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Lord Whitty: My Lords, I am not sure whether this amendment is innocuous or if it would be effective in achieving what the noble Lord seeks. It would require the Environment Agency, in addition to its other duties in determining a licence application, to have specific regard to the funding period for any engineering, storage or processing facilities.

If the amendment aims to ensure that the time limit of the licence is linked to such considerations, then it would not achieve that aim. The intervention of the noble Lord, Lord Sutherland, suggested that it would be achieved in his later amendments. Of itself it would not do so, but it would give funding issues a specific status to which the agency would have to have regard when it determines a licence. Putting such a provision on the face of the Bill, it would raise the funding issue above other matters which the agency must consider, including those relating to the water company and its ongoing costings and others relating to the effect on abstractors, consumers and so forth.

While obviously it is right that the agency should consider the funding issue among other matters, we would not want it to be constrained in the way proposed in the amendment. The agency already has to have regard to the reasonable requirements of the applicant, who can submit a business case to support consideration of the desired time limit of the licence. The agency can already consider such issues, including funding issues, and should do so where they form part of a business case. But, as the noble Baroness, Lady Miller, implied, it should not do so over and above other considerations. There is a balance to be struck and placing greater emphasis on this one dimension would unbalance the approach.

As regards how the Environment Agency considers the time-limiting of licences, it has guidelines which recognise that longer duration licences may be justified in certain cases, including where the funding consideration is of importance. We believe that the guidelines provide the necessary flexibility to determine the duration of licences in the context of the sustainable management of water resources and investment in those water resources. That is properly a matter for the agency to determine in accordance with its existing duties and responsibilities. In making its decision it has to take into account all considerations and should not place an undue emphasis on funding issues. It should, however, recognise that they are a part of the process.

I do not believe that it would be helpful to put such a consideration on the face of the Bill. It would constrain the agency in taking an all-round decision in relation to an application for a licence.

4.30 p.m.

Lord Dixon-Smith: My Lords, I am grateful to the noble Lords, Lord Borrie and Lord Sutherland of Houndwood, and my noble friend Lady O'Cathain for

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their support. I am disappointed that the noble Baroness, Lady Miller of Chilthorne Domer, feels that we do not need to put this requirement on the face of the Bill.

But the demand for water has to be met. The enormous increases in housing that are being discussed will have to be supplied. They will not be supplied out of the existing infrastructure and water systems in the South East. I am not saying that we are short of water because we are not—we use a very small proportion of the available water in this country—but we do not have adequate conservation to guarantee supplies. It is that issue which lies behind the discussion.

I heard what the Minister said about the guidelines given to the Environment Agency, but they will not be readily available to people in other walks of life. I have no doubt that we shall be able to get a copy of them from the Library, but whether banks, financial houses and other such bodies will carry them is entirely another matter. It is very doubtful that they will. It is very doubtful that, when discussing the subject generally, they would necessarily have them drawn to their attention.

I shall consider what the Minister said. We will be discussing later amendments on a similar theme and at some point we may begin to elicit some satisfaction from a reluctant government. For now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 17 [Protected rights]:

Baroness Byford moved Amendment No. 22:

    Page 21, line 2, at end insert—

"( ) A protected right that has been unused for four years shall not cease under subsection (4) above if the licence holder can demonstrate that his pattern of abstraction is or has been over a longer cycle."

The noble Baroness said: My Lords, the amendment relates to those abstractors who, perhaps for reasons of sound agricultural management, operate a crop rotation pattern that demands extra water resource at, say, seven-year intervals. The Bill does not make plain that there will be any presumption of flexibility of approach to the removal of these licence rights.

The agricultural and rural tourism industries have long memories of the damage wrought by the outbreak of foot and mouth and the action—in some cases, the lack of action—taken by Defra. If the renewal of licences is to be a matter for reasoned consideration and a flexible approach, it does no harm to have that reflected in the law. If the true intention is to be rigid and uncaring, then we should change the proposed legislation.

We have received a submission from the National Farmers' Union and I should like to enlarge upon it. We all agree that Amendment No. 22 raises an important point. Abstraction and irrigation is not necessary in every growing season. This might be due to the weather, the crops under production, the rotational cycle or, more seriously, health considerations for the land and the crops.

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There are many examples of situations where abstraction from surface water is restricted for phytosanitary reasons. These include restrictions for the containment and eradication of notifiable diseases such as potato cyst nematodes—such restrictions are in force on the River Nene—or simply to control the build-up of soil-borne disease such as neck-rot in onions and cavity spot in carrot crops.

The use of an elongated crop cycle promotes a reduction in the use of plant protection products and such a requirement is frequently seen in the supply contracts from multiple retailers. Organic producers, for example, often rely on the fallow period of rotation for the eradication and control of plant pests and diseases. It is clear that where a cropping pattern is influenced by considerations such as these a licence-holder should not be in any danger of the loss of his abstraction rights.

The NFU would also welcome the amendment being extended to take into account future changes in production where there is under-production of crops in response to market considerations.

We had a lengthy debate yesterday on the issue of the countryside. For once I was able to say to the noble Lord, Lord Hoyle, who is not in his place, that it was a good debate because it went much wider than agriculture. When we are considering such Bills we must also consider the industries that are directly affected.

In Grand Committee I had the support of the noble Lord, Lord Livsey, for which I was grateful, and, although she is not in her place today, the noble Baroness, Lady Young of Old Scone, said:

    "I am sure that there is no intention to get in the way of legitimate agricultural rotation, which would simply be nonsensical".—[Official Report, 1/4/03; col. GC142.]

If the Government do not intend this to be a restriction on agriculture, they should accept the amendment. I hope they do. I beg to move.

Baroness Miller of Chilthorne Domer: My Lords, I declare an interest as chairman of Somerset Food Links.

It is clear that even if the Government are not minded to accept this amendment they would be wise to bring forward an amendment along the same lines, as they still have time to do. The noble Baroness, Lady Byford, set out the case for the amendment very cogently. It pays regard to the rights and needs of farmers, particularly those pursuing organic production which, of necessity, involves longer cycles.

I support the amendment. I hope that the Government will tell the House either that they will accept it or that they will bring forward a similar amendment at Third Reading.

Baroness Farrington of Ribbleton: My Lords, I hope that both noble Baronesses will be pleased to hear that we accept the underlying general concern expressed in Amendment No. 22, and we wish to give further consideration to the best formulation of a suitable amendment to meet the concerns.

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In the case of revocation of unused abstraction licences, we have said that we would not expect the agency to make proposals for revocation where non-use was a part of the operational requirement of the abstractor for valid reasons. The automatic cessation of a protected right after four years of non-use for exempt abstractors might be seen as unfair, as the noble Baronesses have recognised, as it would not allow planned non-use to be taken into account. We will therefore bring forward a suitable government amendment to cater for this situation. On that basis, I hope the noble Baroness, Lady Byford, will be happy to withdraw her amendment.

Baroness Byford: My Lords, in the briefest of time, I thank the Minister. I am delighted, and thank her for agreeing to bring back a suitable government amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 [Form, contents and effect of licences]:

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