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Lord Whitty: I do not believe that it is. I would draw the opposite conclusion if it were that simple. In effect, the agency will be considering the licence in the original terms of the licence and according to the three main tests: namely, renewal of the licence would not mean that environmental sustainability was in question; a requirement that the need for the licence is demonstrated; and a requirement that water abstracted under the licence is being, and will be, used in an efficient manner. Those are the same conditions under which the licence was originally granted. Therefore, the presumption is that, provided the licence has been operated in the manner intended, there will be a renewal. That is the opposite of the conclusion that the noble Baroness derives.

With regard to the administrative and legal framework arising under the Water Resources Act, it is also true that that is expressed in terms that licences may be granted unless there is a reason not to do so. That, again, makes a presumption of renewal. In fact, if anything, the renewal process is made easier as a result of the Bill.

The noble Baroness, Lady Byford, asked why we should make changes. One of the changes is intended to make renewal easier so that we are not required to advertise, we are not required to consider protected rights, and we are not required to consider in a formal way any process.

I turn to the question of renewal of a single licence being considered in a broader context—a point raised by the noble Lord, Lord Dixon-Smith. The abstraction management strategies would themselves look at the totality of the licensing system and, in the long run, as my noble friend Lady Young said, the time limits of the abstraction licences in the same catchment area would be coincidental. Therefore, one could consider the totality. In doing so, one needs to take into account the views not only of the other abstraction licence holders but of stakeholders generally. Therefore, it would be an open and public process.

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It is also true that, to my knowledge—noble Lords may find some obscure example and I challenge them to do so—in any licence procedure where there is a time limit on the licence, the renewal process may be a presumption administratively and policy-wise, but there is no legislative basis for saying that renewal will be a presumption. That suggests that in such a licensing system, there will be a degree of flexibility and discretion and, in particular, the Environment Agency, when considering a particular renewal, will be able to take all those sustainability arguments into account before making a decision. But provided that all the objectives of the Act are met—

Baroness Miller of Chilthorne Domer: Perhaps I may press the Minister on that point. If he regards the issue of renewal to be so critical to sustainability, I wonder whether Amendment No. 57 does not then become more important in terms of bringing permanent licences into the renewal system. Perhaps, in his reply, he can give me some examples—if there are any—where, over the past, say, five years, licences have been voluntarily converted from permanent to time-limited ones.

Lord Dixon-Smith: I raise a slightly similar point but one that is not quite the same. If we are dealing with the matter of licences and their duration, I believe that a driving licence can now be issued for a very long time. It will be issued until one is either 65 or 70 from about the age of 30.

Lord Whitty: The noble Lord is correct, although, by the time noble Lords who may be towards the top end of that scale reach the age of 70, certain conditions will relate to the renewal. However, if most other licences are subject to a time limit in the renewal process, there is no presumption written into the primary legislation, but there may well be an administrative and a policy presumption, which is exactly what we are proposing the agency should deliver here. But if it were written in tight terms and, in this case, in very narrow terms on the face of the Bill, that would not give the agency the flexibility to take these wider sustainability issues into account when considering the renewal of any licence.

The noble Baroness asked whether there were any examples of voluntary conversion. I do not know that there are any. I stand to be corrected, but we are talking about an entirely new situation. We are moving into a new management system where, desirably, everything would become part of a time-limited licensing system in the long run. My objection to Amendment No. 57 does not lie in its ultimate intention but in the fact that it would concentrate all that administrative effort, with all the potential compensation issues which arise, in the period running up to 2012. That does not seem to be a sensible way to meet that objective.

I recognise that the industry and potential abstractors will need some clarity in the question of renewal. They will also need to know what reviews can do and what they cannot. The Water Framework Directive requires periodic reviews. We have said that

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there will be six-year reviews. Incidentally, those reviews could lead to a withdrawal of the licence, although the noble Baroness is correct to say that in most circumstances the review process will mean a change in the terms of the licence and a commitment by the licensee. But, in extremis, it could mean a withdrawal of the licence.

Therefore, a water abstractor must face the possibility that, in certain circumstances, if there is a detrimental environmental effect, the licence might not be renewed or might be withdrawn. That requires a renewal situation in which the Environment Agency has wider and greater flexibility and a greater range of grounds on which to refuse a renewal than would be provided by Amendment No. 60. Therefore, I hope that noble Lords will not pursue the amendment in its present form.

Baroness O'Cathain: I am extremely unhappy with all that. In fact, I shall certainly not press this amendment, but I shall return to the issue on Report with a different amendment. I hope that, before we reach Report stage, the Minister will try to find out why the Government have changed their mind so significantly since the explanation in the draft of November 2002 and the consultation exercise of May 2002.

Baroness Miller of Chilthorne Domer: I believe that when the Minister began his summing up, he said that the Liberal Democrats had taken an opposite position on these two amendments. I do not believe that to be the case. I believe that the Liberal Democrats are looking for the best of all possible worlds.

Noble Lords: Oh!

Lord Livsey of Talgarth: That is a very good philosophy.

Baroness Miller of Chilthorne Domer: I am glad that noble Lords agree with me. When we return to this issue on Report, I believe that, between us, we and the Conservatives will have devised an amendment which will, indeed, introduce the best of all possible worlds into the Bill—at least, in this small but particularly critical area. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 agreed to.

Clause 20 [Limited extension of abstraction licence validity]:

The Duke of Montrose moved Amendment No. 58:

    Page 22, line 28, leave out "whose term exceeded twelve months but"

The noble Duke said: In moving Amendment No. 58, I shall speak also to Amendment No. 59. We are still in the throes and machinations of the renewal of licences. Clause 20 implies that it may possibly take the agency longer than three months to determine an application for the renewal of a licence. We are interested to know why licences of less than 12 months

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are excluded and not allowed a limited extension if there is a failure to extend the licence after an application. Can the Government guarantee that there will be no delay in renewing them, or are the holders of such short licences deemed not to require their renewal?

I turn to Amendment No. 59. The implication of the clause is to transfer the onus of renewal and the burdens of the administrative system of abstraction licensing from the Environment Agency on to the licence holder. This amendment has been tabled at the instigation of the NFU, which is opposing Clause 20 as it moves this burden of responsibility.

Consequently, we seek to ensure that if a licence has not been renewed by the time of its expiry while an application for the renewal of a licence is ongoing, an abstractor will not lose the right to abstract water and the licence will not lapse. Should the Environment Agency take longer than that to determine a licence, the abstraction will still be able to proceed. I beg to move.

Lord Livsey of Talgarth: I believe that the amendment is worthy of support. Clearly, one does not want to see a licence run out and then someone who is really dependent on a source of water to be unable to renew access to that water while there is an administrative delay. I consider that to be an undesirable state of affairs and, for that reason, I support the amendment.

Lord Whitty: Taken together, the amendments would mean that a licence which had been granted for a genuine short-term problem would, in effect, be dealt with for renewal purposes as though it were a long-term licence. That would greatly diminish the attractiveness of giving short-term licences in genuinely short-term situations. It would also impose a substantial administrative burden on the Environment Agency. Explicitly, in effect, Amendment No. 59 would transfer the responsibility for securing the renewal of an expiring short-term licence from the holder of that licence to the agency. That does not seem to me reasonable.

It would also provide no incentive for applicants to assume responsibility or to take action to ensure that the renewal of their licence was dealt with in a timely manner. It would have the rather undesirable effect of requiring the agency to issue a formal notice of expiry, even when a valid application to renew the licence had been submitted in a timely manner.

The whole point of short-term licences is that they should deal with short-term situations. It does not seem to me sensible to bring short-term licences into a system which is more appropriate for long-term licences, and it might, in certain circumstances, lead to the agency being less flexible in the granting of short-term licences. That would be undesirable because we need that flexibility, but we need it to grant licences which would not then be capable of being rolled on beyond their initial point of necessity.

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4.30 p.m.

The Duke of Montrose: I am interested to hear what the Minister has to say on this. It appears, then, that short-term licences will be considered only in emergency situations.

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