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Lord Dixon-Smith: My Lords, to a degree we are raking over hot ashes and they are now being fanned. The noble Lord, Lord Stoddart of Swindon, gave the precise reason why that is so. We are not discussing business costs, although it is possible that they will be affected as a result of this Bill. But businesses are businesses and they are there to survive and make an honest living. If their costs increase they are passed on to the consumer. Ultimately they become costs to the whole of society. That is why this matter is important.

This particular amendment is directed at protecting or excluding, as far as possible, the smaller business sector insofar as it is protected at the present time and not

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included within the ambit of the 1990 Act. The noble Duke, the Duke of Montrose, raised an important point about the drafting of regulations after the 1990 Act is repealed. It seems to me that at that point it would be possible to draft regulations which were strictly outwith the ambit of that Act, so I would certainly wish to have at the very least an assurance from the Minster that that will not happen.

The noble Duke also raised the question of conventions on secondary legislation. I have spoken about that already in connection with this Bill. I may have something further to say on that later in the proceedings. It is a very difficult matter for the whole House. The Bill is much improved. For that thanks are due to the Minister for his work in persuading the Government to change the Bill. However, it is still a Bill which is wholly dependent for its implementation on regulations, the vast bulk of which have not been seen even in consultation form. Therefore, everything has to be taken on trust. I know the Minister well enough to believe that I can trust him. But the discussion at this stage would not have taken place had we been dealing with a more conventional Bill.

Lord Whitty: My Lords, I can assure noble Lords that I am not rejecting this amendment because it has a minor drafting flaw or because it is advocated by my noble friend Lord Stoddart of Swindon. I hope I have displayed that when good ideas come from the House I consider them and act on them. However, this amendment is a thoroughly bad idea. So much that is misleading has been said in this debate that I do not know quite where to start. Perhaps I should begin where the noble Lord, Lord Dixon-Smith, ended and on the point which the noble Duke raised; namely, that we were creating a new regulatory power which somehow went beyond what already exists.

The 1990 Act already allows regulations setting out the sectors and the activities which are to be covered. We are not creating a new power in that sense. We are not changing the regime so that we do not specify in advance the levels of pollution. The British system of pollution control has always been site specific. By definition, the harm will always vary according to the location. We are not altering the practice.

Baroness Blatch: My Lords, on the point made by the noble Lord about secondary legislation, perhaps I may point out that much of the 1990 Act has been removed. Secondary legislation has as its source clauses in an Act. If those are removed the power to make secondary legislation may exist but it cannot be implemented.

Lord Whitty: My Lords, the powers are there in the Act. They are specified in regulations, which are very much in the same terms as the 1990 Act. We have no

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additional power to make regulations such as those about which the noble Duke was concerned. We already have those powers.

Baroness Blatch: My Lords, I am not arguing about the powers. They are there, but the clauses on which to build the secondary legislation will not exist.

Lord Whitty: My Lords, the powers are defined in the purposes of the Act.

Perhaps I may now turn to the effect of this amendment. On the one hand it would create an incoherent system and on the other it would be deeply detrimental to the small firms about which noble Lords have expressed concern. I, too, am particularly concerned about them. The amendment would introduce two parallel systems, one based on BAT and the other on BATNEEC. The objective of this Bill is to create one coherent regime, which is based on BAT, to which I shall return in a moment, and clearly understandable by the whole of industry. That is supported by the vast majority of spokespeople from industry whom we have consulted.

The problem with the noble Lord's amendment is that not only would it introduce an incoherent two-tier regime in the sense of having two different techniques, but the threshold for those two techniques would also be defined by size of firm; whereas the whole threshold in the directive is determined by size of installation. Let us imagine, for example, a business which owns two installations, both producing the same product via the same processes. One would be covered by the directive's terms and the other by the BATNEEC terms. That company would just have to struggle in an effort to understand which technique to apply in each different situation. The two concepts are very similar, but they are not identical in law. Therefore, the noble Lord's amendment would clearly be counterproductive for the very industrial interests that he seeks to protect.

Perhaps I may clarify one matter, because I believe that the noble Lord probably had a point in referring back to the statements that I made on the last occasion. There may not have been total clarity there, but I think that the noble Lord made it slightly worse by quoting my words in the wrong order. Nevertheless, I shall try to clarify the position in the hope that it will satisfy the noble Lord.

There will be 7,000 IPPC installations which will be subject to integrated control--that is to say, emissions by air, land and water. Those are the large installations to which I referred. There are approximately 12,000 LAPC installations already regulated under earlier legislation, which relates to emissions by air. It is true that all will be subject to BAT, but it is not true that, for the first time, regulations will apply to them.

I turn now to the difference between BAT and BATNEEC. The amendment seems to keep alive the canard which has clearly gained a lot of force in your Lordships' House; namely, that BAT is somehow a stricter version of BATNEEC, without considering the flexibility and the viability of the corporation concerned. I shall not spell out everything that I said at an earlier

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stage in the Bill's proceedings because it is all set out in the Official Report of 19th April. However, I hope that noble Lords who I feel have been misled on this point--not deliberately perhaps, but, nevertheless they have been--will understand. We do not expect the change in the technique from BATNEEC to BAT to lead to an operator spending significant amounts of money on upgrading equipment.

Contrary to the impression that has been conveyed in that respect, both BAT and BATNEEC have similar regard to costs. Indeed, it is absolutely explicit in the directive. BAT is about technology which is economically viable. The economics of a small firm and indeed of large firms are, therefore, taken into account. Indeed, that is something that the directive states very explicitly. Therefore, I do not believe that noble Lords should go down the road of regarding this as being an unrealistic, "ultra-green" definition bearing no relationship to the costs facing the management of small firms.

However, the real damage that would fall on small firms is, I believe, unintended by the noble Lord. I said on Report that lines 7 and 8 of his amendment, which was very similar, would require integrated permitting of emissions to the environment as a whole to be extended to all installations; in other words, it would have to be extended to those smaller installations mainly owned by smaller firms, though not entirely, which are covered by the local air pollution control system. That would be burdensome to small firms. It would not be a relief for them and would in fact prove to be the opposite. I do not honestly think that the noble Lord's colleagues in the Federation of Small Businesses would, in reality, thank him were he to pursue his amendment. It would be an additional burdensome amendment to extend this beyond the air emissions control which exists at present and which everyone understands. It would saddle small businesses with integrated permitting.

In these provisions we are not gold-plating; we are seeking to provide a coherent system which will protect the environment and which can be understood by industry. Indeed, most of industry welcomes it. The amendment would defeat the purpose of the Bill which is to maintain coherence in our pollution control in the face of the need to implement the directive. If implemented as drafted, the provision would be seriously burdensome to smaller firms. Therefore, I hope the noble Lord will feel able to withdraw his amendment.

The Duke of Montrose: My Lords, before the Minister sits down, can he say whether the other countries within the European Union will be asked to set specific levels of pollution under the directive and whether the UK will be allowed to keep a flexible level based on site-specific circumstances? Is that what the noble Lord is saying?

Lord Whitty: My Lords, the pollution control relates to the final output. All member states will be transposing the directive with regard to their own traditional systems

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of pollution control. Ours is a site-specific approach. Therefore, the answer to the noble Duke's question is, yes.

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