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Lord Jenkin of Roding: I am grateful to the noble Baroness for a full and considered reply. I recognise that she and her advisers have clearly understood the purpose of these two amendments.

To take the second amendment first, the provision of annual accounts was in a sense a peg on which to hang the argument about transparency. I wish to study the Minister's words carefully. As I understood her, she appears to accept the argument that there is a need for much greater transparency. She also appears to accept the argument that the fees paid by an operator should relate only to the costs incurred by the regulator in regulating that operator. If that is indeed the case, much of my argument has been met. I merely point out to the noble Baroness that the main industrial representative body, the CBI, indicated as recently as last month--in the letter that I quoted earlier from Dr. Janet Asherson, who heads the environment section--that it has as yet absolutely no confidence that it has the information that would enable that process to be monitored in any way. It seems sensible that there should be an early meeting between representatives of the CBI and representatives from the noble Baroness's department so that its concerns can be aired.

It is interesting that in her letter Dr. Janet Asherson states that the CBI is extremely concerned that there appears to be "inadequate mechanism" for dialogue between the agency and business in respect of charges and that the CBI would expect a fuller explanation of the justification for the proposed increases. That does

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not apply only to the Environment Agency; there are no doubt other regulators as well. It therefore seems that the least the Government ought now to be able to do is to follow this matter up and see that these deeply felt concerns are properly aired.

The noble Baroness's opening words were reassuring. It is not intended to cover the general costs of the Environment Agency in the charges. She made that clear. As I understood her, it is to be only in relation to the regulation process. That is reassuring.

We shall want to look carefully at the rest of what the noble Baroness said. She read a carefully prepared statement which was technical and went into some detail and I am not sure that at this hour of the night I was capable of absorbing it. I ask her to believe that out in the country there is considerable concern. People have faced two years of substantial increases in charges for which they appear to have had no sufficient justification. The noble Baroness's speech appeared to offer some justification. If there was indeed a subsidy, it may well be right that it should be dealt with. However, the people have no information as to whether or not that is true; they have to take it on trust. Therefore these two amendments hang together and we shall want to consider the matter very carefully. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Luke moved Amendment No. 30:

Page 5, line 38, at end insert ("including, in particular, the impact of any regulations on the agricultural and food industries").

The noble Lord said: This amendment seeks to ensure that food manufacturing and agriculture receive as much advance warning as possible of regulations under the new regime which may affect them. I hardly need to say that farming is in very poor shape generally and any new impositions by way of extra costs could cause some operations, at least, to close altogether.

As has been said by several Members of the Committee, this is a skeleton of a Bill and I should therefore like to ask some questions and briefly give detailed examples to give point to the anxieties widely felt, particularly in agriculture.

As a matter of definition, does pollution of the air in the countryside mean "smelly"? I take it as such as applied to sewage farms and the laying of shoddy and slurry. Is it proposed that large dairy operations or large flocks of sheep should be included under regulations? As the Minister knows, regulations already exist to prevent livestock units becoming a "nuisance". Is that another word for pollution through smell, noise, flies, rodents and dust?

Manure is to be incorporated immediately into the soil, except on grassland. Is the Minister aware that this makes very little sense in that units providing livestock manure are cleared out on to arable land, usually in September and in October? It is impossible to follow a spreader at the same speed as not only are good soil conditions for spreading not good conditions for preparing a seedbed but also the tractor doing the

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spreading is often the same tractor that will be used for incorporating by pulling a plough or cultivator some time later.

While incorporating manure into the soil rapidly may minimise the release of ammonia into the air, it will not minimise the smell, which comes from the spreading of the manure, and rapid incorporation will increase the amount of ammonia going into the groundwater.

With poultry units the best way to regulate smell and create dry manure is to use cages, which, by virtue of the high density of the birds, maintain a high house temperature, but they are to be banned. On the other hand, barns and free-range poultry farming create much more smell and much more ammonia. Where does the priority lie--with prevention of pollution or with animal welfare?

I am sorry that some of this is rather detailed and technical, but I think it shows how important proper communications are between the regulatory authorities, whether at national or local government level, and the farming industry.

I could give examples from the food industry, but I shall spare the Committee that except to remind Members that if heavy new manufacturing costs are incurred as a result of the new regulations, they are bound to affect the price of food to the consumer. I beg to move.

6.45 p.m.

Lord Whitty: I never have the temerity in this Chamber to claim to be an expert on agriculture. I think we need to concentrate only on those areas where there are agricultural and food installations to which the regulations will apply and to which regulations have not previously applied.

As I understand it, we are bound under the directive to include within the pollution control system intensive pig and poultry units above certain thresholds. Those thresholds are quite high. We expect about a thousand of the larger pig and poultry farms in England to be affected, as will certain parts of the food industry, slaughterhouses and renderers which exceed prescribed thresholds. Apart from those fairly large operations, there is no extension into the other areas to which the noble Lord referred. Installations of that size are substantial, with significant potential to pollute land, water and air and it is right that they should be regulated in the same way as other industries with similar potential.

We agree, particularly in the present state of the agricultural industry, that any regulatory regime should seek to minimise burdens and costs while still remaining effective. The agriculture and food and drink industries will be subject to the same requirements of "best available techniques" as other sectors. The Ministry of Agriculture and the Environment Agency have been assisting the agriculture and food and drink industries in considering measures for minimising emissions which might fall within the new pollution control regime. We are also looking at what is done in other member states to ensure that, as far as possible, we retain a level playing field for our industry, though it is the case that

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prior to this directive some member states already had strict controls in place on the storage and spreading of manure and slurry.

The regime is not intended to exclude all country smells. It applies to intensive farming and to large installations and therefore is aimed at dealing with the greatest inconvenience to both country dwellers and others, but it is not intended to restrict the distinctive odour of many parts of our countryside.

When dealing with new regulations, particularly when they apply to sectors which have not previously been covered, we are committed to publishing regulatory appraisals of all proposals which will have an impact on businesses, and that includes the agricultural business. We have published a regulatory appraisal of the Bill and in the documentation there is a draft regulatory appraisal of the regulations we propose to make. Those are already out for public consultation. However, it is axiomatic with a pollution control system based on a flexible concept such as "best available techniques", where what is required varies site by site as well as industry by industry, that there is little that is specific which one can say in advance about the impact the system will have. As far as industry is concerned, and the agricultural industry in particular, it faces a choice between up-front, explicit emission levels, which can be costed in advance, and a flexible, site-specific system, which by definition cannot be costed in advance.

Industry will, of course, be fully consulted as the guidance is drawn up. So far, all indications are that the agricultural industry and the food and drink sectors, which are affected for the first time, prefer the latter approach--a site-by-site approach--rather than an a priori laying down of emission standards, even though the preferred approach involves some degree of uncertainty. We are involved, and will continue to be involved, in consultation with, and providing information to, the sectors concerned. It may be that in the light of that consultation certain changes to our approach will be necessary, but the noble Lord can be assured that that process is taking place and therefore I believe that his amendment is not necessary.

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