§ 36 Clause 33, page 37, line 41, leave out Clause 33
§ Lord WhittyMy Lords, I beg to move that the House do agree with the Commons in their Amendment No. 36.I shall refer also to Amendments Nos. 37 and 49.
When we debated Clause 33, there was a bit of confusion about what it applied to at that point in the Bill. The objective of inserting Clause 33, which noble Lords opposite supported, was that it would apply to the Environment Agency. There was confusion about whether it applied to Ofwat or the Environment Agency. The part of the Bill to which it relates deals with the powers of Ofwat and not a right of appeal against decisions by the agency.
I believe that in practice this change does not alter the current provision in relation to Ofwat because the company can already appeal to Ofwat if it makes an order that is not within its powers. I think, therefore, the insertion at the earlier stage was due to a misunderstanding that this part of the Bill related to the Environment Agency where different arguments apply. As it stands, the clause was not necessary because there already is an appeal system in relation to Ofwat.
§ Moved, That the House do agree with the Commons in their Amendment No. 36.—(Lord Whitty.)
§ 36A Baroness Byfordrose to move, as an amendment to the Motion that the House do agree with the Commons in their Amendment No. 36, leave out "agree" and insert "disagree".
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The noble Baroness said: I thank the Minister for accepting that there was slight confusion in Committee. I accept that the clause before us relates to Ofwat and not the Environment Agency. The Minister was kind enough to write to me, saying:
Clause 33 amends the Water Industry Act 1991 to include additional provision for appeals against enforcement orders proposed by the regulator. I should emphasise that those enforcement orders are the function of Ofwat, not the Environment Agency".
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I am happy to accept that. He continued:
The Act already contains considerable safeguards so that the regulator must consult the company and then consider any representations or objections. This procedure will ensure that errors are avoided".
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I must say that I asked myself, "Why is he so confident?" I fear that errors still occur even with the best will in the world. He continued:
The purpose of enforcement orders is to protect consumers or the environment against company shortcomings".
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I accept all that the noble Lord wrote in his letter. However, unless I have misread it, it still leaves the regulator as judge and jury. We are concerned, because that is not an ideal situation. When we debated the matter earlier, we received support from my noble friend Lady O'Cathain, and the noble Lord, Lord Borrie, when the noble Baroness, Lady Miller, and I spoke to it. So I raise the issue again. The noble Lord, Lord Borrie, said:
But let us suppose that the agency's exercise of a power is questionable. Can it be questioned at all? Under Section 21 of the Water Industry Act 1991, the only possible remedy that I can see for a company aggrieved by an enforcement notice is either unlawfulness or failure of the agency to comply with statutory procedures. However, as the power is expressed in very subjective terms, it is difficult, if not impossible, for any aggrieved company to cross the huge hurdle of demonstrating that the Environment Agency has acted unlawfully.
The amendment would add two grounds: error of law or fact, and unreasonable use of power".—[Official Report, 24/6/03; cols. 156–7.]
§ When we continued to debate the matter, it was suggested that judicial review was the only option open to the company. That is unsatisfactory, which is why I move this amendment to the Motion moved by the Minister.
§ Moved, as an amendment to the Motion that the House do agree with the Commons in their Amendment No. 36, leave out "agree" and insert "disagree".—(Baroness Byford.)
§ Lord Livsey of TalgarthMy Lords, I shall speak briefly to the amendment to reinforce what the noble Baroness, Lady Byford, said. Clearly, there must be redress if there are errors on orders; if orders are unreasonable, they must also be open to challenge and redress. If that cannot be done, that leaves those who want to appeal in a difficult situation, as the noble Baroness said.
§ Lord WhittyMy Lords, I fear that neither the noble Lord nor the noble Baroness have really heard what I said. There may well be queries about appeals against the Environment Agency; I think that the comments of my noble friend Lord Borrie in the Moses Room largely related to that.
I could go into a long riposte in defence of the protection that we have against inequitable decisions by the Environment Agency, but the point tonight is that reinserting the clause that the Commons want to remove would be of no benefit in relation to the Environment Agency. It relates to Ofwat, as I thought that the noble Baroness recognised in her remarks, and therefore does not meet any of the objections to which the noble Lord, Lord Livsey, or the noble Baroness, in the latter part of her remarks, referred. It is not logical for us to pursue the matter at this stage.
§ Baroness ByfordMy Lords, I thank the Minister for that response, although I am not thrilled with it. If he says that that is factually correct and that I am under a misunderstanding, which I think he is suggesting, we have clarified that the provision does not refer to the Environment Agency. I am happy with that. Even if it 1689 is Ofwat, that body will still be the judge and jury, will it not? That is the point that I am trying to make. I have accepted that perhaps we were at cross purposes, because in Committee we were getting confused over whose responsibility it was—whether it was the Environment Agency's, or not. I have accepted that, and it does not worry me. What does worry me, however, is that Ofwat will still be the judge and jury unless the Minister is telling me otherwise. That is the point that I am trying to make.
§ Lord WhittyMy Lords, as the noble Lord, Lord Livsey, recognised, there are already grounds for appeal against Ofwat if it exceeds its powers, perhaps due to making a mistake, to the application of the law to the facts, or to administrative error. The noble Lord, Lord Livsey, says that those are restrictive powers, but they are substantial powers of appeal and they are already there. If the proposal applied literally to Ofwat, it would duplicate the powers that already exist in the existing legislation. However, most of the arguments in support of the noble Baroness, which were made at previous stages, related in fact to grievances with the Environment Agency's decisions, not with Ofwat's.
§ Baroness ByfordMy Lords, perhaps it would be better at this stage of the Bill not to press the matter. I beg leave to withdraw the amendment.
§ Amendment No. 36A, as an amendment to Commons Amendment No. 36, by leave withdrawn.
§ On Question, Motion agreed to.