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Viscount Ullswater: My Lords, Amendments Nos. 97, 98 and 102 are grouped with the amendment now under consideration. Therefore, I am rather surprised that my noble friend Lord Marlesford did not address the matter when he had the opportunity. With one exception, this group of amendments seeks to amend the way in which the new agencies should take account of costs and benefits. The exception is that my noble friend wishes to remove Clause 37 from the Bill.

We have already discussed at length and agreed in Committee that Clause 37 should stand part of the Bill. I undertook then to consider the one outstanding point about the extent to which costs other than purely financial costs could be included. I have spoken to amendments this afternoon, which I intend to move shortly, which clarify the meaning of the term "costs" in Clause 37, to which the noble Baroness, Lady Hamwee, drew attention. They ensure that environmental costs as well as financial and other costs are to be included in the agencies' assessment of likely costs and benefits. I therefore believe that Clause 37, amended in this way, should be included in the Bill. I believe that Clause 37, amended in the way I have explained, is the right approach to this subject.

Amendments Nos. 94 and 98 seek to replace subsection (1), which requires each new agency to take account of costs and benefits, with a new subsection which would require Ministers to give the agency guidance on costs and benefits. We have already said that we will give guidance on the taking into account of costs and benefits as part of the guidance on the contribution the agencies are to make to sustainable development. But we do not believe that the agencies' taking account of costs and benefits should simply be a matter for guidance; it is fundamental to the responsible

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operation of the agencies. I think that the amended version of this clause is what is required and sets out clearly what the agencies need to do. I therefore ask the noble Baroness to withdraw the amendment.

Lord Marlesford: My Lords, before the noble Viscount sits down, I had hoped —as it states at the top of the groupings list that one can speak to any amendment in its place in the Marshalled List—to speak separately to Amendment No. 102, as it is a "stand part" amendment. Is that in order?

Viscount Ullswater: My Lords, the grouping is for the convenience of the House, but as the groupings list makes clear, a noble Lord may speak to his amendment when it appears in the Marshalled List.

Baroness Hamwee: My Lords, I thank the Minister for his comments. My view remains that, particularly as the draft guidance alludes to the issue of costs in connection with the references to sustainable development, perhaps it would be better for the whole issue to be dealt with by way of guidance. But in view of the hour I do not seek to press the point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Coleraine moved Amendment No. 95:

Page 31, line 28, after ("Agency") insert ("and any local authority to the extent specified in subsection (3) below").

The noble Lord said: My Lords, I rise briefly, and with some diffidence in view of the cross currents of the past few minutes, to move Amendment No. 95 and to speak also to Amendments Nos. 99 and 101 in my name. It seems anomalous that the agencies should be under the costs and benefits duty but local authorities exercising similar statutory functions are not subject to those duties. This amendment, or Amendment No. 101, would extend Clause 37 to apply to the powers of local authorities in relation to local authority air pollution control, statutory nuisance and contaminated land. I beg to move.

Viscount Ullswater: My Lords, Amendments Nos. 95, 99, and 101 spoken to by my noble friend Lord Coleraine, seek to apply to local authorities exercising powers with respect to local authority air pollution control (LAAPC), contaminated land and statutory nuisance, the duty to have regard to costs and benefits under Clause 37. I can, of course, understand the concern behind my noble friend's amendments, but I do not think that they are necessary or appropriate in this case. The agencies have a wide and complex range of functions; in addition to their core functions in respect of the control of wastes and industrial pollution, and water regulation, they will need to carry out research, make reports and, in fact, under Clause 35, will have powers to do anything which is calculated to facilitate, or is conducive or incidental to, the carrying out of their functions. The powers of local authorities which are caught by my noble friend's amendments have none of this breadth and complexity, but the statutes under which they operate address the issue in other ways.

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In the case of statutory nuisance, local authorities are already required to use the best practicable means to deal with the nuisance. The definition of this under Section 79(9) of the Environmental Protection Act 1990 makes specific reference to the need for financial implications to be taken into account with other factors.

For local authority air pollution control under Part I of the 1990 Act, local authorities are required to use the best available techniques not entailing excessive costs (BATNEEC). My right honourable friend the Secretary of State issues comprehensive statutory guidance for local authorities on what constitutes BATNEEC for each category of industry. This is issued only after close consultation with the representatives of the industries concerned. In respect of contaminated land, the Bill already provides for the consideration of costs and benefits by enforcing authorities, which may be the agencies or local authorities. The new Section 78D(2) provides that enforcing authorities should have regard to costs and the seriousness of the harm or pollution of controlled waters in question when specifying what is to be required by way of remediation on any site.

I am not, therefore, persuaded that it is necessary for local authorities to have the further and additional proposed duty to have regard to costs and benefits. Costs and benefits are already taken into account by other means appropriate to these functions. I therefore ask my noble friend to withdraw his amendments.

Lord Coleraine: My Lords, at this hour I shall merely thank my noble friend for the comprehensiveness of his reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

11.45 p.m.

Viscount Ullswater moved Amendment No. 96:

Page 31, line 34, leave out from first ("the") to first ("of") in line 35 and insert ("likely costs and benefits").

The noble Viscount said: My Lords, I have already spoken to the amendment. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 97 to 99 not moved.]

Viscount Ullswater moved Amendment No. 100:

Page 31, line 39, leave out ("or meet any aims or") and insert ("any").

The noble Viscount said: My Lords, I have already spoken to the amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 101 not moved.]

Lord Marlesford moved Amendment No. 102:

Leave out Clause 37.

The noble Lord said: My Lords, I am grateful for the opportunity to speak to this amendment separately because I believe that the proposal to omit Clause 37 is a separate proposal although we have debated some aspects of that clause.

I have two reasons for believing that the clause is unnecessary. First, the new Clause 4, which the House has already agreed and which was welcomed, makes Clause 37 that much less necessary as it provides for a

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principal aim of the agency to be to take into account any likely costs. In addition to our discussions in Committee, that makes it less necessary for costs and benefits to be taken into account in a separate clause.

I also suggest that there is still a real danger of vexatious litigation, with requirements for judicial review, arising from decisions taken in the context of the provisions of Clause 37. I sent my noble friend a copy of the legal advice from the CPRE's honorary standing counsel, Mr. Jeremy Sullivan QC, who made it clear that in his opinion there was a real danger that the effect of this clause would be such vexatious litigation.

I therefore ask my noble friend to consider seriously whether it is necessary to include Clause 37 in the Bill. Perhaps he would like to give his view on that question.

Lord Williams of Elvel: My Lords, that seems to be a fair question, particularly in view of Amendment No. 124 which the noble Viscount will move and which includes "costs to the environment" in "costs". If anyone can calculate what environmental benefits are, I can guarantee that they will not be able to calculate environmental costs. Therefore, the whole of Clause 37 relating to cost benefit analysis, given that costs now include environmental costs, seems to be a nonsense.

Viscount Ullswater: My Lords, as I indicated, we have discussed this at length in Committee. I have no reason to believe that a requirement to take account of cost benefits is over-restrictive or bureaucratic. It does not override the agency's other duties and obligations. It applies to those areas of the agency's work where it has a discretion and ensures that the agency cannot incur or cause others to incur costs unjustified by the environmental benefits. It does not bite where it would be unreasonable—for example, in cases of emergency where the agency must be able to act immediately.

The proposal that the environment agency should have regard to compliance costs for industry when setting environmental standards was included in the consultation paper on the agency which was issued in 1991. It simply enshrines existing good practice in the legislation.

At Committee stage we had quite a long discussion on the concept of cost benefit analysis. I remember that the noble Lord, Lord Chorley, indicated that it was one which industry was quite prepared to undertake. I believe that to be the case. That is the reason why I believe that Clause 37 should stand part of the Bill. I hope that my noble friend will withdraw the amendment.

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