The Minister of State, Department for Environment, Food and Rural Affairs (Jim Fitzpatrick): Mr. Evans, it is a pleasure to see you in the Chair this afternoon.

I beg to move,

These regulations have been made to streamline and simplify our environmental permitting arrangements while continuing to safeguard the environment and human health.

Members will know that many potentially polluting activities, such as the use of incinerators or sewage treatment plants and radioactive waste discharges from nuclear power stations, need a permit. When the Environment Agency or the local authority grants an environmental permit, it is permitting an activity, subject to conditions, to control pollution. The regulations cut red tape and provide an easier and more flexible way of doing that. They are consistent with the Government’s policy on better regulation, allowing us to focus on protecting the environment at a lower cost. That is vital at a time when we must be mindful of the impact of climate change and must not be distracted by unnecessary bureaucratic processes.

In 2005, the Better Regulation Task Force challenged the Department for Environment, Food and Rural Affairs to improve our permitting regulations, saying that

We responded with the Environmental Permitting Regulations 2007, which came into force in April 2008. Those regulations, along with guidance, were the key product from the first phase of a productive partnership between DEFRA, the Environment Agency, the Welsh Assembly Government and other stakeholders. That partnership has now expanded to include the Department of Energy and Climate Change.

The regulations that we are debating today build on the sound base of the 2007 regulations, integrating the permitting systems for radioactive substances regulation, discharges into groundwater and water discharge consenting. Furthermore, we are taking this opportunity to consolidate into the regulations the permitting parts of the mining waste directive and the batteries directive, as well as the outcome of the waste exemptions review, which have all already been subject to parliamentary scrutiny. We estimate that these regulations will save £45 million that, added to the savings of the first phase of the programme, will mean a total saving of £121 million to business, regulators and others during the next 10 years. Although we are still in the early days of implementation of the programme, savings from standard permits have already allowed the Environment Agency to lower its fees.

The regulations are more than 170 pages shorter than previous law. They repeal and re-enact much of the Radioactive Substances Act 1960, which is basically 1950s legislation; part of the Water Resources Act 1991; the Groundwater Regulations 2009, and the 2007 regulations. They also replace a number of other statutory instruments that are now redundant.

As I have already said, these regulations still deliver the environmental and human health protection that we need. For example, in the new environmental permitting regulations’ offence for water discharge and groundwater activities, “cause” and “knowingly permit” have the same meaning as in previous legislation. The majority of businesses that are low risk will face fewer forms, fewer inspections and simpler guidance.

Speaking in a debate on the 2007 regulations, the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), said that business would no longer be burning the midnight oil dealing with overly complex systems. Under these regulations, and subject to national security considerations relating to radioactive substances, an operator requires only a single environmental permit for activities on the same site, making it cheaper, quicker and easier to apply for permits, while continuing to protect the environment.

Before I close, I must draw Members’ attention to an error in the regulations, which was unfortunately spotted only after they were laid. It relates to the storage limits for waste oils that are allowed under a waste exemption. Where the current limit says 400 cubic metres, in fact the limit should be 3 cubic metres. An amendment will be made to correct the error before the regulations come into force.

Miss Anne McIntosh (Vale of York) (Con): It is a great pleasure to serve under your chairmanship, Mr. Evans. I welcome you to the Chair and the Minister to his place. I hope that I can act as his conscience and that of the Committee. I am sure that those of his hon. Friends who were fortunate enough to sit on the Committee that considered the 2009 regulations will have shared with him the strength of feeling expressed at the time and during the short period for which the 2009 regulations have been in place.

I have one or two matters of concern to raise; as I said, I hope to be, if nothing else, the Minister’s conscience. However, I have a serious matter to raise at the outset that is particularly pertinent. It relates to the abstraction of water and existing discharge licences. The Water Act 2003 came into force in October of that year with a promise that the accompanying regulations would be published the following April. The latest information from the Department for Environment, Food and Rural Affairs is that those regulations are unlikely to be published before April 2011. The concern is that the Water Act 2003 links licences to the six-yearly cycles of the European water framework directive and wraps up all water issues such as extraction and consumption into river basin management plans. The former has checkpoints in 2012, 2018 and every six years thereafter.

The crucial point is that in 2012, the rules surrounding the ability to claim compensation should a licence not be issued or renewed for any reason will change. In the case of mineral extraction—a key focus of the regulations before us—the issue is transfer licences, which will take the place of existing discharge licences. As the minimum time required for the licensing process is two years, the deadline for adequate compensation will have passed before the licences are issued. That might not necessarily be a problem—I do not wish to appear alarmist—but until the regulations are published, industry will assume the worst.

The second problem is that the industry must now compete for transfer licences with all the other industrial consumers in each river basin area, such as breweries, distilleries, iron and steel manufacturers and other heavy industry, in establishing a priority for de minimis consumption. Large-volume transfers from groundwater into surface water might well prove difficult. Industry would like to take this opportunity to raise those concerns. It has made them known to the Environment Agency and DEFRA, but little progress has been made.

I will not dwell on the mistake that the Minister placed on the record in a spirit of good will. Obviously, the record will speak for itself. However, I am sure that he will find it unacceptable that the Act came into force in October 2003 with much fanfare and a promise that the accompanying regulations would be published within eight months, yet those regulations are unlikely to be published before April next year. I raise that at the outset to allow him time to consider the implications. We would like to hear the outcome, and industry is keen as well.

When will the revised guidance for businesses be issued? I understand that no deadline has been set. Obviously, we would like to know that they will be issued and that a proper consultation period will be held. Will the Minister give us the date of publication and the consultation period? It would be immensely helpful to the Committee.

If my understanding is correct, a full impact assessment for small firms has not been done. Why? The Government conceded that the definition of terms such as “competent authority” needed clarification. Again, my understanding is that the definitions are not in the regulations; I certainly have not been able to find them. I would be interested to know when and where the definitions will be published, what notification will be given to industry and what the consultation period will be.

As I said at the outset, we are re-convening a Committee called less than three months ago to consider the 2009 regulations. Will the Minister tell us why the regulations before us have been introduced so soon after the previous ones?

What assurances can the Minister give the Committee that the Environment Agency’s administrative responsibilities will not be passed on to the water companies? The water companies had their five-year price review last year, so the timing is sensitive. We seek assurances on that.

When will the likely new costs for environmental permit applications from the Environment Agency be divulged so that companies can assess the proposals’ impact fully? I understand that they have not yet been divulged, so we would like to know when that will happen and how long companies will have to respond.

Will the Minister explain the decision to allow no right of appeal or arbitration either before or after reference to the competent authority has been made? I will come in a moment to the consultation on the appeals process, but it would be helpful to know while we are considering the regulations why that decision was made.

I query the economic impact assessment. The Minister said that savings will be made, but will he confirm that the one-off cost of introducing the regulations will be £3.8 million, and that it is mostly industry that will be asked to take up the burden? My understanding is that the measures are deregulatory. He will be aware that we are keen on deregulation and lifting the regulatory burden on businesses, but the UK already has one of the most effective systems of regulatory control in Europe for mining waste operations. Many other member states, such as Germany and Sweden, have decided that their existing regulations are sufficient. They see no need to change their regulatory system in light of the mining waste directive. Why does he propose to place additional burdens on UK-based firms, subjecting them to greater regulation, with which their European competitors will not have to comply?

We support the principles of better regulation and the intention of the environmental permitting programme phase 2 proposals, designed to reduce costs for the industry by cutting red tape while continuing to protect the environment and health. However, we are concerned that the proposed changes set out in the regulations might not deliver the cost savings to the industry for which the Government and the Minister hope. They might increase costs and make some processes more cumbersome.

The Library has prepared a useful note for me that considers the regulations. The draft regulations enjoyed a consultation period, with a range of representatives from industry, regulators and other interested parties. Apparently, more than 1,000 such representatives were consulted on the draft EP 2010 regulations. Obviously, there were some concerns. I would just like the Minister to satisfy us about the need for the change in the regulatory regime. If industry is right and these burdens will be greater than those of at least two other competitor countries in the EU, why is that the case?

I have an even greater concern. The Library note informed me of something that was not immediately clear on my reading of the regulations: breaking up a UK-wide system for controlling radioactive substances follows from the strict interpretation of the regulations. The EP 2007 and 2010 regulations apply only to England and Wales. They were considered to be a rare opportunity to modernise completely and streamline the system for radioactive substances regulation.

I would like the Minister to respond to the concerns about breaking up the UK-wide system, which could have disadvantages for companies that operate across borders. I understand that the Government felt that any potential disadvantages of the new system were outweighed by the advantages resulting from the changes, as the EP regulations modernise and simplify the permitting procedures—the Minister will say that. However, the EP regulations do not change the regulator, what is regulated or the environmental standards. The Government considered that regulators working on harmonising their procedures could readily deal with any cross-border issues.

However, having just been through the Commons stages of the Flood and Water Management Bill, I know that there are enormous problems regarding the border transitional changes, especially between England and Wales. So I would like an assurance from the Minister today that the same difficulties between England and Wales will not arise when changing radioactive substance regulation and breaking up the existing UK-wide system.

Regarding the four-year rule, the Government decided to continue the regulator’s powers to vary water discharge consents only every four years. That flew in the face of the majority of respondents to the consultation, in particular those from the water industry who argued that the current arrangements should be maintained. The Minister has agreed that there will be no change and I would like to understand his thinking when he agreed that.

Earlier, I alluded to appeals. It is the current policy that the regulator’s decisions on water discharge consent variations should be suspended when an appeal is made, and that policy will be maintained. In the light of the responses to the consultation, the Minister has agreed that no change is being made to existing policy. Is he completely satisfied with the way that the appeals procedures will work?

Concerns were expressed at the consultation stage about the vegetation cutting proposals, which practitioners considered to be too prescriptive. They also felt that they could potentially contaminate water bodies and increase flood risk. The Minister himself alluded to the relationship between these regulations and other water legislation. I understand that he and the Department have met industry representatives following their responses and they have identified an acceptable way of addressing these concerns. Additional guidance is to be issued, so I wonder if he could share that guidance and the agreement that he has reached with the industry in that regard.

I want to make a point about small discharges and sites of special scientific interest, or triple SIs, which I am sure many members of the Committee will have; perhaps they do not exist in Upminster, but we certainly have them in North Yorkshire. Several interested parties expressed strong concerns about the potentially damaging effect of small discharges of sewage effluent into sensitive sites, such as triple SIs, drinking water catchment areas and waters with high biodiversity.

I will not embark on my usual discourse on sustainable drainage systems at this point; I shall save that for when the Flood and Water Management Bill returns for its final stages. An additional annexe to the water quality guidance part of the regulations has been drawn up, providing guidance on the registration of exempt water discharge and groundwater activities relating to such small discharges of effluent. I would be interested to hear from the Minister whether there will be a consultation period now that the regulator has published more detailed technical guidance on those aspects.

On terminology, one consequence of integrating the new candidate regimes into the draft EP 2010 regulations is that the regimes will become subject to new regulatory language. I understand that a number of those who responded to the consultation have asked for greater clarity. We are told that that will be provided through advice and guidance from Government and regulators, but I would like to hear from the Minister what the purport of that will be. It is unacceptable that we should allow the regulations to pass without understanding the purport of the terminology.

I emphasise all the points that I have made, particularly that the regulations due in April 2004 have not been published, as well as all the questions that I posed. In conclusion, I ask the Minister to calm the worst fears if possible and salve his own conscience about the regulations’ negative impact on industry.

Waste industries, as the Minister will realise, are 100 per cent. controlled by the Environment Agency. They may well benefit from having just one permit rather than a string of them. However, that becomes sensitive and a little inappropriate when the permit covers industries currently controlled by a mix of Departments and agencies. The result can be only duplication, triplication and overlap, and an overload on business. Will he put our minds and that of industry at rest in that regard?

To industry, it is a classic case. One of the biggest problems that the UK mineral industry encounters is the delays and extra costs and burdens created by the fact that planning increasingly requires double-tracking through the planners and the Environment Agency, with the risk that any hurdle or obstacle along the way could stop the proposed planning bid in its tracks. The industry says clearly that the planning problem is worsening. We heard this morning that £3 million will be given to the Planning Inspectorate to implement the order under the Marine and Coastal Access Act 2009 that we considered then. Will a similar amount go to the Planning Inspectorate if companies are allowed to appeal? It would be helpful for them to know.

The industry’s view on the mining waste directive is essentially that this country’s well-regulated industry is governed by the Health and Safety Executive. I applaud the work of the HSE. Sometimes it is over-zealous—I dare say all of us are guilty of that—but Whitehall, together with the HSE and planners, overlooks how much control it has and the degree of control handed to the Environment Agency, which largely goes without ministerial or parliamentary supervision. I think that it would be the first to accept that it exists to regulate but does not always understand a great deal about industry. The key thing is that it should engage with the people who run the companies and the system, and who are on the receiving end of burden-increasing regulations such as those before us today.

I hope that the Minister’s response will show that the Department is in listening mode. He will realise that we understand and support many of the underlying aims of the regulations, but he has some way to go to satisfy our concerns this afternoon.

Mr. Roger Williams (Brecon and Radnorshire) (LD): I believe that this is the first time that I have served under your chairmanship, Mr. Evans. I apologise to you and other hon. Members for my late appearance. After the hon. Lady’s comprehensive analysis of the regulations, I will not detain the Committee long. I look forward to the Minister’s reply.

I have two points to make. One concerns the need for planning permission set out in the regulations and the change in approach. Some established businesses might find it difficult to meet that requirement, given the changes. That includes well-established businesses, perhaps even some that were established before planning permission was required, and therefore rely on established use criteria. Will the Minister say something about that? The waste industry is worried.

The other point is rather minor, in some ways, but it causes concern. The Minister might have covered it before I was in the room. There is some anxiety about old case law used to prosecute those who commit an offence under the Water Resources Act 1991. Will that still apply to somebody who commits an offence under the new environmental permitting regulations? To put it as clearly as I can, will he clarify whether, under the new regulations, the offences in water discharge and groundwater activities of “cause” and “knowingly permit” have the same meaning as under the previous legislation?