Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply. I also thank the noble Lord, Lord Hardy of Wath. Rereading my amendment, I agree with him that it should have said something more along the lines of,

or whatever. He is right to point out the sloppy wording.

The Minister's reply was very helpful. He holds out hope that in future the regulations may be more streamlined. He said that licences could be the subject of one application—I presume that he also meant one licence fee. That being the case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 26:

    After Clause 19, insert the following new clause—

After section 46 of the WRA there is inserted—
(1) Licence renewal will be subject to three tests, namely that—
(a) environmental sustainability must not be in question;
(b) the need for the licence is demonstrable;
(c) the water extracted under the licence is being and will be used efficiently and effectively.
(2) If the conditions of subsection (1) above are met, except in exceptional circumstances of extraordinary pressure on water resources in that locality, the licence will be renewed for a minimum of six years.""

The noble Baroness said: My Lords, when the amendment was before the Committee, we had a very full and thorough debate. We have tried to improve the thoughts that were reflected in the discussions that took place, and have come forward with our suggestion of the three tests for the licences, of which the Government apparently approve.

The first test is that,

    "environmental sustainability must not be in question".

The second test is that,

    "the need for the licence is demonstrable".

The third test is that,

    "the water extracted under the licence is being and will be used efficiently and effectively".

12 Jun 2003 : Column 412

As I said, our discussions on the matter were full. They ranged from cols. GC 125 to GC 128 of the Official Report of 1st April 2003, and those who spoke in support of the amendment that I moved then included the noble Lords, Lord Borrie and Lord Howie, and my noble friend Lady O'Cathain. We have considered noble Lords' comments carefully, and hope that the new wording will meet some, if not all, of the points made by the Minister.

The three tests that I mentioned have already been set out by the agency. It is appropriate that they appear as an open commitment in the Bill. The period of six years has been chosen to match the review period stipulated in the European water directive. The get-out clause is an attempt to recognise that we do not control nature on a permanent basis. Water is a most powerful medium, capable of changing its own path without man's assistance. We should not like to have in law a clause that, on the face of it, insisted on renewal in the event of a landslide that blocked a water course or the opening up of an underground channel that dried a water course.

I have had a contribution from the National Farmers Union, which stated its concerns and its support for the amendment. As recently demonstrated by the joint awarding of the Environment Agency's water efficiency award for the agriculture and horticulture sector, sponsored by the NFU, the efficient use of water in those businesses is actively promoted by the NFU and its members. The NFU "Waterwise" campaign encourages farmers and growers to undertake a simple water audit for their holdings and to track down and eliminate sources of inefficient water use and wastage. Farmers are well aware of the benefits for their businesses that can be achieved by effective and efficient use of water.

The amendment is important. I beg to move.

5 p.m.

Lord Borrie: My Lords, I was reminded by the noble Baroness, Lady O'Cathain, declaring her interest, that perhaps I should have declared my interest and connection as a non-executive director of a water company. I made that declaration at Second Reading and in Committee, but perhaps it is best practice to declare it at each stage of the Bill.

In a way, the subject of this amendment is part of a theme pursued—but just touched on—in an earlier amendment tabled by the noble Lord, Lord Dixon-Smith, and others. Water companies very strongly need reassurance when they are expected to lay out capital expenditure for vital infrastructure. They want assurance that there will be an adequate period of licence during which they can recover their money. Of course we have had some—I use the word again—assurances of a sort from the Government that if the water company presented a suitable business plan to the Environment Agency, the company might be able to convince the agency that the normal licence length of 12 years should be longer.

I think that the noble Lord, Lord Whitty, indicated in Grand Committee that the Environment Agency is committed to a presumption of renewal, which is what

12 Jun 2003 : Column 413

we are discussing under this amendment. The trouble is that those assurances and statements from either the Minister or the Environment Agency—with due respect to both of them—are not on the face of the Bill and therefore may not satisfy the mythical banker to whom the noble Lord, Lord Dixon-Smith, referred earlier and may not satisfy companies. Consequently, they may not satisfy the needs of future consumers who will want such capital expenditure if adequate supplies are to be assured for the future.

In Grand Committee, the noble Lord, Lord Whitty, denied—I put it in perhaps a provocative way, though the noble Lord does not usually need much provocation to be very clear and blunt himself—that there was a presumption against renewal. I think that it is implicit in the Bill as it stands that there is a presumption against renewal. I suppose that that is why I see value in Amendment No. 26, which would introduce a presumption in favour. It would give that magic reassurance which I think is so important.

Baroness Miller of Chilthorne Domer: My Lords, I have certain reservations about this amendment as well. I believe that the Bill's current provisions for the renewal of licences are adequate. The Bill also provides for an appeals process. My unease may be more to do with the second part of the amendment, which ties the licence renewal period down to a period of six years. We have discussed at length the issue of climate change and various other pressures. I think that the six-year minimum is likely to be used in practice. However, given all the comments about those pressures, I would be very uneasy if, by accepting the amendment, we removed the ability to grant licences for shorter periods should that become appropriate. We should particularly bear in mind that the amendment would, I believe, cover all licences regardless of whether they applied to very large projects or very small ones or to multiple small abstractions that exceeded the licensing threshold. I therefore have reservations about the amendment.

Lord Whitty: My Lords, I too have reservations about the amendment. There is not, to answer my noble friend Lord Borrie, a presumption either in this legislation or in practice against renewal. Indeed, the Environment Agency has clearly included a presumption of renewal in its published draft guidance on the time-limiting of licences. So the Environment Agency will operate the system on the presumption of renewal. However, it needs some discretion in that regard. The amendment is seeking to introduce into a well established statutory decision-making process a requirement that, where certain conditions are met, the decision is effectively taken out of the hands of the decision-making bodies.

I am slightly surprised that my noble friend, who has himself been one of those decision-making bodies, can contemplate such a constraint on judgment being made so explicit in primary legislation. Introducing a statutory criterion would tend to predetermine the outcome if the tests in the amendment were met. The

12 Jun 2003 : Column 414

general approach to licensing is that there is a presumption for a licence if the conditions are met. That same presumption applies to the renewal of the licence.

There is an appeals process. In essence, the renewal tests—the judgment of the regulator at the point of application for renewal—really should be seen as a quality check that the conditions of the licence are still met; that changes that could not reasonably be foreseen at the time of grant, such as climate change, have been taken into account; and that there is therefore no reason to go against the presumption of renewal.

One of the difficulties with the stipulations in the amendment is that the changes since the granting of the first licence, which may have been some time ago—more than 12 years; we are potentially talking about a rolling programme here—will have been gradual rather than dramatic, particularly in relation to climate change, one would hope. Therefore, different judgments have to be made at different times as to whether the licence terms are still appropriate. So a certain amount of judgment has to be exercised even against an administrative presumption of renewal.

The amendment's effect and implied prescription would tie the hands of the regulator in reaching those judgments. So, with reassurances about how the Environment Agency is approaching this task, I recommend that the House should not accept an amendment that would put on a statutory basis a rigid presumption of renewal.

Next Section Back to Table of Contents Lords Hansard Home Page