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Baroness Hamwee: My Lords, I too thank the Government for these amendments. I look forward to agreeing Amendment No. 1 and, in due course, Amendment No. 11--I pick up the point just made by the noble Lord, Lord Dixon-Smith--which reflects our agreement to Amendment No. 1. Congratulations are due to the Minister. It is perhaps a pity that the provisions must be framed in this way. I hope that I detect increasing willingness on the part of the Government to accept when matters can be made better and to reflect general agreement particularly on relatively technical measures such as this, which are intended not to undermine policy but simply to improve legislation. We have seen that recently in the way in

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which the Government have approached the Rating (Valuation) Bill. I very much welcome what I detect as a commonsense attitude.

Having said that, I have one minor quibble which arises in subsection (3)(e) of the new clause. That imports definitions by reference to the Council directive. I make this point with regard not only to Council directives but also to other legislation. I believe that it is desirable to provide definitions in legislation so that that legislation is self-contained to the greatest possible extent. As this is a fairly technical piece of legislation, I recognise that generally readers will not be leafing through it in an interested way and that the Council directive will be readily available to those who need to know. Nevertheless, it is not a practice that I want encouraged. Apart from that little quibble, I support the amendments.

Lord Stoddart of Swindon: My Lords, like previous speakers, I welcome these amendments, if only because now on the face of the Bill--it is a pity that it was not there at the beginning--we know exactly what this piece of legislation is about. Unfortunately, all too often matters European are slipped through without Members of either this House or the other place being perfectly aware of what is happening. As this House is starved of resources, it is extremely difficult for individual Members to be able to understand exactly what is going on, particularly as the flood of legislation, both primary and secondary, continues.

I congratulate my noble friend on tabling this amendment. Does this set a precedent for all other Bills that may very well have a European content, whether they enact regulations or directives? It is important to know the answer to that question.

As it is quite clear that what we are about here is implementing a directive, does it matter whether or not we discuss it? If we make any significant amendments to the directive, will they be lawful under British law? I believe that the directive has been agreed by qualified majority voting and therefore it becomes European law. I must have the confusion in my mind cleared up as to whether, if this House and the other place are not prepared to implement all or part of the directive, that will be lawful under European law.

8.30 p.m.

The Duke of Montrose: My Lords, in my inexperienced way, I have been trying to follow this Bill and, like the previous speaker, I am very aware of the lack of resources that one comes across in trying to keep up with everything.

So much of what we want to know about the Bill will be contained in Statutory Instruments. The Department of the Environment, Transport and the Regions tried to give us some indication in the third consultation paper that came out last December. Another consultation paper was promised this spring, but I have been unable to lay my hands on it. It was also suggested that the final regulations would be out by July 1999. I think the timing has slipped.

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One matter leaves me slightly in the dark. Under Schedule 1(1) of the draft statutory regulations, the activities that should be controlled are listed. However, Schedule 1(2) simply states, "Etc". I do not know how many sections there are after that or how many other areas there are. I would have hoped that by this time some indication would have been given as to what other areas the Government wish to bring under the focus of the Bill.

This amendment talks about harm to human senses. I notice that the text has been imported from the Environmental Protection Act. In the Environmental Protection Act the Government tried to define "harm". Further on in the 1990 Act, I came across another definition. Under "statutory nuisances", it refers to activities prejudicial to health and refers to activities which are,

    "injurious, or likely to cause injury, to health". It struck me that perhaps that was a useful definition to attach to the question of harm to human health or to human senses, which needs more definition than the Bill presently contains.

Lord Whitty: My Lords, I welcome the support and expressions of gratitude that I have heard from some noble Lords. However, I remind the House that from the word "go" we decided, in relation to this particular directive, that we need primary legislation because we want to bring together the effects of the European directive to which the noble Lord, Lord Pearson of Rannoch, referred and British practice. It is true that we would not have this legislation in this form were it not for the directive, but the opportunity of the directive has allowed us to rationalise the British as well as the European aspects of pollution control. The 1990 Act was working reasonably well, but it was not a comprehensive system of pollution control covering both the national and the local authority sides. Also certain sectors were excluded. This is an opportunity to make some major improvements.

My noble friend Lord Stoddart asked whether this is a precedent. It may be a precedent in terms of clarity of primary legislation, but it is not a precedent for the way in which we shall deal with directives in the future, most of which can easily be transposed--I know he does not like it--under the European Communities Act. However, we want to bring together the European and British regimes.

The noble Baroness, Lady Hamwee, raised a query about the definition. Perhaps I should write to her in more detail. The directive uses expressions, but does not define them, so we can simply repeat the definitions in this Bill. It will not be seen as a precedent in other respects.

On the consultation papers mentioned by the noble Duke, the Duke of Montrose, we shall be sticking to the timetable. The final consultation paper will be issued in June and will include the final draft regulations. The other regulations referred to relate specifically to the oil and gas offshore side. Those regulations are also available for consultation about now and have been dealt

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with under the auspices of the Department of Trade and Industry, which has consulted widely with the offshore industry.

I am not sure that I can reply immediately to the other points raised by the noble Duke, the Duke of Montrose, but I shall do so in writing. Some points require double-checking against the wording of the 1990 Act. Many of them are repeated in the draft regulations to which he has already referred.

The main point of the changes is to respond to the constitutional questions which were raised at earlier stages. I believe that they do so, and do so fully. I expect that we shall hear again some of the additional points raised in relation to the European dimension before the debate is finished. I commend the amendment to the House.

Lord Dixon-Smith: My Lords, before the Minister sits down, perhaps I may ask whether other interested noble Lords can receive copies of the reply to the noble Duke, the Duke of Montrose.

Lord Whitty: My Lords, I can certainly confirm that.

[Amendment No. 2, as an amendment to Amendment No. 1, not moved.]

On Question, Amendment No. 1 agreed to.

Clause 1 [Regulation of polluting activities]:

Lord Whitty moved Amendment No. 3:

Page 1, line 8, leave out subsections (2) to (4) and insert--
("( ) In accordance with subsection (1) of section (General purpose and definitions), the provision which may be made by regulations under this section is provision for or in connection with any of the matters mentioned in paragraphs (a) to (c) of that subsection.")

On Question, amendment agreed to.

Lord Pearson of Rannoch moved Amendment No. 4:

Page 2, line 10, at end insert--
("( ) Regulations under this section shall require individuals or bodies responsible for carrying out such activities as are referred to in the regulations to employ the best available techniques not entailing excessive cost (in this clause referred to as "BATNEEC") to be used for minimising the pollution which may be caused to the environment as a whole by those activities:
Provided that--
(a) regulations under this section may specify circumstances where a more or less restrictive regime than BATNEEC may be required either to comply with European or other international obligations, or on account of other circumstances;
(b) where regulations are made pursuant to paragraph (a) above, they shall be accompanied by a statement explaining why such a more or less restrictive regime should be applied; and
(c) if the regime to be employed is more restrictive than BATNEEC, the regulations embodying that regime shall not be made unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.")

The noble Lord said: My Lords, I apologise to the House for entering the fray on this disturbing Bill so late in the day. Perhaps I owe the House an explanation.

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I have to confess that I was not aware of this Bill until the closing stages of the Bill in Committee on Monday 19th April. On that day, I came into the Chamber to listen to the debate on European economic and monetary union which was to follow. My noble friend Lord Jenkin of Roding and my noble friend Lord Renton were clearly doing valiant battle to amend the Bill, but it all seemed rather dense stuff and I did not pay much attention until I heard my noble friend Lord Renton say at col. 974 of Hansard that he had been in Parliament for 53 years and that this Bill was the only example he had seen of an Act of Parliament of national and international importance being replaced by regulations. That Act of Parliament was, of course, the Environmental Protection Act 1990.

My noble friend then divided the House and lost his amendment which was intended to prevent the Bill from removing the first 28 sections of that Act from the statute book and replacing them with this Bill and its regulation-making powers. Therefore, unfortunately, we cannot bring this amendment back on Report. Indeed, it is unfortunate that my noble friend Lord Renton is unable to be present this evening.

I was sufficiently worried by what I had chanced to hear that I went and looked up the history of the Bill. I was deeply shocked by what I discovered. I submit that most Members of your Lordships' House are still not even vaguely aware of what the Government are attempting to do. Although we are at Report stage, I fear that we have to consider a brief history of the Bill so that we can decide whether these amendments, now tabled by the Government, are worth accepting or whether, together with the rest of the Bill, they should quite simply be thrown out at Third Reading.

The Bill received a low-key Second Reading on 7th December last, with no Conservative or Labour Peer taking part. This is scarcely surprising, as the true purpose of the Bill, which is to import EC Directive 96/61 into British law, was hidden in line 42 of Schedule 1 on page 6 of that Bill. The Bill's Explanatory Notes do not mention that fact until point 5 on page 2. At Second Reading, only the noble Baronesses, Lady Hamwee and Lady Byford, appeared to have woken up to the Bill's inherently unconstitutional nature. The Bill then went before the Delegated Powers and Deregulation Committee, which on 16th December issued a most damning report on the Bill saying that as drafted it was a "skeleton" Bill and therefore inappropriate for secondary powers.

Nevertheless, the Government pressed on with the Committee Stage on 15th February, and got into such trouble from all sides of the House that they were forced to lift the Bill and re-commit it on 19th April, tabling a number of amendments. In the meantime, the Delegated Powers and Deregulation Committee had made a number of further recommendations on 10th March, saying that even if the House accepted the amendments which the Government were then proposing the committee,

    "would not wish this Bill to be regarded as a precedent for the future. It remains important that the purposes and ambit of legislation, together with any important governing criteria, should be clearly specified within the primary legislation, and not simply left to the exercise of delegated powers".

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    The committee concluded somewhat reluctantly that the amendments that the Government proposed to move on 19th April made the Bill just about acceptable. It even accepted the Government's assurances as to how they would deal with one of the Bill's most serious flaws, which is to replace the Environmental Protection Act's criteria for pollution control, being "best available techniques not entailing excessive costs" (BATNEEC), with Directive 96-61's criteria, which are simply "best available techniques" (BAT), which could clearly be vastly more expensive and even ruinous to small and medium sized business.

However, my noble friend Lord Jenkin was clearly not quite so satisfied with the Government's assurances as was the Select Committee, because he tabled an amendment at re-commitment on 19th April to bring BATNEEC back into the Bill.

I am not sure whether my noble friend is satisfied with the Minister's explanation at col. 967 of the Official Report of 19th April as to why there really is not much difference between BAT and BATNEEC, but I am afraid I am not, which is why I have had the impertinence to retable my noble friend's amendment tonight. I, too, very much regret that he is not here owing to his operation.

At col. 967 of the Official Report of 19th April the Minister stated;

    "Paragraph 11 of Article 2 of the directive makes it absolutely clear that cost is a key consideration. It states"-- and I now quote from the directive from which the Minister quoted--

    "'available techniques shall mean those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages'".

The Minister then said:

    "We are therefore not losing the reference to costs which may be behind some of the concerns expressed". We may not be losing a mere reference to costs, but that is far weaker than to say that pollution must be controlled by methods which do not entail excessive cost, with that requirement placed on the face of the Bill, as it is in Section 7 of the Environmental Protection Act 1990 which this Bill consigns to oblivion together with the remainder of Sections 1 to 28.

Furthermore, the Minister did not quote the whole of paragraph 11 of Article 2 of the directive, which I am afraid I should now do. It states:

    "'Best available techniques' shall mean the most effective and advanced stage in the development of activities and their methods of operation which indicate the practical suitability of particular techniques for providing in principle the basis for emission limit values designed to prevent and, where that is not practicable ... to reduce emissions and the impact on the environment as a whole: 'techniques' shall include both the technology used and the way in which the installation is designed, built, maintained, operated and decommissioned'".

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    We then come to the part quoted by the Minister, that,

    "'available' techniques shall mean those developed on a scale which allows implementation in the relevant industrial sector, under economically and technically viable conditions, taking into consideration the costs and advantages". However, the directive continues:

    "whether or not the techniques are used or produced inside the Member State in question, as long as they are reasonably accessible to the operator, 'best' shall mean most effective in achieving a high general level of protection of the environment as a whole. In determining the best available techniques, special consideration should be given to items listed in Annexe IV". I shall not trouble your Lordships other than to say that Annex IV is very extensive.

I hope that that gives a slightly broader picture of what the directive actually says than the perhaps slightly selective quotation used by the Minister. As I have said, even in the quotation used by the Minister, the directive and the Bill are far weaker than the Environmental Protection Act 1990.

As I have said, I am not really sure what the present position of my noble friend Lord Jenkin of Roding is on this matter. I may be wrong--in which case I apologise, especially in his absence--but in any case I mean no offence when I say that I understand my noble friend has been speaking on this Bill so far on behalf of the Confederation of British Industry. It may be that the CBI, for reasons that are not clear to me, has withdrawn its opposition to this clause. Be that as it may, the CBI generally speaking represents big business which might well feel that it can cope with the Bill as amended so far. But what about small business? They are clearly more likely to be affected by the abandonment of BATNEEC than are big businesses.

To discover how they felt, I had a word with the Federation of Small Businesses, whose executive director has sent me the following fax today. It is not long but I fear that I should quote it in full. It states:

    "The Federation of Small Businesses (FSB) which represents over 135,000 members, responded to the Government on the implementation of the IPPC Directive on 26th February 1999.

    "The FSB's response expressed grave concerns that the proposals would add tighter regulation to all businesses without any concessions for small businesses.

    "The FSB contended in the strongest possible terms that small businesses could not afford the implementation of such a directive.

    "Following the FSB's response to that consultation, it does seems to us that we were taken out of the loop as far as further discussions on this item were concerned and the FSB has no evidence of even an acknowledgement to its original response.

    "The original Government consultation stated that the Bill was in accordance with Better Regulation policy. The changes following the CBI's alleged change of heart clearly mean that the Bill is now not in accordance with Better Regulation policy.

    "The CBI represents large businesses. We do not believe that it was speaking for small firms on this issue.

    "Large companies, when push comes to shove, do not really mind excessive regulation. They have the resources and the personnel to comply, knowing that at the same time, their small competitors will face difficulties and costs because of those same regulations.

    "The FSB supports the concept of 'Best Available Techniques Not Entailing Excessive Cost' (BATNEEC). The FSB is horrified that such a concept is now not being considered. We would urge Ministers to think on this and to add the concept as a schedule to the main legislation.

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    "By their action, Government is now abandoning the interests of small businesses; an action which will also price many out of business". That is dated today.

There we have it. The big boys think they can live with this Bill if it becomes law, but our vital small businesses take an altogether different view.

I wonder whether I could end with a word of advice to the Minister. He is someone for whom all of us in this House have great respect. We admire his incisive mind, and his endless courtesy from the Dispatch Box. I know that I am stretching his patience today. But I must put it to him that he has made a mistake with this Bill. I am fairly sure that I can see what happened. His civil servants came to him and said, "Minister, we have got to put this wretched directive into British law or we shall irritate our lords and masters in Brussels, and it really is too complicated to attach it to the Environmental Protection Act, so let's do it this way. Let's take all the powers from the Act and all the powers in the directive, and let's just do it by regulation when necessary and when it suits us". So we have this Bill, which I submit is still entirely unsatisfactory even with the amendments which have so far been forced upon it.

I should have thought it very unlikely that all, or indeed any, of the other EU countries are importing this directive with anything like the enthusiasm of the Minister and his department. But I shall be pressing the Minister upon that under Amendments Nos. 7 and 8.

I should have thought that the Minister would be perfectly safe to abandon the whole thing. That is what I suggest that he should do. I beg to move.

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