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The Earl of Onslow: At Belshazzar's feast there appeared on the walls the words:

When translated, the phrase did not mean: "unless and to the extent that it is reasonable" etc., it meant:

    "Thou art weighed in the balances and art found wanting".

So we know early on what a cost-benefit analysis is. I should like to see in the Bill words more like those my noble friend Lord Renton suggested, using "advantage" or "disadvantage". Of course, the agency must rightly make value judgments and ask: "Do we save this one bogwort but ruin employment for 800,000 people?". I take the argument obviously ad absurdum. It seems to me that the language of the clause is convoluted and in some ways over-precise but in other ways not precise enough. If the Old Testament can get it right—which it did fairly easily with:

    "Thou art weighed in the balances and art found wanting"—

and we all know exactly what that means—then surely the drafters of government Bills, with the assistance of the Renton Committee and possibly the previous lesson in English from the authors of the Authorized Version of the Bible, could make a better attempt at laying out what the view of the agency must be in this example rather than what is written in very obscure language.

6.15 p.m.

Lord Peyton of Yeovil: My noble friend Lord Onslow is being extraordinarily optimistic in suggesting that the parliamentary draftsmen, given the instructions they receive from Ministers, could possibly match the Old Testament for clarity. However, I echo some of the questions asked by the noble Baroness, Lady Hamwee, in moving the Motion, but that is not to say that I look for the same answers to her questions.

First, there is a small point about which I should like to be clear. In balancing costs against benefits, is it right that when we use the word "costs" we are talking about financial costs? I take it that that is correct but I should be grateful if my noble friend could confirm it. I repeat what the noble Baroness said about that: whose costs, what benefits and to whom will those benefits accrue?

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The second question is one which the noble Baroness also asked: what is the second half of the clause intended to do? I have a nasty feeling that, having done what I consider to be the right thing in the first half of the clause, the Government then seem to have had second thoughts and said: "Oh no, sorry, we didn't really mean that. We will go back to where we were, without the first half of the clause". I hope that my noble friend will be able to give us a lucid explanation of the meaning, value and import of the second half of the clause.

The most important point that I wish to make is that I believe that the Government are absolutely right to take into account the costs of doing all those things. Everyone who is sensible and sane, including industry, wishes to see the environment improved. There is no question or doubt at all about that. But to say that the costs must be regarded as secondary or put up as an excuse by industry is quite wrong. It is high time that the country, and all of us, remembered that when we mention costs we are talking about the competitive capacity of British industry and about jobs. Let that not be forgotten.

When my noble friend Lord Marlesford said on an earlier amendment that departmental advice was preferable to having something in the statute for ministerial guidance, I respectfully beg leave to differ with him. I can think of nothing I would rather avoid in this context than ministerial guidance or departmental advice. I mean no offence to my noble friend.

Lord Moran: I hope that the Government will take careful note of what the noble Lord, Lord Renton, said, as it seems to me important. If they do not do so and if we maintain the present wording of Clause 37, one point bothers me; namely, that in many cases it must be much easier to calculate industrial costs, for example, than to calculate environmental benefits. Perhaps I may give one example of what I mean. As my noble friend Lord Elis-Thomas is present, perhaps I may give a Welsh example. A power station in Wales may burn some agreeable substance like orimulsion, emitting a good deal of sulphur. The regulating agency—at present the NRA and HMIP, but in future the environment agency—applying BATNEEC, may say that the power station must install the best form of flue gas desulphurisation. It is clear that that is a very expensive option and there is no difficulty in calculating the cost of the operation. However, on the other side, the environmental benefits may largely consist of ensuring that fish, invertebrates, dippers and other organisms may continue to survive in large numbers of Welsh rivers and lakes. It must be extremely difficult to calculate that against a clearly defined industrial cost.

Lord Vinson: Will the noble Lord give way? He may be comforted to know that the cost of cleaning up orimulsion to the levels which I believe he would find acceptable and which would make the atmosphere or the exhaust gases of the power station fully within the regulatory limits, is about 5 per cent. of the cost of the electricity generated. I believe that everyone would

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agree that that is a wholly acceptable cost. It can be calculated and therefore I do not think that the point the noble Lord makes will stand up.

Lord Moran: I am glad to hear what the noble Lord said and, if it is correct, it is good news. I was only giving it as an example because, as a general principle, it must often be difficult to balance an assessment of the rather intangible but still extraordinarily important environmental benefits against the quite easily calculated industrial costs. That is what worries me and why I much prefer "advantages" and "disadvantages", as suggested by the noble Lord, Lord Renton.

Lord Elton: Despite what my noble friend Lord Vinson said, there will be occasions when, supposing the calculation given had been 50 per cent. and not 5 per cent., either an important question will be unanswered in the Bill or we shall have to compare apples with eggs, counting them against each other. I suspect that the clause, as drafted, takes account of that. If Members of the Committee will turn to page 50, there is a proposed insertion in the Environmental Protection Act 1990. At line 13 it will read:

    "Without prejudice to section 37 of the Environment Act 1995".

That is the part that we are looking at. To summarise, there shall be a duty on the agency to have regard to,

    "the cost which is likely to be involved",

on a person on whom it has served a notice. That clearly is a financial cost. By preserving the duty under Section 37 and introducing a duty dealing with cost in this new clause, it seems to me that a distinction is made between them. I merely ask my noble friend whether, if that is so, it could not be more clearly stated than it is now, for example, in some way such as that suggested by my noble friend Lord Renton.

Lord Chorley: This is an occasion when, perhaps surprisingly, I find myself in some sympathy with the Government on this matter. I am sure that we need some provision on the lines of Clause 37, though it may not be precisely right. I spent much of my professional life off and on being involved in cost-benefit analysis, so I know all about the pitfalls and so forth. In the world in which I moved in those days it was a well understood term of art. Perhaps that is part of the problem.

However, I emphasise—I refer to what the noble Viscount, Lord Ullswater, said on a previous set of amendments, on which he said that he would come back to the House—it is not just a question of financial costs. It is a question of costs right across the board, including all the environmental costs. That is what the term of art means.

There is another point which it is important to emphasise and which has been touched on by other Members of the Committee. There is a great problem, in that many of the costs are not readily, or even, in some cases, at all quantifiable. That has to be recognised. It is important to set out clearly in each case the distribution of costs and benefits and who incurs them or benefits from them—in other words, the distribution of the costs and benefits, whether quantifiable or not. It is important that these matters are described. Whether any advantage is to be gained from

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the use by the noble Lord, Lord Renton, of the term "advantages and disadvantages", I do not know. It is not normally a term of art in the world in which I moved. However, I would possibly go along with it provided that there is some reference to costs, because it is very important to know what costs (whether or not they can be measured) are being incurred.

Lord Beaumont of Whitley: I agree strongly with the noble Lord who has just spoken. But he has underlined the necessity to spell out what is needed rather more clearly than is done in this clause. Given the way in which he described it, I believe that almost all of us would agree. I could not accept, for instance, what the noble Lord, Lord Peyton, as I understand it said. The noble Lord said that everyone wanted to improve the environment, which is probably more or less true. He then went on either to state or to imply—I believe he stated it—that therefore people would all act accordingly. What happens is that everyone is in favour of improving the environment so long as the cost does not fall on themselves but on someone else. Therefore there is absolutely certainly a need to sort out what the cost benefits are. It is in relation to that aspect that we need from the Government rather more clarity than is presently the case.

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