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Lord Renton: I have a few brief comments to make. They arise from the discussions surrounding each of the amendments that have been mentioned. Whenever we are enacting any legislation, quite obviously we should be careful to ensure that it is enforceable. Otherwise, we are merely enacting a dead letter. When we give power, we are giving a discretion. But if the body to which we are giving the power exercises its discretion in favour of using such power, it must have adequate power of enforcement.

Amendment No. 212 tabled in the name of my noble friend Lord Mills uses the expression "to enforce powers" which has been criticised. Nevertheless, I have some sympathy in that respect. The implication in the amendment is that those concerned have decided to use the power and that they then need to be able to enforce it. However, it is a rather tricky drafting matter about which I shall express no more than an opinion.

The expression "costs" in relation to benefits has also been commented upon by several noble Lords. I wonder whether "costs" is the best word in that context. We are always talking about cost benefit; in other words, comparing the advantages and disadvantages of steps which may be taken in a wide range of circumstances. But, in that connection I should have thought that we are really considering the expense involved and it might be better if "costs" was replaced by "expenses". I know that it would mean sacrificing the usual cost-benefit comparison, but in the context in which it is used in the amendments I believe that "expenses" might be the more appropriate word.

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I have a great deal of sympathy with the remarks made by the noble Lord, Lord Moran, regarding his amendment. I must confess that I have a little doubt about Amendment No. 213. That amendment seeks to introduce a new criminal offence, whereas it may not be necessary to do so. I know that we must have adequate powers of enforcement, but I should have thought that most of the enforcement which will be needed will be enforcement by the civil process of the courts. It does not seem to me that that process should have to be enforced with the aid of the creation of the minor criminal offence outlined in the amendment. I shall be most interested to hear what my noble friend Lord Ullswater says in his response.

Lord Vinson: Before my noble friend responds, I should like to lend my support to those who believe that he should resist the amendments. It would be very strange indeed if the new agency were given exception to the well accepted, tried and tested mechanism, not only in this country but also in America and elsewhere, for assessing the appropriate remedy for any environmental damage.

On Second Reading I was glad to see that my noble friend the Minister made it clear that such a consideration does not override the agency's other duties and obligations; in other words, I take it that it does not override the agency's emergency powers but that it does give time for considered thought as to what the appropriate remedy would be and prevent unnecessary costs being put on to the firm or individual involved, which at the end of the day are costs that are borne by all of us because they are ultimately reflected in prices.

I hope that my noble friend the Minister will clarify the position. At the same time, perhaps my noble friend could also assure me that the provisions of the deregulation Bill that made it possible for sensible appeals procedures to be introduced early on can be built into the new agency's remit in line with that legislation.

Lord Marlesford: I agree with my noble friends Lord Wade and Lord Vinson, and, indeed, with other noble Lords, on the need to ensure that decisions or proposals made by the new agency should take full account of the cost-benefit part of the equation. I understand why the provision has been included in the Bill in the form of Clause 37. We have had so many examples of extremely burdensome proposals from various agencies. Perhaps the Health and Safety Executive is the most notorious. That is why I very much supported the Government's attempts to lighten the burden through the deregulation legislation, which is now an Act. But having said that, I would ask the Government to consider carefully whether including this provision in Clause 37 is the right way of doing it.

Of course we must take more seriously both costs and benefits in putting forward environmental regulations. It is only now that some of the most ill considered matters that were introduced several years ago are coming into practical effect.

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I wish to give the Committee one small example which has just come to my notice. Under the Control of Pollution Act and the Environmental Protection Act horse manure has been classified as industrial waste. Believe it or not, under Statutory Instrument 819 of 1988, that means that unless the animals concerned are being used for agricultural purposes their muck has to be put onto a licensed tip. Apparently there is no de minimis exemption to that. It would be a laughing matter were it not quite serious for some people. I am told that in the county of Cambridgeshire it has been customary for the muck from the Newmarket horses to be stored in a field by an enterprising entrepreneur who collects it from the stables and then sells it to gardeners and others. The environmental department of the Cambridgeshire County Council has now said that that is illegal as the field is not a licensed tip and those concerned have been fined £1,500. No doubt that will result in the end of that particular enterprise.

I give that as an example of the crazy sort of things we have to avoid. However, there have been other cases where expectations have been aroused by environmental legislation which have not been met. Often those expectations have been aroused because the costs have not been taken account of in the legislation. One of the most obvious examples is the bathing water directive from Europe. It was all embracing and in certain cases was unachievable, and therefore has not been achieved, and in many other cases it has been used as an excuse to do nothing. It is a thoroughly unsatisfactory method of proceeding. I am one of the relatively few Members of this Chamber who has spent 16 weeks of my life in Blackpool—not on holiday. I had to attend every party conference of both parties there for 16 years. I am not decrying Blackpool; it is a wonderful place. However, the beach there has singularly failed to benefit from the directive. I am merely trying to illustrate the nonsenses which can arise when a provision is ill digested. That is the important point.

Of course one can understand why the Government have been tempted to introduce into the statute a costs and benefits provision. However, I question whether that is the right way of proceeding. It is, I understand, a precedent in environmental legislation and as such its implications need to be thought through carefully. Some Members of the Committee may be aware that I am chairman of the Council for the Protection of Rural England. In order to obtain an objective view of this issue the CPRE asked Mr Jeremy Sullivan QC, who is the CPRE's honorary standing counsel—he has just taken over that role from Mr Justice Carwath on the latter's appointment to the High Court Bench—for an opinion. Mr Sullivan's advice is clear. If I may, I will send my noble friend a copy of the advice which I have here. Mr Sullivan states—this is the crucial point—that the drafting is in such generalised terms that it will positively invite challenges to almost anything that this agency does, by way of judicial review. In other words, if it is a case of saying that the benefits were not properly taken into account in a decision that is made, there is a challenge of judicial review; or it may be a case of saying that the costs of the measures that are

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taken were not properly accounted for. The measure is going to make, or could make, the whole of the agency's operations unworkable. That cannot be desirable.

Starting from the simple premise that I fully support the need for a balanced decision based on cost benefit in any such agency's activities, I would suggest that the right way of doing that is by advice and guidance from the department to the agency. It is a much more difficult matter to challenge judicially regulations which the agency may make if that is done on the basis of common sense and good practice. I believe that most of the agencies—I am afraid the Health and Safety Executive is an exception; in general the National Rivers Authority is not an exception—have not put forward foolish measures.

Noble Lords: Oh!

Lord Marlesford: I think many of them have put forward some foolish measures, but in general they have recognised that they have to accord with what will be seen as possible, desirable and justifiable. That is the right way to proceed. I believe it would prove to be technically flawed to incorporate in the Bill a provision which would enable judicial review to be used in a campaign against the agency. This would weaken its role not only as a champion of the environment but also as an organisation which could take a sensible and balanced view of what is possible in terms of cost and benefit.

5.45 p.m.

Viscount Ullswater: I am glad that my noble friend Lord Marlesford eventually reached the end of his speech because I was confused to begin with as, in the first instance, his words seemed to promote this clause and then he managed, with dexterity, to say that we should not have the clause in the Bill. I also notice that he wishes to oppose the Question that Clause 37 shall stand part of the Bill. Perhaps we should have another debate on that matter when the proposition that the clause should stand part of the Bill is before the Committee, because I believe that many of the other amendments tackle the different view.

Sustainable development involves reconciling the needs of economic development and effective environmental protection. Regulators should not therefore be able to impose costs which are not justified by the environmental benefits which they bring. In saying that I hope that I have the approval of my noble friend Lord Wade and of course my noble friend Lord Vinson. The provision should require the agencies to consider costs and benefits in the round, including environmental costs and benefits. It is not intended to restrict that consideration either to only specified sorts of costs and benefits or to costs and benefits falling only on specified classes of organisations or people.

Large amounts of work have been and continue to be done on quantification of environmental costs and benefits. But I accept that not all costs and benefits can be quantified in financial terms. This is why the clause is not intended to restrict consideration to those costs and benefits which can be quantified or to require the agencies to act only where they can demonstrate an

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excess of benefit over cost. The agencies must use their judgment and the clause is intended to enable them to do so.

My noble friend Lord Marlesford pointed to some of the difficulties which can occur on both sides and warned us to beware of that. All of these amendments seek to modify the proposed duty on the agency to have regard to costs and benefits. Amendments Nos. 211 and 238 in the name of the noble Lord, Lord Carmichael of Kelvingrove, seek to limit the cost to environmental and human cost. The former of those amendments would amend the general duty on the agency, and the latter would apply both to the agency and to local authorities and would apply specifically in relation to remediation notices for contaminated land. Amendments Nos. 210 and 212 in the name of my noble friend Lord Crickhowell and moved by my noble friend Lord Mills and Amendment No. 214 in the name of the noble Lord, Lord Moran, would exclude the need to consider costs and benefits in relation to enforcement functions. Amendment No. 213 in the name of my noble friend Lord Mills would provide a new power for the agency to require any person to provide information that it reasonably considers it needs to take account of costs and benefits and would make non-provision of such information an offence. Amendment No. 211A in the name of the noble Earl, Lord Lytton, would specify that the cost to be taken into account includes the costs of third parties.

As I have sought to make clear, the Government accept that the costs and benefits to which the agency should have regard should not be limited to financial costs and benefits but must include the wider costs and benefits with which the noble Lord, Lord Carmichael, is concerned. But it cannot be limited to environmental and human costs. The justification for financial costs imposed, for example, on those who are required to meet particular standards in terms of releases to the environment, must also be considered. That is recognised in the existing provisions in the Environmental Protection Act 1990 and we believe must equally be recognised here.

My noble friend Lord Mills and the noble Lord, Lord Moran, are clearly anxious to ensure that decisions to enforce and, in particular to prosecute, under environmental legislation are not thwarted by challenges on the basis that prosecution was not the most effective solution. They have stressed that there may be valid reasons why a prosecution is appropriate in a particular case which do not relate solely to the cost of environmental damage in that case, and which may not easily be quantified.

I recognise the validity of that argument. Nor do such considerations apply only to enforcement. Equally, the agency must not be thwarted, for example, in its ability to deal effectively with environmental emergencies by a need to undertake costs and benefits analysis. That was a point made by my noble friend Lord Vinson. It is to cover such cases, which I do not believe can be listed exhaustively, that the Bill qualifies the requirement in Clause 37(1) to take account of costs and benefits:

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    "unless and to the extent that it is unreasonable for it to do so in view of the nature or purpose of the power or in the circumstances of the particular case".

It seems to me that this provides a more effective way of dealing with the concerns which have been raised than the amendments proposed.

I listened particularly carefully to the explanation of my noble friend Lord Mills of the need for Amendment No. 213 and will wish to look at the record in Hansard. Clearly it is important that the agency should not be thwarted from effective action by those who would seek to challenge its decisions on the grounds of cost but then withhold from it the information it would need to take proper account of costs and benefits. But equally I believe that we should avoid if possible the need for the agency to take account of costs and benefits leading to the imposition of additional burdens on regulated organisations and the introduction of new offences and penalties. That point was brought forward by my noble friend Lord Renton. On the basis of experience with the assessment of best available techniques not entailing excessive cost under integrated pollution control I do not believe that such additional information-gathering powers are required. In practice the agency can only properly have regard to information on costs and benefits that is available to it. Those who wish to argue that a particular course of action is too costly would therefore need to provide evidence to support their claims. If they decline to do so the agency would be justified in acting on the basis of the evidence it had. Indeed, I believe that there is a risk that the amendment would have the perverse effect of helping those who might wish to challenge the agency on the ground that it had the power to obtain further relevant information but failed to use it in a particular case.

In Amendment No. 211A the noble Earl, Lord Lytton, seeks to specify that the costs to be considered include those of third parties. I believe that the clause as drafted covers such costs and that such an explicit statement is therefore unnecessary. Indeed, by specifying that costs to one set of parties are specifically covered the effect may be to cast doubt on whether all other costs are to be considered equally.

My noble friend Lord Vinson suggested that there should be some form of appeal mechanism. This Bill and the environmental legislation under which the agency will operate include a number of appeal provisions. It is not proposed to rewrite all of those to bring them into line with the model provision being developed under the deregulation Act. However, they incorporate the principles which are to be reflected in that model provision.

At an earlier stage in the Committee proceedings I undertook to take further legal advice on whether costs and benefits should be interpreted as restricting the types of costs and benefits which are relevant. I am advised that there is no doubt that benefits should be construed widely, including environmental benefits. However, it is possible that costs incurred could be construed more narrowly as actual financial costs. We are continuing to examine the matter, but if there is real doubt I shall consider introducing an amendment to remove it.

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With that assurance and those explanations I hope that noble Lords will feel able to withdraw their amendments.

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