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Mr. Tyler: The Minister has come to the point about which I asked my hon. Friend the Member for Somerton and Frome (Mr. Heath): if it ain't broke, why fix it? The Minister has just said that the Environment Agency has a proper and effective role, so why must we change it?

Mr. Morley: Because there have been some severe problems. My hon. Friend the Member for Sherwood (Paddy Tipping) is right. Offhand, I can think of only three cases that were resolved. The Environment Agency has been asking for those powers, so the hon. Member for North Cornwall (Mr. Tyler) should not think that everything in the mines sector is problem-free. If people are de-watering, they are abstracting from the aquifer. There may be ways of mitigating that, as the hon. Member for Somerton and Frome pointed out, but it should be within a regime that gives the Environment Agency some tools for managing the process. That is an important general principle in the Bill and I think that it is accepted; we are talking about the detail in certain circumstances. Although I understand the points that are being made, I cannot accept them. I feel that we have addressed the concerns raised in the discussions and that the balance is right.

New clause 3 would introduce two new features, both concerned with the renewal of time-limited licences and both relating only to quarries. Our provisions are intended to create a system for sustainable water resources management that applies to all abstractors. There cannot be a separate regime with one sector being treated differently.

The new clause would provide that compensation be paid to a quarry if a licence was not renewed or if it was curtailed. However, the only reason that a licence for quarry de-watering would not be renewed or would be curtailed would be that there was an environmental problem that could not be overcome. We should not compensate people for causing environmental damage. That is another principle in the Bill: the polluter pays.

The proposal would include the presumption of renewal for mines and quarries as a statutory requirement. It would also introduce, in a well-established statutory decision-making process, a requirement that, where certain conditions were met, the decision would effectively be taken out of the hands of the proper decision-making body—the Environment Agency.

New clause 12, tabled by the hon. Member for Lewes (Norman Baker), would place the presumption of renewal in statute, for all abstractors. My concern is that such a provision would fetter the agency's ability to consider other relevant factors. It is difficult to define in

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a Bill every factor that might arise in sufficient detail for all those cases where the presumption cannot apply. The presumption of renewal reiterates the effective presumption of grant existing at the time of the original application, provided that there is continuing need and that environmental sustainability is not threatened.

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The Environment Agency must have concrete grounds for not granting or not renewing a licence, and its decisions can be challenged by appeal. We have to be careful about including undue restraints in the Bill because one of the considerations that the agency must take into account in renewing a licence is the efficient use of water. The hon. Member for Lewes has not included that in his criteria, as far as I am aware.

Norman Baker: That is covered by environmental sustainability and water abstraction in new clause 12.

Mr. Morley: I accept the hon. Gentleman's assurance that that is his intention, but new clause 12 does not say that. [Interruption.] He can imagine how such meanings could be argued over in court. We should be as clear as possible in framing legislation. If it is impossible to deal with every circumstance in relation to the presumption of renewal, there must be flexibility to allow the agency to do its job. That is why it is unwise to stipulate in the way that the hon. Gentleman suggests in new clause 12. It could lead to great difficulties in the future. My worry is that it could tie one hand behind the agency's back, and I would not want that to happen.

Mr. Heath: I am concerned about how the agency can deal with the cumulative effect of a number of permissions on a single aquifer. Each planning permission and each licence may well not have an environmentally unsustainable effect on the aquifer, but the cumulative effect may be unsustainable. In those circumstances and under the Minister's scheme, would the agency be right to cancel all permissions in a given area?

Mr. Morley: The hon. Gentleman goes into hypothetical detail. However, as a rule of thumb, the agency will certainly take into account the cumulative effect of abstraction. If a further application could add to the overall effect of a number of existing licences that would certainly affect whether a new application was granted. Of course, there is nothing new about that—the agency currently operates in that way in respect of its resource management duties—so the existing situation would not change.

Of course, we have powers to direct the agency in how it deals with such issues if it becomes necessary to do so in the light of experience, so the presumption of renewal need not be included in the Bill, as that could be too restrictive. The presumption of renewal exists, as has been emphasised on a number of occasions, and I do so again now, so that there is no doubt or argument about it.

Amendments Nos. 9 and 11 would impose particular considerations in specifying the expiry date of a licence. Incorporating criteria, such as fixed duration, or the

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need to relate licences to asset-lifetime criteria could have the effect of overriding other criteria, not least environmental considerations. So those amendments are unacceptable.

Amendment No. 12 would significantly limit the ability of the agency to refuse to renew a licence to the very narrow set of circumstances set out in that amendment. It would remove the tests to ensure whether water continues to be used efficiently or is still required. The hon. Member for Lewes says that such things are covered by sustainability, but there could be argument about that.

I come now to amendment No. 10. I met representatives of mineral water companies, and I understand their concerns about what might happen if someone wishes to construct a borehole adjacent to the site of their existing abstraction licence. Of course, existing licence holders do have protected rights in respect of quantities. I realise that the hon. Member for Leominster (Mr. Wiggin) is concerned that boreholes might affect the chemical composition of the water, and I pointed out in my discussions with mineral water companies that I would ask the agency whether it could take such issues into account. However, there are real problems. The agency does not have a duty to take into account the effect of boreholes on the mineral composition of water. The agency's duty relates simply to quantities, so amendment No. 10 would not have the effect that the hon. Gentleman argues for. Moreover, there would be real technical problems. The greater protection is on the quantities and on the rights of existing licence holders. As has rightly been stated, there is deregulation under a certain threshold, but if a problem arose the threshold could be lowered.

Amendment No. 24 would restrict the Secretary of State's ability to direct the agency to apply for a threshold order under new section 27A of the Water Resources Act 1991. The Secretary of State would be able to exercise this power only in relation to issues of national importance. The power to intervene, exceptional as it is, may be used to make changes to reflect important national policy matters, but it could also be used in respect of matters on which the agency had yet to have the opportunity to take action. To enable full accountability between the Secretary of State and the agency, it is necessary to have the ability to intervene in unforeseen circumstances, which may encompass wider issues than those of national importance. Again, we must ensure that the agency has flexibility.

Amendment No. 25 deals with advertising regulations—a matter to which Members did not give a great deal of attention—and amendment No. 4 is concerned with protected rights. There seemed to be some confusion in Committee about the question of the time limit, and I must make it clear that we are talking about protected rights, not the right to abstract. Clause 17 preserves the protected right of those abstractors who no longer require a licence as a result of the Bill's various deregulatory measures—in other words, those who are below the current threshold. But where the right to abstract is not exercised, the protected right may lapse after four years, or—as was rightly pointed out—after another such period, as agreed by the agency. The intention is to prevent any unused abstraction rights from blocking access to water resources by preventing

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the issuing of new licences. But I must stress that that the loss of a protected right after four years does not prevent an abstraction from taking place. Unlicensed abstraction can continue lawfully at any time because it is below the threshold; it is simply the status of the abstraction that changes.

Amendment No. 4 seeks to change the period from four years to six years—an issue that was discussed in Committee. We believe that the proposed normal four-year period achieves a balance between the needs of an abstractor for the resources that they have a right to abstract, and the needs of other licence applicants, and, of course, of the environment.

Clause 24 introduces the right to sue an abstractor who causes damage. Abstractors will therefore need to remain alert to the possibility that they are harming others, if they are to avoid being subject to claims for damages. That will ensure that the law on water abstraction is entirely consistent with long-established rules in other areas—for example, the requirement for property owners and other occupiers or users of land to respect the interests of their neighbours. I understand what the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) said about the concern that that might lead to some house owners taking action. She gave an example of people in the watercress industry, and amendment No. 126 would provide a restricted definition of loss or damage. Different rules would apply to loss or damage under these provisions compared to the usual principles that apply to other cases.

Although the most common type of damage will be tangible damage to property, people who have suffered kinds of otherwise recoverable harm should have the ability to obtain the appropriate compensation. However, if the hon. Lady thinks that that might provide an excuse for someone to take legal action because they might argue that the water flow in the stream outside their house has devalued their property because it is on the waterside, I assure her that that is not the intention of clause 24. Just like anything else, such a case would have to be made in a court of law, and our legal advisers inform me that it would be very difficult to make such a case. In the end, it is for the court to decide, but it is not the Bill's intention to provide such a right. The Bill simply intends to put in place provision for similar rights to apply in similar circumstances so that there is consistency. I do not believe that it will necessarily bring about major changes.

I think that I have covered the main points that have not unreasonably been raised. I hope that I have addressed those points in a serious and detailed manner and provided reassurance to Members who have spoken on behalf of companies in their constituencies. I emphasise that we take such points seriously and are seeking to address them as far as possible as we seek a balance between sustainable management, the powers of the Environment Agency and the rights of abstractors.

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