Guidance on Costs and Benefits

Part of New clause 3 – in the House of Commons at 5:30 pm on 27th June 1995.

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Photo of Joan Ruddock Joan Ruddock , Lewisham, Deptford 5:30 pm, 27th June 1995

The new clause is an attempt to challenge the Government's repeated assertion that cost-benefit considerations in respect of the Environment Agency's functions can properly be enshrined in statute without detriment to environmental protection. It is grouped with alternative proposals relating to guidance and an amendment that would delete clause 38.

I say at the outset that deletion of clause 38 would be our preferred course of action. Similar sentiments are clearly expressed in amendment No. 252, which we also support. That feeling unites not only the Opposition parties but every major conservation and green pressure group in the country. The issue has given cause for concern, which was publicly expressed by the Royal Commission on environmental pollution, the Prime Minister's panel on sustainable development and the Environment Agency advisory committee.

The crux of the matter is that the Environment Agency has been given a principal aim of protecting and enhancing the environment, yet, under both clause 4 and clause 38, which was formerly clause 37, it has a duty to have regard to "costs" and "benefits". Indeed, in Committee, the Minister said that he believed that clause 37 applied to clause 4. Those debates have caused a great deal of uncertainty, a sense that the agency's principal aim could be subordinated to cost-benefit analysis and a feeling that the draft guidance and ministerial answers to date have only added to the confusion.

New clause 38 would require the Government to face up to the problem that they have created. It requires the Secretary of State to consult his own experts—the Royal Commission on environmental pollution, the House of Commons Select Committee on the Environment, the House of Lords Select Committee on Sustainable Development and the Prime Minister's panel on sustainable development—and then to produce a report containing guidance on the role, definition and usages of costs and benefits. That is a wholly reasonable proposition. Surely the Government should not place a duty on the new Environment Agency unless they can explain how that duty should be put into effect.

Our concern, and that of the Council for the Protection of Rural England and of Greenpeace, which have both taken counsel's opinion on the matter, is that a duty on the face of the Bill will expose the agency to legal challenge by way of judicial review. Costs to industry are easily calculated. Costs to the environment are not. Even if cases do not reach the courts, there is a real danger that the new agency will be constrained in seeking to impose requirements on polluters where considerable cost might be anticipated. The environment stands to be the loser.

Many organisations have pressed briefings and questions on hon. Members for this debate. I trust that the Minister will answer them directly tonight, even if he will not accept the new clause. I wish to repeat only a couple of the questions posed by the World Wide Fund for Nature.

Will the Minister assure us that environmental protection and enhancement will be at the heart of all the Environment Agency's functions? Will he assure the House that costs and benefits will not be the sole criteria by which the standards and targets to be achieved by the agencies will be set? [Interruption.]

The Minister is replying in the affirmative from a sedentary position. I am delighted that he does so, but I would much prefer it if he put his answer more fully on the record. Does he agree that, while costs and benefits are appropriate in guidance, they should not be used as a decision-making process in their own right? They should be used instead to seek cost-effective means for achieving standards rather than determining what those standards should be.

We believe that the fact that the overriding duty of the new agency is to be hedged around with cost-benefit considerations is another example of how commercial interests have been allowed to undermine the fundamental purpose of the Environment Agency. We press the Government, even at this late stage, to hear the force and weight of contrary opinion and to remove that constraint on the Environment Agency before it is too late.