Environmental Civil Sanctions (England) (Amendment) Order 2023
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Lord Benyon
That the Grand Committee do consider the Environmental Civil Sanctions (England) (Amendment) Order 2023.
Relevant document: 48th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, I beg to move that the Environmental Civil Sanctions (England) (Amendment) Order 2023, which was laid before this House on 12 July, be approved. In doing so, I hope that it will be useful to your Lordships if I speak also to the Environmental Permitting (England and Wales) (Amendment) (England) (No.2) Regulations 2023.
The purpose of the instruments before the Committee is to strengthen environmental civil sanctions and provide environmental regulators with the tools that they need to hold operators to account. The instruments have been grouped as they form a package of amendments to the civil sanctions available to Natural England and the Environment Agency.
A public consultation on these proposed changes was held earlier this year, first trailed in the plan for water, and received majority support from the public and a range of operators under the legislation in question. Strengthening regulations that hold polluters to account, from water companies to waste operators, is part of the Government’s wider plan to reduce pollution and protect the biodiversity and ecology of our natural environment. Earlier this year, we published our environmental improvement plan. It provides an ambitious five-year road map for a cleaner, greener country, with a delivery plan for restoring nature and improving environmental quality across the board. We have since gone further with our comprehensive integrated plan for water, which will deliver clean and plentiful water.
To deliver on our ambitions, we must ensure that regulators have all the tools they need to take action on unacceptable breaches of environmental regulations. The current provision for variable monetary penalties under the Environmental Civil Sanctions (England) Order 2010 is capped at £250,000. This means that some operators may think that they can price in the penalty rather than follow the law. Therefore, current penalties do not act as a strong deterrent, particularly for large operators with significant turnover.
The limitation can be resolved by the amendments before the Committee today, which will entirely remove the cap. This will future-proof penalties to ensure that Natural England and the Environment Agency can determine the amount of the penalty in line with their enforcement policy. Penalties will be based on the degree of environmental harm and culpability as well as the size of the operator, ensuring that penalties are calibrated to act as a proportionate deterrent and punishment.
Currently, there is no provision for variable monetary penalties under the Environmental Permitting (England and Wales) Regulations 2016. The majority of Environmental Agency investigations are conducted under the environmental permitting regulations but the agency is limited in its enforcement options to warnings, advice, guidance or criminal prosecutions. A “justice gap” exists for moderate to severe offences. This limitation can be resolved by the instruments, which will introduce variable monetary penalties to the environmental permitting regulations.
Strong safeguards for determining the penalty, including a requirement on the Environment Agency to take into account an operator’s ability to pay, remain in place. The Environment Agency will also continue to use the guidelines for environmental offences published by the independent Sentencing Council as the basis to determine the amounts of all variable monetary penalties. The guidelines include a number of safeguards to ensure that penalties are proportionate and take into account the size of an operator, its ability to pay, its degree of responsibility and the seriousness of the incident. The instruments require the environmental regulators to update and publish guidance that sets out their methodology for determining the amounts of these penalties. A consultation on updating the guidance has been launched and will ensure a fair, proportionate and consistent approach.
The UK has a long and proud history of work in this area. The Government’s environmental improvement plan and integrated plan for water make our commitment to protect the environment clear. These instruments will ensure that the regulators are able to act swiftly against those who would threaten to harm it. They build on announcements earlier this year, with the proceeds of fines going into water improvement schemes through a new water restoration fund, and on water company dividends being linked to environmental performance. Together, this is a strong package designed to target those companies most egregiously harming our environment.
I commend this draft instrument to the House.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introductory remarks on these two statutory instruments. It is regrettable but not entirely surprising that businesses find it cheaper to pay the current fine of up to £250,000 than to fix the problem causing the breach of environmental law. There have been numerous debates in the House on storm overflows and the resultant sewage spills into waterways. It is time that this was resolved in a way that effectively deters the polluters from their anti-social activities. I fully support the removal of the cap of £250,000 for a larger fine and hope that the threat of a more substantial fine will be a sufficient deterrent.
I have looked at the consultation questions and responses on changing the cap. There was enormous support, with 88% of respondents agreeing or strongly agreeing with the proposals to change the cap. I smiled to myself when I saw that the lowest support for this change came from the waste and resource management and energy sectors. Some 27 organisations ranging across a wide variety of interests are listed as having taken part in the consultation, from the Clean Rivers Trust and the River Otter Fisheries Association to Severn Trent Water and Wessex Water. There was a good cross-section of responses.
I noted that there was some concern that removing the cap might result in disproportionately high penalties. This would obviously depend on how someone had been affected by the breach of legal protection; the Minister set out the process for assessing fines. A minor breach is unlikely to receive a high penalty whereas a major incident that results in contamination over a large area and on a scale that takes huge resources to clean up should, quite rightly, deserve a substantial penalty.
Only by implementing the “polluter pays” principle in full will our environment eventually be cleared up. I note that the Secondary Legislation Scrutiny Committee also supports closing the gaps in the enforcement regime. I fully support this SI.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, it is a delight to be back in the Moses Room. I hope noble Lords all had a rewarding and relaxing recess—if they can remember it after eight days. We come together again after a summer of yet more horrendous headlines about illegal discharges into our waterways, amateur athletes being taken ill after swimming in our rivers and, apparently—according to the Office for Environmental Protection—the Government and our regulators may have broken the law with regard to the 852 sewage discharges that are now occurring daily. This is a sorry state of affairs.
It is only right and proper that we review the current regulatory and enforcement framework so that we ensure that criminals are punished for breaking the law. I just worry that the proposals in the legislation before us are more of a political stunt rather than a plan to deal with the current crisis affecting our waterways, given that uncapped fines are already available to the financial regulator.
I know from personal experience that the Minister is truly committed to protecting our environment. His record is clear and not to be questioned. However, we are seeing such mixed messages from the Government regarding their commitment to environmental regulation: they promised not to reduce regulation yet, even as we speak, their proposals in the Chamber regarding nutrient neutrality in the levelling up Bill are seemingly a broken promise related to this issue. So I am sure that the Minister understands why some of us have some concerns about the current state of environmental regulation and enforcement.
I turn to the substance of this SI. We will of course support these changes but, as was made clear during the debate in the other place, His Majesty’s Opposition are not convinced that these actions alone will make any real impact on the sewage crisis currently before us. Given the urgency of the situation and the facts that your Lordships’ House sat for longer than the other place prior to the Summer Recess, that MPs agreed the legislation on 18 July and that it was laid before us on 12 July, can the Minister confirm why this SI was not brought forward for approval sooner?
There is a long history of regulators having the power to issue fines or pursue legal action but there are relatively few cases of these steps reaching a conclusion. What, if anything, makes the Minister believe that this time will be different? Can she provide the Committee with more detail about how these fines will be set aside and spent? The Secretary of State has previously said that they will go into a dedicated fund, which will, where possible, invest in local improvements. Can the Minister provide a definition of “local”? I do not aim to be difficult but is this an aim or a requirement? What will happen if it is thought that infrastructure improvement elsewhere would have a greater impact on future discharge levels in a locality?
While I have the Minister’s attention, can he update us on when the sewage task force established by Defra last met? I believe that it has met only once in the past 12 months. If the Government are truly serious about tackling this crisis, the task force may wish to meet more regularly than once a year. I look forward to hearing from the Minister.
Lord Benyon (Con)
I thank both noble Baronesses for their response to this instrument and their qualified support for what the Government are doing. The noble Baroness, Lady Bakewell, rightly pointed out that the consultation produced a clear level of support, which is why we are taking this through.
The noble Baroness, Lady Anderson, asked why this is being brought forward now. It has been through a process, including the consultation and the response to it, and SIs cannot be done overnight. They need to be drafted and brought forward properly; I think that we brought this one forward in as timely a way as possible. I hope that she does not think that this a stunt or any form of window dressing because it is a very serious attempt to tackle the justice gap that I referred to in my earlier remarks. The SI was brought in to address precisely the justice gap that exists within the environmental civil sanctions regime. Expectations of the Government and the public on protections for the environment are higher than ever. We need to address this gap and ensure that regulators have the right tools to take action against environmental offences.
The noble Baroness asked whether this will make a difference. Deterrent is the best form of avoiding pollution in the first place. If the level of fines was no deterrent and was being priced in by some bad actors, that will no longer be the case and they will face very severe financial penalties indeed. It should be added that, since 2015, the Environment Agency has concluded 59 criminal prosecutions against water companies and secured £150 million in fines. The regulators—the Environment Agency and Ofwat—have recently launched the largest-ever criminal and civil investigation into water companies’ sewage discharges, at more than 2,200 treatment works. The Environment Agency will act against non-compliance. This will include criminal prosecution, for which there can be unlimited fines. On 12 July we began legislation to introduce unlimited civil penalties, which is before the Committee today.
This needs to be seen in the context of more activity than there has ever been to try to address the quality of our waters. The storm overflow actions start from the basis of knowing where the storm overflows are, which we did not when we came into government. The coalition Government set about requiring water companies to tell us where their overflows were. We are now at the point of knowing every single one, and that is part of the reason why a light has been shone on the activities of some water and sewerage companies. Transparency is the best form of sanction because people can see what is going on—and so can the enforcement authorities. We have increased monitoring and will have 100% monitored by the end of this year.
Other continuous efforts will be part of this. In 2022, 93% of our bathing waters in England met the highest standards of “good” or “excellent”, up from 76% in 2010, but that statistic will not see us rest on our laurels. We want to make sure that all bathing waters are of good or excellent standard. We are eliminating all storm overflows and seeing investment levels never seen before.
The noble Baroness asked about the sewage task force. I do not know when it last met, but I am happy to find out and share that. There are a whole lot of engagement activities, including talking to water and sewerage companies and working with the Environment Agency. Just because one body has not met, that does not mean there is not a resolve to deal with this problem; this is part of it. I hope that, with those remarks, I have addressed this statutory instrument.