Motion A

Environment Bill - Commons Reasons and Amendments – in the House of Lords at 3:35 pm on 9th November 2021.

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Lord Goldsmith of Richmond Park:

Moved by Lord Goldsmith of Richmond Park

That this House do not insist on its disagreement with the Commons in their Amendments 31A and 31B on which the Commons have insisted for their Reason 31D, and do not insist on its Amendment 31C in lieu to which the Commons have disagreed for the same Reason.

31D: Because the Bill and Amendments 31A and 31B make appropriate provision in relation to guidance and the independence of the OEP.

Photo of Lord Goldsmith of Richmond Park Lord Goldsmith of Richmond Park The Minister of State, Department for Environment, Food and Rural Affairs, Minister of State (Foreign, Commonwealth and Development Office)

My Lords, this is a momentous month for the environment. We are hosting the world at COP 26, the world’s best chance to reach agreement on the action needed to avert catastrophic climate change and support those already experiencing its effects. Huge global progress has already been made in this forum. Over 130 countries representing more than 90% of the world’s forests have committed to halt and reverse deforestation by 2030. We have secured an unprecedented $20 billion to protect the world’s forests. Financial institutions with assets worth nearly $9 trillion have committed to align with nature. We secured the commitment from the big multilateral development banks, including the World Bank, that they too will align their portfolios not only with Paris goals but with nature as well. And, crucially, we secured a commitment from the 12 biggest buyers of agricultural commodities—including China Oil and Foodstuffs Corporation—that their buying policies will be aligned with 1.5 degrees and our overall deforestation goals. Each of these commitments is new and unprecedented; combined, they are mutually reinforcing, and this represents a turning point in our relationship with the world’s forests. Our job is now to inject real accountability into the process and to ensure that these promises are kept in full. This landmark Environment Bill, which we hope is now so close to its conclusion, will be an integral part of that action.

Noble Lords will have seen that this Government have moved significantly on a number of the issues which your Lordships’ House insisted on at Third Reading. I will begin by discussing Amendments 31C and 75C, tabled by the noble Lord, Lord Krebs, and the noble Baroness, Lady Ritchie of Downpatrick, and Amendments 31A, 31B, 75A and 75B which have been re-tabled by my honourable friend Minister Pow in the other place.

I thank the noble Lord, Lord Krebs, the noble Baronesses, Lady Parminter, Lady Jones of Whitchurch and Lady Ritchie of Downpatrick, and my noble and learned friend Lord Mackay of Clashfern, for their work in this important area. I thank the noble Lord, Lord Krebs, in particular for his conversations with me and with the Secretary of State on the power in the Bill to offer guidance to the OEP. As a direct result of those conversations, there are a number of points that I would like to put on the record today, in the knowledge that ministerial statements in Hansard could be drawn on by the courts as a legitimate aid to statutory interpretation in the future.

The OEP is and must be an independent body capable of holding public authorities to account on their environmental responsibilities, including through the use of their enforcement functions. That is why the Government have given the OEP a remit and powers of unprecedented breadth in this Bill. In order for the OEP to work effectively, it must act strategically and take action only when there is an environmental and public interest in doing so. On this point, everyone is agreed.

As the Secretary of State is ultimately accountable for the OEP’s performance and use of public funds, the Government consider that this accountability power in Clause 24 is necessary to ensure that the body continues to use public resources effectively to achieve the greatest public good. However, I must be clear that the content of guidance is limited to the areas of the OEP’s enforcement policy listed in Clause 22(6). It cannot be used to direct the OEP as to the content of any report they might produce or any advice to the Government. Indeed, it cannot be used as a power of direction at all. It would also be inappropriate for the Secretary of State to issue guidance on specific matters relating to the enforcement of environmental law against the Secretary of State for Defra, given that there would be a conflict of interest.

I do not want to be disingenuous: the OEP would be expected to have regard to any guidance issued, but it retains the ability and discretion to make its own decisions and is not bound to act in accordance with the guidance where it has clear reasons not to do so. I know that the noble Lord, Lord Krebs, and others have previously raised concerns that the Secretary of State might be able to use guidance to preclude the OEP investigating a broad category of individual cases or subject areas, such as nuclear power stations. I must say unequivocally that it is our view that the power could not lawfully be used in this way.

Any guidance issued must be consistent with the duty in paragraph 17 of Schedule 1 for the Secretary of State to have regard to the need to protect the independence of the OEP. Any guidance that diverts OEP scrutiny away from entire policy areas, outside existing statutory steers on prioritisation, would not be in keeping with that duty. This is not a power that could be used simply to divert the OEP away from investigating issues that could be in some way inconvenient to government. The provision for guidance on how the OEP intends to exercise its functions means that the guidance will in its nature be on the OEP’s approach to these issues, rather than defining specific areas to prioritise or deprioritise.

The OEP will operate with a very high degree of independence, especially when it comes to making individual enforcement decisions. In exercising its discretion in individual cases, the OEP would need to have regard to all relevant factors, but ultimately must take all its decisions objectively, impartially and independently of government.

Furthermore, the Environment Bill already provides that the OEP should focus on cases that have national implications. Guidance could not be issued that goes against these existing provisions and could instead add further detail. However, it will remain up to the OEP, within the framework provided by the Bill and any guidance, to determine whether cases that have a discrete local impact also have national implications, or for some other reason have sufficiently broad or widespread impact to be considered serious, or to be prioritised, for the purposes of its enforcement functions.

It is important to note that the Secretary of State is also able to offer guidance on how the OEP should respect the integrity of other bodies and existing statutory regimes. With such a huge and broad remit, the OEP will be able to scrutinise all public authorities, including many expert scientific bodies. This ability will be important for the OEP to be able to take a broad view and identify systemic issues.

Although I am sure the OEP will be extremely effective, it will be a relatively small body with a broad remit. The decisions of organisations such as Cefas, for example, which employs hundreds of world-leading marine scientists, will be based on deep expertise and often highly technical scientific data. The OEP will need to be mindful of this in its own decision-making when scrutinising these bodies. It is important to get this balance right to maintain confidence and integrity within existing regimes, and guidance could help to address this.

We believe that this power is important to ensure accountability, so that the OEP can contribute to delivering environmental improvements in the way I think we all agree it should: by acting strategically, not just in the short term, but long into the future. I can also confirm that this Government will not issue guidance to the OEP before its initial set-up or before it has had the chance to develop its own enforcement policy.

I recognise the points that noble Lords have raised, which is why the Government previously reintroduced a provision for Parliament and the Northern Ireland Assembly to scrutinise any draft guidance before it is issued. I hope my assurances regarding what this power could and could not be used for, as well as the additional parliamentary scrutiny we have provided for, serve to reassure noble Lords about this provision.

Turning to Amendments 33B and 33C, I thank all noble Lords for their contributions on this topic, but in particular the noble Lord, Lord Anderson of Ipswich, for his detailed and continuously constructive conversations with me and my officials. On environmental review, the key area of debate has been the remedies available in the event that a breach of environmental law is confirmed by the court. At the heart of this issue has always been the fact that, through environmental review, the OEP will have the ability to bring cases to court outside standard judicial review time limits, potentially long after the decisions in question have been taken. For this reason, the Government have maintained that bespoke provision is necessary to ensure certainty and fairness for third parties who have acted in line with decisions made by public bodies, and to protect good administration.

The OEP may pursue cases for enforcement action only if it considers that the conduct in question would constitute a “serious” failure to comply with environmental law. Clause 23(7) states that the OEP must have regard, among other things,

“to the particular importance of prioritising cases that it considers have or may have national implications”.

While the OEP will have discretion to interpret these criteria, setting out its approach in its enforcement policy, it follows in the Government’s view that cases which only have a local concern—for example, the majority of individual planning and environmental permitting decisions—are unlikely to have sufficiently broad or widespread impact to be prioritised. The OEP could pursue such cases if it considers them indicative of a broader or more systemic issue or failure, or if especially serious harm has resulted, or may result, from the potential failure. The OEP, for example, could consider this in relation to the destruction of a nationally important population of a rare and protected species, but this should not be the norm.

However, we have listened to and carefully considered the views and concerns raised in this House and in the other place and agree that it is important that these protections are balanced with the need to prevent or mitigate serious environmental harm. As such, I am pleased to be able to propose an amendment in lieu which strikes this important balance. In introducing it to your Lordships, I must repeat my earlier acknowledgement that ministerial Statements in Hansard could be drawn on by the courts as a legitimate aid to statutory interpretation in the future, as I put a number of points firmly on the record.

This amendment will ensure that a high bar is still set for the granting of remedies where third parties may be affected. This is set out in Condition A of our amendment. However, critically, it will also provide that, even where Condition A is not met, if the court is satisfied that it is necessary to prevent or mitigate serious damage to the natural environment or human health, and there is an exceptional public interest reason to do so, the court will be able to grant a remedy. This is set out in Condition B, which provides the court with discretion to undertake a real and meaningful, albeit weighted, balancing exercise. This means that there would no longer be a blanket prohibition on the granting of remedies where third parties are likely to suffer substantial hardship or prejudice.

In the rare cases where third parties may be affected, however, I would like to illustrate how this provision could operate with an example. Potentially, on an environmental review, the court could rule that an environmental permit had been granted to a factory operator with such inadequate conditions that it was unlawful. If the court concluded that Condition A was not met, because substantial hardship to the factory operator would be likely to result from the quashing of the permit, it would then turn to Condition B. If in the absence of a quashing order it is likely that the factory would continue to release harmful air pollutants with serious impacts for the health of the local population, the court may conclude that it is necessary to grant a remedy to prevent or mitigate serious damage to the natural environment or human health.

At this point the court would need to weigh the public interest in preventing serious harm against the public interest in preventing substantial hardship occurring to a third party. To grant a remedy, the court would need to be satisfied that the public interest in preventing this serious harm substantially outweighed the interest in preventing hardship, thereby constituting an “exceptional public interest reason” to grant the remedy. In cases such as this, where severe damage to the environment or people’s health could occur or continue if no remedy was granted, the court may choose to grant a remedy.

Given the types of serious cases the OEP is likely to bring, we consider that this test strikes the appropriate balance. I have every faith that it will do so, and that this amendment will therefore serve to be a valuable addition to the OEP’s enforcement framework as a whole. I hope that this amendment serves to provide reassurance that the Government are thoroughly committed to protecting against environmental harms through the OEP’s enforcement functions. On this basis, I hope that noble Lords can support this amendment so that we can proceed to finalise the Bill, establish the OEP in law and enable it to begin its important work.

Finally, on Amendment 45B, tabled by the noble Duke, the Duke of Wellington, and Amendments 45C and 45D, tabled by Rebecca Pow in the other place, I recognise at the outset the enormous efforts of the noble Duke, the Duke of Wellington, the noble Lord, Lord Oates, the noble Baroness, Lady Quin, and my noble friend Lady Altmann in their work on this issue.

I am pleased that the Government’s amendment in lieu, which I announced on 26 October, was agreed yesterday in the other place. The frequency with which sewage is discharged from storm overflows into our waters is of course absolutely unacceptable. I want to be clear with the House that there have been some factually incorrect claims online that the Government are somehow through this Bill legalising sewage dumping; that is not only not true but very clearly the opposite of the truth. Claims to that effect are factually inaccurate and undermine the integrity of this debate.

I am pleased to confirm that our new amendment says that water companies

“must secure a progressive reduction in the adverse impact of discharges” from their storm overflows. The word “must” means that we are placing a direct legal duty upon water companies to do this. Water companies face a choice: reduce sewage discharges or face the consequences of strong enforcement action.

Turning to the specific amendment from the noble Duke, the Duke of Wellington, we have redrafted it to ensure both proper legal effect and more effective implementation, and we have gone further in places. My counterpart in the other House has had many discussions with the noble Duke in recent days and weeks, and I would like to reiterate some of the points that she has made for the benefit of this House.

First, this amendment is a clear duty on water companies to deliver improvements, which the noble Duke pressed for throughout the passage of the Bill. Indeed, our amendment contains a stronger duty than in his initial wording; it will ensure that they have to take the necessary steps relative to the size of the problem.

We have taken the “progressive” reduction wording directly from the Lords’ amendment. “Progressive” means that water companies must continue to take action even after the next price review period and even after they have achieved a significant reduction and tackled high-priority sites, as required in the draft policy statement to the regulator, Ofwat.

We have also gone further than the noble Duke’s amendment in other areas. First, our amendment clearly specifies that “adverse impacts” includes impacts both on the environment and on public health. I know the noble Duke was particularly interested in enforcement, and rightly so. Our version goes further because it will dock in with the existing enforcement regime in the Water Industry Act. This means that Ofwat can issue enforcement notices to direct specific actions, or fine companies up to 10% of their annual turnover, which could run to many millions of pounds. The Government will also be able to take enforcement action and we will not hesitate to do so if we do not see sufficient progress. Furthermore, the OEP will be able to take enforcement action against the Environment Agency, Ofwat or the Government should it feel that any of us are not adequately discharging our duties.

I extend my thanks very sincerely again to the noble Duke, the Duke of Wellington, for championing the cause of our rivers, and I hope that he will now be able to support our amendment today. More broadly, I acknowledge the exceptional work on the Bill by all noble Lords, whose scrutiny and advice has led to it being immensely strengthened, with new, world-leading measures added to it. This is a testament to the cross-party working, dedication and expertise of noble Lords in protecting our natural environment. Noble Lords have improved our Bill immeasurably, and I hope that, like me, they want to see it pass into law today, as the world is watching from Glasgow. I beg to move.