Clause 44 - Standards of performance

Water Bill [Lords] – in a Public Bill Committee at 10:00 am on 16 October 2003.

Alert me about debates like this

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs) 10:00, 16 October 2003

I beg to move amendment No. 80, in

clause 44, page 49, line 5, leave out from 'Council' to end of line 7.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss amendment No. 81, in

clause 45, page 50, line 32, leave out from 'Council' to end of line 34.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

This is a probing amendment. The bits of the Bill that the amendments would leave out are not particularly contentious, but they seem unnecessary because section 39 of the Water Industry Act already includes

''persons or bodies appearing to the Secretary of State to be representative of persons likely to be affected''.

Therefore, we do not need new subsection (1)(b)(iv), which specifies

''other persons or bodies as the Secretary of State may consider appropriate''.

They are already included. The purpose of the amendment is to find out why we need all the extra paragraphs in this part of the amendment to the Water Industry Act.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I can explain that. The amendments would remove the requirement for the authority to serve a copy of the application on

''such other persons or bodies that the Secretary of State may consider appropriate''.

The authority would have to consult only the undertakers on the council and representative bodies.

The new provision was placed in the Bill primarily to account for changes that would come in with the new competitive markets. There may be occasions when proposed new standards of performance will have a direct impact on licensed water suppliers in the competitive market. Naturally, in such cases the licensees would have to be consulted, because they would be affected.

On the other hand, new standards may only be relevant to domestic consumers. Those new standards will not be of interest to licensees who cannot operate in the domestic market. Therefore, it would not be sensible to list licensees as statutory consultees for all occasions, although there may be times when a wider area of consultation is considered appropriate.

The Bill ensures that the Secretary of State gives consideration to wider consultation, depending on the circumstances. The amendment would remove that requirement. The reasoning behind the clause is to account for different circumstances and groups, and to give the Secretary of State flexibility in how she addresses the issue.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I am grateful for that reply. I suspected that that might be the case but I needed that to be confirmed. I am grateful for that. I have no wish to tie the Secretary of State's hands with regard to consultation, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I beg to move amendment No. 283, in

clause 44, page 49, line 32, leave out from 'environment' to end of line 35.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss the following:

Amendment No. 285, in

clause 45, page 51, line 13, leave out from 'environment' to end of line 16.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

Our amendment is another probing amendment. The Liberal Democrats are happy for the Secretary of State to make regulations in the interests of public health or the environment. However, the legislation gives additional powers to the Secretary of State. If we look back at section 39, we see that those powers are strengthened. We do not understand why those extra powers are necessary. Structures already in place do that job anyway. In what circumstances would the Minister expect those powers to be used?

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I can answer that point. The amendments would limit the power given to the Secretary of State by the Bill to propose performance standards without first having to be in receipt of an application by the authority. One reason for the new powers is to provide an opportunity for the Consumer Council for Water, the Environment Agency and the drinking water inspectorate to approach the Secretary of State if they feel that he or she should intervene on a particular problem.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

Would the Minister add the National Assembly for Wales to the list of bodies that could suggest such intervention?

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

The Bill will have the same effect. For example, any of those bodies—the Consumer Council for Water, the Environment Agency or the drinking water inspectorate—may approach the Welsh Assembly on a Welsh issue, if appropriate, in relation to the line of accountability. There is no problem with that, and I can give that assurance.

The drafting is difficult as it applies to the consumer council because its powers will be wide-ranging, not restricted to environmental or public health matters. It will be empowered to represent a wide range of issues and consumer interests. We want to ensure that such bodies are strong and independent. We do not want to reduce the council's ability to be a forceful advocate for consumers. However, the amendment would restrict the council's powers to ask the Secretary of State to intervene. The measure is not simply to allow the Secretary of State to say, ''I do not like the look of that''; it is to allow other bodies to approach him or her to make representations if they feel that there is a problem and intervention is necessary.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I thank the Minister for that clarification. A couple of small points arise from it. First, there is a mechanism whereby organisations

such as the Consumer Council can go to big brother to ask him to intervene. Does the Minister expect to make a judgment internally as to whether it would be worth intervening, or would he pass concerns straight through? Secondly, are there any additional reasons why the Minister might intervene that would not result from a request from another body?

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

The answer to the second question is that there may be. It is about accountability and the powers of the Secretary of State, which he holds on behalf of Parliament. There may be occasions when issues are raised with him through Parliament. It is difficult to give specific examples. In my experience, representations are received from all sorts of groups for intervention on issues—not just water, but a range of issues for which DEFRA has responsibility. I confirm that when representations are received there must be consultation with specialist technical and scientific advisers, depending on the situation. If there is a complaint about a particular issue, one must hear both sides of the story. Such things go on all the time in the Department, both informally and formally. Issues are often resolved by informal discussion, but the Bill contains a safeguard. If a matter cannot be resolved by discussion and if the Secretary of State comes to the conclusion, after due discussion and legal and technical advice, that there may be a case for intervention, there is the power to intervene.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I thank the Minister for that further clarification. Now that that information has been provided to the Committee, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I beg to move amendment No. 94, in

clause 44, page 49, line 39, after 'research', insert 'and regulatory impact assessment'.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss the following:

Amendment No. 95, in

clause 44, page 50, leave out lines 1 to 4 and insert—

'(7) Before giving notice under subsection (5)(a) above, the Secretary of State shall arrange for—

(a) such research as he considers appropriate with a view to discovering the views of a representative sample of persons likely to be affected; and

(b) a regulatory impact assessment of his proposals to be carried out for the purpose of assessing the likely quantitative and qualitative environmental, public health, economic and social impacts of his proposals.'.

Amendment No. 96, in

clause 44, page 50, line 4, at end insert—

'(7A) The Secretary of State shall not proceed with any proposal for the making of regulations under subsection (4) above where it is apparent from the regulatory impact assessment carried out under subsection (7)(b) above that the adverse effects of the regulations would outweigh their benefit.'.

Amendment No. 97, in

clause 45, page 51, line 20, after 'research', insert 'and regulatory impact assessment'.

Amendment No. 98, in

clause 45, page 51, leave out lines 30 to 33 and insert—

'(7) Before giving notice under subsection (5)(a) above, the Secretary of State shall arrange for—

(a) such research as he considers appropriate with a view to discovering the views of a representative sample of persons likely to be affected; and

(b) a regulatory impact assessment of his proposals to be carried out for the purpose of assessing the likely quantitative and qualitative environmental public health, economic and social impacts of his proposals.'.

Amendment No. 99, in

clause 45, page 51, line 33, at end insert—

'(7A) The Secretary of State shall not proceed with any proposal for the making of regulations under subsection (4) above where it is apparent from the regulatory impact assessment carried out under subsection (7)(b) above that the adverse effects of the regulations would outweigh their benefit.'.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

The amendments deal with regulatory impact assessments. In the current climate, that is popular and sensible. The amendments are constructive because we are dealing with the quality of standards of performance in relation to water supply and sewerage services. The hon. Member for Stroud (Mr. Drew) mentioned the difficulties that some of his constituents have had. It is helpful to everybody concerned in the industry, whether they are consumers or suppliers, to ensure that any change in the regulations is tested fully by an impact assessment.

Given the spirit of the Bill, the Secretary of State would want appropriate research to be carried out to discover the views of representative samples of persons likely to be affected. We must consider how right he or she is to do that, and we must ensure that the views considered are fully informed. The people concerned would need to know the results of a regulatory impact assessment. The amendments are intended to include such an assessment in the Bill.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I do not disagree with the hon. Gentleman's argument for a regulatory impact assessment. He will be aware that it is the norm these days to apply such assessments. Although we support his intention, again we do not think that the point needs to be spelt out in the Bill because it is implicit. Government policy clearly states—the Prime Minister clearly outlined this in August 1998—that no proposal for regulation that has an impact on businesses or charities will be considered without a regulatory impact assessment. Government policy applies to the Bill.

Photo of Andrew Lansley Andrew Lansley Shadow Secretary of State for Health

Does the Minister recognise that the policy to which he referred relates to Departments and Executive agencies, but does not apply as a matter of course to regulatory agencies operating as public corporations, such as the Water Services Regulation Authority?

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

We consider that the policy does apply to such bodies, and we would expect them to conform to it, as they do when they introduce proposals.

The process must be flexible enough to respond to new developments, such as equal treatment, environmental appraisals and rural-proofing, which could be overlooked if we started to specify regulatory impact assessments in great detail.

Amendments Nos. 96 and 99 would prevent the Secretary of State from making regulations if the regulatory impact assessment showed that the costs outweighed the benefits. Of course, the whole point of

a regulatory impact assessment is to consider that aspect. If the costs did outweigh the benefits, alternative mechanisms would have to be taken into account. That is part of the process. I believe that the matter is covered in the Bill. I do not disagree with the thrust of the argument put by the hon. Member for Leominster, but I do not believe that there is a need to apply the provisions in the amendments. The clause applies only to the Secretary of State; it does not apply to the regulatory authority. Nevertheless, those impact assessments are what we expect, and that is implicit in the Bill.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs) 10:15, 16 October 2003

I am grateful to the Minister for that response, and I accept that we have a difficulty—we have had it all the way through consideration of the Bill, but particularly this morning—with what is implicit and what is not. I feel strongly that every time we are constructive in our amending, we are told it is implicit, and when we put our finger on something that the Government might have missed we are told that we are out of order.

The other change that it would have been useful to include in the Bill was that in amendment No. 95(b), which put into words the elements of sustainability. That would have added weight, and would have dealt with the argument that we all agreed with when the hon. Member for Falmouth and Camborne (Ms Atherton)—who is not in her place today—introduced the issue of sustainability in an earlier amendment. [Interruption.] We voted to keep it in the Bill, the Minister will recall. It was he who voted against it.

I had expected the Minister to object to the impact assessment proposals in the amendments on the basis of unnecessary cost. I am glad that that was not his argument. He instead chose to say that such measures were implicit in the Bill. The amendments were never intended to reduce the Minister's flexibility. We are faced with a difficult dilemma as to whether we believe sustainability is worth including in the Bill, or whether it is implicit that the Government would carry out impact assessments.

We were also told that the Government had no proposals to increase taxation despite 60 subsequent tax rises. I am not sure that believing the Prime Minister is necessarily the wisest course for the Committee to follow. It does not give me a great deal of comfort to know that the provision is implicit, particularly as a change of Prime Minister could result in very different implicit procedures for Secretaries of State. I hope that the Minister will explain further whether, if he became Secretary of State, the proposals would still be implicit if the Chancellor became Prime Minister.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

It goes beyond implicit in the sense that any Bill must have a regulatory impact assessment.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

The Minister has risen to the challenge, and I am grateful to him for trying to set my mind at rest. It is only fair at this point that I withdraw my

amendment. I hope that in future, if there is an opportunity to include the matter in the Bill, he will grasp it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

I beg to move amendment No. 284, in

clause 44, page 49, line 44, leave out 'summarise' and insert 'detail'.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss the following:

Amendment No. 286, in

clause 45, page 51, line 25, leave out 'summarise' and insert 'detail'.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

The Minister has given us various assurances about what will or will not happen. We have felt that good things could happen, but they are not being included in the Bill. I share the concerns previously outlined by the Conservative spokesman.

Under the proposals, the word ''summarise'' would be used to give reasons instead of details. Subsection (5)(b) says that in new subsection (3)(a)

''for 'the provisions proposed by the Director in his application or those provisions' there is substituted 'those which in the opinion of the Secretary of State give effect to the proposals set out in the Authority's application or to those proposals'''.

We have heard that the Minister will have regard to representations and will take the information on board, but we will have only a summary. People or groups who want to make representations, especially if they have alerted one another to a particular problem, will want to know more about the background to the problem that gave rise to the situation. They will want to know why the Secretary of State is taking action. They will want more detail to enable them to decide whether they have a good case before they go to the expense and worry of pursuing it. They will want sufficient information to be able to decide what applies to their organisation, although it may not apply to others.

In the interests of transparency, and to provide support for the organisations, the Minister has already said that he is anxious that information should be available to the people and organisations concerned, and that is why we want the detail rather than a summary to be in the Bill.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

I can reassure the hon. Lady, as there is a slight misunderstanding of how the notices are used. It is basically a matter of process, because issuing a notice is a formal exercise to inform stakeholders of the existence of the proposal, rather than a means of providing for detailed analysis. It is a formal process to make people aware that discussion is under way.

The notice is not designed to be a discussion of the merits of the regulatory proposal. The details would be set out in a consultation paper and a regulatory impact assessment for people to comment on and discuss.

I have already made it clear that the Government are committed to producing a new regulatory impact assessment every time the powers are used. The RIA will set out the assessment of options that could be employed to achieve an outcome and provide a detailed explanation of the choices. The full details will be spelt out for people to consider the options.

Photo of Ms Sue Doughty Ms Sue Doughty Liberal Democrat, Guildford

The Minister has given further pointers about the information that will be provided, and we will need to consider that. I am happy that the regulatory impact assessment provision is there, but I still have some anxieties. However, we will leave the matter there, and may return to it on Report if we have anything further to say. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 44 ordered to stand part of the Bill.

Clause 45 ordered to stand part of the Bill.