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4 pm

Mr. Morley: I was very interested in the points put forward by hon. Members because those points were not unreasonable, and it might be helpful if I repeat the assurances that I have given the industry groups that have come to see me about a number of issues addressed in new clauses 2, 3 and 12 and amendments Nos. 9, 11 and 12.

It might be helpful if I first stress some of the safeguards in the system. I know that hon. Members are united in the desire to ensure that the Bill is an effective and sustainable resource management tool for a resource that is under increasing pressure of demand. That aim is not particularly controversial. Indeed, I am glad to say that the various industry groups have been united in saying that they support the principles behind the Bill. Not unreasonably, they want some safeguards for their own sectors and I understand that. I have tried to go as far as I can in providing safeguards without undermining the basic principle of the Bill, which is sustainable water management. I shall give details of some of the safeguards for the benefit of hon. Members.

First, new licence applicants can provide a business case to the Environment Agency to support the need for a licence with a longer duration. The agency must have regard to all relevant considerations and if there is a strong business case for a licence longer than 12 years—which is a guideline only, and not set in stone—the agency can take that case into account.

Secondly, as I have stressed on several occasions, the policy presumption is in favour of licence renewal. That was initially set out, as the hon. Member for Leominster (Mr. Wiggin) said, in the Government's policy document, "Taking Water Responsibly" in 1999. If a licence is still required and water is being used efficiently, the licence will be severely curtailed or not renewed only if the activities are causing unacceptable damage to the environment. Indeed, companies will have opportunities to discuss mitigation measures, which, in some cases, may not lead to curtailment. However, the means to curtail or refuse a licence is a powerful tool to enable the Environment Agency to deal with unsustainable extraction of water, as has happened in some cases. Abstractors will be given six years' notice of likely non-renewal or changes in the terms of their licence, which will give them time to find a sustainable arrangement, such as a negotiated solution with the Environment Agency.

As the hon. Gentleman mentioned, rights of appeal to the Secretary of State already exist under the Water Resources Act 1991 in relation to agency decisions on the granting of licences, including licence length and licence revocation or variation. The Bill does not take

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those rights away. Therefore, rights of appeal exist if abstractors feel aggrieved by the Environment Agency's decision.

Mr. Wiggin: I apologise for missing the first 30 seconds of the Minister's speech. Why is it important that the safeguards that he has just mentioned—I am sure that the industry is grateful for them—are not included in the Bill?

Mr. Morley: To put it in a nutshell, it is to do with the Environment Agency's need for flexibility and the risks of restraint and unforeseen consequences if such requirements are included in the Bill.

Paddy Tipping (Sherwood): My hon. Friend met representatives from the Quarry Products Association and subsequently wrote to its chairman, Lord Sutherland. Where will the Bill leave the quarrying industry? It is right that new licences can be for a longer period. It is also right that the presumption will be that licences will be renewed. However, is it not the case that in only three instances the Environment Agency has been concerned about water abstraction by quarrying and that all were resolved satisfactorily by technical solutions? Can my hon. Friend give the industry an assurance that it will have a long-term future and the opportunity to make long-term investment?

Mr. Morley: My hon. Friend, like my hon. Friend the Member for High Peak (Tom Levitt) and the hon. Member for Somerton and Frome (Mr. Heath), is concerned about quarrying, and I understand that. I believe, of course, that quarrying has a long-term future in this country. The idea of putting points in writing to the Quarry Products Association, after my meetings with members on both sides of the question and with the association, was to clarify formally what is intended in the Bill. It is important to any company or trade organisation to have such clarification, and the industry has what I am saying now, on the official record, and what I said in the letter, which gave the reassurances that the QPA sought. There is a fair degree of flexibility in the Bill for dealing with a range of issues.

There are compensation provisions in the Water Resources Act 1991 for when licence revocation or modification results in loss or damage. Clause 102 of the Bill provides powers to make regulations governing compensation to be paid to any previously exempt abstractor who is not granted a licence or is granted a licence that will constrain his activity when the Bill takes effect. In addition, the Environment Agency has published draft guidance on how it will address the duration and renewal of licences. The agency will review, consult on and reissue that guidance once the Bill has been passed. It will take account of views expressed in Committee and on Report. We believe that the legislation has been framed in such a way as to provide an equitable, flexible and sustainable approach to abstraction licences.

Mr. Heath: The Minister is being very helpful. Will he say something about the relationship, if any, between the Agency's approach to licensing and the minerals plans for specific areas? Is there any correlation between the two? Does he expect one to inform the other?

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Mr. Morley: One will inform the other on the planning boundaries and the long-term availability of mineral resources. One of the new clauses suggests that we should link the length of planning permissions to the length of licences. I cannot accept that, and I shall explain why. New clauses 2, 3 and 12 and amendments Nos. 9, 11 and 12 would all limit the Bill's operations and would fetter the Environment Agency's ability to manage our water resources sustainably. They would also fetter the Secretary of State at appeal. That is my concern about them.

There is a question of balance, which has come up a few times. We must recognise the needs of industries that may be affected by our proposals, and we have tried to take them into account. The other side of the balance must be sustainable management. The Bill is about giving the Environment Agency the tools to do its job, and to do it effectively, while still providing the checks and balances on the agency's operations that one would expect in a democratic society. Getting the balance right is the problem, but I believe that it is right in the Bill, right in how we have tried to take account of the legitimate concerns of hon. Members, right in how I have given assurances on the record and in writing, and right in how concerns will be addressed in the Agency's guidelines.

Norman Baker: In what way would new clause 12 fetter decision making? Surely it provides the balance that the Minister wants by containing a presumption that licences will be renewed while setting out conditions under which they may not be.

Mr. Morley: I shall come to that point. I think in a linear way and the hon. Gentleman keeps jumping in and throwing me off my nice linear thought patterns. I assure him that I shall get there, along my linear course, so he should not worry.

New clause 2 would remove from the Environment Agency responsibility for determining the time limit applying to licences granted for de-watering activities. The effect would be to transfer to planning authorities the responsibility for determining a key abstraction licence condition—the duration of an abstraction licence. It is not appropriate for the planning authorities rather than the Environment Agency to have that responsibility. Furthermore, if planning authorities were concerned about possible water problems, they might restrict the length of the permission. The proposal could have that unforeseen consequence.

Mr. Wiggin: The Minister may have missed the point. The whole point of planning is to allow a company to know how long its business will be viable. If the planning authority has to take de-watering into consideration and has to issue planning permission of an appropriate length, investors can look at the situation and decide whether they want to invest in the company. We should not have that certainty under the two-part planning system. The Minister may have put his finger on the nub of the problem but he has not come to the right conclusion.

Mr. Morley: I understand the hon. Gentleman's point although I do not necessarily accept that it is as significant as he thinks. Companies may require

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different permits for a range of operations. Some permits are annual and some are reviewed and renewed from time to time. I come back to the point about the presumption of renewal, which provides some comfort in relation to long-term planning. As I said, if the business case merits it, the length of the abstraction licence may be greater in some circumstances. The Environment Agency is always consulted about mineral plans, as are mineral planning authorities about catchment abstraction management. There is a link between the two, which relates to the question put by the hon. Member for Somerton and Frome.

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