pay back £34 million mainly due to inadequate controls in the sheepmeat sector. Once devolution takes

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place, will such a fine then become a liability on the Scottish Administration? If so, from where will the funds to meet the proportion due from the Scottish finances come?
Baroness Carnegy of Lour: My Lords, perhaps I may ask the Minister a question. The sums going into the Scottish Consolidated Fund are explained in Article 8 of the order while the sums going out are explained in Article 9. They include the cost of preparing for the Parliament, the expenses of the Lord Advocate and of Ministers, and other expenses that arise in the public interest. Who controls the budget of the Consolidated Fund? The order explains that in the transitional year expenses must not exceed £50 million. Who sees to it that that is what is happening? Will that be the responsibility of the Secretary of State for Scotland throughout the transitional year or will it be, first, the Secretary of State for Scotland and then whoever is responsible for the budget of the Scots Parliament?
I am trying to imagine what would happen if a different party were in power in the Scots Parliament from that in power at Westminster—that is, a different party from that to which the Secretary of State belongs? How would that control be exercised? What will happen if the Comptroller and Auditor General does not like what is being clone with the Scottish Consolidated Fund? How can he intervene? One is trying to picture whether this will work smoothly. As the Minister said, it is really important that the transitional year goes smoothly and the parliament gets off the ground to the satisfaction of the Scottish people who will be watching very closely how it works.
Lord Sewel: My Lords, I believe that a number of matters of important detail have been raised in this short debate. Perhaps I may confirm, first, that the principal appointed day is indeed 1st July. That deals with the point raised by the noble Lord, Lord Mackay of Ardbrecknish. As regards a point raised by the noble Lord, Lord Steel of Aikwood, I can tell him in response that I could offer a definition of "transitory" and "transitional" in that we as politicians are transitory but this House is transitional. However, I do not think that that is the nature of the definition which rests in this legislation. I cannot think of anything better at this time of night, so perhaps the noble Lord will leave the matter with me.
I move on now to the point about the way our European colleagues impose what are effectively fines on governments for various shortcomings. The answer to that is quite simple. If the shortcoming in the opinion of the European Commission is the result of action or inaction on the part of Scottish Ministers or the Scottish Parliament, the "fine" would have to be paid by the Scottish executive. The money is available to the latter. As is the case now in agricultural matters, it is the agricultural budget of the Scottish Office which has to stump up the cash if there is an error in payments made to farmers in Scotland. One good way to avoid it is to keep better stock records. I have to make that point time and time again to a number of farmers. Indeed, that is one of the big improvements that we can make.
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The noble Baroness, Lady Carnegy of Lour. asked who controls the budget. Up to 1st July it is the Secretary of State and, thereafter, it will be Scottish Ministers. However, the Comptroller and Auditor General has to agree issues as they come through. The interesting point about the role of the auditor general for Scotland is that the legislation makes it clear that, basically, he has to be appointed and the Scottish legislation has to give him certain duties to allow him to grant credits so that money can come out of the consolidated fund. Therefore, there is no way that the Scottish Parliament could be tempted not to appoint an auditor general for Scotland and somehow avoid the appropriate scrutiny and control. Indeed, if it were to try to do so, it would simply not be able to get the credits to spend the money. Everything must be properly in place.
I turn now to the business of fines. I notice that the noble Lords, Lord Mackay and Lord Steel seem not so much to be running after their colleagues in the other place but rather colleagues of the party which is not represented in this House. I refer of course to the Scottish National Party. I am interested by the argument that I believe the noble Lord, Lord Steel, came close to advocating, that somehow fines should fund the judicial service. The noble Lord does not seem to agree. I am glad to see that he is moving away from that. However, from the way he explained it, he seemed to be saying that we could use the money collected from fines to fund the judicial service. That would be an interesting proposition. Whether we increase fines in order: to pay for better pensions for judges—a matter which is close to my heart and close to the hearts of many Members of your Lordships' House—I do not know. I believe that there are probably better ways of doing so.
The income from fines has never gone into the Scottish Office block; it has always gone into the UK Consolidated Fund. This new arrangement does not alter the position. It is not money which was previously available to the Scottish Office and which is now being taken away. Indeed, it never was available to the Scottish Office. As I said, it went into the Consolidated Fund. I suggest that it would be inappropriate for fine income to work its way into the Scottish Office block because, in a way, that would give the criminal justice system an incentive to maximise fine income and make inappropriate disposals of cases. For example, in some cases the most appropriate method of disposal would be a community service order. However, if you are running a bit short of income, people may slap in a fine rather than imposing a community service order. I do not believe that that is the appropriate way to proceed.
As I said, there is nothing new in the procedures. We are trying to hand over to the Scottish Parliament and the Scottish executive arrangements which presently obtain within the relationship of Scotland and the United Kingdom on the financial side. The position on fines reflects that fact. With that explanation, I hope that noble Lords will feel able to support the order.. I commend the order to the House.
On Question, Motion agreed to.

Railways (Rateable Values) (Scotland) Order 1999
7.55 p.m.
Lord Sewel Lord Sewel rose to move, That the draft order laid before the House on 21st January be approved
[6th Report from the Joint Committee].
The noble Lord said: My Lords, this is a straightforward draft order which prescribes rateable values for the year 1998–99 for the operational lands and heritages occupied by ScotRail, and other franchise operators which are now in rateable occupation of property acquired from the British Railways Board.
When the ScotRail passenger rail franchise was acquired by the National Express Group on 1st April 1997, the British Railways Board (Rateable Values) (Scotland) Order 1995, which had prescribed the rateable value of property occupied by British Rail, ceased to have any effect. A new order was therefore required prescribing the rateable value for the new occupiers for 1997–98, and for each subsequent financial year until 1st April 2000.
The rateable value figure prescribed in the 1997–98 order was taken from the British Railways (Rateable Values) (Scotland) Order 1995, but adjusted to take account of the disposal of a number of properties. For the 1998–99 draft order, this figure has been further adjusted to take into account the acquisition of new station leases. The rateable value has been apportioned among the franchise operators on the basis of rental evidence from the current regulatory and charging regime and between local authorities on the basis of the locations of the properties concerned.
The draft order has been subject to consultation with local authorities and the franchise operators concerned. All are in agreement with the proposal. A further order will be required for 1999–2000 in due course. I beg to move.
Moved, That the draft order laid before the House on 21st January be approved [6th Report from the Joint Committee].— (Lord Sewel.)
Lord Steel of Aikwood: My Lords, I have two questions for the Minister about this order. First, I believe I am right in saying that the rateable values proposed here are what are called "agreed valuations"
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in that they are not objectively assessed. In the days when the property was owned by British Rail that was quite understandable, because it was simply one public body paying other public bodies public money. Therefore, one did not need to be particularly precise about it.
However, with the advent of privatisation I do not see how this system can really be justified as continuing year in year out—though, if I detected the Minister's words correctly, I believe it comes to an end in the year 2000. I can think of many businesses in Scotland which would love to have agreed valuations rather than those imposed upon them. It seems to me that we are really continuing a rather privileged category of private businesses which have these so-called "agreed valuations". Perhaps the Minister can clarify the position.
Secondly, I am really a seeker after advice and guidance here. There is a habit now of private operators, particularly those owning station property, to let out more and more of the property for shops. Indeed, stations are becoming shopping arcades. In the particular case of Waverley Station in Edinburgh, a huge development scheme is being proposed. Can the Minister say whether these non-railways functioning premises—that is to say, these retail shops—are included in, and subject to, these orders? In other words, are they gaining any advantage over other shops which have to have their valuations imposed upon them and not agreed as in the order? That is a simple question to which I should like an answer from the Minister.
Lord Sewel: My Lords, the noble Lord is right in saying that these values are the result of negotiation, discussion and work on what is called the cumulo figure of £605, 100 that goes back to 1995 and has been varied since then. I do not think we should take this as a kind of soft option valuation. The fact that it has been subject to variation and change over time seems to me to indicate that it is a matter that is examined. On the particular point raised by the noble Lord, Lord Steel of Aikwood, of where this valuation stops and other kinds of valuation take over as regards shopping arcades and other such matters, if the noble Lord does not mind, I shall write to him in order to give him a precise and detailed answer.
On Question, Motion agreed to.
House adjourned at eight o'clock.