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Mr. David Heath (Somerton and Frome): The hon. Gentleman will be aware of the concern of quarry producers in my part of the country and elsewhere about the effect of the new abstraction arrangements on their activities, particularly below-water table abstractions.
Can he enter into further dialogue with them, because I am sure that that their concerns can be met, and that we can have an adequate planning regime that deals with mineral permissions without a mismatch between the mineral permission on the one hand and the abstraction licence on the other?
Mr. Morley: I shall come soon to that very point.
However, mine dewatering has an impact on the environment and the water table. It is therefore perfectly legitimate to bring mine dewatering within the Bill's remit. Of course, I appreciate that there are issues relating to capital investment and long-term planning to which we are sensitive. We are adopting a reasonable position, and recognise both the needs of the industry and the need for proper resource management. There will be an opportunity to discuss that during proceedings on the Bill. It is a question of balance, and I believe that the balance set out in the Bill is about right.
Mr. Morley: I come now to dewatering, and if hon. Members wish to make points, I shall be happy to deal with them. Under the Bill, transfers for quarry dewatering are brought within the system. It is claimed in some quarters that quarry water is returned to the environment and is not consumed. However, dewatering has caused problems for other abstractors in the area who rely on water in the same strata, and it has caused damage to nature conservation sites. We need a safeguard for the activities but, of course, each activity should be treated on its merits.
Tom Levitt (High Peak): I am grateful to my hon. Friend for that explanation. No one would deny that controls are needed on the quality of water returned to the environment by dewatering, but time limits and the effect on investment are causing the problem. Ministers in another place have give verbal assurances, but why is there an objection to including the possibility of exemptions in either the Bill or guidance?
Mr. Morley: As a general principle, the time limit is 12 years. Nevertheless, the Environment Agency in certain circumstances can provide longer time limits, depending on individual circumstances. It therefore comes back to the point that I made earlier—it very much depends on the circumstances of a particular application and the particular need. I fully expect the Environment Agency to be reasonable in the way in which it addresses that.
Mr. David Curry (Skipton and Ripon): The hon. Gentleman knows that the Environment Agency already has powers to intervene where there are environmental difficulties. Would it not be more sensible, when allowing dewatering licences to be coterminous with the quarrying permit, to reinforce the powers of the Environment Agency to intervene in cases where there was a perceived environmental problem? That would get over the difficulties of investment and uncertainty.
Mr. Morley: I accept the point that the right hon. Gentleman is making, and it is not unreasonable. It is a question of balance. The problem is that some mineral
extractors have permission that runs for a very long time, so the time limit for the abstraction licence has to be restricted. There is a presumption of renewal in the Bill and there is some flexibility for the Environment Agency, as the right hon. Gentleman rightly states. There is an argument about balance, but I think that the balance in the Bill is right.
Mr. Patrick McLoughlin (West Derbyshire): The Minister is obviously aware that this is causing a great deal of concern throughout the industry. Will he take the issue away after today's debate and consider whether 12 years is the right length of time? There is a great argument—apparently, it has even been accepted by the Prime Minister—about the amount of extra bureaucracy put on to businesses. This is one more layer that they could do without.
Mr. Morley: It is true that there is a new restriction, but I repeat that I believe it is justified as it relates to extraction from the water table and can impact on other abstractors, their businesses and their needs, and can cause environmental damage. We are not taking a dogmatic position. It is a question of the balance between the needs of long-term investment in mineral extraction, and the needs of proper resource management. I believe that we have achieved the right balance, but that will be subject to the scrutiny of the House in Committee and on Report, and we will listen to the reasoned arguments put forward.
Mr. Simon Thomas (Ceredigion): On a slightly wider point, if we consider business needs in relation to bottled water, such as at Ty Nant in my constituency, or mines water, the issue is investment decisions and how the licensing regime interacts with those. What can the Minister say about the new water services authority, and how much emphasis will be placed on business needs, sustainability, job creation and employment in the deliberations of the authority and of the Government on the Bill?
Mr. Morley: Those concerns are more than adequately addressed in the Bill. First, there is the presumption of renewal. Secondly, even where potential problems are identified, Environment Agency officials will sit down with the abstractor to discuss ways of resolving the problem. They will not go straight in and start taking people's licences off them without first trying to resolve the problem in a satisfactory way, recognising the needs of investment and social and business issues.
Those are all presumptions in the Bill. They are recognised. The Bill aims at proper resource management in a balanced way, taking into account the conflicting demands in a reasonable and legitimate way. The points that have been raised about long-term investment—in mineral water, for example—are understood and taken into account.
Diana Organ (Forest of Dean): Many quarry owners are concerned because of the commitment of long-term investment. If the Environment Agency is to revoke a licence, there is no right of appeal under the Bill. In any
other planning application where one loses the right to continue development, there is a right of appeal. It seems undemocratic that we are not allowing quarry owners the right of appeal once their licence has been revoked.
Mr. Morley: There is in the Bill a right of appeal to the Secretary of State, so that safeguard exists in relation to licences that are withdrawn.
Part 2 aims to provide a new and better regulatory environment for the water industry and its consumers. The new regulatory arrangements set out in the Bill reflect the need to balance consumer and industry interests highlighted in the 1998 White Paper "A Fair Deal for Consumers—Modernising the Framework for Utility Regulation". Water is unique among utilities. Environmental and public health issues mean that regulation of the water market needs the close involvement of environmental and drinking water regulators. There is also the ongoing need for large-scale and long-term capital investment.
The aim of the new regulatory framework is to improve quality of service by strengthening regulatory consistency and transparency and promoting consumer interests. The Bill replaces the existing director general of water services with a regulatory authority, as recommended by the Better Regulation Task Force. It places consumers at the heart of regulation with an independent consumer council for water, whose sole purpose is to promote the interests of consumers, undertakers and licensees. The new council will have the power to investigate complaints and to carry out investigations into consumer issues, public advice and information. To help it with these tasks, it has the power to demand information from the regulator and undertakers.
Both the new regulatory authority and the council will have a duty to contribute to sustainable development, ensuring that the economic needs of the industry are balanced against the social concerns of consumers and important environmental issues linked with a finite resource.
Paddy Tipping (Sherwood): My hon. Friend spoke about the need for balance. Is he aware of the upcoming price review, and has he seen the indications of the demands of the water companies for a 12 or 13 per cent. a year increase in water prices? That is not real balance, is it?
Mr. Morley: My hon. Friend is trying to divert me from the subject of the Bill. What I can tell him is that I am well aware of the current price review, and that these are very early days.
Part 2 also deals with competition. The benefits of genuine open competition are well known and widely supported. In the case of water, however, the potential for more innovation and improved service must be balanced against public health, the environment and affordability. That is coupled with another wider Government objective—to safeguard consumers' interests by ensuring that the water industry continues to provide water efficiently and effectively for all.
Mr. John Redwood (Wokingham): Competition is the best way of guaranteeing better quality and better
supply. Many businesses are being ripped off by the water industry monopolists at present: prices are high, there is no specification that they want, and there are not the necessary volumes. Will the Minister consider lowering the suggested limit from 50 to 10 megalitres to allow most businesses to benefit from competition, and also allowing competition to all domestic consumers, who will otherwise be ripped off in the way described by the hon. Member for Sherwood (Mr. Tipping)?
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