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Grand Committee

Volume 713: debated on Wednesday 21 October 2009

Grand Committee

Wednesday, 21 October 2009.

Arrangement of Business

Announcement

Before the Minister moves the first statutory instrument to be considered, could I remind noble Lords that in the case of each statutory instrument, the Motion before the Committee will be that the Committee do consider the statutory instrument in question? I should perhaps make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way. I would add that Divisions are expected in the Chamber. If there is a Division, the Committee will adjourn for 10 minutes.

Welsh Ministers (Transfer of Functions) (No. 2) Order 2009

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Welsh Ministers (Transfer of Functions) (No. 2) Order 2009.

With the leave of the Committee, I shall speak also to the draft Government of Wales Act 2006 (Consequential Modifications, Transitional Provisions and Saving) Order 2009. This draft order for Welsh Ministers would transfer a range of functions relating to building standards from UK Government Ministers to Welsh Ministers. In particular, it would transfer the power to make building regulations for Wales. The proposed transfer of functions has the approval and support of the Departments for Communities and Local Government, Energy and Climate Change, and Business, Innovation and Skills.

The draft order transfers to Welsh Ministers functions of the Secretary of State under the Building Act 1984 and associated legislation. These include the function of making building regulations that set functional performance requirements for building work. Building regulations address a range of health, safety and sustainability issues including structural stability, fire protection, resistance to moisture and contamination, energy and energy efficiency, ventilation, combustion and accessibility. The 1984 Act also confers functions on the Secretary of State in relation to the administration of the regulations, and imposes a duty to establish and maintain a Building Regulations Advisory Committee (BRAC) for England and Wales to advise on changes to the regulations.

I am grateful to my noble friend. With regard to the building regulations provisions in paragraph 9, is there to be a payment of any kind made to members? What are the terms and conditions of appointment, and are the committee positions in Wales to be advertised?

I think I am grateful to my noble friend for notice of his questions. I will respond to them later when I hope to be able to respond to other contributions to the debate. I hope that he will bide a little time before we get to that stage.

Some functions under the 1984 Act relating to appeals and determinations have already been transferred to Welsh Ministers. The proposed transfer will include all of the Secretary of State’s remaining functions under the 1984 Act and related secondary legislation, with a small number of specific exceptions. For example, functions are not transferred in relation to energy infrastructure buildings, except where planning functions are already devolved or where the buildings are not used to carry out an energy function—for example, houses or office buildings on the site of a power station. It will be recognised by the Committee that energy is not a devolved matter.

Although energy infrastructure buildings are exempt from the building regulations, this exemption will come to an end if and when Section 5 of the Sustainable and Secure Buildings Act 2004 is brought into force. When that happens, the power to set construction standards for those buildings should remain with UK Government Ministers.

The order will also transfer functions under the amended regulations made in 2000 in respect of energy performance certificates, but only in relation to certificates which are required on the construction or alteration of buildings. As I have mentioned, the 1984 Act requires the Secretary of State to appoint a Building Regulations Advisory Committee and consult the committee before making certain building regulations.

It is appropriate that Welsh Ministers, when they propose to exercise the power to make building regulations for Wales, should receive advice from a committee with specific knowledge and expertise relating to Wales. The draft order therefore provides for the BRAC to be replaced by separate committees—for England and for Wales. In addition to functions under the 1984 Act and regulations, the order will transfer reporting functions under two other Acts.

Section 6 of the Sustainable and Secure Buildings Act 2004 requires the Secretary of State to report on the building stock in England and Wales every two years, covering changes to building regulations and matters relating to energy efficiency, emissions, on-site energy generation and recycling. Section 14 of the Climate Change and Sustainable Energy Act 2006 provides for reports on steps which the Secretary of State has taken to secure greater compliance with environmental requirements of building regulations.

The transfer of these reporting functions is wholly consistent with the transfer of functions under the Building Act and with the Welsh Assembly Government’s policies and strategies relating to climate change and waste.

The Welsh Assembly Government have sought the devolution of building regulations as a key element in achieving its climate change and sustainable development objectives in Wales. They have begun a process of informal engagement with the public and industry, but a significant amount of work remains to be done in respect of the development of changes to the energy efficiency requirements of the regulations. The period before the order comes into force in 2011 will ensure that Wales benefits from the changes to those requirements which the UK Government propose for 2010, and give the Welsh Assembly Government the opportunity to further develop their proposals and engage with the industry in Wales.

Welsh Ministers have given an assurance that they intend to continue with the current building control system and to develop changes only in respect of energy efficiency in the first two years. Welsh Ministers have further confirmed support for the UK Government’s proposals for reform of the building control system, the implementation of which may fall to Wales to implement after the transfer. There will be no budgetary transfer from the UK Government to the Welsh Consolidated Fund when the executive functions concerned transfer. The full costs of devolution in this case will be borne by the Welsh Assembly Government.

The post-transfer financial consequences external to government of any proposed changes to the building regulations will be considered through regulatory impact assessment, in accordance with the statutory code of practice required under Section 76 of the Government of Wales Act. Any proposals for changes to the regulations will also be subject to consultation, in accordance with the requirements of the Building Act.

The proposed transfer of building regulations functions would complement existing devolved planning and development control functions enabling the Welsh Ministers to exercise more coherent policy control over the development process, through the stages of planning, design and construction. Delivering sustainability in the built environment increasingly relies on a co-ordinated approach, taking into account matters of location, site arrangement and detailed design.

The draft Government of Wales Act 2006 order recognises that the legal separation of the National Assembly for Wales and the Welsh Assembly Government under the Government of Wales Act 2006 has required a large number of consequential modifications to other enactments. This order makes further consequential modifications to three Acts and related revocations, transitional and saving provisions. Part 2 of the order deals with modifications to British nationality legislation; Part 3 deals with modifications to the Constitutional Reform Act 2005 and the Companies Act 2006.

On Part 2, Articles 3 to 6 relate to Section 2(1)(b) of the British Nationality Act 1981. This provides for a child who is born overseas to a British citizen serving overseas in Crown service, or in closely associated service which has been designated by order of the Secretary of State under Section 2(3) of that Act, to be a British citizen. The present designation order is the British Citizenship (Designated Service) Order 2006.

In the case of Crown service, provided that either parent is serving overseas in Crown service under the Government of the United Kingdom and was recruited for that service in the UK, their child will be at birth a British citizen. In effect, for British citizenship purposes, that means that the child will be treated as if it was born in the UK.

The Government of Wales Act 2006 has established the Crown in right of the Welsh Assembly Government as a separate emanation of the Crown. Article 3 modifies the definition in Section 50 to include service under the Welsh Assembly Government as Crown service.

If the order is made, service with the Welsh Assembly Government overseas will henceforth be Crown service under the Government of the United Kingdom on a par with service with the other emanations of the Crown in the United Kingdom. Consequently, Articles 4 and 5 make appropriate revocations in respect of the 2006 and 2008 orders. Article 6 makes related transitional provision to deal with children born overseas to a member of staff of the Welsh Assembly Government during the period from 25 May 2007, when the Welsh Assembly Government came into being, until 14 February 2008, when the 2008 designation order came into force.

The effect of that transitional provision is that for such a child’s British citizenship, the service overseas of the parent with the Welsh Assembly Government is treated as if it had been Crown service under the Government of the UK. That means that the child will become a British citizen otherwise than by descent rather than, as at present, a British citizen by descent.

Article 6 also makes a saving provision in respect of children born between 14 February 2008 and the date that the order comes into force. In that case, the effect is to ensure that the status of that child as a British citizen is unaffected by the revocation of the 2008 order. Such a child will continue to be a British citizen otherwise than by descent. Inquiries have revealed that there are three children covered by the transitional provision and four children by the saving.

Turning to Part 3, Article 7 modifies Section 41 of the Constitutional Reform Act 2005. Section 41 provides for the relationship of the new Supreme Court of the United Kingdom with other courts in the UK. In particular, it provides that decisions of the Supreme Court on a devolution matter coming before it are not binding upon the Supreme Court itself but are otherwise binding in all legal proceedings. The modification to the definition of devolution matters means that it now covers proceedings before the new Supreme Court in respect of the new legislative powers of the National Assembly for Wales.

Articles 8 to 12 make modifications to a number of provisions in the Companies Act 2006. Sections 54 and 1193 of the Companies Act 2006 place restrictions on companies and businesses adopting names that suggest a connection with branches of government.

Articles 9 and 11 amend respectively Sections 54 and 1193 to include reference to the Welsh Assembly Government alongside the existing references to Her Majesty’s Government and others, the effect of which is that companies and businesses cannot adopt names which suggest a connection with any of those bodies or the public authorities set out in the draft Company, Limited Liability Partnership and Business Names (Public Authorities) Regulations 2009.

Sections 54 and 1193, which came into force on 1 October, replaced provisions previously contained in Section 26(2)(a) of the Companies Act 1985 and Section 2(1)(a) of the Business Names Act 1985. The Government of Wales Act 2006 (Consequential Modifications and Transitional Provisions) Order 2007 modified those Acts so that the Welsh Assembly Government were treated for the purposes of those provisions the same as Her Majesty’s Government and the Scottish Administration. This instrument ensures that Sections 54 and 1193 of the Companies Act 2006 include the Welsh Assembly Government as well as Her Majesty’s Government and the other devolved Administrations.

The Companies Act 2006 and Limited Liability Partnerships (Transitional Provisions and Savings) (Amendment) Regulations 2009, made on 9 September, contained a saving for the provisions in the Companies Act 1985 and the Business Names Act 1985 that applied in respect of the Welsh Assembly Government. That saving will now cease to have effect. Articles 10 and 12 modify respectively Sections 482 and 1231 of the Companies Act 2006. Those sections contain references to the Government of Wales Act 1998 that now need to refer to corresponding references in the Government of Wales Act 2006.

Sitting suspended for a Division in the House.

4.10 pm

My Lords, I was speaking on a not unimportant but relatively minor point to do with the Companies Act. Articles 10 and 12 of the order modify respectively Sections 482 and 1231 of the Companies Act 2006. Those sections contain references to the Government of Wales Act 1998, which now of course need to refer to the corresponding references in the Government of Wales Act 2006. In addition, Article 12(3) requires the First Minister for Wales to lay before the National Assembly a copy of each report received from the independent supervisor of the Auditors General. That requirement will not apply to calendar years before 2010. It is, however, appropriate, following the Government of Wales Act 2006, that the consequential modifications to the three Acts should be made. I commend the orders to the House and beg to move the first one.

My Lords, I thank the Minister for explaining the order and the consequential order to us. If I understand it correctly, they largely involve building regulations. I have spent a lot of my life—probably about 30 years of it—involved in and around building regulations, so I suppose that I must declare an interest, having worked for Redland as a buildings materials producer and then been a director of the NHBC.

The purpose of the order is, as the Minister said, to transfer to the Welsh Ministers functions currently exercised by the Secretary of State under the Building Act 1984 and associated legislation. The Explanatory Memorandum indicates that the purpose of the proposed transfer is to help to advance the Welsh Assembly Government’s policies to tackle climate change. The Assembly Government intend to pursue even more stringent carbon reduction targets than those applicable in the rest of the country, and aim to achieve that by, inter alia, reducing still further the environmental impact of the building industry—a brave objective. To help to advance that policy, the Assembly Government consider it necessary to develop their own building regulations—another brave challenge.

Although the pursuit of policy to tackle climate change is of course laudable, I am concerned that the creation of a different building regulations regime in Wales from that of England may have a severe impact on both the Welsh construction industry and Welsh house buyers. It appears self-evident that complying with more stringent building regulations will inevitably lead to greater costs on the building industry, which is at present already suffering grievously in Wales. Indeed, Redrow Homes, Wales's largest house building company, recently posted its worst ever set of results.

The housing market in Wales is very fragile. It must be a concern that any additional costs that fall on house builders and are passed on to house buyers will have the effect of further depressing the market. At a time when the goal of increasing the supply of affordable housing is being pursued, it is hard to see that any proposal that has the effect of increasing the cost of houses will do anything to allay what is a serious problem, especially in rural Wales.

It is a concern that, according to the Explanatory Memorandum, no impact assessment has been undertaken. The Minister will no doubt respond by saying that that matter should be left to the Assembly Government to conduct during the pre-measure stage. However, I note from the memorandum that engagement with industry and other stakeholders over potential changes to the regulations in Wales has actually begun. What initial responses have been received from the industry so far? Is it the case, as anecdotal evidence has it, that the response of the building industry to date has been wholly adverse? What do the Government propose to do to address the concerns of the industry? What initial assessment have the Government made about the likely additional cost to the industry of complying with the kind of regulations that are foreseen as a consequence of the Assembly Government’s policy?

What assessment have the Government made of the likely impact of more stringent regulations on house prices, the housing market generally and, perhaps most important of all, the availability of affordable housing? What assessment have they made of the likely impact of the availability of mortgages? Do the Government recognise that with more stringent building regulations in place in Wales than in England there will be a significant incentive to Welsh builders to move their operations out of the Principality into England, which in the most populous parts of Wales is less than an hour down the road? What consideration have the Government given to the potential of more stringent regulations deterring English builders from pursuing building operations in Wales?

The order provides for a commencement date of 31 December 2011, which according to the Explanatory Memorandum is intended to provide a lead-in period for the establishment of Welsh Assembly Government capacity for the transfer of functions and development and engagement work in respect of the first proposed changes to the building regulations. How satisfied is the Minister that the Welsh Assembly Government are able to build such additional capacity in time for the commencement date?

The order provides for the establishment of a building regulation advisory committee for Wales and a separate committee for England. What assessment has been made of the effect of such separation on the capacity of the committee for England? What are the implications of such a separation? On costs generally, is it intended that any and all additional costs generated by the new Welsh regime will be absorbed by the Assembly out of the existing budget? As the Minister will gather from my questions, we on this side of the Committee have serious reservations about this proposal. Having spent a lifetime involved with building regulations, I would also like to know how long it took to reproduce the building regulations from Northern Ireland, which were completed about five years ago. There are also separate building regulations for Scotland, so we should know how long it took for them to be produced. At least the Scots have the advantage of being a long way away from the main building of England. From where I stand, I hope that Her Majesty’s Government will have a little more thought about passing this burden—and I believe that it is a burden—to the Welsh Assembly.

The second order seems to be largely technical and administrative and a tidying-up exercise. I have no particular comments to add to the Minister’s explanation of it.

My Lords, in contrast, this order is welcome, given that it transfers building standards functions from the Secretary of State to Welsh Ministers. It enables the power to make building regulations and create a Welsh advisory committee. Given the National Assembly’s commitment to sustainability required by the Government of Wales Act 1998, the order is especially important, because it transfers functions under the Sustainable and Secure Buildings Act 2004 and the Climate Change and Sustainable Energy Act 2006.

The functions within these Acts will assist Welsh Ministers to meet the carbon-reduction targets of climate-change policies for Wales. The Climate Change Commission for Wales and a promised 3 per cent per annum carbon-reduction target in operation by 2011 will be drivers to achieve objectives for the buildings defined in the order. What distresses me is the time that it has taken to obtain this order to transfer functions—from 29 November 2007 to enactment by the end of 2011. This is an enormous length of time to get a simple piece of legislation through the parliamentary and Assembly procedures. It proves that the clumsy bureaucratic process of transferring functions in the Government of Wales Act 2006 is far too slow, and the sooner that more primary legislative powers are transferred to the Assembly, the better.

Part 4 of the 2006 Act needs to be enacted as soon as possible, and a referendum needs to be brought forward, to give the Assembly the new powers. I agree with the opposition Front Bench that the affordability and impact of the regulation need to be examined. However, in my experience in Wales, building companies from the other side of Offa’s Dyke tend to build a lot of executive houses that local people cannot afford. This is not necessarily the disaster that the opposition Front Bench is promulgating.

The second order makes changes consequential to the Government of Wales Act 2006. I agree that this contains a much simpler series of technical amendments relating to Acts of Parliament—three in this case. The impact of the 2006 Act on separation of powers from the Assembly and UK Government to the Executive and Welsh Ministers is a desirable reform. The Secretary of State may make modification orders to enactments as he considers appropriate, as a result of the Government of Wales Act 2006. This is a tidying-up exercise. As the Minister said, the modifying enactments are the British Nationality Act 1981, the Constitutional Reform Act 2005 and the Companies Act 2006. The changes are all consequential on the Government of Wales Act 2006, but there is a drip-feed of gradual transferral.

Paragraph 7.3 in the Explanatory Memorandum stresses:

“Most of the executive functions of the old Assembly became functions of the Welsh Ministers”,

and it sets out the process consequential to the 2006 Act.

The new Assembly now has legislative powers to pass Assembly measures for the Executive, who are the Ministers, to have Executive powers. My party agrees with that, but it is a terribly slow process towards giving the Assembly full legislative powers, and we could spend time better ensuring that the Assembly gets those powers as soon as practicable.

My Lords, I certainly welcome the content of the two orders that we are now considering. In many respects, both involve what might be described as consequential developments. In the case of the second order, it clearly deals mechanically with matters which arise from the passing of the Government of Wales Act 2006. It is worth noting that although that Act received Royal Assent on 26 July 2006, we are now in the third tranche of consequential amendments. The Act itself, a rather bulky piece of legislation, contains dozens if not more consequential amendments. In 2007, there was a very substantial clutch, again dealt with by way of regulation, and now we are in the third tranche. If I was of a mischievous disposition, I would ask the Minister whether he can give an undertaking signed, as it were, in his heart’s blood, that there will be no further tranches but, not being of that disposition, I allow that to remain as a wholly rhetorical question.

One must note the difficulty when one is dealing with a process of devolution that started in 1964 and which has gone on piecemeal, dealing with hundreds of small items, some of them of impact, others are very little impact. I regard them almost as a cloud of confetti. It is very difficult to count each and every one and try to place it in its exact sequence. That is why I—and, I suspect, one or two others in this House—would welcome a transfer of functions on a general basis, with a short schedule of matters which are excepted and not transferred. When that happy day will come, we know not, but that would take away a great deal of the pain, anguish and frustration inherent in the present system.

Turning to the first order, which deals with the question of building regulations, the noble Lord, Lord Glentoran, with his usual force and dynamism, has made a powerful case, but it is not a case against the regulations, it is a case against Welsh devolution in general. We have a devolution settlement which confers on the Welsh Assembly, a democratically elected body with certain substantial powers, the right to ask this House to allow it to be distinctive in areas which have been well delineated since 1964. However, if you then say, “Except in relation to anything where Wales might in fact take a different line from that of England, and where we assume that there is a Welsh border that distinguishes between what happens to the east and to the west”, you will have made devolution a nonsense. You will have negated the whole purpose of devolution. I say that with the utmost respect, which I feel for the noble Lord. The case that he is making is an anti-devolution case rather than an anti-regulation case.

As for the consequentiality—if there is such a word in the English language—of the provisions, into their creative merits they are to a large extent consequential on the events that took place many years ago. They are mainly based on the Building Act of 1984. Most of the administrative and legislative provisions of that Act were devolved to Wales a long time ago. All that is happening now is that a few gaps are being filled in. If there were a general case, it would have been decided a long time ago, so this is consequential on decisions that have been laid down and established.

The powers in fact mean that Welsh Ministers will be able to take a more holistic, creative view of the whole situation. They will have greater flexibility and be able to look at safety, for instance, side by side with carbon reduction. Regulations in Wales may well be of a standard marginally higher than those in England—in theory, it could be marginally lower because there is no stipulation that it must be higher. We know not what the 2010 regulations will be in England, but they will take precedence. Whatever the situation, the building regulations will allow a distinctive Welsh approach to be taken to building. They will allow the Welsh Assembly to show whether it can live up to its undertaking of a 3 per cent carbon reduction by 2011, and a much more flexible and integrated approach to the problems. To deny the Assembly that would be to deny the very basis of devolution. For that reason, I welcome the order.

As regards cost, I doubt whether the point made by the noble Lord is valid. There will obviously be greater cost if you have a higher standard—it is axiomatic. On the other hand, the market value of the produce you create will also be greater.

My Lords, I declare an interest at the outset in that I had ministerial responsibility for housing in Wales. However, it was at such a remote time in the past that I had better describe it as being in the 80s. Wales had its special housing problems then, as now.

Obviously, a great deal of detailed work has gone into the preparation of these orders. Those of us who have studied them and the accompanying memorandum are appreciative of the clarity of these documents. I have a few comments. I want to deal first with the order which gives to Welsh Ministers functions relating to building and building standards. What is being done and why is well set out in the Explanatory Memorandum. We are told that it is a consequence of the one-nation agreement between Labour and Plaid Cymru parties which support the present Welsh Assembly Government. That agreement provided for the Climate Change Commission for Wales and a carbon reduction target of 3 per cent from 2011 in devolved areas of government. In turn, that development requires the appointment of separate building regulations advisory committees for England and Wales in place of the single advisory committee currently covering both countries.

I want to concentrate on the duplication of these committees and the bureaucracy that goes with them without any apparent real need or supporting public demand. We are told that the impact on the public sector will not be significant and that there will be no budgetary transfer from the UK Government to the Welsh Consolidated Fund. That may be so, but we are facing a period of severe public spending restraint, whatever happens at the next general election, and we must be mindful of the latent costs of duplications of this kind and question the need for them whenever they are proposed. Where they are proposed, as in this case, can the Government ensure that there is maximum co-operation between what are very similar committees for England and Wales with similar functions in order to avoid needless duplication of effort, staff and expense?

I am concerned about the points made by my noble friend Lord Glentoran relating to how more stringent regulations may possibly result in increased costs to builders and, indeed, to building purchasers. This will not be welcome to Welsh people if it occurs, and with due respect, the noble Lord, Lord Elystan-Morgan, was somewhat unfair in accusing my noble friend of making an anti-devolution point. I really think that with all his building experience, he was talking about the cost impact of more stringent conditions.

I am most grateful to the noble Lord for giving way. I have high and warm regard for the noble Lord, Lord Glentoran, and I would like to make it clear that in no way did I insinuate that he was seeking to avoid the issue and trying to attack devolution in toto. What I said was that his criticism—fundamentally, that any discretion given to the Welsh authority in relation to any field to apply a standard higher or lower than that of England has its problems—is something that is essentially an argument not against the particular regulations before us, but against devolution itself. It was in that context that I put the argument.

I shall not follow the noble Lord into the intricacies of the political and philosophical field that he is trying to lead me into, but I make the point that I am sure my noble friend Lord Glentoran did not intend to put forward an anti-devolution argument.

I shall move on to the second order dealing with consequential modifications. It is a reflection of the new split in Welsh devolution between the legislative Assembly and the Executive in the form of the Welsh Assembly Government, as explained in paragraph 4.7 of the Explanatory Memorandum. Those of us who welcomed that development as a step away from a local government to a central government model of devolution will welcome this order in principle, and I am happy to do so. The proposed modification to the British Nationality Act 1981 to extend Crown service under the Government of the United Kingdom to Crown service under the Welsh Assembly Government seems to encapsulate the change made by the 2006 Act with regard to the status of those who serve the Assembly Government.

Some Assembly civil servants work overseas, as indicated in paragraph 11 of the Explanatory Memorandum. I am happy to hear that their families are successful and producing children, but while the modification proposed will certainly place the parents on an equal footing with those who serve the Scottish and Northern Ireland Administrations as well as those serving the United Kingdom Government, I hope fervently that those who are serving the Welsh Assembly Government will work closely with their United Kingdom counterparts locally wherever they may be because there are sometimes considerable benefits to be gained from collaborating and working together, rather than striking out independently.

That was certainly my experience over more than 15 years as a Minister in the old Welsh Office when we successfully attracted a great deal of inward investment to Wales with the assistance of colleagues in departments such as the Foreign and Commonwealth Office and the Department of Trade and Industry. With my noble friend the Duke of Montrose sitting beside me, I am bound to say that on occasion I was very happy to represent Scotland, simply because there was not a Scot in sight. But I sought to do so in the knowledge that if there had been the Scottish Minister, he would have represented Wales in the absence of a Welsh Minister. Incidentally, I would be interested to know how many Welsh Assembly employees work overseas, what they do and where they work. It would also be interesting to know just how the Welsh numbers compare with those relating to Northern Ireland and the Scottish Administration, although I do not think that we will be given those numbers today.

My Lords, I should declare that I played a positive part as a Minister in the 1979 referendum and a part in the more recent referendum. After 1979, I keenly followed the ministerial career of the noble Lord, Lord Roberts of Conwy. His was a distinguished contribution and, my word, it seemed he was there for ever. That is a compliment, not a criticism. Indeed, I was ignominiously thrown out of office in 1979 and when the noble Lord, Lord Roberts, took my place he took every advantage—and that is not a criticism either. I recommend his memoir—a very serious tome—which was very well received in Wales.

In the Explanatory Memorandum, so kindly made available to the Committee, there is at paragraph 7.3 a reference to fire safety. There a coherent policy control is claimed for the regulations; for example, the integration of development and building controls. Can my noble friend make available now or later any detail concerning fire safety? How are our excellent fire authorities involved in Wales? Furthermore, paragraph 7.17 of the memorandum refers to public consultation. What details might be given on consultation? Are any details available at this time for the consideration of the Committee? How many thousands of people attended the consultation meeting in Penrhiwceiber in the south and how many hundreds from Llanfairfechan in the north? That is a rhetorical question, but I should like to know what consultation is taking place. I thank my noble friend the Minister for his opening remarks. As ever, I have no trouble in supporting these orders.

Finally, on a philosophical point, it is my opinion that the Welsh Assembly is on a certain course to acquire more powers. Arguably, that could be by evolution, as seems to be the case, or possibly on the big bang development, which may be the case in the medium term. I do not know which it will be.

All of us followed the decision of the Scottish Parliament to release a sick prisoner to enable him to return to Libya. The case brought a searching and continuing examination of British governance—particularly the relationship between, in this instance, the Westminster and Edinburgh Parliaments. It has thus brought the claims of devolved government to the fore of parliamentarians’ considerations at a time when our major political parties are considering the contents of their general election manifestos. Shall they offer more devolved powers to Edinburgh, Cardiff and Belfast? Does the Libyan experience enhance or diminish the case for more devolution to our Celtic nations?

I would be very surprised if the inner counsels of the London-based parties were not debating with policy- makers where to go next on the devolution map. It is reasonable simply to raise that point as we consider these important documents. If the parties are not considering those issues, perhaps they should. The Edinburgh Parliament—or, rather, the Government in the Edinburgh Parliament—did not appear to give ground during the Libyan furore. The Scottish Government had their way. They did not budge. What happened there was seen and considered in some detail, I should think, in Cardiff and Belfast. Are there any implications for the Welsh Assembly?

I believe that the Welsh Assembly will continue to seek more powers. I would be astonished if it did not. My guess is that the London parties are likely to bid against each other to offer more devolved powers to the Celtic nations. I would be surprised if party manifestos did not bring forth more offers—and the likelihood—of more powers. I offer these remarks only to enable me, if no one else, to put these regulations into better context. This is a question of governance raised in the mother of Parliaments—an ancient Parliament.

My Lords, I am grateful to all noble Lords who have contributed to the debate. The noble Lord, Lord Glentoran, said that the order relating to the building regulations involved some courage. I have always looked upon courage as being the first political virtue. After all, Sir Humphrey often said to the Minister that pursuing a policy would be courageous, when he meant that it would be downright daft. However, for politicians as a whole courage is what marks them out; that is how they get things done. I am not worried about the charge that courage is needed in this area—although not to the extent that the noble Lord, Lord Glentoran, indicated.

However, I do not have the courage to engage again in the devolution debate. I heard what my noble friend Lord Jones said and I heard the contribution of the noble Lord, Lord Roberts, but when we are talking about functions consequential upon devolved legislation—which, with the best will in the world are points of detail which follow the logic of powers already devolved to Wales—raising the whole issue of the principles of devolution is stretching this debate a bit far.

I heard what my noble friend Lord Jones said; I know how lyrical he can wax on these issues and how eloquent he can be, and I have no doubt that there will be a time when that eloquence is deployed in future on the broad principles of these issues. If the Committee will forgive me, though, I will not follow that up now, otherwise I will never get my job done today.

I am obliged to answer one or two questions. I do not think that the changes are quite as significant as the noble Lord, Lord Glentoran, has indicated. To take the most obvious point, is it likely that the changes regarding the empowering of the Welsh Assembly in respect of building regulations will have a significant impact on Welsh house prices? I ask you, in the context of the credit crunch and the enormous shift in house prices over the past couple of years, are we going to say that house prices are going to be significantly affected by these aspects of the regulations? Of course, it will be for the Welsh Assembly to judge that. The noble Lord, coming as he does from a part of the country that enjoys aspects of devolved government too, must surely have trust in his fellow citizens.

The Welsh Assembly Government will have to make their judgments about additional costs, and they are likely to be extremely careful in the context of the difficulties facing the building industry at present. We cannot overestimate the challenges at the moment for the whole building industry, but that is true in England as well. I maintain that we must trust the Welsh Assembly Government to advance these regulations as they see fit in due course, while having proper regard to exactly the points that the noble Lord has indicated: potential additional costs on the building industry, and perhaps thereby, as he has suggested, a marginal advantage to people who build houses in England as opposed to Wales. That is for the Welsh Assembly Government to reach their decisions on; that is the whole point of devolution. We are not debating the principle of devolution here; all we are debating is the consequential impact of decisions already taken.

I hear what the noble Lord has said, but I am obliged to say that he is being somewhat oversolicitous about the issues in Wales. If he is making a general point, then any advances in building regulations that increase costs at present might be considered untimely. In so far as that point is valid, it will be registered in Wales as much as it will in England, Northern Ireland or Scotland—in fact, anywhere in the United Kingdom. We must give due credit to our fellow legislators elsewhere to take account of these issues, but I am not of a mind to worry unduly about them. I think the noble Lord will accept that the Welsh Assembly will need to take this decision into account.

There is no doubt the Welsh Assembly may use their enhanced powers to improve the position of building in Wales to meet carbon targets. The noble Lord, Lord Livsey, commended that, and so do I. After all, no one thinks that we are going to meet carbon targets without cost; if anyone does think so, they have not examined the debates about the whole issue of carbon targets and the challenges that face this nation in issues far beyond the question of housebuilding regulations, which are the subject of this order. We shall not always debate those potential costs, but while we know that we need to address our minds to those matters, to suggest that we might have doubts about these changes in empowering the Welsh Assembly Government in this narrow area because of the potential costs involved is straining the issues too far. I understand the noble Lord’s concerns and he is right to identify the challenges faced by the building industry at present. No one underestimates that. I say merely that when these powers are transferred to Welsh Ministers, it will be for them to make judgments on the matter in the same way as Ministers in other parts of the United Kingdom.

He also asked about consultation and whether participation in it has been extensive. I do not have the figures before me, but what is known is that it is not possible for effect to be given to this legislation without proper consultation and the Assembly Government are committed to that. When they bring in the regulations, consultation will take place.

I was also asked about the fact that we have divided the committee into one for England and one for Wales. There is now an opportunity for fruitful discourse between them. The intention would be for representatives to sit as observers on each other’s committees so that there is an exchange of information. England will be responsible for its area, of course, and Wales for its own once these orders are given eventual effect, but there should be an understanding on both sides of the border—given that the noble Lord, Lord Glentoran, emphasised how quick the transition can be from populous parts of Wales to England and, to a certain extent, vice versa—that the two committees will have in attendance representatives from the other committee in order to see how these matters are being handled. I take on board the point that almost any aspect of Welsh affairs, taking into consideration the position so far as England is concerned, is bound to be of considerable importance. So I accept the noble Lord’s warning on that point and I want to give him a reassurance that we have a framework for it.

I turn now to the other points that were raised in the debate. I have some difficulty in avoiding getting involved in the bigger debate, but I am grateful to the noble Lord, Lord Livsey, who welcomed these orders as a step forward for the people of Wales in terms of their empowerment to consider these matters. The issue of climate change has to involve the whole nation of the United Kingdom as best we are able to effect. Central Government have to take their case to Copenhagen where we have big issues to confront which can be resolved only within forums with an international agenda. Actual effective action will also depend on maximum participation of our citizenry at every level and therefore developments that devolve responsibility to local areas, and certainly as an aspect of the devolution process so far as Wales is concerned, are surely to be welcomed.

I respect the contribution of the noble Lord, Lord Roberts of Conwy, who has vast experience of these matters. He indicated that times they are a’changing and therefore we face new challenges 20 years on from some of those he faced. However, I want to emphasise the point that effective co-ordination will take place. He also asked me about job specifications under the second of these orders. I do not have a detailed response for him, although I am prepared to write. He will recognise the limited numbers involved, but I did ask about the kind of work that these people are doing. Largely, it is that of promoting Wales overseas, so the work is related to business and tourism, thus mainly economic functions overseas on behalf of Wales. Scotland and Northern Ireland have the same facility, and while key representation is bound to be United Kingdom-wide, in certain areas where particular approaches may be fruitful, it is only right that the devolved nations are represented overseas, particularly as regards certain trade and industry matters and, for Wales, in terms of tourism.

The numbers are limited, which is why the number of children involved is likely to be small. That does not make it any more necessary; we want to ensure that the children of servants of the Welsh Assembly Government overseas enjoy the same rights as they would if they were children of people working on behalf of the Foreign Office or the Department for Business in our embassies overseas for the UK Government.

This has been a rather wider-ranging debate than I had anticipated, and I am well aware of the fact that I may not have answered all the general questions as effectively as I would have liked. The noble Lord, Lord Jones, asked me about certain aspects of fire safety; I will have to write to him about that.

The matters that we are considering today are a consequence of decisions that we have already taken with regard to devolved powers. Perhaps the wider debate on devolution, which is always an important one, ought to wait until another day.

Motion agreed.

Government of Wales Act 2006 (Consequential Modifications, Transitional Provisions and Saving) Order 2009

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Government of Wales Act 2006 (Consequential Modifications, Transitional Provisions and Saving) Order 2009.

Motion agreed.

Groundwater (England and Wales) Regulations 2009

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Groundwater (England and Wales) Regulations 2009.

My Lords, I welcome the opportunity to introduce these regulations. The water framework directive of 2000 envisaged a new groundwater directive to clarify the WFD’s objectives for groundwater, and a new directive was agreed in 2006 to replace the 1980 groundwater directive. In the discussions on that directive, the UK aimed for simple, transparent measures to protect groundwater from pollution; locally determined risk-based standards and targeted monitoring; and to avoid measures that would be disproportionately costly compared with the environmental benefits achieved. I am pleased to report that potentially ineffective and costly EU-wide standards were, on the whole, avoided. The impact assessment indicated a cost-neutral outcome in relation to action already required under the directive. I hope that that is of some reassurance to the Committee about the nature and impact of these regulations.

The 2006 directive adopts existing EU values for controls over nitrates and pesticides, and provides for member states to determine national groundwater standards, the way in which these should be used to assess groundwater body status, and the identification and reversal of pollution trends. These elements are being transposed separately as part of WFD implementation. The regulations before us today transpose Article 6 of the directive, which makes operational the WFD objective to prevent or limit the input of pollutants to groundwater, and distinguishes the substances whose input into groundwater is to be prevented from those to be limited. Sensible exemptions facilitate a practicable approach.

Currently, there are groundwater protection measures transposing the 1980 directive in the Water Resources Act 1991 and the 1998 groundwater regulations. The new regulations introduce no fundamental changes to groundwater protection. Nevertheless, it is necessary to amend the 1998 regulations to transpose Article 6 while respecting the provisions of the 1980 directive, which remains in force until December 2013.

Consultation on transposition was completed last summer. Responses indicated broad agreement with the proposed approach. The details of the regulations are as follows.

Regulation 1 deals with coming into force and regulation 2 updates definitions. In particular, a registration or disposal under the Radioactive Substances Act 1993 will become a permit for groundwater purposes. The terms “hazardous” substances and “non-hazardous” pollutants effectively replace the list 1 and list 2 dangerous substances to be controlled.

Regulation 3 explains the meaning of “hazardous substances”—essentially those that are persistent, bioaccumulative and toxic, and of which the existing prescriptive list 1 comprises a large subset. Member states must identify hazardous substances, and that will be the responsibility of the Environment Agency in England and Wales.

Regulation 4 provides that “non-hazardous” pollutants cover all other pollutants. These new terms potentially embrace a wider range of pollutants, but in practice the agency will identify additional substances where they are problematic.

Regulations 5 and 6 reflect the welcome fact that the 2006 directive provides for sensible exceptions, such as unavoidable accidents; exemptions from the need for a permit, such as very small inputs that would not affect groundwater quality; and inputs that cannot be prevented without risk to human health or which, for contaminated ground, would involve disproportionate cost.

Under the 2006 directive, disposals of radioactive substances and discharges from septic tanks are no longer exempt and so will now be subject to permitting under these regulations. The controls relating to both radioactive substances and discharges from septic tanks are expected to enter the environmental permitting regulations in 2010. In relation to discharges from septic tanks, the current exemption will be carried over in relation to discharges that amount to less than two cubic metres per day, but from 1 January 2012 it will be necessary to register with the environmental agencies such discharges, subject to basic rules of operation and maintenance.

Article 6 of the 2006 directive requires us to prevent the input into groundwater of hazardous substances and to limit the input into groundwater of non-hazardous substances to avoid pollution. Regulations 7, 8 and 9 put this into practice and Defra guidance will clarify what is meant by the requirement at regulation 8 to prevent the input of hazardous substances. This is an important objective but will not always be achievable. European Commission guidance explains that, in this context, prevention means taking all necessary and reasonable measures, where “reasonable” means technically feasible and without involving disproportionate cost. In other words, we must do whatever we can while recognising the inevitable limitations that apply to the concept of “absolute prevention”.

Regulation 10 sets out the circumstances where the agency may permit inputs of pollutants, given a range of practical considerations. These are valuable exemptions, offering greater flexibility than hitherto. Regulation 11 requires investigations and the technical precautions to ensure that the grant of a permit is made only in accordance with the requirements.

Under regulation 12, future reviews of permits will be carried out as necessary rather than on the current statutory four-yearly basis, and should therefore save resources. In practice, such reviews will normally follow the water framework directive’s six-year review cycle for the publication of river basin management plans.

Regulation 13 carries over the offence of “causing or knowingly permitting” an unauthorised discharge, established in the 1991 Water Resources Act and the groundwater regulations 1998. As before, exceptions are made for highway drains—there are too many to permit individually—and for discharges of less than two cubic metres a day from septic tanks.

In both cases, the agency may serve a prohibition notice where problems arise. Regulation 14 carries over relevant defences. Regulations 15 and 16 provide for transfer and administration permits, including conditions, reasons for refusal and for appeals against refusal, variation or revocation of permits. Regulation 17 enables the agency to serve a notice requiring information, and regulation 18, similar to current powers, to prohibit an activity which might lead to the input of a pollutant to groundwater, with a right of appeal contained in regulation 19.

Regulation 20 carries over the provision in the 1998 groundwater regulations for Ministers to approve codes of good practice giving guidance on compliance with the regulations to be taken into account by the agency when serving a prohibition notice. Regulation 21 requires the agency to record details of permits on a public register. Regulations 22 to 24 update the standard penalties for offences and regulation 25 revokes the 1998 groundwater regulations.

We intend to consult on draft guidance to the Environment Agency once the regulations are made. The regulations will be short-lived, in that they will be absorbed into the environmental permitting regulations in 2010. However, the transposition date for the 2006 directive means that these regulations are needed to bridge the gap.

In conclusion, I commend the groundwater regulations as a good example of successful EU negotiations contributing to good operational management, reflecting my department’s approach to better regulation. I beg to move.

I thank the Minister for introducing the regulations and going through them. I think that he shares my determination to use this brief debate to expand on the Government’s reasons for their introduction. We on these Benches appreciate and understand that groundwater is an important resource. Its contamination is potentially very dangerous to human health, aquatic life, plant life and animal life. Damage to it is very difficult and costly to remedy.

I must declare my interest as a farmer and grower and start by asking what impact the regulations might have on livestock farmers, particularly the aspect of diffuse pollution, which may cover muck-spreading and slurry. My second interest is as someone living in the countryside, far away from mains sewerage and dependent on septic tank drainage. I am not alone, of course. How many dwellings in England and Wales have domestic septic tanks and how many have other types of domestic sewage treatment, similarly not connected to the mains sewerage? I am minded to think that the regulations would include mini-schemes covering small hamlets, clusters of houses and rural businesses, using schemes such as I have at home, a Clargester system for the pack house premises. Almost all those systems are linked to soakaways, which would see them included.

Why was the current exemption limit for domestic discharge set at two cubic metres per day? Does the new European groundwater directive specifically ban such discharges and remove the previous exemption, or is that the Government’s interpretation? The major consequence of the regulations is that that exemption will be removed in due course. What is the current extent of groundwater pollution from domestic septic tanks discharging less than two cubic metres per day? Can that be characterised by location, frequency or the type of equipment used? What is the level of resultant damage?

I know that those are detailed questions, but they are of great interest to the large number of people who may well find themselves involved.

Does the Minister believe that any domestic sewage installations currently in use will be rendered unsuitable by the implementation of these new regulations? After all, some may be of proper interest to English Heritage. How many septic tanks or sewage plants will have to be replaced? What are the costs involved and who is picking up the bill?

The Environment Agency—I refer here to a Written Answer given by the noble Lord, Lord Tunnicliffe, to a Question I tabled on 17 September—has 20,000 discharge permits or input permits and groundwater extraction authorisations. How many permits is it estimated will be sought by the owners of domestic sewage systems when they are included, as now they will be? How will the agency ensure that householders in isolated dwellings that may require a permit will be given the information they need to make their decision? I note that a web-based system of registration is proposed, but what percentage of the households affected have access to the web? On what grounds will the Environment Agency be able to refuse to issue a permit to the owner of a domestic sewage system, and what will be the probable charge for a permit to use a septic tank? Will householders who pay to have septic tanks emptied need a permit each time? Will the web-based registration scheme for discharges from isolated dwellings be a record of all discharges or just a record of septic tank owners?

How does the Environment Agency discover that someone is discharging less than two cubic metres of effluent daily and how is it traced to its source? What are the agency’s costs for enforcing this legislation? We have the impact assessment, but has an independent evaluation been made of the cost burden that it will bear for bringing in daily discharges of less than two cubic metres from isolated dwellings? The impact assessment sought information on which groundwater policy would be reviewed to establish actual costs and benefit. It would be interesting to know whether this is going to be forthcoming, and if so, how frequently. I know that the Government propose to make all this part of a regular river basin management process, and while the long-promised floods and water management Bill—I hope that we will see it in the forthcoming Queen’s Speech—will undoubtedly consider this aspect, the draft Bill makes no reference to these regulations.

Taken as they stand, these regulations will have a huge effect and generate potentially considerable costs for UK householders and businesses alike. The Explanatory Memorandum talks of a light touch in their implementation, but I note that the punishment for failing to comply with them is a fine of up to £50,000 or up to 12 months in prison for those who find themselves inadvertently caught within their scope after 1 January 2012, so no light touch there. Is this really a like-for-like interpretation of EU water regulations? I know from my French experience that my soakaway system has been examined and approved by the local authority. Has Defra discussed with other European countries how they are handling this directive?

I make no apology for the highly interrogative nature of my contribution. We have a duty to ensure that the implications of these regulations have been thoroughly thought through by Her Majesty’s Government, and I look forward to the Minister’s response to my remarks.

My Lords, I rise on behalf of the Liberal Democrats to give a general welcome to these regulations, which seek to transpose the groundwater directive of 2006. There was an obligation to transpose it by 16 January this year, so we are only 10 months late. By the normal standards of these things, perhaps I should congratulate the Government on being only some months late when compared with the years that it can sometimes take to do these things. Why it always takes so long is a mystery buried in the depths of Whitehall but at least this is being dealt with in the same calendar year, so I offer the Government some gentle congratulations.

As the Minister said, these regulations will not have a long life and will be absorbed into the environmental permitting regulations at some time in 2010. Perhaps the Minister will confirm that. As they will simply be absorbed, that will not make much difference. By and large, these are sensible regulations that transpose a sensible directive and, in that respect, we give them a general welcome.

The noble Lord, Lord Taylor of Holbeach, spoke on the two aspects that require further probing. The first is the review of existing authorisations and the second is the issue of septic tanks and similar devices that lead to small-scale soakaways to which the regulations will apply from the beginning of January 2012.

On the review, the noble Lord, Lord Taylor, previously asked a Question of the noble Lord, Lord Tunnicliffe, who told him that there are “upward of”—I presume that that means more than—20,000 authorisations at the moment. I am not clear about what the procedure will be for the review of these authorisations. Paragraph 12(2) of the order states:

“All permits granted before the coming into force of these Regulations must be reviewed before 22nd December 2012”.

What is a review? Will it be new or merely a desk review looking at regulations which, given the risk-based assessment that the Minister said would take place, will require further detailed investigation, while the majority will be put on the desk pile for regulations that do not need any change? Can the Minister explain exactly how this review will take place? This relates to what the noble Lord, Lord Taylor, said about resources. The figure of 20,000 is a lot, and if many of those authorisations are to be reviewed in detail, what resources will be involved? Will the Environment Agency have sufficient finance and manpower to carry out the task?

The noble Lord asked many detailed questions about septic tanks, some of which I was going to ask. I shall not go into detail on those because there is no point repeating what he said. Not all septic tanks will be affected. Some, especially those in urban areas, are emptied by a vehicle that comes around and takes away the contents. However, septic tanks with a soakaway will be affected in just over two years’ time. The fundamental questions are, first, does the Minister know how many of these installations there are around the country and, therefore, what the scale of the task is and, secondly, will the Environment Agency really have the resources to carry out the review, or will it rely on existing approvals and consents at a local level of the type that the noble Lord, Lord Taylor, mentioned?

In most cases, these soakaways do not cause a problem. They work—they clearly soak away—and, presumably, they are absorbed within the fairly immediate locality as biological processes deal with them over time so they do not get down into serious groundwater. There are a number of instances, however, where they cause serious problems. How is the Environment Agency going to determine which ones it needs to look at seriously? How will it separate the wheat from the chaff? The wheat will be a small proportion of the total, but there are problems that need to be looked at nevertheless. Will it be a matter of relying on complaints? If so, complaints from whom—from nearby residents, owners of land or local authorities? Or will it simply apply throughout the whole lot? Presumably, it would take a long time to deal with them all.

These are serious issues, even though they are small-scale and local. On the one hand, we want problems tackled properly where they exist; on the other hand, in the majority of cases where there are not serious problems, we do not want a huge new tier of regulation and bureaucracy where it is not necessary. What is the answer to this conundrum? I shall be interested to hear what the Minister has to say about it.

My final question is on the draft guidance that the Government intend to issue to the Environment Agency, and which it is going to consult on. What main issues will the guidance cover?

As I said at the beginning, we welcome these regulations and congratulate the Government on not being too late in bringing them forward.

My Lords, I apologise to the Minister and other noble Lords; I was told that there would be a 10-minute break after the previous set of orders, and I am afraid that I was downstairs supporting Lantra in its important work of highlighting the need for skills in land-based work. I shall listen carefully to what the Minister has to say.

I want to pick up on one or two things. There is the question of how people will be notified. In very rural areas, websites are inadequate. The Minister will know well that we have had debates in the House about broadband; I think I have a Question coming up shortly on that very topic.

What is the position of an “owner” or a “business” rather than a tenant? Here I have to declare an interest: I have two cottages in our lane at home, one of which has a septic tank and the other a soakaway. This sounds very basic, but when the new tenant comes in, the septic tank is emptied, so they start at square one; after that, though, it is their responsibility. If they do not do what they should and thereby cause pollution, where does the buck stop? Does that come my way, or does it go to the tenant?

Sitting suspended for a Division in the House.

My Lords, I do not need to go over what I said. I hope that the Minister heard my question. My first point was about broadband; the second was on the whole question of septic tanks and soakaways.

I have two other questions. The third is: what happens if you are in an area such as Lincolnshire, as my noble friend is, where the groundwater rises and falls? How will the agency take that into account? Fourthly, what is the distinction between the role of the Environment Agency and the local authority? Will the local authority be given direction from the Environment Agency? I am not clear who will operate the system. I know where the responsibility lies, but it is the practicality on which I seek clarification.

My last two questions follow from comments made by other noble Lords. One is on permits and the other is on the total cost and the likely cost to individuals.

My Lords, I am grateful to noble Lords for their contributions, and even more grateful for the small intermission, which enabled me to get some grip on the volley of questions. I am especially grateful to the noble Lord, Lord Taylor, who gave me notice of his questions. He apologised for the interrogative nature of his speech. No apology is necessary; these are real issues that we need to identify. My only apology is because he asked me such a volley of questions that I may be slightly protracted in my reply.

I am also grateful to the noble Lord, Lord Greaves, who said that he would listen intently to the responses I made to the noble Lord, Lord Taylor, and who otherwise would have asked those questions if they had not already been put. If I take a little time over these issues, particularly as they relate to septic tanks, which has been the main burden of this discussion, I shall satisfy all noble Lords. I will also comment on the particular points raised by the noble Baroness, Lady Byford, in her contribution.

I start by giving the good news first because it cheers me and I hope that it will do the same for the Committee. I was asked by the noble Lord, Lord Taylor, how we compare with other European countries in how we tackle this issue. We think that we get off reasonably lightly. Many other EU countries are going to require full permits, probably at the municipal level because of the nature of their government—that is certainly likely to be the case in Germany—while others have clear registration and notification schemes that will require compliance. I hope that my answers will make it clear that we have a somewhat lighter touch than the full-permit regime requires. That is the context in which I want to begin my response to the questions.

Obviously, the issue of septic tanks is very significant. Small discharges from isolated domestic dwellings not connected to the sewerage system were previously exempted from the requirement for authorisation. That will not be the case in the longer term and the intention is that, under the EPRs, discharges from septic tanks of two cubic metres or less should be subject to registration with the Environment Agency as exempt groundwater activities. Registration will be dependent on compliance with basic rules of operation and maintenance and will be free, as the consequence of a previous ministerial decision. Meanwhile, until 1 January 2012, small discharges—those of under two cubic metres per day—will continue to be exempt unless they are the cause of an environmental problem in that they might pollute a drinking water supply. In those cases the Environment Agency may serve a notice either to prohibit the activity or to require that a permit should be applied for. The arrangement will also apply in the case of registered exemptions under the EPRs. As is the case at present, all school discharges within a defined area around a drinking water supply will require a full permit, subject to an application charge but not subsistence charges.

That is the background, but the noble Lord, Lord Taylor, has addressed to me a series of specific questions to which I want to reply so as to flesh out the issues which have been raised. If my responses do not do that, I will take note and be only too prepared to write subsequent to our proceedings to noble Lords who have contributed to the debate.

I was asked why the exemption limit has been set at two cubic metres per day. This is the Environment Agency’s practical interpretation of the original exemption in the 1980 directive. It is a practical limit sufficient for the daily needs of a household of up to 10 persons. With regard to the 2006 directive, the position is that the 1980 groundwater directive and regulations of the same year exempt such discharges. The exemption is not sustained in either the water framework directive or the 2006 groundwater directive. The issue was explored at length in the European Parliament and an automatic exemption cannot be included in the new regulations except for a period lasting until January 2012, which recognises that the 1980 directive remains in force until we get to 2013.

How many dwellings have septic tanks and how many other types of domestic sewage treatment are not connected to the mains sewerage? We estimate that there are approximately 300,000 septic tanks not connected to the mains sewerage system. Because septic tanks are not routinely controlled, it is impossible to know their location and precise number. That will be remedied once groundwater controls fall under the environmental permitting system and septic tanks are subject to a registration scheme. The regulations will apply to any installation from which there is a discharge, but not sealed cesspits.

The EA has about 20,000 discharge permits, input permits and groundwater extraction authorisations. How many permits do we estimate will be sought by the owners of domestic sewage systems? Probably several thousand will require a specific permit, because they are close to drinking water supplies, which is our obvious major concern. That requirement is no different from the current situation. Until 1 January 2012, other septic tanks will require no permit. Thereafter, under the proposed EPRs, all such discharges will be subject to a registration scheme and therefore subject to basic rules of sound operation and good maintenance.

It is germane to our discussion this afternoon that I replied to a Written Question from the noble Lord, Lord Taylor. He asked,

“how many permits covered by the draft Groundwater (England and Wales) Regulations 2009 are outstanding in each region in England and Wales”.

The Answer was as follows:

“The following classes of permits are subject to the existing (1998) Groundwater Regulations and will become valid permits for the purposes of the Groundwater Regulations 2009 when they come into force:

(1) Consents to discharge to groundwater under the Water Resources Act 1991.

(2) Permits under Environmental Permitting Regulations 2007 where these may result in inputs to groundwater.

(3) Groundwater authorisations under the Groundwater Regulations 1998.

There are upwards of 20,000 such permits in total. The number of new applications and variations to such permits will fluctuate daily as they are submitted and processed according to statutory procedures. There is currently no significant backlog of applications”.

So we have an order of magnitude, but I cannot be absolutely precise in my response.

“To provide an analysis of each outstanding permit broken down by region would require detailed searches of Environment Agency permitting databases which would incur disproportionate cost”. —[Official Report, 5/10/09; col. WA468.]

On what grounds will the EA be able to refuse to issue a permit? Site-specific assessment will determine the circumstances in which a permit may be refused. However, that will normally happen only where there is pollution or the threat of pollution to a drinking water supply. Will any domestic sewage installations currently in use be rendered unsuitable by the implementation of the regulations and, if so, how many septic tanks and sewage plants will have to be replaced? The regulations introduce no specific new standards applying to the design, installation and maintenance of septic tanks. However, in current circumstances, an existing septic tank would be unsuitable if it results in an unacceptable discharge. There is no change in that respect deriving from the regulations.

Will a web-based registration scheme for discharges from isolated dwellings be a record of all discharges or a record of septic tank owners? I emphasise that under the regulations, the current exemption continues until 1 January 2012. The objective is to know the location of septic tanks and which properties are served by them. That will facilitate the identification of problems and encourage good practice. I will come to the point about communication raised by the noble Baroness in more detail in a moment.

How does the Environment Agency discover that someone is discharging less than two cubic metres of effluent daily, and how does it chase it to the source? We intend to adopt a sensitive and light-touch approach whenever we can. It is possible to identify areas which are not served by mains sewerage and new properties by the planning system. The number of people occupying a property, which gives an indication of the volume of discharge is, as I said, 10, so we have some idea of where the problem may occur.

What is the current extent of groundwater pollution from domestic septic tanks that discharge less then two cubic centimetres a day and can this be characterised by the type of location of concealed equipment? What is the level of resulting damage? The Environment Agency is aware of some locations where aggregations of septic tanks are believed to be responsible for pollution. Because of the absence of reliable data on the location of septic tanks, it is difficult to address these issues at present. The condition, operation and maintenance of equipment must determine its performance, as all noble Lords will recognise. Typically, diffuse pollution will result from some aggregation of septic tanks. Occasionally, an individual septic tank may threaten a drinking water supply—hence the requirement for a permit when that tank is close to such drinking water locations.

What is the probable charge for a permit to use a septic tank? There will be no registration fee for the foreseeable future. There is an application fee for tanks which currently require a permit, which is a one-off charge of £124. This is reviewed annually after consultation, but there is no annual subsistence charge. The Environment Agency’s charging scheme for 2010-11, which is out to consultation, proposes a 1 per cent increase on the basic charge.

What is the Environment Agency’s predicted cost of enforcing the legislation on daily discharges of less than two cubic centimetres from isolated dwellings? The cost of applications is fully covered by an application fee, in line with cost-recovery principles. Enforcement is carried out on a risk basis and costs to the Environment Agency are minimal. We can take some pleasure in that.

The impact assessment sought information on which groundwater policy would be reviewed to establish actual costs and benefits. The Government propose to make this part of the regular river basin management process. Will Defra then collate these data to come up with an annual summary of costs and benefits? We are a little foxed by this question, which is challenging. The Environment Agency has proposed individual impact assessments for each river basin management plan. These were published on Monday. As I indicated in my opening remarks, the review will be in line with the six-yearly, not annual, cycle of the plans.

How will the agency inform householders in isolated dwellings that they may require a permit and what will it need to make that decision? Since the exemption from the need for a permit lasts until January 2012, there is some time available to us to give this important issue full consideration. I recognise the anxieties to which the noble Baroness, Lady Byford, gave voice. The Environment Agency is considering how relevant requirement will be brought to the attention of septic tank users. Guidance on the requirements of these regulations, which will also apply to the EPRs, has been prepared and will be issued for consultation as soon as we have it ready. I accept entirely what the noble Baroness said, and the noble Lord, Lord Taylor, indicated his concern about how we communicate effectively in these areas. I am all too well aware of the fact that government in all their forms need to do that. I answered a Question in the House only yesterday about the Inland Revenue and effective communication via the web. That is effective communication for a percentage of our citizens. It is less effective for some, due to their computer literacy, and for others because they do not have any access to the web. That was the point made by the noble Baroness and the noble Lord, Lord Taylor. We need to address that issue and we take it on board entirely.

Will householders who pay to have septic tanks emptied need a permit? The answer is no. The regular emptying of a septic tank is a matter of good practice. Permits will be required in locations that are, for example, close to a drinking water supply. I return to the main concern that we all have about the purity of our water. All other tanks are exempt until January 2012 and thereafter will be subject to legislation under the proposed EPRs.

Will these regulations heap more costs onto the community for very little benefit? That was the theme of the noble Lord’s anxieties. I can answer categorically no, in those terms. The impact assessment for the directive negotiations showed a broadly cost-neutral outcome in relation to resources already committed to the implementation of the water framework directive; that is our judgment, as I said in my opening remarks. The position on transposition is similar, although there is an element of swings and roundabouts in that some operators will benefit while others might incur modest additional costs. For example, permit holders under the existing regime may incur some additional costs for higher risk activities, but for those of a lower risk, the costs may in fact be reduced. This is in line with the “polluter pays” principle, to which we all subscribe and which is inherently fair.

I was asked whether charges to farmers will rise as a result of these regulations. They will not do so directly, as they make no provision for additional or higher charges. They carry over the existing arrangements set out in the 1980 groundwater regulations they replace, and the charges made by the EA are reviewed annually through established arrangements for the agency to recover its costs, a point I made earlier. That is the sole concern of the agency in levying its fees. However, the 2006 groundwater directive does not stipulate a review period for authorisation, and neither do the proposed regulations. This means that a review can be conducted on the basis of need rather than a rigid four-year cycle. Less frequent reviews, where this is possible, will mean lower charges, and therefore will be welcomed by the Committee.

The noble Baroness asked me about the position of the landlord and the tenant. Normally, we would expect the liability to rest with the occupier and user, but there might be tenancy agreements written in different terms and therefore we cannot be categorical in the legislation. However, the expectation is that the occupier and user would be the liable person.

I think that I have answered the questions put to me on the general aspects of communications, and I want to emphasise that in the department we are all too aware, as indeed is the Environment Agency, of the need for the effective communication of these important matters. The noble Lord, Lord Greaves, asked me about a review of the permits, which will apply only to existing permits. Not all septic tanks are affected, rather it is only those with permits because they are in sensitive locations. There will be no specific review period for revision; it will be done when it is required.

I am grateful to the Minister. I do not think that the question about permits refers specifically to septic tanks. The point I raised was that although the new, more flexible system of review is welcome, in that it does not have to be carried out every four years but will be done on the basis of risk, the regulations as set out appear to say that all existing permits have to be reviewed before 22 December 2012. My question concerned the scale of resources required to do that.

My Lords, perhaps I may return to two points. I will read the Minister’s remarks very carefully tomorrow, but I think he referred to sealed septic tanks. Could he define what they are?

I thank my noble friend because I was not sure whether I had heard it correctly.

My other question is this. When the Environment Agency reviews its costs and charges, will anyone else be able to check them or is the agency free to set its charges at levels it regards as relevant?

The Environment Agency is under the scrutiny of the obvious source; namely, the Secretary of State. He examines the decisions the agency takes. If it were thought that the agency was levying charges that could not be justified by the actions being carried out, the Secretary of State would be expected to act. I am in no doubt that if it did not happen at this end of the building, there would be a fair fuss at the other end. There is a fallback position in those terms.

I just say to the noble Lord, Lord Greaves, that the current four-yearly review is in its last cycle, which will be completed in 2012.

Before the Minister concludes, it is of interest that there are two elements to the regulations: there is the registration requirement and the permitting element. As I understand it, the permitting element refers to those in a location that may give rise to a hazard. If that is the case, I seek to make a plea to the Minister that for those whose responsibility is purely to register that they have a non-mains sewerage system, the registration should be kept as simple as possible. If the registration requires a full description of the system employed, I can assure him that in old properties, it is almost impossible to know quite how the system operates. Bits may have been added on, and it would be difficult for individuals if they subsequently found themselves falling foul of the regulations, which carry quite heavy penalties, because they had failed accurately to describe the full implications of their system. If registration is considered to be necessary, it should be kept as straightforward and simple as possible so that people feel that they can comply without too much wear and tear on their nerves.

That point is well received. I said that we are concerned to deliver light-touch regulation. I entirely understand what he says about registration; that point will be borne in mind.

I wonder whether I can have one final bite at the review business. The Minister says that we are within a four-year review period that ends on 22 December 2012. Regulation 12(2) seems to say that all the existing permits must be reviewed between the coming into force of the regulations and that date. Is the Minister saying that in practice, reviews that have taken place during the past year—because we appear to be about one year into the four-year review period—will be counted, regardless of what the regulations say?

I am grateful to the noble Lord and I will address the specific point in a moment. The regulations exempt until 2012. The registration, which we have also discussed, is being introduced under the 2010 environmental permitting regulations, the EPRs, which we have not debated yet. They will need to be considered, so we shall have the opportunity to examine that part of the regime in due course. The regulations we are debating today merely exempt until 2012.

I have answered noble Lords as far as I am able in what has been a very intensive debate. I am only too prepared to write further if that is considered necessary. I have carefully identified the participants in this debate, who have etched themselves into my memory, so I will know if they are dissatisfied and will write to them accordingly.

Motion agreed.

Committee adjourned at 6.05 pm.