Water Bill [Lords]

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Mr. Wiggin: I have learned my lesson about batting away at the wrong clause. If there is a typo, it is better to quit while you are behind, rather than seeking hopelessly to sneak ahead.

It is gravely disturbing that the compensation paid will be varied, and the arbitration in proposed new section (4C) in the amendment would be most helpful. It would take into consideration representations from the Secretary of State, the Environment Agency and the authority as well as the Secretary of State's determination, whether the reference relates to that part of the determination or not. I look forward to the Minister's comments.

Mr. Morley: Where a licence is revoked or modified, compensation is payable for loss or damage under section 61 of the Water Resources Act 1991. The same section also provides that any disputes relating to the amount of compensation may be referred to the Lands Tribunal, which is common in many issues. The tribunal is independent of the Secretary of State and has a great deal of experience in dealing with such disputes.

Clause 27 sets out circumstances in which compensation would not be payable when a new abstraction licence is varied to a minimum amount specified in the licence itself. That provision, coupled with clause 21(3), is intended to give the agency the competence to issue licences with a duration of more than 12 years, in respect of major, long-term development. Given what was said in some earlier debates, I would have thought that Opposition

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Members welcomed that, because it will be part of the agency's flexibility.

Clause 29 specifies that compensation will not be payable when a non-time-limited licence is revoked because the abstraction is causing serious environmental damage. We discussed that matter earlier.

Amendment No. 53 would amend clause 27 to reflect the principle that the holder of an abstraction licence should not be deprived of abstraction rights without the possibility of a hearing. Amendment No. 55 would have the same effect with respect to clause 29. The 1991 Act already provides a mechanism for a hearing in such cases. The hearing would take place when it is decided whether to vary a licence on the grounds set out in clause 27 or clause 29. It is also important to note that, contrary to what the amendments imply, section 61 of the 1991 Act does not provide for the Secretary of State to make a decision on whether to award compensation. In the circumstances set out there, that would follow as a matter of law. I hope that I have reassured the hon. Member for Leominster that there is a right of appeal, and that he will therefore withdraw his amendment.

Mr. Wiggin: I am grateful to the Minister for his reply—those were the types of assurance I sought. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 ordered to stand part of the Bill.

Clause 28 ordered to stand part of the Bill.

Clause 29

Withdrawal of compensation for certain revocations and variations

Mr. Wiggin: I beg to move amendment No. 229, in

    clause 29, page 34, line 3, at end insert

    'or such later date as the Secretary of State may by order prescribe'.

In tabling the amendment, we seek further clarification of the drafting.

Mr. Morley: The clause introduces a new power by which, from 2012, the agency can revoke, without payment of compensation, any permanent licence that is causing serious damage to the environment. We have discussed that, and the principle behind it is understood. There is a right of appeal against the decision, either to the Secretary of State or to the National Assembly for Wales, depending on the case.

The amendment would enable the Secretary of State to substitute a date later than 15 July 2012. There are numerous environmentally damaging abstractions throughout England and Wales, and many of those are in place for historical reasons. I said that one or two of those might have to be dealt with earlier than 2012. Some of the licences would not have been granted today, given the agency's current knowledge of water resource management.

Abstractors must work with the agency to ensure that environmentally damaging abstractions are replaced with a sustainable alternative. I reiterate that removal of the licence is a last resort; there may be alternatives that can be put in place through work with

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the abstractor. We see no reason to delay dealing with the damaging abstractions beyond 2012, bearing it in mind that the notice period started from when the Bill appeared in draft form. Those who hold licences have therefore had a long period of advance notice of the changes that will take place.

Mr. Swire: What the Minister says is right, but will he make a distinction when he comes to deciding on the compensation, or inducement, that those with permanent licences will be offered in order to convert to the four-year licences? Will he make a distinction between those who have been granted permanent licences within the past four or five years, and those who have had them for 10 or 20 years? There will be a significant difference between the two.

Mr. Morley: That may well be the case. I hope that the licences granted more recently would reflect the greater knowledge and understanding of catchments and the impact on the area. It depends on the individual circumstances. Each case will be considered on its merits. There will be attempts to resolve issues through sustainable means. I would not want Members to get the impression that from 2012 there will be squads of agency hit-people going around the countryside withdrawing licences. It is simply about giving the agency proper tools for proper sustainable management.

Mr. Swire: The Minister deals with a point that I had not raised. I want to pursue the point about licensing. If, come 15 July 2012, there is a logjam in the transfer process for licences, can he guarantee that the people involved will be able to continue to operate while the change is processed?

Mr. Morley: I can confirm that. In discussions, we have already ascertained that licences will continue during withdrawal and appeal procedures.

Mr. Wiggin: I am grateful to the Minister for that answer. We sought to ensure that there was some flexibility. We do not want the scenario—jokingly described by the Minister—of agency officials rushing around taking people's licences away. The amendment would have provided the extra flexibility necessary to prevent that from happening. However, this is not a make or break clause, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Norman Baker: I beg to move amendment No. 246, in

    clause 29, page 34, line 21, at end add—

    '(4) Where this section applies, in determining any proposals to revoke or vary a licence to abstract water, the Secretary of State shall have regard to the reasonable requirements of the abstractor, including, in relation to businesses, the existing and planned commitment of resources.'.

We discussed this matter in some detail earlier so I shall be much quicker than I intended when I tabled the amendment. However, I cannot get by without mentioning the dreaded word ''watercress''. Everybody else has been mentioning it so I need to put it on record as well, particularly as I have been lobbied at great length by my hon. Friends the

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Members for Winchester (Mr. Oaten) and for Romsey (Sandra Gidley), who have watercress in their constituencies. Watercress looms large in my consideration of the Bill, as it does in that of other Members. I wake up dreaming of watercress at night—well, almost.

Sue Doughty: While we are talking about Members who have been lobbying on that matter, I should mention my hon. Friend the Member for Mid-Dorset and North Poole (Mrs. Brooke), who has been lobbying on behalf of watercress growers—[Interruption.]

Norman Baker: I am not sure that there is in any watercress in Colchester, but perhaps I will be corrected—[Interruption.] The matter may well be in the next issue of ''Focus''. You should call the hon. Member for Stroud (Mr. Drew) next, Mr. O'Brien; he is shouting at the Liberal Democrats. He might wait for the by-election result tonight to—[Interruption.]

The Chairman: Order. We can talk about watercress, but not by ballot.

Norman Baker: The watercress industry has been exceedingly efficient in lobbying on the Bill and we should pay credit to it for that. Members of the industry will know, more than anybody else—although members of the Committee probably now know—that watercress production is developed over many years. Beds are constantly repaired, renewed and replaced, as any structure more than 200 years old would need to be. Watercress producers finance their structures on a 50-year writedown basis and are obviously concerned about what might happen now, hence the amendment.

Rather than repeat all the arguments, I will put on the record those that have not been made. There are environmental benefits to watercress production, not least to wildlife. I am told that some of the last populations of white-clawed water crayfish are located in watercress beds. One can also find thriving populations of brown trout, marsh pipits and other vulnerable species that choose to live in the environs of the farms.

If we are balancing the interests of producers with those of the environment, we must consider that if watercress producers do not have some certainty, and on that basis cannot raise bank loans, some production could move overseas to Spain, Portugal or other countries.

Mr. Key: It is important that we recognise that the clause is not just about persistent watercress growers but something much bigger: the court case that was hanging over the heads of Severn Trent Water which very nearly led to the Environment Agency being sued for millions over abstraction and other issues pertaining to the length of the River Trent. So as I said, this is not just about the watercress growers; the agency is also covering its back to ensure that it avoids the possibility of being sued.

4.45 pm

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