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Lord Sutherland of Houndwood: I thank the noble Baroness for the reassurance she has given, particularly of right of appeal and on the presumption of renewal and on compensation under transitional measures. I shall read Hansard carefully tomorrow. I thank the noble Baroness, Lady Byford, and the noble Lord, Lord Livsey, for their support on the matters. As they said, this is an important sector and it is absolutely critical to the economy that it functions efficiently and well.

I note the point made about fairness of treatment across different industries. I simply underline the point that if the Bill is intended to protect quantity of water at a certain level of quality, that should not really be an issue because of the processes used in the mining business as the water is returned at equivalent quality. Therefore, the need to protect volume does not arise. That being said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

Clause 6 [Rights to abstract small quantities]:

Baroness Byford moved Amendment No. 16:

The noble Baroness said: The four amendments in this group raise an important point, especially as the Government are encouraging ever greater diversification on farms. It is possible that the holding might have the occupier's house and household on it, but in addition there could be one or more tied cottages. Assuming that gardening, for example, is a domestic purpose, the water abstracted could well be used by more than just the occupier's household.

Looking at the Bill, subsection (3)(a) specifies that the abstraction is for use on contiguous and other land held by the same person. My question to the Minister is: what is the point in confining its use to the occupier? I beg to move.

Lord Dixon-Smith: I support the amendment. The practice is normal in more remote rural areas. Essex is not rural but when I was a boy it was certainly more remote than it is today. We used to supply water from our well and we pumped it up into a header tank. It supplied our house and all the stock on the farm. It also supplied a number of cottages. Therefore, the restriction in the clause is too narrow because it specifies "the occupier's household". In areas where there is not easy access to the mains and so forth, where there is a reasonable water supply it would be normal for one well or one borehole to supply a number of households. It might be three, four or five, one does not know.

My noble friend raised the diversification point. As drafted, the Bill is too narrow. One can accept the quantum of water but to tie it to the occupier's

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household is too narrow. Using the water for domestic purposes is practical and if the domestic purposes happen to include a herd of cows, I do not see that as a problem. If one lives in a remote area where that is the situation, provided you are in the quantum of water, why worry about it?

Lord Whitty: There is a certain amount of misunderstanding. There is the issue of exemption and the issue of protected rights. The protected rights relate back to the Water Resources Act and the rights which existed prior to the 1963 Act. Those had to be taken into account in every future licence and no such licences are allowed to derogate from those protected rights. That deals with the historic issue.

However, Clause 6 extends the exemption for small abstractions so that small abstractions can be made for any purpose, not just those which are agricultural or domestic. Therefore, Clauses 6 and 17 limit protected rights under the new regime to those that existed under the old regime—pre-1963 rights.

The effect of the amendments—the concern behind me is slightly different from that expressed by both noble Lords who have spoken—would not extend the exemption. They attempt to deal with the historic situation. The extension of the exemption is already achieved by Clause 6 because any abstraction of up to 20 cubic metres per day for domestic purposes, regardless of whether the occupier uses the water, will be exempt.

The amendments deal with the protected rights situation. They would extend what was trying to protect grandfather rights to the new situation. I do not believe that it was the intention of Members of the Committee to make that extension and we do not want any proliferation of rights which dealt with an historic situation.

There is a little confusion and it might be helpful if I write to the noble Baroness about the matter. If certain aspects are not dealt with, and if that lies behind their concern, they will not be dealt with by these amendments. On the other hand, there may be ways of dealing with them.

Baroness Byford: I am grateful to the Minister. I suspect that he did not expect us to say what we said in moving our amendment and I can only apologise.

Lord Whitty: I thought that the noble Baroness was going to talk about caravan parks and related matters. There we go.

Baroness Byford: I shall do that in a moment. Our concern related to cases in which the borehole supplies other buildings. I shall read Hansard carefully and perhaps we can talk about the matter before proceeding much further. If there is a misunderstanding or a loophole, I shall be happy to come back to the Minister. I am grateful for his help and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 17 to 19 not moved.]

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Baroness Byford moved Amendment No. 20:

    Page 8, line 10, at end insert "provided that such well or borehole does not impinge upon pre-existing licensed abstraction producing potable water"

The noble Baroness said: Amendment No. 20 deals with the question of one borehole impinging on a pre-existing licensed abstraction. It has been brought to my attention in particular by the British Soft Drinks Association. It is most concerned that Clause 6 sets out provision for exempting small abstractions from licensing requirements. Its water bottling members do not oppose licensing exemptions for small abstractions, but have concerns that exemptions can be made purely on the grounds of size without recourse to any notification or environmental impact assessment. Even small abstractions from the ground water require boreholes to be drilled and that activity could damage both rock strata and the supply and quality in the related aquifers. A BSDA member is currently confronted with just such an activity and has serious concerns for the future of his business if his water supply is affected. That is the reason for moving the amendment. I beg to move.

Lord Whitty: Once again, the explanation of the motivation behind the amendment is not what I anticipated. The effect of the amendment is that if a person puts down a borehole to take advantage of the exemption provided by the clause, he can find himself in breach of the exemption if the construction impinges on another extraction producing potable water.

It is not the borehole but the extraction that would be the issue. If the intention of the amendment is to provide protection to other bottling suppliers, the issue is whether the level of deregulation is appropriate in the circumstances; in other words, whether the small exemption could cause a problem for the soft drinks industry or the mineral water bottling industry.

It is inconsistent with the general objective of deregulating small abstracters if in this case we provide for the protection of other rights against that small exemption. The new regulatory scheme will have the flexibility for raising, or lowering, by order the threshold in local areas. It will therefore be for the Environment Agency when applying for such an order, and the Secretary of State in deciding whether to grant it, to consider whether any local threshold could vary from the general threshold in order to avoid interference with another abstraction. Clearly, that could arise in the circumstances which the noble Baroness, Lady Byford, suggests.

If we were to have a complete exclusion and to base it on the borehole rather than the abstraction, we would, first, roll back a degree of deregulation and, secondly, fail to deal with the specific problem. I will need to consider the issue raised by the water bottlers because in certain circumstances they have a specific concern. We may be able to deal with that in a different way. Certainly as written it would undermine the intention of deregulation in this area.

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Baroness Byford: I am grateful to the Minister. This is a technical area and he will have gathered that I am not expert in it. Nor do I have any financial or other tie with the British Soft Drinks Association. Quality bottled water has become a large industry. I would like to see it grow. I would rather we all bought UK water than water from abroad. I would also like it if we all drank more milk, but that is another matter. My noble friend says that it is not as good for me.

The bottled water industry is a growing one and it is dependent on having a good, ready supply of water. If the industry is opened up and the supplies are affected, that will have a bearing on the industry. I am grateful to the Minister for what he has said. I hope that before Report stage we can arrive at a solution. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer moved Amendment No. 21:

    Page 8, line 27, at end insert—

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