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Lord Whitty: My Lords, whatever business one is in, one is under a duty of care not to damage someone else's property. The granting of a licence does not override that duty of care. However, the amendment would mean that the person being damaged would not have the right to sue a person who had abstracted water and thereby caused damage. That is not sensible. Not only must the abstractor operate in terms of the licence, he must also operate with regard to the duty of care. Saying simply that he has abstracted water in accordance with the licence is not an adequate defence against the duty to avoid damage to other people's property, whether or not it is above the surface and immediately visible.

Baroness O'Cathain: My Lords, I do not know whether the Minister heard what I said. I said that the agency grants the abstraction licence, so therefore the agency assesses the impact of the proposed abstraction. Then, taking its assessment into account, it can refuse a licence. Is there no responsibility on the agency?

The Minister said that the Environment Agency took into account water resources, the environment and the right of other abstractors to abstract, but surely the agency's assessment must take into account the possible impact on third parties. Is that not a duty on the Environment Agency when granting an abstraction licence? We must not forget that it grants the licence, so can the Minister clarify the point?

Lord Whitty: My Lords, we are in danger of getting out of order again. The agency is bound to take into account damage to the environment, which may include property damage, and damage to the right or ability of another abstractor to abstract, but it does not take into account any more general, non-environmental damage which any business is obliged to try to avoid. To give an indemnity against that simply because an abstractor is fulfilling the terms of his licence on abstraction would be excessive and would not be granted in other circumstances.

It is not the duty of the Environment Agency to ensure that by giving a licence it prevents someone causing damage further down the line. In granting the licence, it must take into account the specifics.

Baroness O'Cathain: My Lords, I thank the Minister for that reply. Obviously, I am unhappy about it and shall seek advice on whether an amendment to limit some of the proceedings brought against the abstractor under the proposed Section 48A

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of the Water Resources Act can be limited. I shall return to the matter at Third Reading and in the meantime beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 25 [Compensation for modification of licence on direction of Secretary of State]:

Baroness O'Cathain moved Amendment No. 30:

    Page 30, line 43, at end insert—

"( ) After subsection (4) there is inserted—
"( ) Subsection (4) above shall not apply while the possibility of the abstraction of water under the licence constitutes part of—
(a) any water resource management scheme maintained under section 20, 20A or 20B above; or
(b) any drought plan maintained under section 39B above.""

The noble Baroness said: My Lords, Amendment No. 30 amends Clause 25 and deals with sleeper licences. On 3rd April, the third day of Grand Committee, we had a long debate on sleeper licences.

If my amendment is carried, the reduction of sleeper licences from seven to four years under Clause 25 would not apply where water may be abstracted as part of the,

    "water resource management scheme . . . or any drought plan".

At the moment, water companies are required to produce water resource management plans. The Bill places these and drought plans on a statutory basis. Sleeper licences give companies the flexibility they need to manage their water resources. If sleeper licences are reduced from seven to four years, companies may need to revise their existing plans, and, indeed, they might not be able to produce the water required in a drought period.

We do not have any model which suggests that droughts occur every three and a half years. They could happen every two years, or indeed every year or sometimes not before six years. If drought plans are not in existence, the problem is huge for water consumers.

When the amendment was discussed in Grand Committee, the Minister said that he was "sympathetic" but argued that the clause was only meant to be used in,

    "a situation where unnecessary, unreasonable non-use of a licence causes damage in one form of another".

The Minister indicated that if the so-called sleeper licence were part of long-term planning and drought planning, clearly the Environment Agency would be acting unreasonably if it tried to revoke it.

He continued:

    "Clearly, if there is no damage to the environment or to access to water, the Environment Agency would be acting unreasonably to revoke a licence being used for beneficial purposes".—[Official Report, 3/4/03; col. GC 170.]

He added, at col. 171, that it,

    "would not be reasonable for the Environment Agency to act against a water company if the sleeper licences . . . were part of a water company's plan".

At that stage, the Minister sought to justify the new clause on the basis that the agency must be able to intervene for unnecessary non-use of a licence that causes damage or certainty in the management of that

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water resources plan. He indicated that it was a power for the agency to deal with particular situations in which the abstractor was behaving unreasonably by not using the abstraction rights.

He argued that,

    "the intervention is a power in certain circumstances to be exerted reasonably and with due regard to all the other duties and powers in the Bill by the Environment Agency".—[Official Report, 3/4/03; col. GC 172.]

The amendment, in essence, provides water companies with a protection on the face of the Bill against the risk of losing abstraction rights that they might need for water resource management plans and drought plans. It makes a clear distinction between situations in which an abstractor is behaving unreasonably by not using the abstraction rights—in other words, a dog in the manger approach—and those where sleeper licences are an integral part of water resource management plans and drought plans. I beg to move.

Baroness Byford: My Lords, I support my noble friend's amendment. We did indeed have a long discussion in Committee about the whole question of sleeper licences. I believe that changing the length of period over which it is allowable to suspend abstractions without losing one's licence needs to be carefully examined.

In Committee, the Minister was adamant that the Environment Agency must review the use or non-use of licences in the light of reasonableness. He said:

    "The Environment Agency will not be required to take away a licence that has not been used for four years: it will have a power to do so, if, in all reasonable circumstances, it judges that there is unreasonable non-use of the licence that is either causing environmental damage or preventing access to the water for other potential users".—[Official Report, 3/4/03; col. GC 168.]

I have some questions for the Minister. In drafting the Bill, did the Government and their advisers calculate four years? Did someone go out and ask non-users why they were not abstracting water? Did that someone then work out the mathematical average time that it took for non-users to become "no further requirement for"? What factors were involved in reaching four, rather than two or five, years? Will the changing face of Britain have an effect in years to come on that figure?

There is almost no industry left. When it has all gone, will water abstraction be done by mining and quarrying, water undertakers and food producers alone? When that happens, will four years be workable, never mind reasonable? What happens to a farmer or a water undertaker who loses the right to abstract and then needs it again? Does the farmer have to relocate? Does he have to change his crop rotation? Does he have to let his beasts die of thirst first? At current prices, it may become more economical to slaughter them than to pay water bowsers to visit the farm.

Does the water undertaker tell developers of the new 4,000 unit estate that there will be no local water supply? Is a water undertaker allowed to do just that?

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Is he allowed to charge more for supply to that estate because it comes from Wales or Scotland, or will all the region's customers have to pay?

Will the Minister give details of how the four years was reached? Will he tell us how many abstraction licences have not been used for four, five, six or seven years? Can he subdivide those figures by region and then give us the water volumes involved? Will he also set against that breakdown of unused capacity the totals of unfilled demand represented by would-be abstractors in each region who are unable to gain licences?

We have pursued the amendment at length in Committee, but many of those basic questions have not been answered. Will the Minister provide the totals, for example, for each water undertaker of the "imports" from other regions that will be rendered unnecessary by the reduction from seven to four years? Will he also provide an estimate of the costs, by water undertaker, that will be saved by taking this step and the likely effect on household bills?

If I may, I shall discuss the environment. Will the Minister tell us what calculations have been made of improvements that will follow on from this action? Can he cite examples in each region of species to be protected that will otherwise be in decline or fail? Will he give us calculations of the effect on the landscape, with its beneficial follow-through to tourism?

In other words, can the Minister lay out in detail the thinking, calculations and the evidence that this change to abstraction licences will result in measurable, tangible, obvious benefits to some parts of society? The Minister indicated previously that the Government are not minded to give way on this amendment. If so, those basic questions deserve a reply.

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