Third Standing Committee on Delegated Legislation

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Third Standing Committee on Delegated Legislation

The Committee consisted of the following Members:

Chairman:

†Mr. Joe Benton

Burnside, David (South Antrim) (UUP)
†Coaker, Vernon (Gedling) (Lab)
†Harris, Mr. Tom (Glasgow, Cathcart) (Lab)
Hogg, Mr. Douglas (Sleaford and North Hykeham) (Con)
†Hoyle, Mr. Lindsay (Chorley) (Lab)
Jack, Mr. Michael (Fylde) (Con)
†Jones, Helen (Warrington, North) (Lab)
†Kidney, Mr. David (Stafford) (Lab)
Leigh, Mr. Edward (Gainsborough) (Con)
†Luff, Mr. Peter (Mid-Worcestershire) (Con)
Mann, John (Bassetlaw) (Lab)
†Öpik, Lembit (Montgomeryshire) (LD)
†Pearson, Mr. Ian (Parliamentary Under-Secretary of State for Northern Ireland)
†Pickthall, Mr. Colin (West Lancashire) (Lab)
†Quinn, Lawrie (Scarborough and Whitby) (Lab)
†Rapson, Syd (Portsmouth, North) (Lab)
Mark Etherton, Committee Clerk
† attended the Committee

 
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Thursday 24 February 2005

[Mr. Joe Benton in the Chair]

Draft Drainage (Amendment) (Northern Ireland) Order 2005

8.55 am

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): I beg to move,

That the Committee has considered the draft Drainage (Amendment) (Northern Ireland) Order 2005.

It is a pleasure, Mr. Benton, to serve under your chairmanship. A draft of the order was laid before the House on 26 January 2005. The order amends the Drainage (Northern Ireland) Order 1973 to give the Department of Agriculture and Rural Development the power to make orders to dissolve drainage trusts and to make regulations to charge for the functions that it undertakes.

The Rivers Agency administers more than 20 drainage trust funds. The funds held in the trusts are relatively small in comparison with current drainage maintenance costs; they have consequently become largely obsolete, and they no longer serve the purpose for which they were established. Some drains covered by such trusts have been designated by the Drainage Council for Northern Ireland and are now maintained by the Rivers Agency at public expense.

Specific power needs to be taken to enable trusts to be dissolved and to provide for the disposal of funds remaining in them. The order provides permissive powers to dissolve the drainage trusts, and it is intended that the individual trusts will be dissolved when considered appropriate by means of subordinate legislation following consultation. The consultation will enable stakeholders to make representations about any detriment to their interests in proposed dissolutions, and to make claims in relation to the disposal of funds remaining in the trusts.

Consideration has been ongoing for a number of years into finding a charging mechanism through which developers could contribute to off-site drainage or other infrastructure improvement costs associated with development. The cost of providing drainage infrastructure improvement schemes to facilitate development are currently borne entirely by the Rivers Agency; as a result, developers benefit from the schemes without having to contribute to the costs.

The Northern Ireland Audit Office report of 8 June 2004 entitled “Recoupment of Drainage Infrastructure Costs”—I gather that it is a very good read—recommended that the Department amend the
 
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1973 order to include provision for a free-standing power to charge. The report dealt specifically with the issues of developers benefiting from infrastructure works undertaken by the Rivers Agency at public expense. The proposed amendment to the 1973 order will enable the Department to address the matter by introducing charging through subordinate legislation. It will also enable the Department to make regulations to charge for other functions under the 1973 order. At this stage, however, I am considering charges only for drainage infrastructure work.

It is envisaged that the subordinate legislation, which will be subject to public consultation, will provide the detail of charging levels, sanctions, recovery procedure and the administrative and financial procedures required for the collection and accounting of any money arising from the charges. The subordinate legislation on obtaining contributions from developers will be formulated in the light of an ongoing study of methodologies for such charging.

The proposals found widespread support and acceptance during public consultation. The Construction Employers Federation objected to charging, but I see no reason why developers in Northern Ireland should not contribute to the cost of dealing with increased discharges from developments when the onus is on developers in England to make such a provision. Indeed, the Northern Ireland Audit Office recommended that we do so.

8.59 am

Mr. Peter Luff (Mid-Worcestershire) (Con): It is a great pleasure to meet under your chairmanship, Mr. Benton—[Interruption.] It is also a great pleasure to see the number of Opposition Members double at this precise moment.

The Minister is right to say that this is a relatively uncontentious order. None the less, I would like him to clarify a number of points if possible. First, there has been some speculation—it is, I think, completely misguided—that there is a read-across between this measure and the wider issues relating to the future of the water industry in Ulster. I believe that that is a misconception and that the current consultation about charging for water services is entirely separate from the order. The Minister’s clarification on that point would be welcome.

Secondly, when I started to read the order, I was a bit alarmed about the sums that might be involved. The Minister said that the sum in the existing drainage trust was small, and the explanatory memorandum mentions £74,000. Perhaps he can clarify whether that is the total amount believed to reside in the trusts. It is indeed a nugatory sum, which, on current interest rates, would provide a maximum of £3,000 to £4,000 a year towards costs. However, given that the sums are genuinely small, the issue need not concern us unduly.

A number of points were raised in the consultation. The major concern clearly related to charging
 
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constructors and developers, and I shall return to that in a moment. Larne borough council raised a concern—I quote here from the Department’s helpful summary of responses to the consultation:

“Charging should not be used to pass the burden of drainage works onto farmers and landowners as a general funding mechanism for the Rivers Agency”.

That is an important point, and I would be grateful for the Minister’s view on it.

The World Wide Fund for Nature expressed

“hopes that the charging proposal will enable the Agency to deliver its services in ways that are in harmony with water ecosystems and take full financial account of the environmental impact of the work required.”

It was

“especially keen to see more use of sustainable urban drainage systems in all areas of development.”

That, too, is an important concern, and I would like to hear the Minister’s response to it. The fund also

“hopes the Agency will consider a further and more radical review of the Drainage Order to reflect the increasing value being placed on water and wetlands throughout Europe.”

I do not know what consideration the Department has given to that point.

That brings us to what is probably the only substantial economic point: charging developers. I am strongly in favour of the principle of charging those who benefit from a development. Clearly, if developers do not pay the cost, the taxpayer does instead, so there is no such thing as a free lunch in such matters. However, it is right that we address some of the specific concerns that have been expressed. The Construction Employers Federation was concerned that

“increasing costs of development could have a detrimental effect on the economy of Northern Ireland.”

My view is that, in reducing the tax burden, that would have a beneficial effect on the economic development of Northern Ireland, but I would be grateful to know what analysis the Department has done of the costs that the order is likely to add to development.

Larne borough council made an interesting point:

“The charging scheme should apply to new developments and not retrospectively for existing developments”.

I imagine that the Minister will be able to give that assurance, but I am not sure.

The Minister gave an indication of the framework under which fees will be developed. If I have read the explanatory memorandum correctly, a separate order will come before the House in 2007 to deal with the fees issue. Can the Minister give us any idea of the sums that are likely to be involved? I imagine that he cannot,
 
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but it would be helpful to get an idea of the scale. Again, I was worried about the dissolution of the trusts and I saw the figure of £74,000, so I think that we are writing a bit of an open cheque on the cost question. I would be grateful if the Minister could give us an indication of the orders of magnitude involved.

9.3 am

Lembit Öpik (Montgomeryshire) (LD): I would like to apologise for my delayed arrival: there was a road traffic accident in my street. That would not have happened under a Liberal Democrat Government.

Mr. Lindsay Hoyle (Chorley) (Lab): I got here.

Lembit Öpik: The hon. Gentleman got here, but perhaps he has more of a safety margin to consider and faces more intense whipping than I apply to myself.

The hon. Member for Mid-Worcestershire (Mr. Luff) has somewhat stolen my thunder, because he has raised my two key points, and I shall not repeat them. I have one additional question, which relates to article 4, and I apologise if the Minister has already covered it. Article 4 states that regulations will be made to

“prescribe the functions in respect of which charges are payable”

and

“the persons liable to pay such charges”.

For which functions does the Department intend to charge and to whom will such charges be made? Beyond that, I apologise once again for my late arrival and I look forward with eager anticipation to the Minister’s sage comments.

9.4 am

Mr. Pearson: First, I confirm that there is no read-across to the current debate and consultation on water charging, the reform of the water industry and the setting up of the Government-owned, contractor-operated arrangements. I confirm also that the figure of £74,000 is correct: we believe that to be the total value of the current drainage trusts.

I thank the hon. Member for Mid-Worcestershire for his comments on the principle of charging and for saying that he was strongly in favour of it, and I can confirm that it will not be retrospective. The hon. Gentleman raised a number of issues, some of which are wider economic issues. He asked about the costs to farmers. As I said in my opening speech, at this stage we are considering charging only developers for drainage infrastructure works. There are no proposals to charge anyone else.

The Northern Ireland Audit Office report of June last year suggested that consideration should be given to charging for the review of planning applications and the administration of schedule 6 applications for
 
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approval to discharge into a water course. Under article 4 of the order, we have taken powers that would enable us to do that, but have no plans to do so. Should we decide to do so, there would be a major consultation exercise.

When charges are introduced, they will be subject to impact assessments. We want to act reasonably and fairly, and to be seen to do so. It is not possible to indicate the likely scale, because it will, to some extent, depend on the scale of future development in Northern
 
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Ireland, but I assure the Committee that we will consult widely on the detail of the charging regime when we have proposals to bring forward. The order simply ensures that the necessary powers are there to enable us to do that at a future debate. I hope that my explanation has helped the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Drainage (Amendment) (Northern Ireland) Order 2005.

Committee rose at eight minutes past Nine o’clock.

 

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Prepared 25 February 2005