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Lord Dubs: My Lords, I am grateful for the comments that have been made. Perhaps I may deal with the question asked by the noble Lord, Lord Molyneaux. I am not sure whether it fits in well with this debate but if I understood him correctly he was asking about possible increases in the regional rate. He related that to the burden on the water services to provide water to new housing developments which did not have access to it. Perhaps the noble Lord will permit me to write to him. I should be delighted to enter a discussion on it, but it would be better if I wrote to the noble Lord.

The noble Lord, Lord Lester, asked about the consequences of the change in procedures as regards the Prison Service. The Prison Service will be relieved of the £250,000 which will not be charged. It will not have to pay that, but that means that, in turn, the Assembly will have its income reduced by the same amount. There will, therefore, be a financial knock-on effect on the Assembly's money. I am not sure at this stage whether it is possible for me to quantify the effect of all the measures. I should prefer not to do that as it is difficult. I hope that the noble Lord will allow me to write to him if any clear figures come to light, rather than make rough estimates which might have to be revised later. I commend the order to the House.

On Question, Motion agreed to.

Parliamentary Constituencies (England) (Miscellaneous Changes) Order 1998

7 p.m.

Lord Hoyle rose to move, That the draft order laid before the House on 4th November be approved [47th Report from the Joint Committee, Session 1997-98].

The noble Lord said: My Lords, the order gives effect without modification to the final recommendations in respect of the 16 constituencies in Greater London, Surrey, Berkshire and Buckinghamshire which are described in the report of the interim review presented to the Home Secretary by the Boundary Commission for England on 26th June.

If the draft miscellaneous changes order now before this House is approved by your Lordships, my right honourable friend the Home Secretary will submit it to Her Majesty in Council to be made. Article 1(3) provides that the order comes into operation on the fourteenth day after the day on which it is made, but the new boundaries will not take effect until the next general election.

The commission's recommendations are framed only to take account of anomalies which have arisen between parliamentary constituency and local government

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boundaries in those areas since June 1994. The changes affect some 3,721 electors in total. These proposals are moderate and sensible and have been welcomed in the areas affected. The commission has received only one objection to the recommendations. That objection raised matters which would have required changes more than the minimum required to bring boundaries back into alignment with local government boundaries and was considered by the commission to be more appropriate for the next general review.

The draft Order in Council now before your Lordships was considered in another place on 17th November and has been approved by that other place. I have no hesitation in commending the commission's final recommendations to your Lordships. I beg to move.

On Question, Motion agreed to.

Pollution Prevention and Control Bill [H.L.]

7.2 p.m.

Lord Whitty: My Lords, I beg to move that this Bill be now read a second time. In speaking to the Bill, I am not sure that I can be as brief as my noble friend--

Noble Lords: Shame!

Lord Whitty: My Lords, this is a very short Bill on pollution prevention and control. It arises from the fact that we must implement the European Council directive on integrated pollution prevention and control next year. We wish to do so in a way which, first, preserves the coherence of our industrial pollution control systems; secondly, delivers maximum benefits for environmental protection; and, thirdly, minimises the burden of compliance.

The Bill will enable us to do just that. It will enable us to create a single unified pollution prevention and control regime where we would otherwise have to have two or three. I do not believe that there should be any great dissention on the matter and I hope the whole House will join me in supporting the Bill.

Perhaps I may put the Bill into context. The background is our system of integrated pollution control on the one hand and the European equivalent on the other. I believe that if I spell out the reasons behind the introduction of the Bill, that will help the House to understand it.

In this country, proposals for an integrated approach to pollution control were first put forward as far back as 1976 by the Royal Commission on Environmental Pollution. Its report drew attention to the way in which pollution is transferred across the environmental media. The commission made a strong case for ensuring an integrated approach to difficult industrial problems at source whether affecting air, water or land. The previous government acted on the Royal Commission's suggestion and by 1991 had introduced a system of integrated pollution control, based on statutory provisions as set out in Part I of the Environmental

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Protection Act 1990. That government also introduced a parallel system of local air pollution control which operates under the same legislation.

The integrated pollution control regime introduced by the previous government now applies to around 2,000 industrial processes in England and Wales, plus another 200 in Scotland. An equivalent system is now being introduced in Northern Ireland. Integrated pollution control covers processes in the chemicals industry, power generation, oil refining, metals, minerals, waste disposal and some other smaller industries, but 60 per cent. of the processes fall within the broad chemicals sector.

The core features of IPC are, first, that the operator needs a permit before he can operate a process of the type to which the regulations apply; secondly, that the permit must include conditions requiring the use of the "best available techniques not entailing excessive cost"; and, thirdly, that regard should be had to the "best practicable environmental option"--a term first coined by the Royal Commission.

The principle of setting standards of pollution control with respect to the individual process is at the heart of the United Kingdom's approach to pollution. It is a principle sometimes misunderstood on the Continent where the UK is, on occasion, accused of taking into account only pollution with a local impact and thereby ignoring the impact of emissions from the UK on continental ecosystems. That was not the approach of the previous government; nor is it our approach. The previous government signed and ratified a UN protocol to reduce emissions of sulphur dioxide. We have signed similar protocols for heavy metals and persistent organic pollutants. We have always taken our responsibilities seriously, not only for pollution within the UK, but beyond our borders also. That tradition has been followed through by my right honourable friend the Deputy Prime Minister, in particular in the Kyoto negotiations.

The previous government were successful in securing a European directive at that level on integrated pollution prevention and control which puts the UK's site-specific approach to pollution permits at the heart of European environmental policy. Not only that, but the UK's pragmatic approach to costs and benefits also appears on the face of the directive. Initially, that was against the wishes of some member states, but the UK approach prevails. The directive states that the permits issued by member states must take into account the technical characteristics of the installation concerned, its geographical location and the local environmental conditions.

That may seem like common sense, but some previous continental regimes had a more rigid and inflexible approach. On costs and benefits, the directive does not employ the UK term "best available techniques not entailing excessive cost", but defines "best available techniques" as those where the "costs and advantages" have been taken into consideration.

A directive as compatible with the UK's approach to pollution control was not achieved without considerable effort and I pay tribute to those involved. Of course, the

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directive is not exactly the same as our existing system; in many respects, it is a significant improvement. It is a good idea to consider, for example, energy efficiency and noise alongside the emissions potential of an installation. Our existing IPC system was rather artificial in the way it limited its focus to emissions of polluting substances and did not address other environmental impacts. I understand that in many cases industry already appraises its projects in the way the directive will require.

The directive also extends to a significantly greater number of installations than our existing system. Our best estimate is that it will apply to some 6,000 installations, compared to the 2,000 or so to which the IPC already applies. The extra installations covered by the directive include 10 per cent. of those currently regulated by local authorities. Therefore, they are already subject to some degree of regulation. It also includes around 1,000 landfill sites, on which we had a debate recently, and a similar number of the larger intensive pig and poultry farms, plus around 500 food and drink factories which are not already covered. There are a number of technical differences between the IPPC and the IPC; for example, the fact that "installations" have to be regulated under the EU directive, whereas "processes" are regulated under the current IPC and the local authority regime.

One could go on at length about the difficulties caused by the decision to control processes under our own Environmental Protection Act 1990, but the European choice of the term "installation" should enable a more rational system to be developed, one which also takes account of the fact that it is, in practice, increasingly common for operators to outsource various aspects of what they do.

It would be possible simply to translate the IPPC directive, along with our existing system of pollution control, into the UK legislation. However, if we did that we would in effect end up with three regimes. The first would be one under the directive controlling the 6,000 installations to which I referred and which the directive requires us to control. Secondly, there would be the remains of the IPC regime covering the 400 for so processes which we control through the IPC but which are not actually included in that directive. The third would be a local air pollution control regime administered through local authorities which would cover the remaining 11,000 or so processes and, therefore, the vast majority of small installations.

The first regime--the European regime--would regulate "installations" according to "best available techniques" and with full consideration of energy efficiency, noise and site remediation. The second regime, the IPC regime, would regulate "processes". The third regime would regulate "processes" but only in respect of emissions to air. The second and third regimes would be compatible with each other, as they are now, but the first regime--the IPPC regime--would be compatible with neither: to use a technical term, the overall result would be a dog's breakfast.

In order to avoid potential confusion and incoherence as regards operators of those processes, we have introduced the Bill. The power set out in the Bill will

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enable us to bring in regulations setting out a more coherent pollution prevention regime consisting of compatible regimes of integrated pollution prevention and control and local air pollution control. We will be able to regulate all installations using a common system and we will have a common terminology running through the integrated system, including a local air pollution control system, as at present. That is basically the purpose of the Bill. We will end up with a more coherent regime and one which is compatible in all respects. However, we will continue to have one regime operated nationally and one through local authorities; but they will operate on the same basis.

At the same time, your Lordships should know that the Government have carried out two consultation exercises and are about to launch a third, the basis of which should be available shortly in the Library of the House. We have been able to identify a number of improvements to the existing regime as a result of that consultation. The Bill would give us an opportunity to extend those benefits and those improvements to all installations which are covered by pollution control through the regulations which we will implement under this Bill.

Those improvements include quicker decisions on variations in cases where the regulator is convinced that an environmental improvement will result; better focused arrangements for public consultation; greater transparency; and measures to make it easier to grant payments to those who deserve them and to withhold them from others. The third consultation paper to which I referred will be available shortly and certainly before we reach the Committee stage of the Bill. It will set out the Government's specific proposals for the use of the regulation-making power in the Bill and will be accompanied by a first draft of the regulations which the Government propose to make. Your Lordships will therefore have a very early opportunity before the Committee stage to see the use to which the Government intend to put the powers in the Bill.

Perhaps I may quickly run through the provisions of the Bill. Clause 1 confers on the Secretary of State power to make regulations creating a new regime of pollution control. Schedule 1 lists some of the specific purposes for which this power may be used. It reads very much like a skeleton draft of the regulations to which I just referred. There is, of course, a question of the competence of the Scottish Parliament and the National Assembly for Wales in future years.

Clause 2(1) and (2) enable the transfer order under the Government of Wales Act 1998 to follow the negative resolution procedure rather than the affirmative procedure to give the responsibility for the secondary legislation to the National Assembly for Wales. Clause 2(3) provides for the transfer of functions under the Bill to the Scottish Executive under the Scotland Act 1998.

Clause 3, together with Schedules 2 and 3, gives effect to some consequential amendments and repeals. In particular, the Bill provides for the repeal of Part I of the Environmental Protection Act 1990 except in so far as it applies to Northern Ireland. Clause 4 contains the

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Short Title and so on of the Bill. Clause 4(7) retains those sections of the 1990 Act which apply to Northern Ireland.

The Bill will duplicate those provisions as far as concerns Great Britain, but the other sections of the 1990 Act need to be retained for Northern Ireland. Clause 4 also provides for regulations under the Bill to apply to installations under the jurisdiction of the United Kingdom but beyond its territorial waters. The directive applies to large combustion plants on oil rigs. Clause 4 will allow such plants within our jurisdiction to be regulated whether or not they are within our territorial waters.

I believe that I have given your Lordships sufficient details of the clauses of this fairly straightforward Bill. I hope that noble Lords will agree that it makes our regulatory mechanisms coherent and understandable. I commend the Bill to the House.

Moved, That the Bill now be read a second time.--(Lord Whitty.)

7.16 p.m.

Lord McNair: My Lords, the first thing I have to do is to apologise on behalf of my noble friend Lord Mar and Kellie. Due to the unexpectedly late start of the debate, my noble friend has had to leave because he has a plane to catch. Noble Lords will be glad to know that I shall not be making two speeches. However, I shall, nevertheless, make a point that he would have made.

I welcome the Bill and I should declare a small and non-financial interest as Vice-Chairman of the West London Green Business Club, which has been established and supported by the Interactive Environmental Group, which also facilitates and supports the National Recycling Network. I feel that some businesses may groan at what they see as a new imposition in the cause of integrated pollution control, but I would rather see the directive and this piece of legislation as a spur to the development of new technologies for recycling, reuse and in process waste (and energy) minimisation.

There is a process which I have come across recently which is an advance on existing methods of consolidation and vitrification for industrial and municipal solid waste. This process uses the heat generated in the materials themselves. I note that the Minister talked about energy conservation. I do not understand the process because I am not technical, but the company Vortek is setting up a plant in the Republic of Ireland and, possibly also, in the United Kingdom to process industrial and municipal waste.

The BATNEEC principle of dealing with pollution was much debated during the passage of the Environmental Protection Bill. It can be operated in such a way as to hold up the development of new technologies or in such a way as to accelerate the development of new technologies because they are actively sought by companies seeking to improve their performance in terms of the environment. This will certainly require investment, but I wonder whether there is a role for the DTI or the Environment Agency in

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acting as a clearing-house for new ideas. We are a very inventive nation and this is an area where our inventiveness could come to the fore.

I hope that the inspectors at the Environment Agency will be tough on polluters and will actually prosecute for negligent and irresponsible pollution. Clearly, there has to be continued pressure on companies to reduce environmental impacts by new technology and new methods of decontamination and purification.

I shall make just one point that I believe my noble friend would have made about education from his point of view. He has just joined the board of the Scottish Environmental Education Council, which supports the need for regulation and rigorous enforcement as a means of preventing and controlling pollution. The success of the Bill will, ultimately, depend on the inter-related roles of education and legislation. The commitment to information, publicity and consultation, mentioned in Schedule 1, is welcome. Fundamentally, there needs to be a hearts and minds approach to pollution and its limitation. It is only through education in its broadest sense that the best environmental practice will be sustained. We need to move from an attitude of "these infernal regulations" to a posture of personal commitment and voluntary action beyond the regulatory requirements.

In its recent environmental strategy, the Scottish Environmental Protection Agency has placed emphasis on the complementary use of non-regulatory tools, such as education, for achieving its objectives--evidence of a hearts and minds approach, my noble friend supposes. I hope that there will be a corresponding increase in the resources allocated to this sector of environmental action and care.

Finally, I am pleased to see that Clause 4 brings offshore installations within the scope of the legislation. I wish the Bill a safe and speedy passage through your Lordships' House and another place.

7.20 p.m.

Baroness Hamwee: My Lords, the Minister said that he hoped that there would be no dissension with regard to the Bill. From these Benches, there will be none.

When I was warned that the Bill was to be part of the business of your Lordships' House, I was told that it was called the Integrated Pollution Bill. The comment was made to me "If we cannot have an integrated approach to the environment, at least we can have integrated pollution". Perhaps neither of those points is fair. I am glad to find that the Bill is about control and prevention first and that it is not a dog's breakfast. However, I wonder whether the Long Title promises a little more than the contents give us. It seems to me that this is not a new system but more a co-ordination of regimes. It is none the worse for that, but I feel that the Long Title is quite optimistic.

We welcome the Bill because we welcome what the Explanatory Notes call,

    "a simple, coherent pollution control system",
for the regulation of all types and sources of pollution. While I am mentioning the Explanatory Notes, perhaps I may say how much I welcome them, particularly for a

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technical Bill such as this. It was far easier to read the rounded explanation than to have to guess at what was between the lines of the technical provisions of the Bill.

The Bill proposes a system to regulate all types and sources of pollution. However, the Minister explained that not everything will be within the new system. As I understand it, what is left outside is what is within the aegis of the local authority. It would be helpful if the noble Lord could expand on what does not fall within the Bill.

The Bill, perhaps inevitably, relies on regulations. The Minister told us that the draft regulations are due to be published by the end of the year. The directive is to be implemented some 10 months later. Does the Minister believe that there will be sufficient time for the consultees to respond to the consultation? How long a period for consultation will there be? On a practical point, will there be sufficient time to put the necessary arrangements in place? The Explanatory Notes say that there will be no regulatory costs but they say also that costs will arise under the regulations. Can the noble Lord give us some idea of the scale of the costs? The paragraph in the Explanatory Notes dealing with the financial effects makes the point. But I am not sure it is sufficient to say that the costs cannot be estimated as they will have to be paid. I do not disagree with the point that the polluter will pay. However, while I hope not appearing to be approving of pollution, I think the operator of a process needs to know the likely bill at the end of the day.

The Minister referred to energy efficiency, and the directive requires installations to be operated in such a way that,

    "energy is used efficiently".
My attention was drawn to the report of the noble Lord, Lord Marshall, on economic instruments and the business use of energy. The report makes the point that IPPC will deliver some emissions reductions for heavy industry, particularly of carbon dioxide, but that most small and medium-sized industrial firms and all commercial premises will be outside its scope. In any event, IPPC is existing process-based. Paragraph 35 of the report states:

    "It will require firms to tighten up their existing processes, but it will not provide an incentive to look at whether instead to reduce operating periods, to retire plant early, or to switch out altogether of more carbon intensive technologies or lines of business into less carbon intensive ones".
The report gives the example of a pipe currently made from primary steel. It says that there could be a number of options which would reduce the energy consumption of its manufacture, such as making the pipe from less steel, making the pipe from recycled steel or even making the pipe from a completely different material. The report states:

    "IPPC will focus on making the primary steel process more efficient but would provide no incentive for the market to take up the other options. In practice these may actually have been better for the environment as well as cheaper in the long run for the economy".

I was interested in the reference in paragraph 8(1) of Schedule 1 to the Bill to the transfer of permits. Can the Minister say a little more about that? Are permits to be

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transferable simply because businesses may be transferred and therefore the permits relating to the businesses need to be transferable as well, or is this some indication of the use of tradable permits? My colleagues in the Liberal Democrat party have been concerned about that point, although perhaps it is a more international system than we will be dealing with here. I should be grateful if the Minister could say a little more about the transfer of permits.

Finally, I made a note that on these Benches we wish the Bill a fair wind. I realise that those dealing with pollution prevention prefer a "calm day", but we will support the Bill.

7.27 p.m.

Baroness Byford: My Lords, I have three slight difficulties with the Bill. The first concerns the way in which the legislation will apply. Ever since our forebears began to realise that polluted drinking water causes cholera there have been those who pollute and those who try to stop pollution.

This Bill is intended to draw together the integrated pollution control regime, the local air pollution control regime and the waste management licensing system in a manner which accords with EC Directive 96/61 on integrated pollution prevention and control. Among other things, this will mean regulating

    "significant numbers of installations which are at present unregulated by either Part I or Part II of the 1990 Act"

    "through a system of permits some 2,600 installations which are not currently regulated in this way".
Perhaps we should note that at present only some 2,000 installations are regulated by permit. Moreover, the EC directive introduces a profound change to the law. At the moment both regimes require that,

    "Best available techniques not entailing excessive costs"
are to be used to prevent or minimise pollution. In future, the operative phrase will be "best available techniques".

To illustrate the nature of this change, I refer your Lordships to the EC directive on the safety of glass used in windows and doors as it is applied to our schools at present. One of the smaller counties calculated that to replace all the unkite-marked glass in its schools with that marked to the correct British Standard would cost some £2.25 million. Most of its schools are in practice replacing all broken panes with BS material, but are covering the rest with safety film at about one-fifth to one-quarter of the cost. Extend that to industrial processes which give rise to pollution, apply best techniques and the probable cost is much higher than that which now applies. In those circumstances it is essential that the requirements of the law are clear, unequivocal and obvious to all those to whom it applies.

My second major difficulty is with the identification of those people and processes which will be covered by the new legislation. Clause 1(4) seems to me to be a catch-all, to end all catch-alls. I doubt whether anyone, having read it, could be sure whether it applied to his business, proposed activity, hobby or whatever. Can the Minister tell us, for example, if it is to be used to extend

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the life of the Magnox reactors as requested by BNFL, while pushing the ratification of the Portugal agreement to render marine protected areas off limits to man's activities, and backing Mr. Prescott's refusal to accept near zero discharges of radioactivity?

My third major difficulty is that in this Bill we once again have a situation where the Government appear to avoid parliamentary scrutiny of their actions by providing the Secretary of State with sweeping powers which, once gained, can be overturned only by a resolution of either House. As noble Lords will know, that means this House will have no opportunity to amend them in detail. Can the Minister assure us that we shall have an opportunity to see the outcome of the consultation due to be published by the end of this year--he has indicated that that will happen--before the Bill reaches Committee stage, and that it will contain a draft of the Secretary of State's intentions? Will that be binding on the Government? Does the Minister agree with me that such a strong reliance on regulations could be seen by the electorate as a total renunciation of democracy by a Government who have a considerable majority?

Finally, I ask for an assurance that the draft regulations will be available in the House before we reach Committee stage to enable us to consider them in detail before the Bill completes its passage. I know that the Minister is aware that the Christmas Recess is nearly upon us, but will he ensure that the department makes every effort to bring forward detailed guidance or draft regulations before the Committee stage? Will he also ensure that the Delegated Powers and Deregulation Committee brings forward its report to assist the House before the Government seek to proceed through all stages of the Bill in this House?

7.33 p.m.

Lord Whitty: My Lords, I thank noble Lords who have participated in this debate. I wish to respond to a number of the points which have been raised. The noble Lord, Lord McNair, referred to technological advance in this area, including vitrification and the creation of solid waste. Those and other new techniques are important and the relevant government departments are actively trying to encourage them. To reduce pollution at source is the main purpose of the Bill and fits in very much with the line the noble Lord took in relation to new technology. While the regulations cannot deliver the new technology, they can at least encourage its use.

I am happy to endorse the point the noble Lord made on behalf of his noble friend Lord Mar and Kellie as regards education and information. That is absolutely essential if we are to get the message across. The sentiments that the noble Lord expressed on behalf of his noble friend are in tune with the department's wish to convey information and to encourage motivation to adopt personal responsibility in these areas. That fits in with our "doing your bit" campaign.

The noble Baroness, Lady Hamwee, mentioned a number of issues. As regards the transfer of permits, the reference in Schedule 1 is to transfers of the permits as operator transfers. However, there is a possible role for

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permit trading in due course although not quite on the scale we are discussing in Buenos Aires. That is referred to in paragraph 1(3) of Schedule 1. There is an element of potential trading, albeit relatively minor, involved.

As regards what is included in the Bill, all three regimes to which I referred are included in order to achieve a coherent approach. It is not a case of local authorities being outside this approach; we hope that there will be a coherent approach based on the same principles. Effectively local authorities will continue to administer the regime as regards the vast majority of installations--that is, over 11,000 of them. The noble Baroness also asked about costs. As regards the acquisition of the permits, it is difficult to predict the precise costs because under the present regime charges range from £100 for a relatively small installation up to £80,000 for a power station. The costs of abatement can be negative or they can run into hundreds of millions of pounds. The key point is that a site specific judgment needs to be based on the costs and benefits on both sides of that equation and needs to be made on a case by case basis.

As regards the consultation document--which I believe the noble Baroness mentioned twice--the timetable is tight. The point was also mentioned by the noble Baroness, Lady Byford. The consultation document I mentioned would probably have been available to this House had this debate taken place on the date originally scheduled, before it was brought forward. However, it will certainly be available to the House in good time for the Committee stage of the Bill and almost certainly before Christmas. The timetable for consultation is relatively tight. We hope to hold two rounds of consultation on the basis of the document before the regulations are laid. That is a challenge but the new regulations with regard to existing installations will be phased in over a period from the passage of the Bill to the year 2007. Although we need quick responses to the consultation, some views in relation to particular processes may be given at a later stage and will still be taken into account.

The noble Baroness, Lady Byford, mentioned a number of other issues. She asked to how many new installations the measure applies. I believe I mentioned the figure of 2,600, which is the approximate figure of new installations, as distinct from those which may be transferred from one regime to another. Of those, about 1,000 are landfill sites and another 1,000 relate to intensive farming installations, principally of large pig and poultry farms. There are about 500 within the food and drink industry to which the present regulations do not apply. It is only that number which will be newly affected. The vast majority fall within the three categories I have mentioned.

The noble Baroness asked to whom Clause 1(4) applies. I assure her that the schedule which will be produced will make it clear that it does not apply to Magnox power stations. In the new year we intend to produce a schedule to make it absolutely clear to which processes and to which installations the measure applies.

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We certainly hope to have the draft consultation paper available before Committee stage, although it is a matter for the House authorities rather than myself. No doubt the Delegated Powers and Deregulation Committee will examine the matter in that timescale. The draft regulations will therefore be available, which will answer many of the points raised.

I thank noble Lords for their contributions. I believe that the Bill will be generally welcomed as a clarification of the position and as an operation of a regime that is more easily understandable than had we moved into three different regimes attempting to control similar processes. The fact that there can be a regime in our national legislation compatible with that of Europe is a positive bonus in this context. I therefore commend the Bill to the House.

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