Examination of Witnesses(Questions 540-559)
MR ELLIOT
MORLEY MP, MR
DANIEL INSTONE
AND MR
STEPHEN REEVES
WEDNESDAY 11 DECEMBER 2002
540. Yes, mercury is what they were concerned
about. They said mercury is naturally occurring and you cannot
remove mercury comprehensively.
(Mr Morley) Level is the key issue.
(Mr Instone) But a lot of that is going to be taken
forward in the daughter Directives under Article 16 of the Framework
Directive, which of course, is still subject to further negotiation.
Mr Wiggin
541. I am sorry that the Wye was not chosen
as the pilot river basin, as this would have revealed some of
the cross-border issues. However, obviously from the Chairman's
point of view, the Ribble will do fine. Can you tell us what aspects
of the Directive will be piloted by the Environment Agency?
(Mr Morley) It is worth saying, Chairman, that the
Environment Agency have been very heavily involved in some of
the development work of this. In fact, you did touch upon it in
terms of the UK lead on estuaries; for example, some of the estuary
work that has been done, some of the work that has been done in
relation to the actual criteria that will be applied. The water
classification is one. The whole idea of the pilots is to look
at how you implement a lot of what is in the Water Directive,
and again, it is also worth saying that we have a very good record
in implementation, and I think the Environment Agency felt that
it was actually pretty well established in terms of a lot of the
work that the pilots are designed to do. However, there is the
European Working Group, and of course, we are quite keen to be
part of that from the United Kingdom, and it is also the fact
that there is a lot of public interest in the idea of the catchment
pilots, and I think that is to be encouraged and to be developed.
So I welcome the fact that the Agency have agreed to implement
this pilot study, and it is an opportunity of looking at ways
in which you can bring together the various aspects of regulation
we have at the present time, diffuse pollution, abstraction, discharge
consents, quality, use, and indeed involvement of public opinion
as well. So I think they do provide a range of useful benefits.
542. When will the pilot study be implemented?
(Mr Morley) I would think it would be as soon as possible,
which would be the beginning of next year.
Mr Jack
543. In paragraph 45 of your evidence to the
Committee you say, "One issue which the Government will wish
to seek views on in its second consultation paper relates to the
seaward limit of river basin districts," and Article 2.7
of the Directive defines coastal waters as extending for a nautical
mile from the territorial baseline, and I gather there is a possible
variation on that to go to three miles. Given that the study which
the Environment Agency did is, if you like, a "pilot pilot"
to the river basin analysis, as far a they are concerned, the
Ribble stopped somewhere before Preston, which was deeply worrying
for my constituents, with the rest of it running through the estuary.
What is the current thinking about the coastal extension as far
as the pilot river basin study is concerned?
(Mr Morley) May I just clarify that the Ribble basin
pilot will include the whole of the estuary.
544. How far offshore?
(Mr Morley) At the present time, I think it is working
on the basis of the one nautical mile which is within the Directive.
You are quite right to say that we are considering whether we
should extend that to three nautical miles. The Scottish executive
have already taken the decision to do this to three nautical miles,
therefore there is an issue of harmonisation which would be logical
in relation to the way we deal with this in the UK. There are
arguments to an extent, particularly on dredging and a range of
activities, which can affect water quality in estuaries and can
impact on it. I personally think there is a case to consider the
extension, and that is being done as part of our consultation.
545. Can I ask you a question which, if you
have been briefed about some of our earlier exchanges, which I
am sure you have, you will have heard me read out a long list
of organisations and bodies who were involved in implementation
of bio-diversity action plans, which affect Lancashire and the
Ribble. I did that to illustrate (a) the dearth of progress and
(b) the complexity of bringing those bodies together. It does
seem to me—and I am aware that there has been some improvement
in terms, for example, of the Ribble and the extension of the
RAMSAR site, and also the development of a plan for the whole
of the Ribble, which RSPB recently wrote to me about, but again,
it gives an indication of the complexity of bodies and issues,
all of which are going to impact and be ultimately determinant
of what will be water quality. Are you going to carry out any
kind of overview study to (a) speed up the processes which I have
described and (b) genuinely try to integrate this myriad of bodies
within the work on river basins? If it does not happen, it does
seem to me we are going to have organisations going off this way,
that way, all at different speeds, all of whom have an important
input to this work.
(Mr Morley) I quite agree with that, but I would argue
very strongly that we are very heavily engaged in consultation
and in fact there are different aspects of policy work which is
under way. You mentioned the bio-diversity strategy. The bio-diversity
strategy has a section on water, so it is very much linked in
relation to water issues and how it will fit in with the Framework
Directive, which was part of that really very extensive consultation.
We have the stakeholder groups, which we have representatives
of all these various groups on, and of course, that gives you
a very wide range of groups and access to that. We have had our
consultation papers, of which you will have seen the second, and
the third is in preparation for next summer. We are also working
on the diffuse pollution consultation, which is under way now.
There is also the Food and Farming Commission report, which has
been launched today. That also relates to the issue of agricultural
pollution. It is true that it is an enormous amount of work involving
very large numbers of organisations and people, and some of them
are different issues but interconnected in relation to the water
framework issue, because there is an overlap there. So we have
that in our minds all the time. What we are not doing is having
completely parallel consultations that do not have this overlap
on water.
546. You used the word—and understandably
so—"consultation" on many occasions. The North
West Bio-Diversity Action Plan was agreed about four years ago,
and I am struggling to see a great deal of progress in terms of
implementing the work that has been undertaken. It does seem to
me that what is involved in those bio-diversity action plans does
play a central part in the context of the issues that affect the
redefinition of water quality under the terms of this Framework
Directive. I was hoping we might actually be able to talk about
action as opposed to consultation.
(Mr Morley) As you quite rightly said yourself, there
has been a lot of movement in relation to implementation of protected
area status in those areas that you were talking about, and that
stems on from the original consultation. The bio-diversity strategy
is a very new one, of course, but that also focuses on what we
have to do in terms of developing issues such as bio-diversity.
May I also say this extends to the agri-environment strategies
that again are being developed as part of the Food and Farming
Commission, because they have implications in relation to run-off
and diffuse pollution management. So we are trying to link all
these in together, and they are part of staged work. It is an
enormous job. I do not dispute that. There are huge amounts of
work going on in all these areas, but you are seeing measures
being progressively put in place, but I do have to say that some
of this work is long-term.
David Taylor
547. In a few months' time in some far-off Committee
room of which we know little, fifteen or more parliamentary colleagues
will gather together as the Standing Committee on delegated legislation
B or something and will listen to you for a while and after a
90-minute desultory debate will give birth to the Water Framework
Directive Regulations Order 2004 or whatever it might be, without
necessarily subjecting the detail of all this to any great scrutiny
or checking on its completeness or its clarity. That is not a
very satisfactory way to put on to the British statute book such
an important piece of work, is it? Why have the Government said
that they want to do it through secondary legislation in that
way?
(Mr Morley) It is because we have well-established
primary legislation which covers water policy that is in place,
well established within England certainly. Therefore, the bulk
of the implementation will be by secondary legislation, and it
is true that there will be reviews by the European Standing Committee
in that sense, but there will be a range of statutory instruments,
most of which will be debatable, open to scrutiny, and of course,
there is the normal scrutiny of the parliamentary process in terms
of how this Directive will develop over time, which will give
parliament ample opportunity for discussing the details, as, indeed
as part of the process you are having with the Select Committee.
548. But environmental groups and the water
industry in general were not convinced by that argument. They
believed that there is a need for primary legislation, did they
not?
(Mr Morley) I have to be honest and say I am not convinced
by that argument. Primary legislation is a very time-consuming
process by its very nature, and if you have the existing legislation
in place, I believe that we should be concentrating on the details
of the Directive in terms of consultation, discussion and debate,
and that is the proper way of scrutiny, and the secondary legislation
and implementation I think is entirely satisfactory as long as
you have the proper consultation and scrutiny of what you are
actually implementing.
549. Have the stakeholders come round to the
idea of implementation by secondary legislation since the first
consultation?
(Mr Morley) I can only say that I have not had many
representations myself from stakeholders complaining about implementation
by secondary legislation.
550. So silence is consent?
(Mr Morley) In my experience, if people are upset
about something, you very soon know about it.
551. The overall value of the Water Framework
Directive could be very considerable. The costs to the water industry,
to land owners, to farmers and others might be enormous. Whenever
we have asked the various witnesses we have had before us so far,
no-one has ever been competent even to give us a range of costs.
Surely something as important as this deserves a greater degree
of scrutiny, at least in terms of the regulatory framework.
(Mr Morley) It certainly is important that the costs
are scrutinised, and we are pulling together the estimates of
what the cost of some of these measures will be. What you have
to bear in mind is that a lot of work is already being done in
the context of, for example, the current price review in relation
to the water regulator. A lot of directives are already in place.
We are currently extending the nitrate-vulnerable zones, for example.
All these various issues are taking some of the cost and therefore
to try and calculate the costs of the measures is difficult, because
some of the costs are already being apportioned in relation to
the various work that is under way. We accept, of course, that
it is important that we try to get a clearer idea on this, and
we are doing this, but it is part of the consultation development
and preparation which is part of the Directive, which is under
way, and is going to give us a clearer idea of what the cost implications
are now. At the moment there is still more work to be done on
that. We have seen a number of estimates, and we have some broad
estimates ourselves, but we think at the present time they are
not very accurate, for a variety of reasons, not least because
there is still a range of unknowns.
Mr Jack
552. Going back to Diana Organ's question at
the beginning of our session, when she asked about signing up
and what were the benefits, it is a bit like going to a menu without
prices. It seems to me that not enough work perhaps was done at
the beginning to give some order of magnitude of the costs that
were involved before people gaily signed up to it and then worried
about how they were going to pay for it afterwards. When it was
signed up, surely somebody must have done a back-of-the-envelope
calculation as to what the order of magnitude of cost was. What
was that number?
(Mr Morley) I do not think there was ever a definitive
cost or even some kind of cost estimate when the framework was
originally proposed. Bearing in mind that, of course, it is bringing
together a lot of regulatory work which is being done on water,
which itself has been costed, so you can actually take some cost
estimates from measures which have been applied or are being applied,
such as the Bathing Water Directive, for example, the work on
the nitrate-vulnerable zones, and that gives you some idea of
what the costs are, but those costs were coming anyway in relation
to the work which was under way and the directives which were
being implemented, and there is some disagreement, of course,
in that there are some groups who claim that some of the costs
might be marginal, while there are others who have put forward
enormous sums of money. We do need to focus on this a bit more,
and we are trying to do this as a Department at the present time
553. Let us go down to a level of detail. You
say you do need to do this a bit more and you need to focus on
it. Just describe the mechanisms. The reason I ask this question
is that the water industries presented the Committee with a wonderful
document entitled The economics of achieving good water standards—a
water industry perspective on implementation of the Water Framework
Directive, and, as you can see, it is a rather thick document,
and it is frightening in the number of potential cost areas that
it identifies. Are you building up a matrix of all the possible
cost areas and then working through with stakeholders to come
to a number? Is that how you are approaching it?
(Mr Morley) Yes, we are building that up, and as part
of that, of course, we have had talks with Water UK about those
costings, but we have some questions on the methodology that has
been applied, and in fact, I understand after meeting with officials
from DEFRA that Water UK are taking it away to look again at those
costings because there are some that we have doubts about.
554. Agriculture is clearly worried, because
it is one of the major sources of diffuse pollution. Given the
perilous state of UK agriculture in terms of its finance, again,
have you no idea at this stage what the farming industry is going
to let itself in for? We have received evidence, of an interesting
parallel in New York, where to clean up some of their waters they
could have had an end of pipe solution at $8 billion or, as it
turned out, they got something where those who caused pollution
had to sort it out at source and in terms of cleaning up their
waters, it cost $100 million, so a big order of magnitude difference.
What is being done to minimise the impact of cost in the case
of the polluter, because of the farming industry's financial position,
and/or the water consumer if we end up with end of pipe solutions?
What are you aiming for between those two extremes?
(Mr Morley) I should first of all point out that the
Water Directive itself does have an element of cost benefit analysis
where it does say that if the costs are so enormous in relation
to what might be a minor benefit, then it is not worth pursuing
those kinds of costs. The Directive is different from some of
the earlier directives, which did not have that kind of approach.
555. Who will adjudicate on that argument? It
is a very interesting point because there is a certain latitude
as to how national member states are going to implement this.
Who is going to decide on this trade-off between an overly expensive
benefit and not doing it? Who is going to be the decider?
(Mr Morley) The Commission has the responsibility,
because each member state will have to put in place monitoring
committees and the Commission will oversee the work that is done
on the monitoring committee, so there will be a standard applied.
It is not going to be used as an excuse for some people to get
out of responsibilities for dealing with the framework. But the
other point you are making is that the costs will vary. If you
take agriculture for example—and we cannot ignore the fact
that agriculture is a big polluter; it accounts for about 70%
of nitrate pollution in water courses and a very high proportion
of phosphates—I think 30-40%. You cannot ignore that particular
issue, but in agriculture itself there are huge regional differences;
in some parts of the country there is very little pollution and
in other parts there is greater, so you cannot necessarily have
a uniform cost. It is going to be different. In terms of agriculture,
it does fall within the `polluter pays' principle and we cannot
ignore that. We also cannot ignore the issue of proportionality
and the costs on the industry as well as that is all part of conciliation
and that we have to take, but in terms of dealing with such things
as nitrates, for example, a lot of it is the application of good
farming standards of practice. In fact, in the nitrate vulnerable
zone cost assessment, the overall assessment per farm was around
about £200 a year, which is quite modest, and that is not
to say that within that of course there will be greater costs
for some farms in some areas and in those cases of course we do
have capital grants, for example, in relation to slurry and silage
storage, so we are trying to address that as well. I think it
is trying to be proportionate in the way that you respond to this,
but recognising that there are pollution issues here which do
need to be addressed.
556. Given the work that is going on in this,
when do you think there will be agreement amongst all parties
as to what the overall cost of implementation would be? Secondly,
when do you think some decisions would be able to be seen as to
how the costs are going to be allocated amongst those who will
have to bear the economic impact of the implementation of the
Directive?
(Mr Morley) I think that we will come to a position
where we can get an agreement on at least a broad view of costs.
I think it is one of these things where it is always going to
be very difficult to get the exact costs, but I think it would
be possible to have a bit more of an accurate picture than we
have at the present time when really a lot of the figures which
have been bandied around are a bit of a stab in the dark really.
557. Can I just remind you of the question I
asked which was when?
(Mr Morley) Yes, I was going to come to that and I
will actually ask one of my officials here.
(Mr Instone) Clearly producing better costs and indeed
better benefits estimates is an iterative process. That is why
we published our first regulatory impact assessment last year
with our first consultation document, knowing that this would
need to be refined, and why we are planning to publish the second
document, as we have said, next year and we will be talking to
stakeholders before we publish that. It is inherent in the nature
of the Directive that because river basin management plans and
indeed programmes of measures are only agreed some years down
the track, we have to start thinking about developing those reasonably
soon. Inevitably the precise costs will be subject to variation
and change depending on what the content of those plans is and
what the programme of measures eventually agreed is, including
participation with stakeholders. Another dimension, just to mention
it, is that we talked earlier about the costs to farmers and that
is why we are doing our consultation in parallel on what the best
measures are to address the issue of agricultural diffuse pollution
of water and we hope that the results of that exercise, which
is one of the reasons why we want to do it now, will feed into
the consideration in river basin management plans about what the
most appropriate measures are and, as I said, agreements on those
will help to refine what the exact costs are.
Mr Lepper
558. We have talked earlier about the resources
that DEFRA has in relation to the Directive and we have talked
also about the role of the Environment Agency. Does the Environment
Agency actually have both the resources and the powers which it
needs in order fully to carry out its role as competent authority?
There have been, as you know, in the course of our sessions some
questions raised about the designation of the Environment Agency
in that role.
(Mr Morley) Well, we are very confident that the Environment
Agency does have the powers to carry out this role and we are
of course discussing it with the Environment Agency. In terms
of the resources to implement the Directive, within its baseline
budget, resources were made available in the Spending Review for
implementation. There is of course always an issue of resources
for any body and the Environment Agency is no different. They
also are taking on a lot of extra work which is not related to
the Water Framework Directive, but of course there are cost implications
to the Environment Agency, and we have been meeting with the Agency
to talk this through with them. I should point out that their
budget is increasing quite substantially, although I would not
want to dismiss the increasing demands made upon them. It is an
issue for them and we have explored with the Agency the whole
issue, just in relation to the Water Framework Directive, of its
implementation and their resources and they are certainly in a
position to take forward the implementation because, as I say,
the initial funding is available and that has also covered the
pilot study. As far as further financial resources are concerned,
that is an issue that we are discussing with them.
559. You will appreciate the concern because
Michael Jack has asked about some aspects of the costs to a whole
range of consumers, for instance, and I think one of the things
which does perturb us about the Directive is, and you have used
the word "diffuse" in relation to the environment, but
the very diffuse nature in a way of the Directive itself and the
difficulty of actually getting a hold perhaps of everything that
might need to be done in relation to properly implementing it.
There is that concern that we do not want at some future date
to find that there are aspects of the Directive, excellent and
worthy though they are and we would all sign up to them, but the
resources simply are not there to carry through the implementation.
(Mr Morley) I quite agree with you in that I come
back to the point that this is the biggest and most complex environmental
Directive which has been brought forward by the European Union.
It is very demanding, but it does bring together a lot of existing
work, a lot of existing Directives and we have to bear that in
mind. It can have the potential of actually having a clearer framework
than where we are at the present time, but I do not underestimate
the difficulties and the potential risks on this and that also
includes the costs of enforcement and implementation. These are
all considerations that we must make and this is why we are having
this really quite detailed consultation process to ensure that
we do cover all of these points and that the very important aspects
that you have touched upon are taken into account so that we do
not miss these issues for the future and we do not find ourselves
with some very expensive liabilities which have not been taken
into account. I do believe that the process we have embarked on
will make sure that we do not miss those.
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