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Baroness Byford: My Lords, before the Minister sits down, perhaps I can stress that she has said again that the Bill is based on the presumption of renewal unless damage is done. If the Minister could point to where that is stated in the Bill we would be quite happy. I have not managed to find it anywhere in the Bill. I know it is late; I know I am tired, but I cannot see it in the Bill.

Baroness Farrington of Ribbleton: My Lords, we have had this debate at every stage of the Bill. The renewal of licences can be withheld only in circumstances where either there are reasonable grounds or there is an opportunity for a legal challenge. Reasonable grounds means damage to the environment or to other users' interests of the same water source. I do not think that I can say anything that will reassure the noble Baroness further. However, if I have failed to reassure her, I would be only too happy to write to her, repeating the detail that was given on previous occasions.

11 p.m.

Baroness Byford: My Lords, the noble Baroness referred to what is technically supposed to be "in practice". But "in practice" is not "in legislation". Whatever the noble Lord does to his amendment—and I have no way of drawing him one way or another—we should record the fact that it is no use the Government going on saying, as they have during the passage of the Bill, "Well, in practice this will happen" or, "In practice that will happen" when it is actually not on the face of the Bill.

Baroness Farrington of Ribbleton: My Lords, I have little to add. The noble Baroness appears to believe that the Government's intention behind this legislation is to prevent industries such as the quarrying industry from continuing to work. That is not what the Bill is about. We have discussed this issue on many occasions. It concerns how we prevent the

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continuation of something were it to cause environmental damage or damage to the interests of other uses of the same water supply.

Lord Sutherland of Houndwood: My Lords, I thank the noble Baroness for her reply. I do so, predictably, in fairly lukewarm fashion. None the less, I thank her. I also thank the noble Lords, Lord Dixon-Smith, Lord Berkeley, Lord Howie and Lord Lipsey, who have spoken in support of the amendment. I understand the points made by the noble Baroness, Lady Miller.

The Government's principal response has been to say—a point we have just discussed—that there is a presumption of renewal. That would be most reassuring were it visible. In my judgment, it is not currently visible. As the Bill proceeds, it would be very helpful if further work could be done on that because the issue of presumption of renewal changes how this Bill will affect the water industry.

The reason is not simply the initial investment; it is the continuing investment. Money will have to be committed over a 15 or 20-year lifecycle from now on. That is a precondition of the Government achieving their aims in their massive construction proposals. The concern is not simply that the licence may be withdrawn haphazardly; rather it is that—if one is going to the banks to persuade them to lend the money—the banks require significant reassurance that the business is viable for more than a six-year period, or even a 12-year period in some cases depending on the level of investment.

I stress that point because it is very important for government policy conceived in a broader context. I hope that the Minister might take the opportunity to have a briefing from the civil servants who visited the quarries that we arranged for them because I think they probably now have a clearer understanding of the issues. The remaining question is whether the Government are turning the matter down on principle or whether in practice one could find ways around the issues. In terms of practice, the key is the degree of reassurance that one could have that the presumption of renewal would stand up not simply in a court of law but in front of the bankers who will lend the money that will keep this industry going. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sutherland of Houndwood moved Amendment No. 23:

    After Clause 22, insert the following new clause—

After section 46 of the WRA there is inserted—
(1) An application to renew a licence granted under this Chapter to abstract water—
(a) to prevent interference with any mining, quarrying or engineering operations (whether underground or surface); or
(b) to prevent damage to works resulting from such operations ("de-watering abstractions"),

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shall be subject to three tests, namely that it can be reasonably demonstrated that—
(a) environmental sustainability is not in question;
(b) there is a need for the licence;
(c) the water abstracted under the licence is being and will be used efficiently and effectively.
(2) If the conditions of subsection (1) above are met, the licence will be renewed for a minimum of six years.
(3) Where an application to renew a licence is refused under subsection (2) above, a person who made the application may appeal to the Secretary of State within such period and subject to such procedures as may be prescribed by order.
( ) Where an application to renew a licence is refused under section 46ZA or the terms of any licence renewed under that section are varied in comparison with the licence which it replaces and the effect of such refusal or variation would be such as to affect to a material extent—
(a) the economic viability of operating the site to which the application relates; or
(b) the asset value of the site to which the application relates,
then compensation will be payable for any loss or damage resulting from any such refusal or variation.""

The noble Lord said: My Lords, I shall speak briefly to this amendment. The first part of Amendment No. 23 has been covered in principle by Amendment No. 21. I shall not speak further to that in detail because we have had a thorough discussion of the issue of principle there.

The second part, however, is particularly germane to issues we have just been discussing. It deals with reassurances concerning compensation. If in fact licences were withdrawn, the issue of compensation becomes a real one. The proposed new Section 46ZB is a request for clarification on the matter of compensation in the event of licences being withdrawn for the reasons given in the Bill. I beg to move.

Lord Dixon-Smith: My Lords, I again support the amendments. The reality is that if one has a viable, extant quarry, and the terms of the water licence are subsequently amended—or even revoked—in such a way as to make the quarry non-viable, that is tantamount to withdrawal of planning permission. Withdrawal of planning permission would certainly be eligible for compensation in almost any circumstances. So it looks as though the effect of a planning permission could be amended without the eligibility for compensation under the Bill as drafted.

That is a fundamental point, and it returns us to the points made about the assurance required for those who provide the funding that backs those operations. This is a significant matter. I hope that the Government may find it in their heart even at this late stage to repent from their omission and agree to the amendments.

Lord Howie of Troon: My Lords, I am happy to support the amendment, and shall do so fairly briefly. I worry not about the amendment but about its situation. From time to time when discussing these matters, people talk about something abstract, ethereal and possibly theological called the environment. We should bear in mind that the quarry

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is part of the environment. The well-being and continued well-being of the quarry is part of the well-being and continued well-being of the environment. That should not be forgotten.

Looking at the matter from my peculiar standpoint, I find that most people worried about the environment confuse the word "environment" with nature. They worry about heather—which is a splendid thing—birds and bees, and so on. So when we receive assurances from the Environment Agency—which is an admirable body, let me say right away; lest I should be misunderstood at this point—we must be sure that they are based on an understanding of the environment that is not narrow and theological but real.

I have some experience of the Environment Agency, English Nature and the natural trust, or whatever it is called. What is it called?

Noble Lords: The National Trust.

Lord Howie of Troon: Yes, my Lords, the National Trust—that august body of self-appointed persons. I have some experience of its attitude toward nature and things that are actually there. I say this with a certain amount of trepidation, because I happen to be a tenant of the National Trust coastguard's cottage near Beachy Head, which is threatened by coastal erosion.

Lord Berkeley: That serves you right, does it not?

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