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8.33 p.m.

Lord Howie of Troon: My Lords, I begin with a question which I thought that my noble friend Lord Carmichael of Kelvingrove might have asked earlier this evening. I notice that in the Bill the environment agency for England and Wales is called the "environment agency" while the Scottish equivalent is called the "environment protection agency". I wonder whether that is a distinction without a difference, or, if there is a difference, what the difference might be. It may be that the question is answered within this very large Bill and I have missed it, but I wonder why there should be a difference.

My main purpose is to give notice of my intentions at Committee stage. We have spoken generally about the Bill and there is no need to add much to what has been said. I shall raise a matter under Clause 7 which I have raised on several occasions before, perhaps to the boredom of noble Lords.

Under Clause 7(1) (c) on page 8, the Bill refers to the agency having regard:

I have many times reminded the House, especially in relation to the waterways and other parts of the environment, that there are certain artefacts which require conservation and protection which are not of architectural interest but are of engineering interest. We are sometimes told that those are covered by the term "historic interest". That is also true of architecture. I have been told in the past that engineering is covered by archaeology because archaeology includes industrial archaeology. I do not think that it does. I think we should refer to engineering or industrial archaeology. I shall not dwell upon the point this evening but I shall certainly return to it at least once during the remaining stages of the Bill.

I should say in parenthesis that there is a precedent. I managed to insert such a provision into the British Waterways Act last year or the year before. That is a precedent which the Bill could follow. That particular piece of legislation was a Private rather than a Public Act. In addition to buildings we should include engineering structures, because the two are not the same thing. However, I shall not go into detail.

In Clause 7 it is stated that "'building' includes structure". That may be correct in common parlance, but in the technical world it is the other way about:

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structures include buildings. I shall not go on about that tonight, but perhaps your Lordships will hear from me later on that subject. I hope that the Government will be convinced on this occasion, in the same way as the British Waterways Board permitted itself to be convinced, without the Government's encouragement on that occasion.

While on the subject of waterways, I should like to support the comments made by the noble Lord, Lord McNair, earlier when he spoke about the regulation of navigation. He is quite right. As I understand the situation, the regulation of navigation is conducted by a number of authorities, some of them quite small. The two main authorities are the NRA and the British Waterways Board. Waterways fall outside the Bill. I should like to see control of the waterways brought under one authority and not partly within the scope of the Bill and partly outside it. The proposal of the noble Lord, Lord McNair, would help in that direction.

Quite apart from the navigation interest, it would be much better if control of the substantial engineering heritage which is embodied in the waterways, canals and similar works were under one control and under a single Act of Parliament. Therefore I support the noble Lord, Lord McNair, in that respect.

One point struck me earlier in the debate. The right reverend Prelate the Bishop of Worcester remarked that every year an area the size of Oxfordshire was given over to road works. I have heard that statistic before. Sometimes Cambridgeshire or Hampshire is referred to; it is always a county. I find it a little hard to believe. However, if it were true--it may be true--the road construction industry would not be in the pitiful condition in which it is at present and has been for the past few years. I query the statistic. I believe that it is mythological, although I would not expect mythology from the right reverend Prelate --or not often.

I am under the impression that in England and Wales--I omit Scotland for this purpose--the total area covered by all roadworks, including streets, culs de sac, car parks and motorways is about 2 per cent. We have two sets of statistics. They cannot both be right. However, I am quite sure that someone will write and tell me if I am wrong. I await that response with interest and even enthusiasm.

As many noble Lords will know, I am perhaps the least green of all the contributors to today's debate. I am a little embarrassed to present myself in public under this guise. However, I was greatly comforted by the cautionary words of the noble Lord, Lord Wade of Chorlton, who seemed to me to have got the issue right with regard to balancing the environment and its protection against the economy. We are all aware of that. But the rhetoric regarding the environment lays that issue to one side; I thought that that argument should be brought in again.

I welcome the Bill. However, my position is rather closer to that of my noble friend Lord Williams of Elvel than to the noble Lord, Lord Beaumont of Whitley, whose view of what he anticipates and hopes for in the future was a mite Utopian for me. If the provisions in the Bill were to move too far in the direction of the noble Lord's hopes, I might become extremely uneasy.

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I hope to be able to support most of the Bill and most of what my noble friend Lord Williams says at Committee stage.

I did not quite understand one of my noble friend's comments; no doubt it was my fault. I did not follow his reference to some form of accountancy. I wondered whether he was talking about an environmental version of what used to be called energy accountancy. Perhaps noble Lords will remember that concept. Let us take the obvious example of building a power station. One balanced the energy put into the materials for building against the energy taken out from the power station and came up with some conclusion. Perhaps my noble friend refers to something of that nature.

Several noble Lords have mentioned the pros and cons of cost benefit analysis. That is not the only system, however. I do not believe that environmental impact analysis was mentioned. Just as cost benefit analysis has strengths and weaknesses, environmental impact analysis has strengths and weaknesses. But with cost benefit plus environmental impact analyses one has something of value. Whether the proposal of my noble friend Lord Williams of Elvel is better than combining those two analyses, I do not know. No doubt that will be made clear at Committee stage. I do not need the answer to that question now.

I look forward to the Committee stage and to the Government agreeing with me regarding the very modest two or three words that I wish to add to the Bill.

8.45 p.m.

Viscount Mills: My Lords, I have already declared my interest as an NRA employee, as well as highlighting a number of issues concerning the draft Bill, in my speech of 23rd November during the debate on the Address. In that speech I asked the Minister about the future environment agency's exact role in promoting sustainable development, and about precisely how cost benefit analyses will be applied to its activities. I also emphasised the need for adequate funding during the setting up of the new agency and for a number of further measures to be included within the Bill.

Although my noble friend Lord Howe was kind enough to answer some of my questions, there are a number of points to which I wish to return. First, I was reassured when my noble friend stated:

    "The provisions as drafted require the agency to consider costs and benefits in the round, including environmental costs and benefits".--[Official Report, 23/11/94; col. 349.]

The inclusion of environmental costs and benefits in cost benefit assessments is to be welcomed. However, I do not recall the Minister clarifying the extent to which cost benefit assessments will be applied to the new agency's activities. If such assessments had to be made on every, or even most, decisions it would result in extra efforts and, of course, extra costs. Those are costs which will erode the benefits. Can the Minister assure your Lordships that those provisions will apply only to major policy and investment decisions and, if so, the scale of activity which might be covered?

The second point to which I wish to return concerns ministerial guidance on sustainable development as set out in Clause 4 of the Bill. Unfortunately the Minister

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was not forthcoming as to the nature of such policy guidance and, along with many other noble Lords, I ask my noble friend when he can share with us what he considers sustainable development might mean for the agency.

There are, of course, other issues concerning what the Royal Society for Nature Conservation has described as,

    "the supremacy of the undefined Ministerial Guidance in Clause 4".

For example, will such guidance and directions be made public and will those be made after proper consultation? Without doubt, the NRA's policy of openness and of publicising widely what it proposes to do, and why, has won the general public's confidence and respect. Ministerial guidance and directions which fail to allow that openness and consultation to continue would, I feel, be a retrograde step.

Furthermore, I presume that guidance or directions from Ministers which directly affected the agency's activities would also be subject to cost benefit analysis. To me, that would seem logical and consistent with the provisions in Clause 37; but perhaps the Minister would be kind enough to clarify whether that would indeed be the case.

Lastly on that subject, I emphasise that a lack of guidance, directions and action from Government could have serious and detrimental effects on the environment agency's ability to operate.

Another question that I raised in my previous speech concerned the funding of the new agency and in particular start-up funding. I have to admit that I was less than convinced by the Minister's response when he stated that the transitional costs of setting up the new agency will be largely funded by offsetting efficiency savings. Is that realistic, given that the NRA is already planning to save £200 million and over 1,200 jobs between 1993 and 1997? Surely that leaves little scope for further efficiency savings.

The one-off sum of £5 million allocated by the Department of the Environment to set up the agency in 1995-96 can be compared with an expenditure of over £79 million needed to set up the NRA, which has taken five years. Furthermore, no financial allowance is being made for any of the agency's proposed new duties such as those relating to contaminated lands, abandoned mines or producer responsibility. The Government are giving the new agency new jobs, but no additional money to do them.

The merger of the NRA, HMIP and the waste regulation authorities will be complex and difficult, and the transitional costs to integrate accommodation, technologies and working practices should be adequately funded by government. Perhaps what is required is a "green dowry" as provided to the NRA when it was set up. Perhaps the Minister will consider that as an option. In addition, moneys to carry out the agency's new duties should also be made available. I believe that it is only after a reasonable period of settling down--say, one-and-a-half to two years--that any process of rationalisation and efficiency savings will become possible.

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Moving on, I should like to draw to your Lordships' attention a matter of crucial importance to the future structure and operation of the new environment agency and, potentially, to the contents of the Bill. This concerns whether the agency's regulatory and operational roles should be separated or integrated. The NRA maintains that the regulatory and operational elements of its work are not in conflict. Indeed, on the contrary, these are claimed to be mutually supportive and highly cost effective.

On the other hand, HMIP argues that splitting the two functions--regulation and operation--will be essential if the agency is to avoid conflicts of interest and accusations of self-policing. Furthermore, a separate regulatory arm would also help to provide an improved business focus and make it easier to recover costs. These are fundamentally different approaches which are understandable, given the different backgrounds of the two organisations. The decision on which approach to adopt is of great significance for the future success or otherwise of the new agency.

I believe, and I think the public believe that the NRA is an effective regulator and part of this success as a regulatory body can be attributed to the NRA's presence "on the river" --a presence which is often in pursuance of its operational activities to maintain, improve and develop, whether it be flood defences, fisheries, navigation, conservation or recreation.

In practice, the effectiveness of the NRA's combined regulatory and operational roles is nowhere better demonstrated than in dealing with emergencies. In cases such as a serious pollution incident, the regulatory role of finding the polluter and the operational role of preventing environmental damage are linked to great effect. Likewise the successful development and implementation of integrated river catchment management planning, referred to by the noble Baroness, Lady David, is considered by many to be dependent on the NRA's intimate knowledge and involvement with both operational and regulatory matters.

I am not aware of there having been conflicts of interest or a lack of business focus due to this duality of function. But should this ever occur, any concerns could be addressed by much less drastic measures than the complete separation of regulatory and operational roles--for example, through audit and/or appeal procedures. Perhaps the simplest and most powerful argument of all is: why change a dynamic system of operation and regulation that has proved to work well over the last five years?

However, other things do need to be changed, such as the plethora of legislation to control discharges from complex industrial sites. This places an unnecessary burden on industry which has to deal with a number of regulators and it results in a number of different charging schemes. Within the Bill, this legislation remains separate, which will perpetuate the complexity and, of course, the burdens. Changes to the existing legislation, either by consolidation or by the provision of enabling clauses, would result in more streamlined procedures and charging schemes for both industry and

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the agency. Can the Minister give an undertaking that such changes will take place as soon as possible and preferably before the agency is set up?

Your Lordships will be aware that since the publishing of the draft Bill further provisions have been introduced into the legislation. Of particular significance are the measures relating to contaminated lands and abandoned mines, and any provisions to deal with these long-standing issues must be welcomed. However, as I have already indicated, I believe that additional resources will be required to deal with these problems.

Turning first to contaminated lands, new and complicated provisions have been developed to deal with these as well as wastefill sites, but lack of adequate funding may well prevent significant progress. Local authorities are expected to take the lead in this matter, but the effect of the new statutory framework on these bodies will apparently be cost neutral. Likewise, there will be no extra calls on central government funds. For the private sector, there is comfort in hearing that the legislation is:

    "not expected to increase existing costs or place additional burdens on business".

Given the present financial stringencies which local authorities face, I would ask your Lordships to consider how seriously these bodies will be able to treat their new contaminated land duties. Likewise, the new environment agency has no budgetary provision to support its powers to clean up contaminated sites. In cases where a remediation notice has been issued, but not complied with, the agency may carry out the works itself and recover its costs with interest.

Problems arise when the owner cannot be identified, as in the case of the so-called "orphan sites", described by my noble friend Lord Crickhowell. These are not provided for within this Bill and I support my noble friend's plea to the Minister to make some provision which would allow the new agency to obtain funds from the government to carry out priority clean ups, if others cannot be found to do so. Even a relatively small annual sum would, over a period of time, start to address the backlog of problems.

The other new provision I should like to talk about briefly concerns abandoned mines. Clause 55 creates new powers to deal with abandoned mines, but not until after 1999. The Government have been quite clear as to why this time limit is to be applied. The Explanatory and Financial Memorandum to the Bill states that,

    "there could be some adverse effect on proceeds to the Government. Accordingly, the removal of the statutory protections is being timed to reduce any possible effect".

This clearly refers to coal privatisation, as my noble friend Lord Crickhowell has already pointed out. While the Government appear to be justified in taking this course of action, others would disagree. For example, the ENDS report editorial of November 1994, states:

    "A more cynical approach and one more at odds with the concept of sustainable development would be hard to imagine".

My concern--and, as I recall, that of my noble friend Lord Crickhowell and the noble Lords, Lord Ezra and Lord Moran--and, indeed, my question to the Minister is: what will happen to mines abandoned before 1999 and to existing mines which are already causing

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pollution? This is a serious problem affecting at least 400 to 500 kilometres of our watercourses. There are a number of other issues I could discuss but I, too, am aware of the hour and they are probably best left to the Committee stage.

I should therefore like to finish with a personal observation. Having now worked for the National Rivers Authority for five years, I can appreciate fully the complexity of its organisation and the work it carries out. The environment agency will, I am sure, be even more complex and challenging to manage. It will need a clarity of purpose and sufficient resources to tackle the difficult tasks that lie ahead. I am confident that your Lordships will help to ensure that when the Bill leaves this House it will provide the new environment agency for England and Wales with the best possible start.

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