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Baroness Miller of Chilthorne Domer: I warmly support the noble Lord's amendment. It is really music to our ears. I am especially grateful that he explained so eloquently that it is a question not of the environmental demands of the Water Framework Directive being in conflict with economic demands but, as he put it, that the two go hand in hand. As I touched on when speaking to my first amendment, the Government's piecemeal approach to implementing the directive still tends to adopt the attitude that those demands are in conflict.

I fear that not only will the directive be implemented in a piecemeal fashion but we will seek derogration after derogation because, instead of following the path laid out by the noble Lord, Lord Haskel, of innovation both creating economic goods and enabling environmental standards to be met, we shall simply not meet the environmental standards. We will then apply for a derogation; we will lag behind the timescale; the incentive will be lost for innovation to be made; and the economic benefit will not be gained. That is the sort of vicious circle in which we are at present.

So I warmly support the amendment and hope that the Government can see the sense of what the noble Lord, Lord Haskel, said.

Lord Dixon-Smith: There can be no dissent from the principle of the amendment, but I look forward to hearing what the Minister has to say in response. One cannot quarrel with the idea of carrying out a review as and when necessary, at least every four years and where a river is unsatisfactory or contains listed substances. "As and when necessary", presumably implies, "when circumstances are perceived to have changed", which could be a greater interval than four years, but that does not matter. The principle behind the amendment is unexceptional, but perhaps the Minister can tell us how the Bill fits with the framework directive and the amendment. I look forward to hearing his response.

Lord Whitty: I agree with much of what my noble friend Lord Haskel said, but not with his amendment. It is important to recognise how we are implementing the Water Framework Directive and the importance of doing so in a way that encourages rather than discourages innovation. I pay tribute to the Environmental Industries Commission for the work that it is undertaking in that respect. It is important that we view the environmental, economic and competitive advantages of compliance together.

However, I am not sure that I can agree with the words of the noble Baroness, Lady Miller, because I do not know on what basis she said that we are seeking

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derogation after derogation. The Water Framework Directive has already been subject to substantial consultation and will be subject to more that is in the pipeline. That certainly does not give the impression that we are seeking derogation after derogation.

Baroness Miller of Chilthorne Domer: Perhaps I can help the Minister. I was thinking of the daughter directive about groundwater quality. On the Government's timetable, we are unlikely to meet those standards and, I expect, will be asking for derogations.

Lord Whitty: On the timetable for the Water Framework Directive, we are not yet at the point of transposing it; we are still consulting about its proper implementation and how it can be delivered through our system in this country. It would therefore be at best premature to say that we will seek derogations all over the place. There may be the odd area in which we cannot meet the exact timetable of the directive, but our support for the framework directive's objectives runs clearly through the consultation.

I think that the primary concern behind the amendment moved by my noble friend is industrial discharges of trade effluents into controlled waters, which is touched on by the Water Framework Directive and has a major effect on the quality of water in the rivers to which he refers. In fact, however, the amendment would disapply the four-year intervention period—if I may put it that way—for all types of discharge consents, not simply those of an industrial nature.

In its work to implement the Water Framework Directive, the Environment Agency is already well versed in the operation of a discharge consent regime and the priorities that it requires under the 1991 Act. We intend the regime to continue to include the four-year non-intervention period, as that allows consent holders, including those with trade effluent consents, greater certainty in investment planning.

Power already exists to allow the Secretary of State to direct the agency to review consents, including those within the four-year period, so an override provision already exists. We do not believe that that needs to be supplemented by any additional, more generalised relaxation of the four-year rule. All these aspects of the implementation of the Water Framework Directive are, have been, and will further be, the subject of widespread consultation. Meanwhile, the existing provisions in the Water Resources Act are sufficient for the implementation of the directive. We do not, therefore, need an amendment to the primary legislation in that respect.

We need to achieve a balance between meeting the objectives of the Water Framework Directive while at the same time encouraging industry to do so in an innovative way. We need to do so in a way that does not create greater uncertainty for industry as a whole. By and large, the four-year period has worked reasonably well and should, in our view, continue to be the norm.

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6.15 p.m.

The Duke of Montrose: Presumably when a business has a discharge consent, it discharges whatever it is into the river or the catchment. If it discharges something that is doing damage, presumably it can be required to cease discharging immediately, and we do not need to revise the four-year consents. If it is not discharging something that does damage, what reason would there be for reviewing the consent within four years?

Lord Whitty: The degree to which the discharge is doing damage depends on the circumstances of the river as a whole. What might have been an appropriate level of allowable discharge at the beginning of the period of consent may change because the nature of the river has changed with regard to flow or other depredation of the river. This would be pretty unusual, which is why it is for the Secretary of State to direct the agency rather than having it as a normal part of the four-year consenting process which we think is, by and large, an adequate and sensible period.

Lord Haskel: I thank the Minister for his detailed and rather thoughtful response. My amendment is not about derogations, it is about regulation. One of the purposes of the amendment is to explore ways in which water regulation can be a bit more positive.

More regulation is a fact of life, especially as we build a fairer society. Indeed, noble Lords may know that Professor Porter recently reported that deregulation is beginning to show diminishing returns. So a more modern attitude to regulation is needed. The simple mantra of "more regulation bad, less regulation good" is not getting us anywhere, so I hope that this will be part of the consultation.

I will read what the Minister has said very carefully. It appeared to me that he was reluctant to give more responsibility to the Environment Agency because the Secretary of State already has certain powers. Getting the Secretary of State to use these powers is usually a pretty cumbersome and long-winded affair, so we will have to give that some thought.

I agree with the Minister that four-yearly reviews give industry an opportunity to plan and invest. But equally, a lot of damage can be done to the environment in four years, and it can take an awful lot longer to clear it up.

Baroness Byford: I have listened carefully to the noble Lord's response to the Minister's comments. Do I gather that the noble Lord is in favour of more regulation, and that this would prevent it from happening in the first place? I got a little confused as the noble Lord spoke, and I am seeking some clarification. Obviously, once we have more regulation, we have more costs, and I thought that we were in favour of deregulation. I thought that that was what the noble Lord, Lord Haskins—rather than the noble Lord, Lord Haskel—is currently looking at, and that the Environment Agency, in particular, was one

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of the agencies whose role was being considered. If the noble Lord could clarify this point, I would be grateful.

Lord Haskel: I am certainly not asking for more regulation. I am saying that it is inevitable that we will have some regulation because of the EU directive, and I am asking that it should be used in a more creative way.

I thank all those who have spoken in this short debate, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 81 agreed to.

Clause 82 [Trade effluent consents: conditions of consent]:

Lord Livsey of Talgarth moved Amendment No. 184:

    Page 96, line 2, at end insert—

"(ab) after subsection (1) there is inserted— "( ) The Agency shall continue to monitor water quality and chemical and bacterial pollution, through water sampling, and is empowered to act to enforce compliance at the source and advise alternatives where chemical processes impact upon discharges.""

The noble Lord said: Amendment No. 184 is related to Amendment No. 183 and what was spelled out in that amendment, which we have just finished debating. However, I would like in this amendment to stress that the agency, which does a good job in monitoring water quality, continues to monitor water quality and chemical and bacterial pollution through sampling, and is empowered to enforce compliance at the source and advise alternatives where chemical processes impact upon discharge. The purpose is to be proactive in tackling industrial and other sources of pollution.

This is an exploratory amendment; we need reassurances that the monitoring process is continuous where discharges take place and that the agency will be given the tools to do the job. There have been some serious incidents—I can think of a number on the Welsh Dee—from chemical plant which caused an enormous amount of damage to the rivers there. There have been other examples of rivers where quite serious incidents have taken place.

The amendment would ensure that the agency will be proactive and will continue to be diligent in carrying out these tasks. I beg to move.

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