The
Committee consisted of the following
Members:
Chairman:
Mr.
Martin Caton
Barker,
Gregory
(Bexhill and Battle)
(Con)
Beckett,
Margaret
(Derby, South)
(Lab)
Benyon,
Mr. Richard
(Newbury)
(Con)
Carswell,
Mr. Douglas
(Harwich)
(Con)
Cox,
Mr. Geoffrey
(Torridge and West Devon)
(Con)
Gapes,
Mike
(Ilford, South)
(Lab/Co-op)
Gardiner,
Barry
(Brent, North)
(Lab)
Griffith,
Nia
(Llanelli) (Lab)
Horwood,
Martin
(Cheltenham)
(LD)
Huhne,
Chris
(Eastleigh)
(LD)
Kumar,
Dr. Ashok
(Middlesbrough, South and East Cleveland)
(Lab)
McDonagh,
Siobhain
(Mitcham and Morden)
(Lab)
Main,
Anne
(St. Albans)
(Con)
Ruddock,
Joan
(Parliamentary Under-Secretary of State for Environment, Food
and Rural Affairs)
Ryan,
Joan
(Enfield, North)
(Lab)
Smith,
Mr. Andrew
(Oxford, East)
(Lab)
Smith,
John
(Vale of Glamorgan)
(Lab)
Glenn McKee, Committee
Clerk
attended the
Committee
First
Delegated Legislation
Committee
Monday 26
November
2007
[Mr.
Martin Caton
in the
Chair]
Draft Environmental Permitting (England and Wales) Regulations 2007
4.30
pm
The
Parliamentary Under-Secretary of State for Environment, Food and Rural
Affairs (Joan Ruddock):
I beg to
move,
That the
Committee has considered the draft Environmental Permitting (England
and Wales) Regulations
2007.
The
draft regulations will streamline and simplify
environmental permitting arrangements by integrating the systems for
waste management licensing and pollution prevention and control. In
doing so, they cut red tape and provide an easier and more flexible way
of permitting, allowing regulators and business to focus on protecting
the environment at a lower cost. The regulations provide an opportunity
to reduce administrative burdens on business and regulators consistent
with the Governments policy on better regulation. They respond
to various drivers to review the different approaches to environmental
regulation and to establish a more efficient regulatory
system.
In 2005, the
Better Regulation Task Force challenged the Department for Environment,
Food and Rural Affairs to improve environmental permitting regulations,
stating in RegulationLess is
More:
Various
licensing requirements are set out in different pieces of legislation
and may impose different administrative requirements on industry. The
procedures relating to integrated pollution prevention and control
(IPPC) for an industrial process that might pollute the air, water or
land are different to those required for waste managementyet
their objective, to protect the environment, is the
same.
The
Hampton report of 2005 challenged us to take a more
risk-based approach to regulation. In that year, we responded to those
drivers by launching the environmental permitting programme with the
Environment Agency, the Welsh Assembly Government and other
stakeholders. The aim was to reduce the administrative burdens on
business, in particular, through a single, streamlined permitting
system. The environmental permitting regulations are a product of that
initiative, which has been developed in close consultation with
industry and other
stakeholders.
The
regulations replace more than 40 pieces of law with one set of clear
regulations, simplifying and reducing them to less than a third of the
length, but still delivering the environmental protection that we so
need. The regulations introduce a risk-based proportionate approach. In
practice, that will mean that the level of regulatory effort is more
proportionate to the level of risk. Regulators will be able to
concentrate more on environmental outcomes and on poor performers who
pose a higher
environmental risk. The vast majority of businesses that are low risk
will face fewer forms, fewer inspections and simpler
guidance.
The
regulations deliver a single permit system for waste management and
industrial pollution by streamlining and combining the two separate
systems currently running. A single system makes it easier to apply for
a permit, to change it, and, ultimately, to surrender it. For example,
under the current regulations a business might need several permits to
operate on a single site. If it wants to change what it does, several
applications will have to be made under separate laws and on separate
forms. Under the new environmental permitting regulations only a single
environmental permit is required for activities on the same site. If a
business wants to diversify into different activities, such as
recycling and composting, it will not need to apply for another permit
but can simply have the conditions of its single permit changed. That
will involve filling in one form, making it cheaper, quicker and easier
to apply.
The changes
will have benefits for a wide range of businesses, but particularly for
smaller enterprises, which often have limited time and resources to
spend on form filling. It is anticipated that that simplification will
bring cost savings of about £76 million over 10 years, through
administrative burden reduction and wider economic benefits. Potential
further cost savings could be realised in the future by delivering
other environmental protection measures through the single permit. We
are currently looking to identify suitable regimes that could be
integrated into the new permitting system as a next step, if the costs
and benefits add up. For now, the single permit will make it easier for
regulators to do their job of protecting the environment, and easier
for business to comply. The regulations have been widely welcomed by
industry, regulators and other stakeholders, and I commend them to the
Committee.
4.35
pm
Gregory
Barker (Bexhill and Battle) (Con): I thank the Minister
for introducing the regulations. It is rare indeed for the Government
to move to reduce the huge regulatory burden on business in this
country, but when they do, they will always find support from the
Conservative party.
However, the measures still
deserve proper scrutiny. The Government, fond as they
are of targets, have decided on the figure of 25 per cent. for the
reduction in regulation by 2010 for the Department for Environment,
Food and Rural Affairs. As the Government measure regulation by the
number of statutory instruments, it is only natural that they should
seek to streamline large bundles of them into single instruments.
Therefore, I am understandably cautious in welcoming the reform. We
need to be absolutely certain that this is a genuine cut in red tape
and not simply a repackaging, and that it will still deliver the
stringent environmental safeguards that we expect.
We have been told that the two
existing permits that cover the 12 EU directives regulated by these
statutory instruments will become three distinct types of permit; two
will become three. Moreover, we have been told that, in certain
circumstances, all three may perform the same function. However, having
looked at the
proposed reforms, I would say that the intentions behind them have been
well thought through. Three types of permit with three breadths of
cover will allow smaller specialist operators access to simpler
permitting and larger multi-use or rapidly evolving operators to apply
for a broader, comprehensive permit. That seems to compare favourably
with the confusingly overlapped pair of permits currently
used.
However, the
proposals raise certain questions. For example, what form will the
independent appeal body take? Much of the inefficiency of the existing
system is due to the laborious appeals system that unsuccessful
applicants must go through. Replacing that with an unspecified body of
unspecified size and cost will seriously undermine the validity of the
£77 million figure for the savings produced by the change.
Furthermore, why will this independent panel necessarily be more
efficient than the existing regime? Can we see some more detail of the
planned structure of the appeal process?
When costing those reforms at a
saving of £77 million over 10 years, did the
Government factor in the cost to the industry of adapting to the new
system and take into account the bureaucratic burden on smaller
operators of reapplying under the new system and its more complicated
choices? What advice will they be providing to guide smaller operators
through that new process?
The new system will be
effective if large numbers of smaller operators apply for the
simplified standard rule permit and only a few require the
labour-intensive bespoke permit. Have the Government looked into the
anticipated uptake of each respective permit? How do they intend to
ensure that operators apply for the correct permit, because all three
could be applicable for a given activity? Have they considered whether
the more restrictive standard permits will stifle enterprise in the
waste sector? Smaller operators that currently have a broader licence
can easily expand into new and growing sectors that might open up
locally. Under the narrower standard rule permit they would have to be
re-licensed to do so or go through the laborious process of reapplying
for a bespoke permit. The IT system to handle the new permits clearly
has the potential for delay. What contingency plans have the Government
put in place for that situation?
Overall, however, these
proposals are welcome. The Conservative party believes that new markets
and burgeoning enterprise within the waste sector are crucial in
tackling the strain on global resources and the challenges of climate
change. Anything that we can do to lift the burden on companies
operating in this sector must be welcomed. Freeing smaller, innovative
entrepreneurs from complicated regulations and helping existing
operators to find new ways of gaining value from their sector with more
flexible permitting is an important part of that. We want to ensure
that that is what the regulations deliver. Regulation should be
efficient and fit for purpose, and we support these efforts to
streamline and speed up environmental permit
processing.
I look
forward to a positive outcome in the follow-up study in 2009, and we
hope that DEFRA implements these changes with clear enough guidance to
minimise any additional burden on industry in adapting to the new
regime.
4.40
pm
Martin
Horwood (Cheltenham) (LD): It is very good to be serving
under your chairmanship, Mr. Caton. I have to apologise for
my hon. Friend the Member for Eastleigh who has an unexpectedly heavy
diary at the moment. I am sure that he is very sad to miss this
sitting, given his green credentials and that he is an
economist.
The
statutory instrument before us and the claims that DEFRA has made for
it are pretty ambitious. It will
be
a modern,
proportionate, risk-based system that is easier, quicker and cheaper to
use
and it
will
not change what is
regulated or who
regulates.
However, it
will produce £55 million of savings in DEFRA administration
alonethe mere fact that £55 million can be
saved in DEFRA administration says somethingand £21
million in what were described by Lord Rooker in another place as
wider benefits. Perhaps the Minister will enlighten us
a little more on those. They are still savings to DEFRA. Given the
complications of the previous system and the reduced amount of form
filling under the new one, it is estimated that a further £35
million will be saved by industry.
As the Minister said, some 600
pages and 40 sets of regulations have been reduced to one set of
regulations of 150 pages. That is still a considerable document. It
would have been quite a challenge for hon. Members to scrutinise it
adequately and to do so in detail for this sitting. The devil, as
always, may well be in the detail. To some extent, we have to take it
on trust that there is no substantive changenot to what is
being regulated or who regulates it, which was the careful phrase used
in the DEFRA briefing, but to the extent or nature of the regulation.
There is a lot of detail in this document, be it on waste incineration
or peat working, and I should be grateful if the Minister took this
opportunity to point out any substantive changes. It would be possible
to make those without changing what is regulated or who regulates
it.
Lord Rooker was
characteristically honest on the subject of cost savings in the other
place. He
said:
I freely
admit that, in the scale of government money, to claim that we are
saving £76 million over 10 years is chicken feed: it is
£7 million a year. It is like the third decimal point in any
departments adding up, and it can be
lost.[Official Report, House of Lords, 20
November 2007; Vol. 696,
c.GC32.]
That may be true, but
it remains a very ambitious target. Will the Minister enlighten us on
where exactly those savings will be made? The £35 million for
industry is an understandable estimate, and I would not expect her to
be able to go into great detail on that. However, the £76
million to be saved within DEFRA is a staggering amount, even if it is
spread over a number of years. Is it to be saved in IT systems, in
printing and publication costs or in staffing?
If there is an assumption that
that £76 million is to be saved in staffing, are we risking what
we now know is a possible consequence of unwisely ambitious cuts in
staffing? Her Majestys Revenue and Customs has given us a
classic example of how savings do not always lead to improvement in
performance. That has given politicians of all parties pause for
thought on how easy
it is to promise thousands of job reductions in Departments and not
worry about the consequences. I should be grateful if the Minister
explored a little the question of where exactly she expects that
£76 million to be saved.
Nevertheless, with those
caveats and questions, this is a welcome simplification of Government
regulation. It is a welcome reduction in red tape, and if it lifts a
significant burden from business, that is also welcome and it will have
Liberal Democrat
support.
4.45
pm
Joan
Ruddock:
First, I am grateful for the positive comments
from the official Opposition and others on this matter. We are
absolutely determined, whatever peoples concerns and caveats
might be, to reduce the burden of regulation. That makes good sense. We
want our business to be as efficient as possible; we are endeavouring
to achieve that and DEFRA is clearly committed to that
too.
I was asked by
the hon. Member for Bexhill and Battle about the cost of moving to the
new system and whether that had been factored into the costs and
benefits. It certainly has. It was considered under the regulatory
impact assessment and that has been reported on and published. The
transitional costs for industry regulators, which are the Environment
Agency, local authorities and others, are reported in the RIA. I can
assure the hon. Gentleman that everything he asked about has been
considered and is published, but he will appreciate the difficulty of
finding the detail right now.
He also asked me about the
existing licence holders, their need to apply for new permits and what
burden that will place on them. Holders of existing permits and
licences will not be required to apply for a new permit. When the new
system comes into force, existing permit holders will be able to take
the benefits of the system without the downside of making fresh
applications. We regard that as a positive and substantial benefit to
them.
I was asked
about the appeal body. The independent appeal body will be the Planning
Inspectorate and will obviously operate as it currently
does.
Gregory
Barker:
That is a very important point. Not
everyones experience of the Planning Inspectorate is
satisfactory. That is not necessarily because of the eventual outcome
and decision, but because it is prone to significant delays that can
last for months and months. How can the Minister reassure us that the
decisions of the appeal body will be dealt with promptly? What is the
expected time scale in which the Planning Inspectorate could turn
around such
decisions?
Joan
Ruddock:
I am sure that the hon. Gentleman will appreciate
that the speed with which any appeal can be turned around will depend
entirely on the complexity of that appeal. It would be impossible to
predict. But I hear what he said about the difficulties that might have
been experienced in the past with the Planning Inspectorate. Clearly,
in making these new arrangements, we will do our very best to ensure
efficient consideration of appeals.
The hon. Gentleman asked me
about the three types of control under the regulations. The first is
exemption. One of the things that we wish to do in making these changes
and bringing the two systems together is to simplify. An exemption
means that the regulators will not have to spend so much time on
low-risk operations. That will be of huge benefit. The exemption occurs
at the lowest end of the risk spectrum. Then there is the standard
permit. Again, that is for fairly low-risk operations. We think that
that will streamline the process and be to industrys advantage.
Indeed, that was the feedback that we got from both industry and
regulators. The bespoke permit will obviously be for the higher-risk
operations and that is how it should be. The Environment Agency is
moving towards spending more time and more effort on the bespoke
permits and on the higher-risk operations. Again, that can only be
appropriate and helpful to
all.
With regard to IT
systems and their implementation, the Environment Agency is putting in
place a system that will allow it to deliver the new regulations; only
as part of that is a new IT system being developed. We believe that the
benefits to customers will occur quite independently of whether the IT
system is in place, and that those benefits will exist even if there is
a delay in the implementation of the IT system. Having said that, far
be it from me to suggest that there will be a delay, and I very much
hope that there will not
be.
I have also been
asked, in passing, about the burdens on small and medium-sized
enterprises and whether that factor had been taken into account.
Indeed, it has been, and their trade associations took part in the
consultation process. It may have been noticed that we had no fewer
than five consultations. At each stage, the number of respondents
declined as we entered into more detailed work. I would suggest that
that shows that people became increasingly satisfied and increasingly
accepting of what was being
proposed.
I was asked
about small operators. I have another note on that subject, which I
shall read out, as I think that it will be of interest. It says that
the new system allows operators to amend their standard permits to
become bespoke permits, by variation rather than applying afresh for a
new permit. I think that that deals with the questions that have been
put by both the hon. Members who have spoken. Again, I would say that
this order is a simplification.
The hon. Member for Cheltenham
asked what guidance might be available. We have consulted on the full
suite of Government guidance and the Environment Agency is currently
preparing its guidance, forms and so on for
publication.
I believe
that the final questionplease tell me if I am wrongwas
about costs and benefits and the breakdown of the £76 million
DEFRA savings. We have said that the breakdown is as follows. There
will be a saving of £55 million over 10 years through the
reduction in the administrative burden, with £35
million in savings for industry and £20 million for the
Environment Agency. The Environment Agency will obviously save money
because there will be a more streamlined permitting
systemapplications, transfers and surrenders will all be
simplified, so the Environment Agency will have far less bureaucracy
and red tape to work through. I again refer hon. Members to the RIA,
which calculated that the overall saving
would be £76 million, and indicated that there would be
£21 million worth of wider economic benefits, given the
increased speed of applications, modifications and so on, which would
enable industry to make quicker decisions, to get on with the job and,
consequently, to save money.
Question put and agreed
to.
Resolved,
That
the Committee has considered the draft Environmental Permitting
(England and Wales) Regulations
2007.
Committee
rose at six minutes to Five
oclock.