HL Deb 20 May 1999 vol 601 cc415-38

3.55 p.m.

Read a third time.

Clause 1 [General purpose and definitions]:

Lord Jenkin of Roding moved Amendment No. 1:

Page I, line 16, at end insert ("including activities in the territorial waters and the sea designated within the meaning of the Continental Shelf Act 1964,")

The noble Lord said: My Lords, I return to a matter that we discussed in Committee and I undertake not to keep the House for more than a moment or two. At the end of that debate on 15th February, I asked the Government to confirm that the offshore oil and gas industry was covered by the Bill, because nowhere does that appear. Nor does it appear in the Council Directive 96/61/EC, which it is the purpose of the Bill to implement. An earlier environmental directive on large combustion plants expressly excluded plants on off-shore installations.

At the end of the Committee stage debate, the Minister made it abundantly clear: that 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".—[Official Report, 15/2/99; col. 527.]

My point is that, for the first time, the Bill extends integrated pollution control—or, as it now is under the directive, integrated pollution and prevention control—to installations offshore. I say with a great deal of pleasure that the Government in their wisdom have decided, as we debated on Report, that there should be express mention of that in Clause 1 of the Bill. That is the reason why I have tabled Amendment No. 1. It simply makes it clear that the activities in the definition subsection should include: activities in the territorial waters and the sea designated within the meaning of the Continental Shelf Act 1964".

It is a simple point. The Minister has accepted the purpose clause which refers to implementing the directive. I believe that it should be set out on the face of the Bill that it extends to the Continental Shelf. It is a comparatively simple point, but I hope at this late stage in this House, or perhaps when the Bill reaches another place, the Minister will feel able to meet the case. I beg to move.

Lord Renton

My Lords, I support the amendment and regard it as important. It is wrong that what happens under the Continental Shelf Act 1964 should be left to the uncertainty of being dealt with or not at some future stage by regulations. This is a matter which internationally, as a matter of pride, we should get right within the contents of the Bill. My noble friend Lord Jenkin has moved a very important amendment.

Lord Dixon-Smith

My Lords, in rising to support: my noble friend Lord Jenkin, I express the hope—I cannot say "wish"—that the Minister might be able to accept the amendment which does nothing to alter he substance of the Bill other than to make explicit on its face what is already implicit in what is happening and what appears in the draft regulations which we have already seen.

If we are legislating in this way—and we already are—there are other industrial processes which take place over and in the Continental Shelf area, such as fishing, which are or might also be affected. 'The draft: regulations apply simply to the business of oil installations. I am well aware that fishing and indeed shipping, which is another industrial occupation, if one may put it that way, might well be affected by the regulations. They are regulated at the present time by many international conventions.

Can the Minister tell me whether we are altering the status of those industries by this extension to the Bill which will take place whether or not the proposed words are added to it?

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, I regret that. I cannot accept the amendment. First, as I have explained previously, it is unnecessary. Clause 1(2) makes clear that activities are covered whether earned on at particular premises or otherwise. The noble Lord, Lord Jenkin, quoted both our legal advice and that of the European Commission, indicating clearly that provision for offshore activities is included.

Subsection (2), taken in conjunction with Clause 5(9), is quite explicit along the lines the noble Lord would wish. Clause 5(9), refers to territorial waters; the sea in any designated area; and the sea in any area specified under the Oil and Gas (Enterprise) Act 1982. That is a precise and clear formulation.

The noble Lord's formulation, in so far as he seeks to clarify, would not clarify sufficiently. The amendment excludes that area of the sea defined in the Oil and Gas (Enterprise) Act 1982, which, I understand, relates to developments straddling the boundary lines between the territorial waters of the United Kingdom and those of another member state.

The amendment would not do precisely what the noble Lord wishes. In any case, clarification is to be found in the last clause of the Bill. I hope that with that explanation the noble Lord will see fit to withdraw the amendment.

Lord Jenkin of Roding

My Lords, I understand the point that the noble Lord the Minister makes about Clause 5. Of course, he is right. That is the clause concerned with the regulation-making powers. We are dealing in Clause 1, as amended after a good deal of debate and after the intervention of the Delegated Powers and Deregulation Committee, with the overall purposes of the Bill. My intention was to make sure that the extension to the North Sea is clearly within those purposes. That is why I added the definition at the end.

I have used the arguments advanced by the noble Lord, Lord Whitty, too often myself not to recognise that saying that an amendment is unnecessary carries some weight in government departments, and even occasionally in the two Houses of Parliament. So, not wanting to prolong the debate, although I still think it is a pity that there is not the reference I have proposed in Clause 1, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Regulation of polluting activities]:

Lord Pearson of Rannoch moved Amendment No. 2:

Page 2, line 17, 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 (not being a category of activity referred to in Annex I of Council Directive 96/61/EC) to employ the best available techniques not entailing excessive cost (in this section referred to as "BATNEEC") to be used for minimising the pollution which may be caused to the environment as a whole by those activities: Provided that—

  1. (a) regulations under this section may specify circumstances where a more or less restrictive regime than BATNEEC may be required either to comply with European or other international obligations, or on account of other circumstances;
  2. (b) where regulations are made pursuant to paragraph (a) above, they shall be accompanied by a statement explaining why such a more or less restrictive regime should be applied; and
  3. (c) if the regime to be employed is more restrictive than BATNEEC, the regulations embodying that regime shall not he 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.")

The noble Lord said: My Lords, noble Lords could be forgiven if their eyes glaze over as they try to understand Amendment No, 2 on the Marshalled List, especially if they are not familiar with this somewhat technical but far-reaching Bill and its extraordinary—indeed, almost unprecedented—passage through your Lordships' House.

I shall not repeat the history of the Bill now at Third Reading because I placed a potted version on the record at Report stage last week, at cols. 1382–1385 of Hansard of 13th May. Suffice it to say that the Bill imports an EU directive, No. 96/61/EC, into British law, and combines that directive with our existing Environmental Protection Act 1990. In doing so the Bill removes the first 28 sections of that Act from the statute book and replaces them with sweeping regulation-making powers. It is very unfortunate that those regulations will not be put in front of us for consideration until after the Bill has become law. The Bill thus sets up a new system of pollution prevention and control in this country. It is therefore a very important Bill, even if it is inevitably rather technical.

The Bill has had a very chequered history in your Lordships' House, including a very damning report from the Delegated Powers and Deregulation Committee. However, it has been much improved during its passage through the House. Thanks are due to the Minister for his helpfulness and wisdom in that regard.

Even so, the Bill still has important and unacceptable flaws. Perhaps the most important remaining defect is that the proposed new pollution prevention and control regime is potentially disastrous for small businesses, even if large businesses feel that they may be able to live with the situation. To understand why this is so, I fear that I have to try your Lordships' patience by describing the difference between two pollution control regimes, called, in the jargon, "BAT" and "BATNEEC". Before your Lordships disappear into the Library without so much as a backward glance, may I assure the House that the difference between the two is really quite easy to understand.

BATNEEC requires that pollution should be prevented and controlled using best available techniques not entailing excessive cost. "Not entailing excessive cost" is the "NEEC" bit. This is the regime imposed by our Environmental Protection Act 1990. It is obviously potentially much less expensive, especially for small businesses, than the regime required by the EC directive, which is BAT, or, simply, "best available techniques" without the requirement that those techniques should not entail excessive cost.

It is true that the BAT regime does say that costs and advantages must be taken into consideration, but that is altogether different from saying that proposals should not entail excessive cost and having that proviso on the face of the Bill, as in Section 7 of our Environmental Protection Act 1990, which is being swept away by the Bill.

The amendment ensures that small businesses can continue to prevent and control pollution under our present BATNEEC regime, which, as the Minister was good enough to agree last week, is working well, while only the larger businesses identified in Annex I of the directive move under the BAT regime, as the directive requires.

I hope that the Minister will be able to accept the amendment which reflects precisely what the directive requires, what the Government's own explanatory notes said was the intention of the Bill when they produced it last November, and, perhaps more important, what the Minister said from the Dispatch Box a week ago was the aim of the Bill.

Let me start with the directive. I quoted this aspect of the directive in full last week; I shall not repeat myself. The point is that the directive brings us BAT, best available techniques, setting up a very wide-ranging regime which merely has to, take into consideration the costs and advantages", of the best available techniques which industry is required to employ to prevent and control pollution. But the directive makes clear that its BAT regime is only to apply to the categories and size of industrial activities which are listed in the directive's Annex I. These are very detailed and clearly apply to large installations which are likely to be owned and operated by large businesses. So this amendment respects the directive fully because it places all the activities listed in Annex I of the directive under the BAT regime, leaving the rest of British industry, which amounts, really, to our smaller businesses which are largely incapable of producing the kind of pollution at which the directive is aimed, under the present successful BATNEEC regime as required by our existing Environmental Protection Act 1990.

The amendment also gives the Government power to vary the BATNEEC regime when necessary, beyond what is required by the directive, by affirmative resolution, which is surely sensible and helpful to the Government and in no way conflicts with the directive. So the amendment fully respects the directive.

I come to what the Minister said last week. He said: The Bill is not about killing off 135,000 small businesses; it will be applied to around 7,000 mainly large businesses".—[Official Report, 13/5/99; col. 1387.] That is great because those, of course, are the 7,000 large businesses covered by Annex I of the directive and, incidentally, the same 7,000 large businesses, as far as I can make out, referred to in the Government's Explanatory Notes issued on 26th November. They are the same 7,000 odd businesses which become exposed to the BAT regime by the amendment before your Lordships rather than to the existing BATNEEC regime which will apply to the rest of industry.

The Official Report of our debate last week grows less clear when my noble friend Lady Blatch and I pressed the Minister and pointed out that the Bill as drafted does not limit the open-ended BAT regime to 7,000 or so larger businesses and industrial activities. We pointed out that the Bill as drafted cancels the BATNEEC regime altogether and introduces BAT for the whole of British industry.

The Minister then appears to have been somewhat misled by his brief because he said: The incorporation of the IPPC regime", by which he meant the directive, will not extend these controls to areas which were not already covered by the 1990 Act". But then, with great respect, he appears to have contradicted himself because he went on to say: Clearly, those small businesses already covered by the 1990 Act will still be covered by this regime". By that, I presume he meant the new regime or BAT, instead of BATNEEC. Perhaps he could clarify that.

Then the Minister went on to make another statement which is clearly wrong. He said: Schedule I clearly restricts that to plants and installations, most of which will he owned by large businesses".—[Officia Report, 13/5/99; col. 1388] Schedule I to the Bill contains no such restriction. It clearly abandons BATNEEC for the whole of British industry because it imports BAT, as required by the directive in paragraph 20 of the schedule to the Bill and it nowhere mentions BATNEEC.

The Bill itself makes clear, as I mentioned last week, that the new regime set up by the Bill is not only to accommodate the directive but also, and I again quote from the Bill, to regulate, otherwise than in pursuance of that Directive, activities which are capable of causing any environmental pollution; otherwise preventing or controlling emissions capable of causing any such pollution". The Bill confirms that those activities include. industrial or commercial activities…carried on on particular premises or otherwise". So the Bill as drafted really does introduce BAT to the whole of British industry and commerce. This amendment would, however, put the Bill precisely on all fours with what appears to be the Government's intention, and so I hope the Minister can accept it.

In conclusion, I should place on the record two brief paragraphs of a letter written to me by the Federation of Small Businesses since our debate last week. The federation represents the 135,000 small businesses to which the Minister referred in his remarks at col. 1387, which I have quoted.

The letter goes as follows: On behalf of our members in particular and small business in general, I write to thank you most sincerely for your vigilance in bringing our attention to the removal of a valuable protection for small firms, namely BATNEEC. Please also convey our gratitude to the noble Lords who rose to support small businesses in the debate. This provides an excellent example of the true value of the upper chamber which should continue to reflect the concerns of business". If the Minister can accept this amendment, it would do much to set the mind of small business at rest and earn their gratitude, which he will have richly deserved. I beg to move.

4.15 p.m.

Lord Stoddart of Swindon

My Lords, I support this amendment. My noble friend will not be surprised by that as he will no doubt have noted my remarks on Report. The amendment is asking that BATNEEC should apply not only to small businesses, although we concentrated on small businesses on Report, but to all businesses. Bureaucracy can impose costs which are not reasonable. Those who regularly read Christopher Booker's column in the Sunday Telegraph will have ample evidence as to how the bureaucracy of officialdom imposes techniques which are not really necessary. They are gold-plated. That applies not only to small businesses but also to large businesses.

Let us not forget that costs imposed on all businesses are usually passed on to the consumer. So, in ensuring that only reasonable costs are entailed and incurred, we are helping the consumer.

We want adequate and proper pollution controls but they need not be as expensive as, sometimes, officials believe they should be. Therefore, in my view, the amendment is extremely sensible.

One of the problems in this country is the growing power, extent and range of the bureaucracy and the growing power of SEFRAs which impose charges on businesses. They are self-financing and can impose their will without parliamentary or ministerial control. Frankly, some of their activities are frightening and damaging to our economic life. Therefore, it seems that this amendment helps to deal with that problem. It does not solve it entirely but it goes some way towards it.

At the same time, it recognises that there may be rare circumstances in which BATNEEC does not apply and should not apply. Therefore, the power is given to Ministers to bring forward alternatives to BATNEEC, provided that Parliament is aware of the circumstances and what is entitled by the changed circumstances in imposing BAT instead of BATNEEC.

Therefore, the amendment is well thought-out and helpful. It will be helpful not only to small businesses but to all businesses and it will certainly be helpful to the consumer because costs may very well be reduced. I know that my noble friend is receptive to good ideas—I do not want to praise him too much because it might damage his career—and I hope that he will consider this amendment and accept it. It is a good amendment. It will not hurt his Bill. Indeed, it will help it from the democratic point of view.

The Duke of Montrose

My Lords, I rise to support this amendment as one who is concerned about small businesses, particularly rural small businesses.

The Long Title of this Bill makes it clear that two approaches are being combined here to activities which cause pollution, one implementing the European Council directive and the other regulating otherwise, activities…capable of causing any environmental pollution". I find the European Council directive relatively easy to discuss. One of its beauties is that it is possible to distinguish within it what is a small business and what is a large business. But when we get beyond that, the line becomes blurred and difficult to determine. As I understand it, everything in the European directive is laid down in terms of the industries, the activities and the substances which are regarded as requiring regulation to prevent pollution.

The one missing element in that jigsaw is that it is left to the individual member states to define at what level or intensity each substance or detrimental activity should be regarded as causing pollution. Perhaps as a slight rider to this debate it would be interesting to know whether the British Government have now drawn up a list of the levels at which they regard pollution will have been created and whether that is available along with other consultation papers.

I find it a rather different story when we come to the incorporation of the British approach, which must be what is contained in the phrase, regulating, otherwise…activities which are capable of causing any environmental pollution". I certainly took a certain amount of comfort from what the Minister told us at Report when he said that. the incorporation of the integrated pollution prevention and control regime will not extend these controls to areas which were not already covered by the 1990 Act".—[Official Report, 13/5/99; col. 1388.] But the worry is that the approach contained in the 1990 Act, shorn of its 28 sections of defining legislation, could lead to statutory instruments being applied in areas which are not presently under consideration.

As someone who has spent many years in farming and land management, I am particularly concerned with what until now has been regarded as acceptable rural or agricultural practice. Perhaps I can illustrate what I mean. One can have some understanding of the European directive's limit on agricultural units which, as the Minister explained to me at Second Reading, is fixed at 40,000 hens, 2,000 fattening pigs or 750 breeding sows. The various components of pollution that have been taken into consideration in arriving at that limit are not actually defined.

One of the substances pinpointed in the directive is any substance with a high level of biological oxygen demand. Such substances are already regarded as pollutants in this country if released into a watercourse, but having a production system which produces such substances at an agricultural level is not presently subject to licence. If the European directive is taken as giving an indication of the levels at which controls are likely to be introduced, one can calculate the estimated biological oxygen demand produced by a unit of 750 breeding sows. At a rough calculation, materials of a similar level of biological oxygen demand would be produced by a unit of somewhere between 250 and 500 dairy cows. Those noble Lords with rural backgrounds will realise that there is a difference as to whether one takes into account pollution produced by cows at grass as well as the pollution produced by cows when indoors.

At this point, one is bound to be considering rather more than the 1,000 agricultural units that the Government presently maintain are likely to be affected. I expect that that particular yardstick will not presently be considered. My worry is that there is nothing in the Bill which would prevent such a comparison being drawn at a later date. That is where we come to the difficulty that I see: that from now on any sanction that this House will be able to voice against statutory instruments will be governed by the practice concerning positive resolution. The present convention whereby this House does not oppose secondary legislation may well be strained beyond its limit. The extremely wide powers delegated by the Bill may compel Members of your Lordships' House to make an intervention, even if only to express their rejection.

Lord Harris of High Cross

My Lords, I wish to intervene in support of this amendment. I should perhaps apologise that I come rather late to this modest scrap. That is not due to the usual indolence, but to ignorance. It is a glorious thing to be a foot-loose, fancy-free Cross-Bencher, but we have no research department and no assiduous Whips to draw our attention to some of these stealthy measures on behalf of European integration.

At Report stage, which I read most carefully, almost all noble Lords paid tribute to the Minister, the noble Lord, Lord Whitty. We have all had experience of the conscientious and courteous way he treats even such fractious questioners as the noble Lord, Lord Pearson. Paradoxically, his high standing underlines the baleful influence of Euro-directives which landed even him in such trouble with the Select Committee on Delegated Powers and Deregulation.

I confess that I speak as a former economist—a relaxed, retired economist—but, nevertheless, wholly opposed to the eruption of this Bill, especially when the 1990 Act seemed to be working to general satisfaction. I am irreconcilably opposed in principle to having the words "best available techniques" detached from the specific clear qualification of "not entailing excessive costs". It reminded me of a phrase of a well remembered Member of this House, Lord George-Brown, who used to say that he opposed something "irregardless" of the intentions of the Minister.

The suppression of pollution is one of those good things, like the National Health Service, on which single-minded enthusiasts could easily spend the greater part of the national income. In an unceasing search for perfection, enthusiasts push for further improvements, which can always be justified without regard to their ever-spiralling expense. Our aim in this matter should never be a world of zero pollution, nor even a world of minimum pollution; it should be a world of optimal pollution. In this as in other policies we must be guided by what economists call the "opportunity cost", measured by the sacrifice of all other desirable improvements displaced by any single line of expenditure.

Whatever the extenuating circumstances or external pressures, I have a slight suspicion, which the Minister need not deny, that he shares some of our reluctance to abandon this mnemonic BATNEEC. In any event, I wish to restore it in place of this impoverished version of "best available techniques", which has me putting my hand over my wallet pocket.

4.30 p.m.

Lord Vinson

My Lords, before the noble Lord replies, I hope that he will bear in mind that this clause, which I fully support, has been drafted with the expertise of the Clerks of the House. But for all that, and because of the arcane use of double negatives, it may not be easy to follow and may be flawed. I hope that the Minister will not reject the amendment on that basis, if that is the case, but look more deeply into what previous speakers have put to him; namely, that there is real concern in industry against losing the well accepted, well understood, well drafted, excellent technique of BATNEEC and substituting an entirely unnecessary alternative.

This is a matter of great importance. It brings in the smaller businesses which are specifically excluded by the EC directive. It is an example of gold-plating regulations at its worst. I hope that the Minister will bear that in mind when he replies.

Baroness Blatch

My Lords, I very strongly support this amendment. But that does not mean that we are in any way downgrading the importance of cleaning up the environment. I regard it as one of the privileges and great pleasures of the original Environmental Protection Act that its efficacy is manifest in the latest reports showing just how much improvement there has been in our rivers and industrial processes over the past decade. That government aim is very much supported.

An important point was made by the noble Lord, Lord Stoddart, which I support. Although we are praying in aid the protection of small businesses, which remains very important, this is a matter which applies to all businesses. If the burden of cost falling on a business results in lost jobs, lost market share or, worse, a company going out of business, it will impact on communities and on the health and wealth of our economy. That is an important point to bear in mind.

So much of the 1990 Act is being removed. I strongly support what my noble friend Lord Renton had to say about this Bill. To take a great swathe from the 1990 Act and then leave it to the vagaries of secondary legislation is simply not good enough. My noble friend the Duke of Montrose also made the point that, because of the limitations on the powers of this House, to take or leave secondary legislation suggests that matters will be very unsatisfactory in future. That sector of cur business and commerce will be put very much more at risk.

I believe that my noble friend has done the House a service. He has read very carefully what the Minister had to say when we last considered this Bill. I see this amendment as a very important salvage exercise. It re-imports into the Bill the protection of small businesses and allows the flexibility which my noble friend set out so clearly as regards BAT and the businesses to which this Bill applies. But should there be any extension to the work of the regulators it seems to me that the NEEC part of BATNEEC (the best available techniques not entailing excessive cost) is absolutely crucial as a protection for the whole of industry and commerce, and in particular the small business sector.

Lord Dixon-Smith

My Lords, to a degree we are raking over hot ashes and they are now being fanned. The noble Lord, Lord Stoddart of Swindon, gave the precise reason why that is so. We are not discussing business costs, although it is possible that they will be affected as a result of this Bill. But businesses are businesses and they are there to survive and make an honest living. If their costs increase they are passed on to the consumer. Ultimately they become costs to the whole of society. That is why this matter is important.

This particular amendment is directed at protecting or excluding, as far as possible, the smaller business sector insofar as it is protected at the present time and not included within the ambit of the 1990 Act. The noble Duke, the Duke of Montrose, raised an important point about the drafting of regulations after the 1990 Act is repealed. It seems to me that at that point it would be possible to draft regulations which were strictly outwith the ambit of that Act, so I would certainly wish to have at the very least an assurance from the Minster that that will not happen.

The noble Duke also raised the question of conventions on secondary legislation. I have spoken about that already in connection with this Bill. I may have something further to say on that later in the proceedings. It is a very difficult matter for the whole House. The Bill is much improved. For that thanks are due to the Minister for his work in persuading the Government to change the Bill. However, it is still a Bill which is wholly dependent for its implementation on regulations, the vast bulk of which have not been seen even in consultation form. Therefore, everything has to be taken on trust. I know the Minister well enough to believe that I can trust him. But the discussion at this stage would not have taken place had we been dealing with a more conventional Bill.

Lord Whitty

My Lords, I can assure noble Lords that I am not rejecting this amendment because it has a minor drafting flaw or because it is advocated by my noble friend Lord Stoddart of Swindon. I hope I have displayed that when good ideas come from the House I consider them and act on them. However, this amendment is a thoroughly bad idea. So much that is misleading has been said in this debate that I do not know quite where to start. Perhaps I should begin where the noble Lord, Lord Dixon-Smith, ended and on the point which the noble Duke raised; namely, that we were creating a new regulatory power which somehow went beyond what already exists.

The 1990 Act already allows regulations setting out the sectors and the activities which are to be covered. We are not creating a new power in that sense. We are not changing the regime so that we do not specify in advance the levels of pollution. The British system of pollution control has always been site specific. By definition, the harm will always vary according to the location. We are not altering the practice.

Baroness Blatch

My Lords, on the point made by the noble Lord about secondary legislation, perhaps I may point out that much of the 1990 Act has been removed. Secondary legislation has as its source clauses in an Act. If those are removed the power to make secondary legislation may exist but it cannot be implemented.

Lord Whitty

My Lords, the powers are there in the Act. They are specified in regulations, which are very much in the same terms as the 1990 Act. We have no additional power to make regulations such as those about which the noble Duke was concerned. We already have those powers.

Baroness Blatch

My Lords, I am not arguing about the powers. They are there, but the clauses on which to build the secondary legislation will not exist.

Lord Whitty

My Lords, the powers are defined in the purposes of the Act.

Perhaps I may now turn to the effect of this amendment. On the one hand it would create an incoherent system and on the other it would be deeply detrimental to the small firms about which noble Lords have expressed concern. I, too, am particularly concerned about them. The amendment would introduce two parallel systems, one based on BAT and the other on BATNEEC. The objective of this Bill is to create one coherent regime, which is based on BAT, to which I shall return in a moment, and clearly understandable by the whole of industry. That is supported by the vast majority of spokespeople from industry whom we have consulted.

The problem with the noble Lord's amendment is that not only would it introduce an incoherent two-tier regime in the sense of having two different techniques, but the threshold for those two techniques would also be defined by size of firm; whereas the whole threshold in the directive is determined by size of installation. Let us imagine, for example, a business which owns two installations, both producing the same product via the same processes. One would be covered by the directive's terms and the other by the BATNEEC terms. That company would just have to struggle in an effort to understand which technique to apply in each different situation. The two concepts are very similar, but they are not identical in law. Therefore, the noble Lord's amendment would clearly be counterproductive for the very industrial interests that he seeks to protect.

Perhaps I may clarify one matter, because I believe that the noble Lord probably had a point in referring back to the statements that I made on the last occasion. There may not have been total clarity there, but I think that the noble Lord made it slightly worse by quoting my words in the wrong order. Nevertheless, I shall try to clarify the position in the hope that it will satisfy the noble Lord.

There will be 7,000 IPPC installations which will be subject to integrated control—that is to say, emissions by air, land and water. Those are the large installations to which I referred. There are approximately 12,000 LAPC installations already regulated under earlier legislation, which relates to emissions by air. It is true that all will be subject to BAT, but it is not true that, for the first time, regulations will apply to them.

I turn now to the difference between BAT and BATNEEC. The amendment seems to keep alive the canard which has clearly gained a lot of force in your Lordships' House; namely, that BAT is somehow a stricter version of BATNEEC, without considering the flexibility and the viability of the corporation concerned. I shall not spell out everything that I said at an earlier stage in the Bill's proceedings because it is all set out in the Official Report of 19th April. However, I hope that noble Lords who I feel have been misled on this point—not deliberately perhaps, but, nevertheless they have been—will understand. We do not expect the change in the technique from BATNEEC to BAT to lead to an operator spending significant amounts of money on upgrading equipment.

Contrary to the impression that has been conveyed in that respect, both BAT and BATNEEC have similar regard to costs. Indeed, it is absolutely explicit in the directive. BAT is about technology which is economically viable. The economics of a small firm and indeed of large firms are, therefore, taken into account. Indeed, that is something that the directive states very explicitly. Therefore, I do not believe that noble Lords should go down the road of regarding this as being an unrealistic, "ultra-green" definition bearing no relationship to the costs facing the management of small firms.

However, the real damage that would fall on small firms is, I believe, unintended by the noble Lord. I said on Report that lines 7 and 8 of his amendment, which was very similar, would require integrated permitting of emissions to the environment as a whole to be extended to all installations; in other words, it would have to be extended to those smaller installations mainly owned by smaller firms, though not entirely, which are covered by the local air pollution control system. That would be burdensome to small firms. It would not be a relief for them and would in fact prove to be the opposite. I do not honestly think that the noble Lord's colleagues in the Federation of Small Businesses would, in reality, thank him were he to pursue his amendment. It would be an additional burdensome amendment to extend this beyond the air emissions control which exists at present and which everyone understands. It would saddle small businesses with integrated permitting.

In these provisions we are not gold-plating; we are seeking to provide a coherent system which will protect the environment and which can be understood by industry. Indeed, most of industry welcomes it. The amendment would defeat the purpose of the Bill which is to maintain coherence in our pollution control in the face of the need to implement the directive. If implemented as drafted, the provision would be seriously burdensome to smaller firms. Therefore, I hope the noble Lord will feel able to withdraw his amendment.

The Duke of Montrose

My Lords, before the Minister sits down, can he say whether the other countries within the European Union will be asked to set specific levels of pollution under the directive and whether the UK will be allowed to keep a flexible level based on site-specific circumstances? Is that what the noble Lord is saying?

Lord Whitty

My Lords, the pollution control relates to the final output. All member states will be transposing the directive with regard to their own traditional systems of pollution control. Ours is a site-specific approach. Therefore, the answer to the noble Duke's question is, yes.

Lord Pearson of Rannoch

My Lords, I am most grateful to the Minister for taking this amendment so seriously. However, I have to rely on the version put upon events by my noble friend Lady Blatch who, after all, took the 1990 Bill through this House. I take her point that it may not be the powers which will create a problem; it is the sections which are to be removed by this Bill which will be the problem.

The noble Lord said that my amendment would set up a two-tier and, therefore, incoherent system. However, one has to point out that the present system of BATNEEC is coherent and is entirely understood by industry of all sizes; indeed, the noble Lord has; admitted that it is working extremely well. I accept that the Government feel that they have to import this directive which insists on BAT, but I do not think that we should necessarily go along with that. The noble Lord then said that I quoted his words in the wrong order. That is a matter of record. Anyone can look at Hansard and check it, but I certainly did not mean to do so and I do not think that I did.

The noble Lord also said that the wording is imperfect and that, in some ways, it would do more harm than good to small business. If that is the case, I have no doubt that the Government could look at it and get the wording right to reflect what has been said in this debate—and, indeed, the spirit of this debate—before the Bill reaches the other place. For my part, I have tried to read the wording again and was assured by the Clerks who helped me draft the amendment, only minutes before the debate started, that the amendment does in fact achieve what I and other noble Lords who support it want to achieve.

As we are on Third Reading, the Bill will now have to go to the other place. If we were to pass this amendment tonight, those in another place could look at it. The Bill could then come back here and we could have another look at it, with the benefit of the wisdom of the other place and of the noble Lord's expert draftsman. In those circumstances, I feel that I have no alternative but to ask for the opinion of the House.

4.47 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 105; Not-Contents, 126.

Division No. 1
Addison, V. Biffen, L.
Ailsa, M. Blaker, L.
Alexander of Tunis, E. Blatch, B.
Archer of Weston-Super-Mare, L. Blyth, L.
Astor of Hever, L. Bowness, L.
Attiee, E. Brabazon of Tara, L.
Bathurst, E. Brentford, V.
Belhaven and Stenton, L. Bridgenian, V.
Brougham and Vaux, L. Mackay of Ardbrecknish, L.
Burnham, L. Mackay of Drumadoon, L.
Byford, B. Mancroft, L.
Cadman, L. Mayhew of Twysden, L.
Campbell of Alloway, L. Miller of Hendon, B.
Campbell of Croy, L. Milverton, L.
Carew, L. Monk Bretton, L.
Carnock, L. Monson, L.
Clark of Kempston, L. Montrose, D.
Clifford of Chudleigh, L. Mowbray and Stourton, L.
Courtown, E. Moyne, L.
Cowdrey of Tonbridge, L. Munster, E.
Cox, B. Murton of Lindisfarne, L.
Cranborne, V. Noel-Buxton, L.
Croham, L. Northbrook, L.
Cuckney, L. Northesk, E.
Davidson, V. Norton of Louth, L.
Denham, L. Nunburnholme, L.
Dixon-Smith, L. Oxfuird, V.
Downshire, M. Park of Monmouth, B.
Dundee, E. Pearson of Rannoch, L. [Teller.]
Dundonald, E. Pender, L.
Eden of Winton, L. Plummer of St. Marylebone, L.
Elliott of Morpeth, L. Prior, L.
Elton, L. Reay, L.
Fookes, B. Rees, L.
Geddes, L. Renton, L.
Gisborough, L. Renwick, L.
Seccombe, B.
Glentoran, L. Sempill, L.
Harding of Petherton, L. Sheppard of Didgemere, L.
Harris of High Cross, L. Skelmersdale, L.
Henley, L. [Teller.] Stewartby, L.
Holderness, L. Stodart of Leaston, L.
HolmPatrick, L. Stoddart of Swindon, L.
Hooper, B. Strathcarron, L.
Howe, E. Strathcona and Mount Royal, L.
Jenkin of Roding, L. Sudeley, L.
Jopling, L. Taylor of Warwick, L.
Keyes, L. Teviot, L.
Lane of Horsell, L. Vinson, L.
Lauderdale, E. Waddington, L.
Leigh, L. Wade of Chorlton, L.
Long, V. Wise, L.
Lyell, L. Young, B.
Acton, L. Davies of Oldham, L.
Addington, L. Desai, L.
Ahmed, L. Dholakia, L.
Alderdice, L. Dixon, L.
Allenby of Megiddo, V. Donoughue, L.
Alli, L. Dormand of Easington, L.
Amos, B. Dubs, L.
Annan, L. Evans of Parkside, L.
Archer of Sandwell, L. Evans of Watford, L.
Ashley of Stoke, L. Ezra, L.
Barnett, L. Falconer of Thoroton, L.
Blackstone, B. Falkland, V.
Borrie, L. Farrington of Ribbleton, B.
Brooke of Alverthorpe, L. Geraint, L.
Brookman, L. Gilbert, L.
Burlison, L. Gladwin of Clee, L.
Calverley, L. Glanusk, L.
Carlisle, E. Goodhart, L.
Carter, L. [Teller.] Gould of Potternewton, B.
Charteris of Amisfield, L. Graham of Edmonton, L.
Chorley, L. Grenfell, L.
Christopher, L. Grey, E.
Clarke of Hampstead, L. Hamwee, B.
Clinton-Davis, L. Hanworth, V.
Cocks of Hartcliffe, L. Hardy of Wath, L.
Crawley, B. Harris of Greenwich, L.
Dahrendorf, L. Harris of Haringey, L.
David, B. Haskel, L.
Hilton of Eggardon, B. Prys-Davies, L.
Hogg of Cumbernauld, L. Ramsay of Cartvale, B.
Hollis of Heigham, B. Redesdale, L.
Hoyle, L. Rendell of Babergh, B.
Hughes, L. Rodgers of Quarry Bank, L.
Hughes of Woodside, L. Rogers of Riverside, L.
Hunt of Kings Heath, L. [Teller.] Russell, E.
Ilchester, E. Sandberg, L.
Irvine of Lairg, L. [Lord Chancellor.] Sawyer, L.
Scotland of Asthal, B.
Iveagh, E. Serota, B.
Jay of Paddington, B. [Lord Privy Seal.] Sharp of Guildford, B.
Shepherd, L.
Jeger, B. Sheppard of Liverpool, L.
Jenkins of Putney, L. Shore of Stepney, L.
Judd, L. Simon, V.
Kennet, L. Smith of Clifton, L.
Kirkhill, L. Smith of Gilmorehill, B.
Laming, L. Strabolgi, L.
Longford, E. Symons of Vernham Dean, B.
Ludford, B. Thomas of Walliswood, B.
McNair, L. Thornton, B.
McNally, L. Thurso, V.
Maddock, B. Tomlinson, L.
Mar and Kellie, E. Tope, L.
Merlyn-Rees, L. Turner of Camden, B.
Mishcon, L. Weatherill, L.
Molloy, L. Whitty, L.
Monkswell, L. Wigoder, L.
Morris of Manchester, L. Williams of Crosby, B.
Murray of Epping Forest, L. Williams of Elvel, L.
Newby, L. Williams of Mostyn, L.
Nicol, B. Winchilsea and Nottingham, E.
Phillips of Sudbury, L. Winston, L.
Pitkeathley, B. Young of Dartington, L.
Ponsonby of Shulbrede, L. Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.58 p.m.

Lord Pearson of Rannoch moved Amendment No. 3:

Page 3, line 11, at end insert— ("() regulations under this section which affect the subject-matter of sections 1 to 28 of the Environmental Protection Act 1990 (notwithstanding the repeal of those sections):")

The noble Lord said: My Lords, I shall deal briefly with this amendment. I refer to what was said in our debate at Report stage at cols. 1390 to 1392 of the Official Report when the Minister was good enough to give an undertaking which unfortunately does not appear to have been correctly printed. The Minister said, The Bill as it stands provides the Secretary of State with a choice of procedure. I can give an undertaking that any amendments to the regulations which affect matters which were previously included on the face of the Employment Protection Act 1990 will be put to Parliament for consideration under the affirmative procedure".—[Official Report, 13/5/99; cols. 1391–1392.]

I just wanted to make sure that the Minister had the opportunity to correct the official record. I am pretty sure that he meant to say the Environmental Protection Act 1990 and not the Employment Protection Act. In view of the importance of the undertaking, I think it is worth getting that on the record. I beg to move.

5 p.m.

Lord Whitty

My Lords, if that is all the noble Lord is seeking I am very happy to put on the record the correct version. As noble Lords will know, I rarely quote the "Employment Protection Act 1990"—even if there were one. Perhaps I can repeat for the record that I intended to refer to the Environmental Protection Act. At Report stage I gave an undertaking that any changes which the Government make to provisions in the regulations and which were previously on the face of the 1990 legislation regarding environmental protection would be made by affirmative procedure. I know that that is what the noble Lord was seeking and also what the CBI was seeking.

The noble Lord seeks to put the issue on the face of the Bill. In practice, that is slightly difficult. In addition, the amendment is rather imprecise because by referring to the "subject-matter" of the 1990 Act it leaves unclear whether minor amendments to the regulations which, under that Act, are currently made by negative procedure would in future have to be made by affirmative procedure. The amendment brings in the affirmative procedure. I do not believe that that is the intention. However, that would be the practical effect of the amendment. At the very least, there could be serious potential dispute as to what "subject-matter" actually meant. I therefore hope that the noble Lord will feel himself able to trust the words in Hansard, as corrected, and leave it at that.

Lord Pearson of Rannoch

My Lords, I do, and I am most grateful to the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Renton moved Amendment No. 4:

After Clause 2, insert the following new clause—

  2. cc435-8
  3. COMMENCEMENT 1,887 words