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Baroness Miller of Chilthorne Domer: I shall keep my remarks about the length of the licence and associated investments for later amendments. I wish to make some remarks on Amendment No. 54A, which stands in the name of the noble Lord, Lord Howie. It is a particularly sensible amendment, given the complexity for planning authorities trying to weigh up all the different issues. I have in mind, for example, the issues surrounding Whatley Quarry's extension in Somerset. Those were whether it would be able to quarry extra minerals and the feared effects on waters as far away as under the city of Bath, which, obviously, is dependent on its spa waters, having recently invested considerably in renewing its ancient system.

If planning permission is not tied in with the length of abstraction licence granted, it could lay the ground for the payment of compensation where a planning permission was granted but could not be fully effected because, for example, the period of water abstraction licence was too short. I think the Minister earlier said that a payment would have to be made by other licence abstractors, which seems particularly unfair on them. It is not their fault that the two permissions were not coterminous. Therefore, I very much support the spirit of the amendment.

Baroness Young of Old Scone: I comment briefly on Amendments Nos. 53 and 54 in order to highlight how there are considerable investments in assets by water companies and others that do not seem to cause problems in terms of renewal of discharge licences as well as abstraction licences. Previously in Committee and at Second Reading, I drew a parallel with licences granted to sewage undertakers on discharges, which are reviewed at between four and six-year intervals without any difficulty. Indeed, the water resources strategies that are drawn up between the economic and environmental regulators of the water industries with the water industry are, I think, an extremely good 25-year framework for such issues to be worked through.

The Water Framework Directive will set a rolling six-year review period and therefore 12 years seems a sensible balance between the concerns of people about long-term assets and the needs of the Water Framework Directive.

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I also comment on Amendment No. 54A, standing in the name of my noble friend Lord Howie of Troon. I shall probably repeat what I said when the issue arose when last we were in Committee. However, he was not here to hear it in person, so I shall say it again.

Lord Howie of Troon: I read it.

Baroness Young of Old Scone: There is no doubt that planning permission for mineral workings and for quarries can take an extremely long time and in some cases are not time-limited, or they are dependent on aged minerals permissions of which it is difficult to see the origins. Quarry and mineral de-watering is also incredibly unpredictable as quarries expand and go deeper. The new point that I want to raise with the noble Lord is that, if quarry de-watering is simply going to return water to the environment in the way he described with the hole in Scotland, I suggest that he need not be concerned about the withdrawal of the licence because it demonstrably would not have an impact on the environment—if indeed what he describes is the situation that was being licensed.

Lord Howie of Troon: If that was so, then what is my noble friend worried about?

Lord Dixon-Smith: The problem we face is that we have a country with a growing population, we have a growing economy, and, although unquestionably there are economies and efficiencies which can be made in the use of water, the likelihood and the reality is that water consumption will increase. The issue is how we deal with it.

One thing that bothers me about the whole licensing regime is that most of major water infrastructure in the country was produced long before licences were even thought about. We see the licensing regime as a means of managing the water supply. It may be; it is a tool. But the real question we must ask ourselves, and which we have not really addressed is this: what we are going to do to enhance the volume of usable water? There is a great deal of usable water and we let an awful lot of it run out to sea.

If we return from that broad perspective to a specific catchment area, which is finding itself in difficulty, the real question we must ask is: do we start to restrict users, who have a jolly good reason for needing the water, or do we tackle the problem from the other end and see what we can do to enhance supply? That is the big issue that really lies behind the questions raised by so many Members of the Committee who have already spoken. I am very grateful for the words, in particular those of the noble Lords, Lord Borrie and Lord Howie, and of my noble friend Lady O'Cathain in making this point.

What worries me a little is that if the licensing regime is seen as a tool for managing water, we may miss the real point, which is how we enhance the required volume of water. If one asks that question, then one finds oneself in slightly difficult territory because the question is: whose responsibility is that? We can say that perhaps it goes with the major water utilities. But their real interest now is to provide for their own

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security of supply. I am not quite sure whether their remit—and perhaps the Minister in his response will reassure me on this—really runs to this wider issue of enhancing the national available water resource, because there is plenty of water there but we do not do perhaps enough to conserve it.

When we come back to how we deal with that problem, we come back to the huge timescale mentioned by the noble Lord, Lord Borrie. There is a 20-year planning process that must be gone through, before we can begin to find major solutions, such as Rutland Water or Graffham or whatever it is now called. That issue must be faced. If such solutions are to be found, people will need certainty.

We can review what happens in a catchment area every 12 years, or we can review it every six years, but we do not need to review the licences as part of that process. The licences can continue. They are the measure of the demand that must be met. Fiddling around and withdrawing licences or reducing amounts by 5 per cent because an area is under pressure is not the solution. If an area is coming under pressure, the solution is to enhance the available water. That is the approach that we must adopt.

One accepts that global warming might make the situation impossible. I went to a fort in Oman that was in pristine—almost unused—condition. It was built for defensive reasons when there was a jolly good water supply, but, within only a few years, the water went and the area became desert, leaving that magnificent building useless. If we had that sort of shift, there would be nothing that the Environment Agency could to about it, and I would not blame it. Going by the projections about global warming that I have heard, I am concerned that it is likely that precipitation will increase. It will become more seasonal and more freaky. If that is the case, it enhances my argument.

We must think about security of available water. That is the big issue that lies behind the amendments. I support what has been said. It is not sensible to have licences lasting for 12 years. We shall come to the question of the presumption of renewal later.

6.30 p.m.

Lord Livsey of Talgarth: I must respond to the debate on Amendment No. 54.

The problem is that we have different types of water user and different types of industry consuming water. We have been discussing depreciation, in one sense, and I can give a few examples. In the Elan Valley complex, which supplies Birmingham, the pipes are 100 years old and are still in use, although, by accounting methods, they were written off some time ago. There may be some mileage in examining accounting conventions for depreciation. For example, the water bottling industry may have equipment that can be written off over a 25-year period. There may be other industries connected with water for which shorter periods would apply.

We must not neglect advances in technology. After all, in accounting or business, it is not always a good thing to write off equipment over a long time. In some

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industries, there are grants made as tax allowances that depend on the short-term writing-off of equipment, so that industries can keep up with technology. There may be a case for publication—it is only an idea—of an accounting convention for different parts of the water industry that could be related to licences. That is particularly important.

I make one other point. At the time of water privatisation, the assets of the water industry were reduced from 30 billion to 7 billion—at a stroke.

Baroness Farrington of Ribbleton: I begin by thanking noble Lords for eventually dealing with the group before us. To the noble Lord, Lord Dixon-Smith, I say what, I believe, I said in answer to a point raised on the first day in Committee by the noble Baroness, Lady O'Cathain: the Environment Agency has responsibility for water resource management in total. I stress that it is not a case of either/or; it is both that and many other things as well.

In spite of all that has been said, the Water Bill does not fix the duration of any new abstraction licences. It simply requires that a time limit be placed on licences. It does not prescribe. There is a clear presumption of renewal, as set out in Taking Water Responsibly.

The noble Baroness, Lady Byford, admitted that there were some difficulties with Amendment No. 48. It would significantly limit the ability of the Environment Agency to refuse to renew a licence to a very narrow set of circumstances and would affect its ability to manage our water resources sustainably. The agency has set out three tests for a request for renewal: environmental sustainability must not be in question; the need for the licence must be demonstrated; and water extracted under the licence is being and will be used efficiently. The agency will determine whether environmental sustainability is in question. In certain circumstances and if there are concerns about local conditions, the applicant may be required to supply supporting information. Demonstrating that the water is used efficiently and that there is continued justification of need will depend on the provision of information.

The agency is required to give reasons for decisions, in cases in which a licence is granted or not granted or departs in any material way from the form in which it was sought. That said, a presumption of renewal will apply to all time-limited licences. That commitment was given by the Government and by the agency in its recent guidance. Time limits are there to provide an opportunity for review in the light of climate change. I think that the noble Lord, Lord Dixon-Smith, made the point that there could be dramatic change over a certain period, but the 25-year option would be too long to allow such changes to be taken properly into account. Having said that, I say to the noble Lord, Lord Livsey of Talgarth, that the 12-year period is not fixed either. Other durations are allowed. If, as I have said, an applicant objects to the duration, not only is there a right of appeal but the agency must have considered costs and benefits in the licence that it granted.

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We worry that it would be dangerous to stipulate the duration of licences in the Bill. Licences could be of longer or shorter duration, or there may need to be investigations over a few years. As the noble Earl, Lord Peel, said, flexibility is necessary. We believe that we have built that flexibility into the Bill. It is up to the Environment Agency, as the licensing authority, to decide on duration case by case. Incorporating a criterion such as a minimum duration, as proposed in Amendment No. 53, or a fixed period, as proposed in Amendment No. 54, could override other criteria, to the disadvantage of all.

Amendment No. 54 would remove from the Environment Agency the responsibility for determining the time limit to apply to all licences for de-watering activities. I reassure my noble friend Lord Howie of Troon that quarry and mine operators will have the same opportunities as other abstractors to submit to the Environment Agency a business case in support of their application. That business case could address issues relating to the proposed lifespan of the licence. The time restriction on the operator would form part of the submission, which the agency must take into account.

I was fascinated by my noble friend's account of his experience of the return of water to the same source. However, although it is not a common experience, if de-watering in mining has taken place, it is not always possible to return the water to the source from which it came, although the total water available to the community may be the same at the end of the process. I think that that was the point that was made by the noble Baroness, Lady Miller of Chilthorne Domer, who spoke of the impact on other abstractors of quarrying in a situation in which there could be a dramatic change in the water table. That is why the Environment Agency should have the opportunity to take into account all those factors.

The lifetime of the infrastructure inseparably associated with the authorisation will extend over the exact and desired period of validity. That is one of the choices that the Government insisted in Taking Water Responsibly must be included. The agency's original guidance, Managing Water Abstraction, published in 2001, picked that up, along with the various points that it used in support.

Throughout our debates, noble Lords have expressed concerns—occasionally, they are opposing concerns—that have equal validity. That underlines the need for the Environment Agency to have the flexibility to meet the diverse circumstances that arise. I hope that my noble friend Lord Howie of Troon will join us later on, because I am sure that he will learn that there is a wide range of knowledge here and the diversity that has underlain this debate will also be a feature of later stages.

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