Water Bill [Lords]

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Norman Baker: Ours is a modest amendment with much to be modest about, but it seeks to draw attention to a wider point, which is germane; how the level of fines appropriate for particular offences can fall way behind inflation. All of us have come across legislation in which a maximum fine has been set, and when the legislation is updated, sometimes many years later, it appears that the fine that was set at the appropriate level at one time has become hopelessly low over the years. Unusually, my amendment would give the Secretary of State some flexibility to increase the fines in a straightforward way as time goes on. The Minister may say that that can be done by secondary legislation. However, he and I have probably come across examples where that has not been done as a

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result of inertia; people have perhaps not noticed that the levels of fines have become out of date and insufficient.

Mr. Thomas: The hon. Gentleman might be interested to know that in the most recent case on which I have information—a discolouration of the water supply in Merthyr Tydfil in July 2000—Dwr Cymru, as it was then, was fined just £12,000. It does not strike me that £12,000 is a particularly substantial amount to ensure that water companies take their responsibilities seriously.

Norman Baker: That leads me to the second reason for tabling the amendment. Fines are often wholly inadequate, particularly when levied on companies that can clearly afford larger fines and for which the example given by the hon. Member for Ceredigion is derisory. Frankly, it is no skin off their nose whether they are fined £12,000 or not. We need a system that represents a deterrent for business—as opposed to individuals—and keeps pace with inflation. If flexibility is not written into legislation, what mechanism is in place within Government to ensure a regular review of the maximum penalties in legislation? Shall we simply wait 25 years for the next water Bill to find that we have not moved on at all? What system is in place to update maximum fines, because they ought to be increased by inflation each year?

Mr. Morley: I have a lot of sympathy with that final point. It is frustrating that when prosecutions are brought against polluters—sometimes at considerable cost—the fines do not reflect the time and effort involved and they are not an adequate deterrent to the companies concerned. Fines are kept under review—that is obviously a matter for the Lord Chancellor's Department—and are sometimes in bands, with an element of index-linking. I would not claim to be an expert on that, but sometimes DEFRA asks for some fines to be reviewed because of the points that the hon. Gentleman makes.

The hon. Member for Leominster, in his amendments, wanted to ask why there were two fines systems. It depends on the seriousness of the offence. Summary offences are dealt with in a magistrates court, and there tends to be a lower maximum. Indictment offences are dealt with in Crown court. There is always a statutory maximum sentencing by a magistrate, but the Crown court can set an unlimited amount; there is no limit. I understand the reasoning behind the amendments but I hope that that answers the points raised. The points raised by the hon. Member for Lewes (Norman Baker) are wider issues, although I do not disagree with the principle of the amendment.

Norman Baker: In the light of our exchange, will the Minister draw the Lord Chancellor's attention to the debate?

Mr. Morley: I am sure that the Lord Chancellor waits every morning for the Committee Hansard to arrive.

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Mr. George Osborne (Tatton): Like the Secretary of State.

Mr. Morley: Absolutely. In relation to the levels of fine for pollution incidents, if my memory is correct, one or two recent cases caused DEFRA some concern. I will certainly raise the issues with the Lord Chancellor.

3.45 pm

Mr. Wiggin: The Minister has generated one question. If upon conviction on indictment to a fine, can that fine be unlimited? If so, the points made by the hon. Member for Lewes have already been taken into consideration.

Mr. Morley: To some extent.

Mr. Wiggin: I accept that. I am grateful to the Minister for his explanations. The question mark should really hang over the way in which polluters are prosecuted and in the procedures used rather than the wording of the Bill. As the facilities that I want are already there, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 260, in

    clause 60, page 76, leave out lines 3 to 5.—[Mr. Morley.]

Mr. Wiggin: I rise because most of the Government amendments have been drafting amendments, but this one would delete at least three lines. Why do the Government want the lines to be deleted?

Hon. Members: Sinister.

Mr. Morley: I assure the Committee that there is no sinister intent to slip it through. The amendment would simply remove the definition of a water undertaker's supply systems, which is unnecessary as the term is already defined in schedule 8 paragraph 50(3). It is a technical amendment.

Mr. Wiggin: I am grateful to the Minister for his reply because we discussed earlier how people might accidentally interfere with a water undertaker's supply system.

Amendment agreed to.

Clause 60, as amended, ordered to stand part of the Bill.

Clauses 62 to 65 ordered to stand part of the Bill.

Clause 66

Drought plans

Question proposed: That the clause stand part of the Bill.

The Chairman: With this we may discuss new clause 3—

    'After section 39A of the WIA there is inserted—

    ''39D Water resource management plans and drought plans: implementation

    In carrying out their respective functions, the Environment Agency and the Authority shall—

    (a) take into account the requirements of—

    (i) all water resource management plans prepared in accordance with sections 37A to 37D above, and

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    (ii) all drought plans prepared in accordance with sections 39B and 39C above; and

    (b) in that regard coordinate the exercise of their respective functions.''.'.

Mr. Wiggin: We tabled the new clause because we are concerned that the drought management and water resource management plans already exist. We want the Environment Agency to take into account the requirements of the resource management plans prepared in accordance with section 37A to D and all drought plans prepared in accordance with section 39B and C, and co-ordinate the exercise of their respective functions. That is a challenge that requires joined-up government, but I hope that the Minister will have a satisfactory reason why the proposal is not necessary.

It is my experience, and my advice suggests, that the plans already exist. The Bill seeks to ensure that they are a compulsory part of the procedures, but they are not checked in a co-ordinated way. The new clause would bring about that co-ordination. I hope that the Minister will ensure that that is what takes place even if the new clause is not the appropriate vehicle by which to do so.

Mr. Morley: I am very keen on a joined-up approach in Government on a wide range of issues, one of which is water resources management. The water companies will have to produce drought and water resources management plans as part of their new statutory duties, but the plans will not be statutory. In other words, the existence of a plan does not automatically mean that invariably it will be followed, because the companies need to review their actions at all times and adjust their plans as circumstances or knowledge changes. This is an opportune time to talk about drought plans, given the summer and autumn we have had.

New clause 3 would make Ofwat and the Environment Agency act on plans on which a water company may have changed its mind. It is for the water companies to act on their plans. The regulators must take a considered view based on the circumstances that prevail at the time of any change and taking into account their statutory duties.

The proposal would also ask Ofwat and the Environment Agency to co-ordinate their functions in respect of drought plans and water resources management plans. We have agreed that more co-ordination between the regulators and between them, the Secretary of State and the National Assembly for Wales is desirable, and we have amended the Bill to that effect. I draw the hon. Gentleman's attention to clause 55 on page 69. That should provide for the more joined-up regulation for which he asks.

However, we must balance the fact that the two regulators have different statutory duties. At times, these may lead to different approaches. Although the Government expect the regulators to work together—it is laid out in the Bill that they will have to publish a memorandum detailing the arrangements to achieve that—it would not be appropriate to force co-operation on the more specific issues identified in the proposal with a legal duty. Water regulators already

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co-ordinate their activities where relevant, and Ofwat has stated its commitment to co-ordination on the draft code of practice. The making of such arrangements will be given greater statutory force by clause 55.

Mr. Wiggin: I am keen to intervene rather than wait until the Minister finishes, because there was one thing he said that I did not follow. He said that it is a statutory requirement for the companies to have a plan. It is also their duty to update that plan but, when trouble arises, they do not have to follow it. It is for the companies to provide the plans as a statutory duty, but the Government will not insist that they follow them. I think that the Minister said that, but it does not seem quite right.

Mr. Morley: I can understand the hon. Gentleman asking that question. It is a statutory requirement to have the plans in place. Because each drought is different in its circumstances and effects, it is difficult to have a plan that is absolutely precise about how to deal with a particular circumstance. The Government expect the plans to lay out the principles; that is the statutory obligation. The details are not dictated by statute, because some flexibility is needed to deal with the different circumstances that water companies may face. I hope that that reassures the hon. Gentleman.

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