Persistent Organic Pollutants (Amendment) Regulations 2024

Baroness Hayman of Ullock Excerpts

Wednesday 20th November 2024 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

That the draft Regulations laid before the House on 8 and 23 October be approved.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the second instrument). Considered in Grand Committee on 13 November.

Motions agreed.

Environmental Protection (Single-use Vapes) (England) Regulations 2024

Baroness Hayman of Ullock Excerpts

Wednesday 13th November 2024 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Environmental Protection (Single-use Vapes) (England) Regulations 2024.

Relevant document: 6th Report from the Secondary Legislation Scrutiny Committee (Special attention drawn to the instrument).

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, it is estimated that more than 360 million single-use vapes were placed on the UK market in 2023. These devices are designed to be used a small number of times and are often referred to as disposable. Once used, which may be after a matter of hours, they are commonly thrown away. Research by Material Focus estimates that 5 million single-use vapes are thrown away every week. That is equivalent to eight per second.

They are often littered. They blight our parks, playgrounds and streets, and they introduce plastics, nicotine salts, heavy metals and lithium-ion batteries into the environment, harming biodiversity, soils, and our rivers and streams. Alternatively, they are thrown into black bins where, at best, they end up in landfill or are incinerated—at worst, they cause fires when they are crushed in bin lorries.

Last year, it was estimated that 700 waste fires were caused by batteries hidden in electricals such as vapes. This generates pollution, damages waste infrastructure and risks the safety of waste management workers, firefighters and the public. To give a personal example, a friend of ours has a medium-sized haulage business, and he lost virtually all his lorries last year through a fire caused by single-use vapes, which pretty much destroyed his business. So they can do enormous damage, and it is important that we tackle this problem.

Research by Action on Smoking and Health shows that the rise in single-use vapes has happened concurrently with an increase in young people vaping. Although vapes can play an important role in smoking cessation, adults who do not smoke and children should never vape. We must do what we can to prevent children from being targeted. Without action, it is estimated that, by 2030, the number of single-use vapes placed on the UK market could rise to over 1 billion per year. We must therefore take steps to stop the misuse of resources and protect our environment.

My department is leading a drive towards a circular economy to minimise waste, prioritise circular product design and retain the value of resources for as long as possible. It is estimated that, last year, 40 tonnes of lithium from single-use vapes were thrown away. This is enough lithium to power 5,000 electric vehicles. Single-use items such as these play no role in a circular economy, so we must act now to ban the supply of single-use vapes in England.

Before I turn to details of the legislation, I acknowledge the work of the Secondary Legislation Scrutiny Committee. Its report highlighted several points of interest, particularly the links to youth vaping, which I referred to earlier, and whether we will monitor market developments following the implementation of the ban. We work closely with the Medicines and Healthcare products Regulatory Agency to understand the types of products notified for use, and we will continue to look at this in future.

The committee highlighted correspondence received from Green Alliance, which strongly supports the ban but questioned the timeline for implementation and enforcement. We want to introduce the ban as soon as possible, but we must allow a minimal but reasonable transition to allow businesses time to run down stocks and adapt activities. That is why the ban will come into force on 1 June next year. Effective enforcement is critical, and we will work closely with enforcement agencies to understand how we can best support them.

I turn to the details of the legislation. This ban is introduced through powers in the Environmental Protection Act 1990. Part 1 of the legislation sets out the meaning of a “single-use vape”, which is

“a vape which is not designed or intended to be re-used”

and which includes any vape that is not rechargeable or refillable.

The ban applies to England only, but my officials have worked closely with the devolved Governments, who are bringing in equivalent legislation. We are grateful to our colleagues in the devolved Governments for their collaboration to ensure that, from 1 June next year, there will be a UK-wide ban.

Parts 2 and 3 of the legislation introduce offences and enforcement provisions. Enforcement of the ban in England will be carried out through local trading standards officers, and the powers in the legislation have been developed in partnership with them. The regulations provide new civil and criminal sanctions and provide powers to test or seize illicit products and issue fines as well as stop or compliance notices. Where a compliance or stop notice is not complied with, a further fine or jail sentence may follow.

Lastly, Part 4 of the legislation covers requirements for guidance, as well as setting out review clauses.

Vapes can play a role in helping adults to quit smoking, but there is no reason for these products to be single use. Given the harm caused, we must take this simple but important step to ban these products.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the Minister has set out the rationale for the introduction of this SI very clearly.

Single-use vapes are extremely popular among young people. Encouraging young people not to start smoking has to be a key aim of any Government. It is something of a rite of passage to gather with your friends for a chat and a smoke or a vape. Preventing experimentation with cigarettes is the first priority. Then, it is about encouraging young people away from vapes—especially single-use ones—when they may have switched to vaping.

I am grateful to Green Alliance for the briefing that it provided on this subject, and to the Secondary Legislation Scrutiny Committee. Since 2023, 7.7 million single-use vapes have been bought every week—twice the number in 2022. Vapes are easily discarded, causing plastic-containing litter. They also contain other hazardous substances such as nicotine, which has previously been used as a pesticide. The batteries in vapes are a potential fire risk; the Minister gave a good example of that.

Although the lithium contained in the vapes discarded in 2023 would have made 5,000 electric vehicle batteries—the Minister referred to this—recycling them is problematic. Young people and others are not going to take their used vapes to a recycling point. The vapes are going to be discarded where they are, sometimes in a litter bin but often just thrown on the ground. A ban on single-use vapes will ensure that the lithium is put to a better use.

The Government’s recent Budget introduced a vaping products duty, which will be introduced in October 2026 —that is two years away—and is to be £2.20 per 10 millilitres of vaping liquid. This will increase the cost of vapes and will, I hope, discourage their use. Cheap, reusable vapes are as easily discarded as single-use ones, so increasing the cost of reusables must be part of the strategy in moving people away from vaping. The ban on single-use vapes will come into force in June 2025, as the Minister said, which gives enough time for retailers to reduce their stocks and for users to become accustomed to buying reusable vapes.

I fully support this SI but I have a couple of small queries. Paragraph 9.7 of the Explanatory Memorandum talks about the

“impact on the public sector as local authorities are regulators and therefore responsible for enforcement”.

The last sentence of the paragraph reads:

“Funding will be provided to support enforcement”.


That is an encouraging statement. Although it does not say what the funding will be, having a statement that it will be provided in the Explanatory Memorandum is to be welcomed.

I turn now to the SI itself. Regulation 14 states that, at the end of a three-year period, the Secretary of State must conduct a “review of the operation” of the Schedule. As with any change in legislation, a review of how the change has had an impact on those affected by the SI is key to ensuring that changes keep pace with public behaviour.

Paragraph 1(1)(a) in Part 1 of the Schedule indicates that a fixed monetary penalty of £200 will be paid to the regulator for a breach of the regulations. Later on, paragraph 16 in Part 2 of the Schedule, which is headed “Offence”, states:

“Where a person on whom a stop notice is served does not comply with it, the person is guilty of an offence and liable—


(a) on summary conviction, to a fine, or imprisonment for a term not exceeding the general limit in a magistrates’ court, or both; or

(b) on conviction on indictment, to imprisonment for a term not exceeding two years, or a fine, or both”.

Imprisonment for 12 months or two years is quite a jump from a £200 fine. It is likely that I have not understood how what seems like an on-the-spot fine of £200 can escalate to imprisonment; I would be grateful if the Minister could help me with this.

Green Alliance has asked three questions. First, given the exponential growth of single-use vapes, can the Government expedite the ban to before 25 June? Also, how do they plan to limit further growth in the use of vapes between now and then?

--- Later in debate ---

[Lord Roborough (Con)]

My Lords, I am grateful to the Minister for her introduction to this instrument. I declare my interest as a user of multiuse vapes for well over 10 years and that I have not smoked for well over 10 years. It is right that the Government are building on our work to deliver regulatory measures that not only restrict the sale of single-use vapes but put in place systems for proper disposal and recycling.

In government, we allocated £3 million of additional funding for trading standards to support the seizure of illegal vapes. This funding was aimed at tackling the importation and sale of non-compliant products. I urge the Government to honour this commitment and ensure that this funding is not only maintained but effectively used to support enforcement operations. Can the Minister give that undertaking today?

This April, my Government created a specialised illicit vaping enforcement team, Operation Joseph. Will the Minister update the Committee on the progress made by that team? I would hope that making the sale of all single-use vapes illegal will make these unregulated vapes easier to identify and control. However, there is a risk that it will drive previously legal users to supply channels that breach the law. What additional steps will the Government take to control this potential black market?

As we regulate single-use vapes, we must also address the growing issue of battery waste. The batteries in these devices, whether single-use or rechargeable, present an environmental hazard if not disposed of properly. Without proper recycling systems in place, these batteries can contaminate the environment with toxic chemicals as well as presenting the dangers the Minister highlighted with her friend’s haulage operation. Many consumers are unaware of the environmental dangers posed by batteries disposed of improperly. Public awareness campaigns are crucial to educate the public about how to dispose of batteries safely and where they can drop them off for recycling. What measures are the Government taking to improve the level of recycling of batteries, particularly those from electric vehicles, whether they be cycles, scooters or cars?

Finaly, I emphasise that our regulatory efforts must not undermine smoking cessation efforts. Vaping has been shown to be a crucial tool for helping people reduce or quit smoking. It is essential that any regulation focuses on eliminating the environmental harm caused by single-use vapes while ensuring that safer alternatives remain available to those who rely on them to quit smoking. I welcome the Minister’s acknowledgement of the relative merits of multiuse vapes as regards smoking in her introductory remarks.

[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for their contributions to this debate. I shall go through some of the questions, and I thank noble Lords for their support for this ban.

The noble Baroness, Lady Bakewell, asked about the date of 1 June for implementation. We need to act swiftly but we have to be practical, as she said, about how we bring this in and allow businesses sufficient time to run down their stocks and adapt what they are doing. That is why we think that six months is a reasonable transition period. It is also a standard transition period in line with international obligations. But we are not just going to do this and leave it for six months. We will use the lead-in time to put in place guidance for businesses, to ensure that there is support for local authority trading standards officers and to communicate details of the ban among stakeholder networks and the public. The idea is to use that time effectively to ensure that, when the ban comes in, it is adhered to and is as effective as possible.

The noble Baroness also asked about funding for enforcement. While I cannot give a specific figure for funding, enforcement will clearly be critical. There is no point having legislation if you do not have anything to enforce it with. We need to consider enforcement for single-use vapes alongside other types of illicit vape, because there is a black market in other kinds of vape as well. We will look at how we can work closely with the Department of Health and Social Care and other relevant enforcement bodies to understand the best way to make sure that the ban is enforced. That is work we will be doing between now and 1 June.

On enforcement, the noble Lord and, in particular, the noble Baroness asked about the £200 fine up to a prison sentence. It is important to say that imprisonment would apply only in cases of persistent non-compliance. It would be the very top end, if someone is continually refusing to comply after they have broken the law on a number of occasions.

The noble Lord, Lord Roborough, asked about the black market. We are discussing with local authority trading standards how we can best support them on black market issues, particularly around underage and illicit tobacco and vapes. There will also be a focus on intelligence sharing between enforcement agencies such as Border Force, HMRC and trading standards to ensure that agencies understand what they need to do to stop this activity and that they work together and share information.

The noble Lord asked about improving the recycling of batteries. At the moment, we are considering proposals to reform batteries regulations. We want to set out some new steps on how we go forward with this, so we will keep noble Lords informed.

On success in tackling illicit vapes, which the noble Lord asked about, in April 2023 the previous Government announced £3 million of investment over two years to enhance work on illicit vapes enforcement, which was led by National Trading Standards. I am sure he is very aware of that. The current actions and activities include intelligence sharing on illegal products and sales, market surveillance and ports enforcement, because we need to be able to catch them when they come in. There is also Operation Joseph. When we know more detail, we will be happy to share that information with noble Lords.

I think I have probably covered everything. If I have missed anything out, I will get back to noble Lords. I beg to move.

Motion agreed.

Persistent Organic Pollutants (Amendment) Regulations 2024

Baroness Hayman of Ullock Excerpts

Wednesday 13th November 2024 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Persistent Organic Pollutants (Amendment) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, this instrument adds three substances, UV-328, dechlorane plus and methoxychlor, to the assimilated persistent organic pollutants—or POPs—regulation in response to the adoption of these three substances as POPs under the United Nations Stockholm convention. The UK is a party to the convention and is therefore obligated to reflect in UK law the listing of POPs under the convention.

In addition, this instrument makes a number of other technical changes to the annexes of the POPs regulation. These include changes to waste concentration limits, specific exemptions and unintentional trace contaminant levels—or UTCs—for some POPs. The amendments, in brief, update and clarify the way that some articles, substances or mixtures containing some POPs can be used, manufactured, placed on the market or disposed of.

This legislative change is permitted by use of the powers available within Articles 7, 15 and 18 of the assimilated EU regulation on POPs. We have worked with the devolved Administrations on this instrument.

POPs are substances recognised as being particularly dangerous to the health of humans, wildlife and the environment. This instrument preserves and adds to the current regime for managing, restricting or eliminating POPs in the UK. Some of the regulations in this amending instrument are needed to implement the UK’s commitments under the United Nations Stockholm convention on POPs. The majority of amendments are informed by updates to the Stockholm convention and, in some cases, following updates made to the Basel Convention guidance on the management of POPs waste, and following consultation.

Let me turn now to the detail of the instrument. At the 11th meeting of the conference of the parties held last year, a decision was adopted to add three new substances called UV-328, dechlorane plus and methoxychlor to the list of substances for global elimination under the convention. This decision was communicated to parties by the UN depository in February 2024. This instrument adds these new POPs to the list of substances that are prohibited by law from being manufactured, placed on the market and used in GB.

Secondly, the instrument provides some exemptions from the prohibitions by allowing the unintentional presence of these three substances at trace levels. These limits define the concentrations at which UV-328, dechlorane plus and methoxychlor can lawfully be found in a substance, article or mixture where they are unintentionally present and found in minimal amounts. Dechlorane plus and UV-328 will also be listed alongside time-limited exemptions for their continued use in specific circumstances. These exemptions are available following agreement by the conference of the parties to the Stockholm convention.

This instrument will make a number of further changes to Annexe 1 of the POPs regulation, including the addition of a UTC level for two POPs that are already prohibited in GB. It will also make amendments to the UTC limits and specific exemptions listed for the substance PFOA, including a provision to phase out or remove exemptions which are no longer required, and tighten the requirements regarding a specific exemption for use of PFOA in PTFE micropowders.

Annexes 4 and 5 of the POPs regulation relate to the treatment of waste containing POPs. This instrument will add or update waste concentration limits for several POPs. In practice, these limits specify the concentration at which waste containing POPs must be diverted from landfill to high-temperature incineration or other appropriate disposal to ensure that the POPs content is appropriately destroyed. Importantly, this includes the introduction of a limit specifically targeted at firefighting foam mixtures containing PFOA, a substance in the PFAS group of chemicals, to ensure environmentally sound disposal of any remaining stockpiles of these foams.

This instrument will update the maximum concentration limits for a number of POPs and add decaBDE, a brominated flame retardant, to the list of PPDEs in annexe 5 of the POPs regulation. Maximum concentration limits set the threshold at which waste handlers can apply to permanently store certain wastes in designated landfill for hazardous waste or salt mines, where it can be demonstrated that destruction is not the environmentally preferred option. The instrument will also add two new European Waste Catalogue codes to the provision: one for fly ash from peat and untreated wood, and one for soil and stones.

Policy development informing this instrument was subject to a public consultation in 2023. In the public consultation, we also stated our intention to prohibit the three new substances once they were adopted for listing under the convention, to implement our international obligations. There have been various opportunities at both domestic and convention level for UK stakeholders to submit information regarding the potential prohibition of UV-328, dechlorane plus and methoxychlor, and their potential adoption for global elimination under the Stockholm convention.

A de minimis impact assessment was carried out. This concluded that there is no indication that the amendments in the instrument are expected to have an impact on businesses, beyond one-off familiarisation costs, and that this instrument is not expected to disproportionately burden small businesses.

The Environment Agency is the delivery body for the POPs regulation for England, and Natural Resources Wales and the Scottish Environment Protection Agency are the delivery bodies for Wales and Scotland respectively. They have been involved in the development of this instrument and have no concerns in relation to implementation or resources.

The territorial extent and application of this instrument is Great Britain. Under the Windsor Framework, the EU POPs regulation applies in Northern Ireland. The devolved Administrations in Wales and Scotland were engaged in the development of the instrument and have consented to it being made on a GB-wide basis.

In conclusion, I emphasise that the measures in this instrument are needed, in part, to implement requirements of the Stockholm convention by adding new POPs UV-328, dechlorane plus and methoxychlor to the list of substances that are prohibited in GB by law. Other amendments included in this instrument ensure that the POPs regulation is adapted to scientific and technical progress in our understanding and treatment of POPs. The draft regulations will allow the UK to implement the Stockholm convention requirements to prohibit, eliminate or restrict the production and use of POPs.

I hope noble Lords will support these measures and their objectives, and I commend the draft regulations to the House.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the Minister for her introduction. I understand why the changes to these regulations have been brought forward, in order to take account of changes to scientific and technical progress, and to stay in line with amendments to the Stockholm Convention on Persistent Organic Pollutants. The UK is a party to this critical convention, and it is important that we ensure that the country and the public as a whole are protected from toxic substances.

The four qualifications for substances being classed as a POP are that they are persistent, toxic, bioaccumulative and subject to long-range environmental transport. This SI makes amendments to the lists of substances in annexe A of the convention. The SI lists these substances as UV 328, dechlorane plus and methoxychlor. The instrument also lists unintentional trace contaminant UTC limits for those substances, and adds two new POPs to this category which are already prohibited under the ordinary POPs regulations: hexachlorobenzene and pentachlorophenol. There are other substances named which are covered by the SI, but I readily admit that, not being a chemist or a scientist, some of the detail is outside my experience.

Paragraph 5.8 of the Explanatory Memorandum refers to certain POP waste being permanently stored in designated hazardous waste landfill or salt mines when destruction is not the environmentally preferred option, as the Minister referred to. I assume that the salt mines referred to will be depleted and never brought back into use. Can she provide reassurance on this matter?

The SI also expands the scope for three offences under the POP regulations of 2007, but neither the Explanatory Memorandum nor the SI says what the penalties for the offences are. Can the Minister provide clarification on this?

An eight-week public consultation took place from 3 March to 23 April 2023. There were 58 responses. Of those, 14—24%—were from industry associations, 16% were from large businesses of 250 or more employees, 16% were from local authorities, 9% from charities, 5% from small and micro-businesses of less than 50 employees, 3% from medium businesses of 50 to 249 employees, 2% from NGOs, 2% from a government body and 2% from a consultancy. There was also 9% from “other”. I wonder who the “other” were, as the website did not say. This is a very wide range of responses on quite a specialist area. The consultation response and the Government’s responses are very detailed and are on the website. I am therefore satisfied that those who will have to implement these regulations know what is likely to happen.

The regulations come into force 21 days after the day on which they are made, which I imagine will be one day next week. Can the Minister confirm this? This is a very specialist subject, but it is important that toxic substances receive adequate regulation. I believe the SI does this and I am happy to support it.

[Lord Roborough (Con)]

My Lords, I also thank the Minister for bringing these regulations to the Committee and for opening this debate. We wholeheartedly support the Government in their work to build on our strong track record of tackling pollution and effectively managing substances that are persistent pollutants.

These regulations amend EU regulation 2019/1021 of the European Parliament and Council on persistent organic pollutants to alter the rules for the management of certain substances under the persistent pollutant regime. It is important that the Government have the right rules in place for the management of substances that can pollute our environment over many years because they break down slowly. We welcome these regulations.

What assessment have the Government made of our pollutant regulation regime since they took office? Can the Minister confirm whether they have identified any areas of pollution where Ministers intend to change our existing regime or whether they feel that it is currently satisfactory? Can she give some idea of current trace levels of these persistent pollutants and how they compare with the limits in this instrument? Further to that, can she reassure this Committee that these new limits will ensure that none of these pollutants can be intentionally introduced in manufacturing, except for the specified products?

The Minister set out exemptions for the use of these chemicals. Can she explain why these exemptions are necessary given the awful long-term consequences of allowing any production of these chemicals and compounds? Finally, what steps are the Government taking to monitor the levels of “forever chemicals” in our environment to ensure that these levels are within a safe range?

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, and the noble Baroness, Lady Bakewell of Hardington Mandeville, for their support for this SI. It is very much appreciated. This was a small but perfectly formed debate on something complex but nevertheless important, because these draft regulations ensure that existing legal provisions for the prohibition and restriction of the manufacture, placing on the market and use of POPs will be extended to the new substances, and they also amend the annexes.

--- Later in debate ---

[Lord Roborough (Con)]

Has the Minister any more information on trace limits as a result of historic manufacturing of these persistent pollutants, compared to the limits in the instruments? That would be interesting and I completely understand if that might need a letter rather than an answer now.

[Baroness Hayman of Ullock (Lab)]

That is an extremely important point, and it is probably part of the research currently being carried out in this sphere. I will check and we will get back to anyone with any outstanding questions.

Motion agreed.

Animal Welfare (Livestock Exports) Enforcement Regulations 2024

Baroness Hayman of Ullock Excerpts

Wednesday 6th November 2024 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

That the draft Regulations laid before the House on 21 May and 12 September be approved.

Considered in Grand Committee on 5 November.

Motions agreed.

Biodiversity Net Gain

Baroness Hayman of Ullock Excerpts

Wednesday 6th November 2024 Lords Chamber

[Baroness Parminter]

To ask His Majesty’s Government what assessment they have made of the effectiveness of the implementation of the biodiversity net gain provisions.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, it is almost nine months since biodiversity net gain became mandatory for most developments. We are pleased to see stakeholders embracing this opportunity to deliver much-needed development while improving the environment at the same time. Officials are monitoring implementation closely and engaging with sectors, including developers and local authorities. We have updated guidance to provide clarification on areas of concern and will continue to refine the policy to ensure that it achieves intended outcomes.

[Baroness Parminter (LD)]

I thank the Minister for her reply. She may know that analysis has shown that only 7% of planning applications are identifying a need for biodiversity net gain, which is massively lower than all of us, including the Government, expected. I am very pleased to hear that officials are monitoring the situation, but will they be reviewing the exceptions, some of which are proving to be rather large loopholes, to ensure that biodiversity net gain builds nature’s recovery and the sustainable homes that we need?

[Baroness Hayman of Ullock (Lab)]

The noble Baroness is referring, I assume, to the exemptions in place for applications that have no or a very limited impact on biodiversity. That was brought in to ensure proportionality and to keep the planning system moving. However, Defra is working with the Ministry of Housing, Communities and Local Government to review planning statistics and specific applications.

[Lord Cromwell (CB)]

My Lords, I am currently involved in negotiating with a developer on biodiversity net gain. This involves boxes of huge and very expensive files, which have to be redone every time Defra changes the metric and locks the land into a commitment of 30-plus years. The developers tell me that their traditional landscaping required under planning often exceeded what is required under biodiversity net gain. Can the Minister give us any data on what real net gain is being achieved?

[Baroness Hayman of Ullock (Lab)]

Clearly, this is still fairly new for planning applications. It came in only eight months ago, so we are considering how we move forward. I do not have data on that to hand, and I am not sure we would have it available at present, as it has been only about eight months, but I will check and get back to the noble Lord.

[The Earl of Courtown (Con)]

My Lords, the last Government improved biodiversity monitoring, setting targets to prevent species loss and create half a million hectares of habitat by 2042. Given the important role nature-based solutions play in improving biodiversity, can the Minister confirm that the Government will encourage the use of such solutions to tackle pollution from our water sector?

[Baroness Hayman of Ullock (Lab)]

The noble Earl makes an extremely important point. Of course, it is very important that we use nature-based solutions to tackle all kinds of pollution, not only water-based ones. We are very keen to see such solutions implemented.

[Lord Teverson (LD)]

My Lords, the Government inherited in their departmental diary a provisional date of November 2025 by which to include biodiversity net gain for nationally significant infrastructure projects. Will the Minister confirm that they will go ahead with that on that date? I encourage them to do so.

[Baroness Hayman of Ullock (Lab)]

I can confirm that we are planning to consult very shortly on applying biodiversity net gain to nationally significant infrastructure projects—NSIPs—without any broad exceptions.

[Baroness Boycott (CB)]

My Lords, in all the planning applications in the biodiversity net gain provisions, are the Government paying attention to the importance of corridors that allow nature to travel between different building sites? Otherwise, it gets too isolated and dies off.

[Baroness Hayman of Ullock (Lab)]

The noble Baroness is right—corridors for wildlife are incredibly important. Many developments have to give due regard to removing hedgerows, for example, in order that they do not stop routes for wildlife such as dormice. It is extremely important and, on all developments, Defra is working with MHCLG to ensure that the environment is taken into full consideration.

[Lord Fox (LD)]

The Minister has spoken about biodiversity and infrastructure projects. How about marine biodiversity? Can the Minister set out the Government’s position on enhancing the regaining of marine biodiversity?

[Baroness Hayman of Ullock (Lab)]

I am sure the noble Lord is aware that restoring marine biodiversity is very complicated. In many ways, it is more complex than restoring biodiversity on land; it is a very challenging subject. Clearly, we need to look at the marine conservation zones to see what they can do, and to work internationally on this because it is a broad international area. The Government are reviewing this at the moment.

[Lord Fuller (Con)]

My Lords, last harvest, the UK’s wheat production fell by 30%—from 14 million to 10 million tonnes. One of the reasons was that so much land had been taken out of production for environmental schemes. We have heard that land for BNG must be locked away for 30 years. What assessment has been made of the long-term impact on our food security of locking land away for a generation, making it unavailable for food production?

[Baroness Hayman of Ullock (Lab)]

I suggest that the noble Lord looks in detail at our land use frame- work when we put it out for consultation shortly. That is one of the things we want to look at, and it is why we are doing the framework: we need to balance our need to produce food against environmental considerations—where we plant our trees, build our houses, and so forth. I look forward to a good debate on that subject.

[Baroness Boycott (CB)]

My Lords, is the Minister going to ban bottom trawling in marine protected areas?

[Baroness Hayman of Ullock (Lab)]

We are looking at bottom trawling at a site-specific level because there are different challenges in different areas. As I said, marine conservation is complex and has to take many things into account. There is quite a lot going on in this area and, if the noble Baroness wants to know the details, I am happy to send them to her or to meet to discuss this further.

[Baroness Redfern (Con)]

My Lords, in the light of the implementation of the biodiversity net gain provision, and given the need to ensure that assessments are done by competent people and that landowners are paid a fair price for their credits, so that they can deliver on their commitments, how are His Majesty’s Government ensuring that the LPAs are equipped to handle the additional burden on their planning officers, and will additional planning officers need to be recruited?

[Baroness Hayman of Ullock (Lab)]

Yes, the Government have committed over £35 million in ring-fenced funding to local planning authorities to help them prepare for and implement biodiversity net gain. We have confirmed funding up to the end of next year and further funding will be in the next review.

[Lord Cromwell (CB)]

As we have some time left, may I ask the Minister to look into why farmers in the higher-level environmental protection scheme—the HLS—are being excluded from joining the SFI scheme, both of which she will be familiar with? I have been asking Defra for months why Ministers are not being advised of this discriminatory approach and I have yet to receive an answer.

[Baroness Hayman of Ullock (Lab)]

I am happy to go back to the department on this. We are going to open up the high-level applications next year, as I am sure the noble Lord is aware, and we are also looking at what we do with the legacy payments. I am happy to discuss this issue with him further, because we are making quite a lot of decisions on how we move forward.

[Lord Teverson (LD)]

My Lords, is not the answer to the question from the noble Lord on the Conservative Benches that if we do not have biodiversity and nature recovery, we will not have an agriculture industry in 30 years’ time?

[Baroness Hayman of Ullock (Lab)]

It is really important that we get the right balance between food production and environmental considerations. It is an important thing for any Government to take forward, and we are taking it very seriously. That is partly why we are doing the land use framework—to ensure that we deliver properly on both areas.

Budget: Implications for Farming Communities

Baroness Hayman of Ullock Excerpts

Tuesday 5th November 2024 Lords Chamber

[Lord Roborough (Con)]

My Lords, I refer the House to my interests as set out in the register, including as a farmer. The removal of half of inheritance tax relief over £1 million under agricultural property relief and business property relief is an attack on all family-owned businesses. Working family farmers are the least able to afford this tax due to high asset values and low incomes. How can the Minister defend this tax to the family farming community and all family businesses, where investment, entrepreneurship and aspiration are now undermined?

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, we understand farmers’ anxiety at changes to agricultural property relief. However, the vast majority of those claiming relief will not be affected by the changes. The latest data available shows that the top 7% of claims for agricultural property relief in 2021-22 accounted for 40% of the cost of the tax relief, with the top 2% accounting for 22% of the cost. Most families will be able to pass the family farm down to their children, just as previous generations have always done.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, farmers in Northern Ireland greatly appreciate that my noble friend the Minister has met the devolved Minister on a fairly regular basis to discuss a wide range of issues. When she next meets the Minister of Agriculture, the Ulster Farmers Union and the agricultural producers in the region, will she discuss the need for tax amelioration measures to provide for succession planning, to encourage young people into farming and protect farm families? There is a unique issue in Northern Ireland which needs to be addressed.

[Baroness Hayman of Ullock (Lab)]

As the noble Baroness said, I meet the Minister of Agriculture in Northern Ireland regularly and met the Ulster Farmers Union very recently, as well as the noble Baroness, to discuss these issues, and I know that my officials meet various organisations regularly to discuss them. I will be back in Belfast towards the end of this month and hope to meet the Ulster Farmers Union again shortly. As she pointed out, tax and succession planning is incredibly important. There is an issue with getting young people into farming, and I recommend that people talk to professionals about what is available to them for tax purposes going forward.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, a sustainable supply of food is essential for the country. The farming community is key to achieving this goal. The perception that farmers are wealthy is erroneous. Farmers have seen their income shrink as a result of the slow implementation of ELMS, and now they face the prospect of having to sell off or dismantle family farms to pay inheritance tax. The appalling headline “We can’t afford to let farmers die tax-free” is a gross distortion of the truth. What is the Minister doing to reverse this impression?

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[Baroness Hayman of Ullock (Lab)]

As I mentioned in my answer to the first question, most family farms will not be affected. The latest data shows that the top 7% of claims for agricultural property relief accounted for 40%. Regarding food security, we have made the largest ever investment in sustainable food production through the environmental land management schemes and are securing long-term food production through them. As part of the Budget, we announced £60 million for the farming recovery fund to support farmers affected by unprecedented extreme wet weather last winter, which the previous Government had not paid.

[The Earl of Devon (CB)]

My Lords, UK farming suffers a chronic lack of productivity and an ageing cohort of farmers. They have been encouraged to hold on to their farms by virtue of agricultural property relief and the inheritance tax benefit of dying in situ. APR reform may therefore improve matters by encouraging earlier transfer to younger generations. However, it will unduly punish those elderly farmers who have estate-planned with APR in mind. What will the Government do to ensure that those elderly farmers who are terribly stressed by this reform and who will not survive seven years are not unduly punished?

[Baroness Hayman of Ullock (Lab)]

The noble Earl makes an incredibly important point. We are aware that this is an issue. I stress that farmers will be able to access 100% relief for the first £1 million and 50% relief thereafter. That means an effective 20% tax relief rate and that an individual can pass up to £2 million, and a couple up to £3 million between them, to a direct descendant inheritance tax free. It is important that we make that clear. However, I stress again that there is financial advice out there. Many businesses and individuals take tax advice. I encourage all businesses, including farms, to do so.

[Viscount Hailsham (Con)]

My Lords, I declare an interest; while I no longer have agricultural land, members of my family do. Last year, on 20 December, the NFU issued a press statement which stated that Steve Reed, then shadow Defra Secretary, had assured the NFU that Labour had no plans to change agricultural property relief. The then NFU president said that

“it’s good to see Labour has listened to our concerns and recognised the importance of keeping this policy”.

Did the NFU misunderstand what Mr Reed said? Was Mr Reed unaware of the Chancellor’s plans? Had those plans been concealed from Mr Reed—or was the NFU being misled?

[Baroness Hayman of Ullock (Lab)]

Clearly, I cannot comment on the detail of a meeting that I did not attend. However, the Government’s commitment to supporting farmers and rural communities is unwavering and we have demonstrated this by committing £5 billion in the agricultural budget over the next two years. That is the biggest ever budget for sustainable food production and nature’s recovery.

[The Lord Bishop of St Albans]

My Lords, can the Minister help us a little? The Treasury figures state that fewer than 25% of farm businesses will be affected by the changes to APR on inheritance tax. However, the NFU estimates that up to half of all working farms could be impacted by the new tax rules. Why is there such a large discrepancy? Can she help us to understand what is going on?

[Baroness Hayman of Ullock (Lab)]

There are two things here. People are looking just at the first £1 million and not at the opportunity for individuals to pass further tax reliefs on, of up to £2 million for one individual and £3 million for a couple. Also, there has been confusion around the data given out by Defra and the Treasury. The Treasury data shows that around 500 estates a year across the UK would be impacted to some extent and about 25% of the total number of estates currently making use of APR. What the Defra data shows is the asset value of farms in England so, by looking at that data, people have assumed that more farms would be impacted. But you cannot draw a straight line between asset value and what it means for inheritance tax, because the number of claims—how many people would be impacted by the change—is affected by many things, such as who owns the business, the nature of the ownership, how many owners there are, how they plan their affairs, and so on; this is where you have some of the confusion.

[Lord Watts (Lab)]

My Lords, can I congratulate the Minister and the Government on ending this unfair treatment of farmers? This is not about farmers; it is about landowners. As we know, millionaire landowners have been buying up land to avoid taxes, and it is about time the Government caught up with them.

[Baroness Hayman of Ullock (Lab)]

My Lords, I appreciate the concerns that farmers have. I think they should look accurately at the figures. My noble friend makes an important point that some large landowners have been using the APR relief as a tax loophole.

[Lord Morrow (DUP)]

My Lords—

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[Baroness Hayman of Ullock (Lab)]

As I mentioned, I meet the Minister in Northern Ireland regularly. The noble Lord says that most of the farms are very small. My understanding is that the buildings—the actual farmhouses themselves—are not included, so that should not have an impact; but if I am wrong, I will clarify that to him. I know that the noble Baroness, Lady Rock, was very keen to ask about tenant farmers. We are having close conversations with the Tenant Farmers Association. I know that the Farming Minister met George Dunn yesterday, and if she would like to discuss the tenant farming aspect further with me I would be very pleased to do so.

Animal Welfare (Livestock Exports) Enforcement Regulations 2024.

Baroness Hayman of Ullock Excerpts

Tuesday 5th November 2024 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Animal Welfare (Livestock Exports) Enforcement Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, these regulations make provision for enforcing the live exports ban in the Animal Welfare (Livestock Exports) Act 2024. They create a robust and effective enforcement regime that builds on the existing requirements for animal welfare in transport and, importantly, ensures that the burden on industry is minimised.

Although animal welfare is a devolved matter, a joint approach to implementation and enforcement has been agreed with the devolved Governments in Scotland and Wales, as many export journeys begin in one jurisdiction and depart from ports located in another. This instrument therefore applies across England, Scotland and Wales to ensure a uniform, consistent enforcement of the prohibition across Great Britain.

This instrument provides powers to the Animal and Plant Health Agency, as the national regulator for animal welfare during transport, and to local authorities, which are responsible for enforcing it. First, to minimise circumvention of the ban and the need for enforcement action, this instrument provides for strengthened pre-export controls for livestock to be carried out by the Animal and Plant Health Agency. The current controls already require organisers of live animal transport to submit a plan of the journey, including departure and destination as well as rest stops. This plan, known as a journey log, must be submitted to APHA for approval for any long journey to a third country.

The new provisions in this instrument will require organisers of such journeys also to provide evidence of the purpose of their export. APHA will need to satisfy itself that the consignment will not be exported for slaughter or fattening before it approves the journey log, and it can refuse to approve the journey log on that basis. To facilitate this process, we have worked with the national beef, sheep and pig associations and the British Pig Association to establish a system whereby they will be able to assess and verify evidence provided by journey organisers. This system should provide journey organisers with a simple way of providing APHA with the required evidence.

The national associations have provided a similar service to industry for many years to facilitate shipments with P&O Ferries, which has a no-slaughter shipment policy. The industry is, therefore, familiar with the process of working with the national associations; we believe that this will encourage engagement and compliance with the new requirement.

It is important to be clear that the pre-export controls set out in these draft regulations do not apply to horses. We are taking a co-design approach to identifying solutions to prevent horses being exported for slaughter. We are working together with stakeholders, who know their industry best, to find the most effective solution. We expect to present specific measures for horses in a separate instrument for consideration in due course.

Secondly, these regulations provide a range of powers to APHA and local authorities; they are to be used in relation to both livestock and horses should investigative or enforcement action prove necessary. These include the power to serve a hold notice to prevent the movement of animals if an inspector suspects that they may be exported for slaughter or fattening. They also include a power of entry and inspection to premises, including vehicles, vessels and dwellings, where inspectors believe an offence is being, has been or is about to be committed, or where there is believed to be evidence of an offence on the premises. This includes a power of entry to private dwellings, subject to obtaining a warrant.

Exporters of livestock and horses will be required to retain records relating to the export of those animals for three years, which must be provided to an inspector on request. It will be an offence to fail to keep these records, to fail to comply with a hold notice or to obstruct an inspector. The penalty for these offences would be an unlimited fine in England and Wales or, in Scotland, a fine limited to level 5 on the standard scale.

These regulations provide the Animal and Plant Health Agency with the power to suspend or revoke a transporter authorisation if there is evidence of non-compliance with the live exports ban. Such decisions may be appealed, first through reconsideration by the Animal and Plant Health Agency then, if unsuccessful, in the relevant First-tier Tribunal.

We are taking a risk-based approach to regulating trade to ensure that the burden on industry is minimised while preventing circumvention of the ban and so minimising offending levels. This instrument is essential to ensure that we can effectively enforce this important animal welfare measure.

[Baroness McIntosh of Pickering (Con)]

My Lords, I welcome the regulations before us. I welcome the Minister to her position and thank her for setting them out.

We will not rehearse all the arguments we had in the debate on the Bill, but I welcome the fact that horses are not covered. I am sure that pony clubs across England, Wales, Scotland and Northern Ireland will be extremely happy to hear that. When does the Minister think she will be in a position to come back to the Committee to explain the position on horses and how it relates to the tripartite agreement?

I have a number of questions that reflect my concerns. I welcome the noble Baroness, Lady Rawlings, to her place; I think she is going to speak in a later debate. She will recall all the excitement around Brightlingsea, which was in my Euro constituency at the time, when one of the first incidents of live animals for export came to my attention. Of course, the cases have been small in number and heavily regulated by the EU and our own domestic regulations.

Paragraph 6.1 of the Explanatory Memorandum states that the regulations, certainly in England,

“will usually be enforced by the local authority”.

Has the Minister’s department done an impact assessment on the cost implications for local authorities and their resources, bearing in mind that we are well aware of the pressures on local authority budgets and resources at this time?

I regret that this is a unilateral measure and is not being imposed by our former partners in our erstwhile membership of the European Union. There is meant to be a legitimate trade in breeding stock and stock for racing. Obviously, it is excluded at the moment because of the prevalence of bluetongue disease. The last time we debated this, which was round about the time before the Bill gained Royal Assent, my understanding was that there were as yet no facilities to allow this practice to happen. This is a legitimate and very lucrative trade, and it is a source of great concern in the farming community that it will still not be permitted once we get over—in due course, I hope—the threat of bluetongue disease.

I perfectly accept that the Minister might not be able to respond today, but could she give us a written reply on where we are with the facilities? They have to be paid for. I understand that they could potentially be at Harwich, in my former Euro-constituency; they could be elsewhere, for example at Dover, but at the moment this is a very serious gap in a legitimate trade. Although it is not necessarily covered by the remit of these regulations, it is a great loss of earnings to those who ply that trade.

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[The Earl of Effingham (Con)]

My Lords, His Majesty’s Official Opposition welcome the Government’s Animal Welfare (Livestock Exports) Enforcement Regulations 2024. In government we took the issue of animal welfare very seriously, as evidenced by the passing of the Act to which this statutory instrument refers. The Animal Welfare (Livestock Exports) Act 2024 prevented the exportation of livestock for the sole purpose of slaughter or preparation for slaughter and received cross-party support.

We are pleased that the current Government continue to focus on this area by implementing the practical steps to ensure that the correct people are held responsible. Increasing the necessary requirements of evidence submission will allow inspectors to examine more closely the intentions of a transporter and ensure that there is sufficient evidence to indicate that an animal is not being taken to slaughter.

I thank the Minister for bringing this statutory instrument forward. We are satisfied that this is a sensible approach and have no issues to raise.

[Baroness Hayman of Ullock (Lab)]

I thank all noble Lords who have contributed to today’s debate. It has been a good debate and I am pleased that so many noble Lords have taken part in it, because this is an important piece of legislation and we were very pleased when in opposition to support the Bill through Parliament to becoming an Act.

As I said, the instrument contains a proportionate set of powers necessary for the Animal and Plant Health Agency and local authorities to enforce the live exports ban effectively. Without these powers to carry out checks and investigations and take enforcement action, there is a risk that the ban could be undermined.

I will check to make sure that I have answered the questions that were asked properly. If I have not, I will get back to noble Lords. There were some questions around equines—horses—from the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Trees. The noble Lord, Lord de Clifford, also mentioned horses. One question was around the delay in bringing in pre-export controls for equines. I am sure that noble Lords are aware that equines are currently exported for multiple purposes ranging from bloodstock moves to leisure activities. They can be privately or commercially transported and fall under numerous industry bodies or none at all. Registered equines are not subject to journey log controls, so at present there is no control point at which intervention by the regulator can occur to stop an export movement that might contravene the ban.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I was addressing some of the questions around equines. Due to the more complex nature of export movements of equines, we are taking a codesign approach to this issue, working together with stakeholders that know the industry best to find the most effective solution.

Questions were asked about the risks in delaying the controls. It is important that we take the necessary time to get this right. We want to ensure that equines will not be exported for slaughter but, at the same time, that the export of equines for legitimate purposes must not be impeded. We are working closely with industry to find that balance.

I was asked about the journey logs for registered horses. Again, we are working together with stakeholders to find the best approach to implementing the ban before we lay the draft enforcement regulations before Parliament, because we want to achieve a balance between ensuring that the ban is implemented effectively while minimising any burden on legitimate risks.

The noble Baroness, Lady McIntosh of Pickering, asked about the Government’s view on the live animal BCP issue. Clearly this is a commercial issue but we are sympathetic to the concerns of the businesses involved. Noble Lords may be interested to know that I have had a series of round tables with different groups of stakeholders to discuss the effectiveness of BCPs, how they work now and how to approach their future operability. We have a lot of feedback and information from stakeholders on this issue as part of tracking its progress, and are meeting with organisations such as the National Farmers’ Union that have a specific interest in live exports.

On enforcement, the noble Baroness, Lady McIntosh, asked about local authorities. Due to the robust pre-export controls and regulatory tools that will be in place, we anticipate very low offending rates. We have been working closely with local authorities to develop the right approach, and they agreed that enforcement action in relation to a live exports ban would have minimal impact on their finances.

The noble Baroness, Lady McIntosh, also asked about the capacity of abattoirs. As she rightly said, there have been no livestock exports for slaughter or fattening from Great Britain to the EU since the beginning of 2021. Prior to this, the number of animals exported for slaughter represented a very small proportion of the total number of animals processed in the UK every year. For example, in 2020, when we had issues with Covid and it stopped, slaughter exports from Great Britain to the EU accounted for less than 0.2% of sheep produced in the UK and around 0.02% of all livestock slaughtered in the UK. Slaughterhouse capacity has been able to absorb the additional supply of animals that may have previously been exported for slaughter, so we do not believe that any further steps are needed to ensure capacity.

The noble Baroness, Lady McIntosh, also asked about advice. Obviously, it is important that livestock exporters are made aware of any new requirements, and the Animal and Plant Health Agency will contact all authorised transporters to inform them of the new requirements before they are due to come into force. We are also engaging with the relevant stakeholder organisations.

I was asked—again, it might well have been by the noble Baroness, Lady McIntosh, who asked quite a few questions—about who is responsible for the hold notice. The transporter, or person responsible, has to comply. If they fail to do so, APHA can arrange for livestock to be returned to the place of departure or placed in suitable accommodation.

The noble Lord, Lord Trees, asked whether we would consider extending a live export ban to the whole of the UK, and other noble Lords asked about Northern Ireland. The live export ban does not apply to Northern Ireland. This is to ensure that farmers in Northern Ireland have unfettered access to both the UK and Republic of Ireland markets. Farmers in Northern Ireland routinely move animals to the Republic of Ireland for slaughter and fattening. I reassure noble Lords that I meet regularly with DAERA, and I have met the Ulster Farmers’ Union a couple of times, so we are very aware of the different pressures on transporting livestock in Northern Ireland and into the Republic.

The noble Lord, Lord Trees, and the noble Baroness, Lady Bakewell, asked about the importance of improving transportation of animals within the country—not going beyond. We need to monitor that very carefully, because animal welfare during any transport is obviously incredibly important. As a Government, we have said that we are committed to improving animal welfare. That is one reason why we are bringing in these regulations very early; we think it is important. At the moment, I am reviewing the animal welfare strategy more broadly and I hope to capture issues such as this within that broader strategy review.

The noble Baroness, Lady McIntosh, asked why records have to be kept for three years. The reason is that this is consistent with existing laws: at the moment, journey logs are required to be retained for three years.

The noble Lord, Lord Elliott, asked about the detail of assessment criteria. The assessment criteria have been developed and agreed with Defra, using the national associations’ knowledge of legitimate priming and breeding exports. This includes checking the pedigree status of animals as well as certain health requirements, such as sheep coming from an accredited scrapie-free flock. We do not intend to publish the assessment criteria, but guidance will be provided to journey organisers and transporters.

The noble Baroness, Lady Bakewell, asked for clarification about whether the ban is in force and how it works with this SI. The ban is already in force. The SI is just to enable the enforcement of the ban that came in previously, as she pointed out.

The noble Baroness, Lady Rawlings, asked about EU rules applying in GB. They do not apply. We have assimilated regulations and continue to protect animals in transport.

Finally, I thank the noble Earl, Lord Effingham, for his very kind words of support. It is important to recognise that the previous Government brought this legislation in. We strongly supported it and it is good to be working cross-party to ensure that it is now enforced effectively. We are committed to upholding the highest standards when it comes to animal welfare, and I am very pleased that we can now put forward these provisions to ensure that the ban on live exports for slaughter is implemented and enforced effectively.

Motion agreed.

Ivory Act 2018 (Meaning of “Ivory” and Miscellaneous Amendments) Regulations 2024

Baroness Hayman of Ullock Excerpts

Tuesday 5th November 2024 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Ivory Act 2018 (Meaning of “Ivory” and Miscellaneous Amendments) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, this instrument amends the Ivory Act 2018 to extend the prohibition on dealing in ivory from an elephant to include ivory from the following four magnificent species: common hippopotamus, killer whale, narwhal and sperm whale. Walrus was included in the original consultation. However, the SI does not include walrus as it will continue to be protected under existing regulations on trade in seal products.

The UK is committed to protecting these species, whose conservation status may be threatened by the trade in their ivory. All four species are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which regulates their trade internationally. Hippopotamus and sperm whale are listed as vulnerable on the International Union for the Conservation of Nature red list.

The objective of this instrument is to help conserve populations of the four additional species. The Act will prohibit commercial activities concerning trade in their ivories in the UK. This will prevent transactions involving items made of ivory from these species contributing to markets, which then create a demand for ivory, driving poaching and the illegal trade.

Extending the ban to these species will also make compliance and enforcement of the Act simpler and more effective, and will reduce opportunities for laundering ivory. It sends a strong signal that ivory should not be seen as a commodity for financial gain or as a status symbol.

This instrument also amends the Schedule to the Ivory Prohibitions (Exemptions) (Process and Procedure) Regulations 2022 on prescribed institutions to correct the names of some of the institutions prescribed under the Act. Lastly, it amends the Ivory Prohibition (Civil Sanctions) Regulations 2022 to make consistent the references to service of notices relating to civil sanctions. I beg to move.

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[The Earl of Effingham (Con)]

My Lords, His Majesty’s Official Opposition are in favour of any measures to preserve the rich tapestry of species on this planet, particularly those threatened with extinction. However, we have some concerns, not with the objective of this SI and the Ivory Act more broadly, but with some of the consequences of its drafting.

The SI extends the definition of ivory to include whale teeth and narwhal tusks. Although we agree with the banning of selling of modern items manufactured from these sources, there is no modern market for whale teeth or narwhal tusks. Old pieces of art, such as inscribed sailor’s knives or mounted narwhal tusks, will fall foul of these regulations and will have to be landfilled.

As we have heard already from my noble friends Lady Rawlings and Lord Carrington, there is virtually no import or export trade in whale teeth or narwhal tusks. In 2022, there were no commercial imports of sperm whale teeth, and just two teeth were exported. Narwhals are not on the International Union for Conservation of Nature’s endangered list.

While it could be argued that this legislation is an important aspect of our soft power, it is debatable whether this soft power has worked. It has not had much influence on the EU, which bans the import and export of ivory but allows it to be traded within the EU. Will the Minister please clarify to the Committee what outcomes she foresees from this decision? Will she outline why these measures have been implemented and say whether she can see that they may have unforeseen and unintended consequences?

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank all noble Lords for their contributions to the debate and for raising important points. As described earlier, extending the Act to these four species demonstrates UK leadership in support of international conservation efforts, setting an example at home to encourage similar actions globally. It makes the existing ban more effective and adds protections to four species that will complement those already in place internationally under the Convention on International Trade in Endangered Species.

I was involved with this the first time around, back in 2018, and, as the noble Baroness, Lady Bakewell of Hardington Mandeville, said, it seems to have taken an awful long time to get here. I wonder whether, like me, she had a stuffed narwhal on her desk—which my grandchildren have now chosen to play with. From our perspective, it is good to see these regulations in front of us.

This measure is part of a comprehensive package of UK leadership to tackle the illegal wildlife trade and reduce poverty, including through our Illegal Wildlife Trade Challenge Fund, which has allocated £57 million to 173 projects across 60 countries. These projects are reducing demand for illegal wildlife products, strengthening law enforcement, establishing effective legal frameworks and promoting sustainable livelihoods.

I turn to answer some of the questions, and hope that we do not have another vote in the middle this time. I will look first at the consultation and stakeholder engagement that took place ahead of this. There was a call for evidence in 2019 and a public consultation from 17 July to 11 September 2021 on extending the Act to other species. The consultation received 997 responses and a clear majority supported an extension to these species. The previous Government published their response to the consultation in May last year.

There is a conservation risk to each species as exhaustible natural resources, which includes the trade in their ivory, both legal and illegal, and how this relates to their conservation status and other threats that they face. There was a clear demonstration in the proportion of respondents who supported this option and the comments submitted that commercial exploitation of species that are endangered or accepted as being in need of protection from the threat posed by trade in their parts violates public morality. So that was the consultation and its outcomes.

The noble Lord, Lord Carrington, asked specific questions around the effectiveness of the Act. One was how many elephants had been saved to date. This is a cross-cutting policy, so it is not possible to say what impact the Ivory Act alone has had. For example, the Illegal Wildlife Trade Challenge Fund is a grant scheme that funds actions to tackle illegal wildlife and poverty reduction in developing countries. These projects contribute to reducing the demand for illegal wildlife products, strengthening enforcement and establishing effective legal frameworks, and promoting sustainable livelihoods through innovative approaches, partnerships and evidence-based interventions that protect endangered species, including elephants. So I cannot be specific, but it does play a role.

The noble Baroness, Lady Bakewell, asked for more information about why we are not extending it to walrus. As I said, walrus were included in the original consultation but are not now, because they continue to be protected under existing regulations on the trade in seal products. Under these regulations, seal products, including walrus ivory, can be imported and placed on the UK market for sale only in very limited circumstances and subject to strict conditions. You can bring seal products to Great Britain and sell them only if they qualify under the Inuit and other indigenous communities exemption and have a seal catch certificate. This is an attestation document that proves that the item is exempt and that the seal products are certified as coming from a traditional hunt carried out by the Inuit or other indigenous communities. The hunt must be carried out for and contribute to the subsistence of the community, and must consider the welfare of the animal. I hope that goes some way towards answering the question from the noble Baroness, Lady Rawlings, around the fact that we work with indigenous communities on these pieces of legislation.

Further questions from the noble Lord, Lord Carrington, were to do with trade and why we decided to add these species. The main problem is that international trade in these species needs to be regulated to ensure that it does not threaten the species’ survival. The UK is also a net exporter of ivory from these species, and we are concerned that it fuels global demand and the market for these ivories.

[Lord Carrington of Fulham (Con)]

The Minister is, I think, getting slightly confused about what I asked. I was not asking whether ivory is being exported; clearly, it is not now, because it is banned. But narwhal tusks are not banned and there is no evidence that they are being exported or imported. Also, the evidence we have is that, in 2022, no sperm whale teeth were imported and two were exported. What I am saying is that, distinct from the ivory market—we can probably dispute that—the products covered specifically by this SI are exported or imported in such small quantities as to have no effect on international trade at all.

[Baroness Hayman of Ullock (Lab)]

I thank the noble Lord for his comments. I still think that there are issues around the fact that these species are endangered. We should be covering them in existing legislation that could have an impact on them in future. It is important that that is covered.

The noble Lord asked about exemptions, so let me come on to them. If an item is 100% ivory, it can be kept or follow the exemptions in Section 2 of the Act, of which I am sure he is very aware. Several other countries have closed their domestic ivory markets so, again, it is not just the UK looking at this as an action.

I should say that I have some information about narwhal ivory, which has just come through—apologies. In the 10 years between 2009 and 2019, commercial imports and exports of narwhal ivory totalled 33 items, while those of sperm whale ivory totalled 203 items. I hope that helps clarify the matter.

It might be helpful, as this issue came up a bit, for me to remind noble Lords what the exemptions to the ivory ban are. There are five exemptions, which will apply to all species once this instrument has gone through: musical instruments made before 1975 with less than 20% ivory by volume; items made before 3 March 1947 with less than 10% ivory by volume; portrait miniatures made before 1918 with a total surface area of no more than 320 square centimetres—and we have another vote.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I was just going through the exemptions to the Ivory Act and had just finished talking about portrait miniatures. Also exempt are items a qualifying museum intends to buy or hire and items made before 1918 that are of outstandingly high artistic, cultural or historical value. I mention that because it has come up quite a lot during the debate, and for clarification because it is some years since the Act came into play.

The noble Lord, Lord Trees, asked a specific question about people going on holiday, small items and so on. This fits with the question from the noble Baroness, Lady Rawlings, about indigenous peoples. To be clear, the Act bans imports for the purposes of dealing. Individuals who are visiting communities outside the UK can purchase items from them directly and bring them into the UK as personal possessions as long as they meet the requirements under CITES. That provides clarification on that point.

With that, I hope I have answered most questions; I will check and come back to noble Lords if I have not.

[The Earl of Effingham (Con)]

I think the Minister said that narwhals are an endangered species, but we believe that they are not endangered; there are around 80,000 mature adults in their population. If the Minister could come back to us at some point, it would be much appreciated.

[Baroness Hayman of Ullock (Lab)]

I clarify that all four species being added to the Act are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora. I hope that helps to answer the noble Earl’s question.

Motion agreed.

Water (Special Measures) Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 4th November 2024 Lords Chamber

On these Benches, we believe that setting up a water restoration fund is a much more effective and transparent way of moving forward. It is also more likely to see the necessary investment in infrastructure carried out in a timely fashion. I will listen to the Minister’s response. However, I do not feel certain that she will give this amendment a positive welcome.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for raising this important issue and tabling Amendment 70, which speaks to the administration of fines. I too welcome the noble Baroness, Lady Bakewell of Hardington Mandeville, back to her rightful place. I hope that she is now completely recovered, but I also congratulate the noble Earl, Lord Russell, on doing such a sterling job in her absence.

I emphasise that the money from civil penalties imposed by the Environment Agency and fines issued by the court go to the Government’s Consolidated Fund. This is in line with other enforcement regimes under the Regulatory Enforcement and Sanctions Act 2008. On the use of penalty funds, the water restoration fund, which launched in April this year, is reinvesting water companies’ environmental fines and penalties into projects to improve the water environment. Up to £11 million of funding from fines and penalties accrued since 2022 was made available on a competitive basis to support a range of water restoration projects. Defra is continuing to work with His Majesty’s Treasury regarding the reinvestment of water company penalties and fines, because while the Budget has of course now been announced, decisions have not yet been taken on all departmental spending.

I assure noble Lords that there are existing procedures in place to ensure that customers are reimbursed for poor performance. As the economic regulator, Ofwat sets specific performance targets for water companies and, where these are not met, companies must reimburse customers through lower water bills in the next financial year. I will give an example: as a result of Ofwat’s annual performance assessment process, it is requiring 13 companies to return £157 million to customers for underperformance in the financial year 2023-24.

Ofwat also has powers which ensure that companies return money to customers for failings related to specific breaches. For example, in 2019 Southern Water returned £123 million to its customers as a result of an Ofwat enforcement case. I hope that the noble Lord is therefore content that this amendment is not necessary, as we believe it would duplicate existing protections.

[Lord Roborough (Con)]

My Lords, I am grateful for the comments from the Minister. It is perhaps not the fullest reassurance that I was looking for about the future destination for fines and penalties. Amendment 70 is, by its nature, a probing amendment and I look forward to further discussions with the Minister.

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Moved by

[Baroness Hayman of Ullock]

71: Clause 6, page 11, line 9, at end insert—
“(11) Section 5(6) also applies for the purposes of this section.”Member’s explanatory statement
This amendment provides that Clause 6 applies to water supply and sewerage licensees only in relation to their licensed activities.

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[Lord Roborough (Con)]

My Lords, I shall speak to Amendment 73, moved by the noble Earl, Lord Russell. I thank the noble Earl, the noble Lord, Lord Sikka, and the noble Baroness, Lady Jones of Moulsecoomb, for their contributions.

On these Benches, we have grave concerns about these amendments. While it is important that the water sector operates with integrity, we fear the amendments may have unintended consequences that could destabilise the industry and ultimately be detrimental to the public and the environment.

On Amendment 73, the power to revoke a water company’s licence is one of great consequence and must be exercised judiciously. An abrupt removal of a licence, without sufficient consideration of the ramifications for infrastructure and service continuity, could leave customers vulnerable and lead to service interruptions. It would also be a very substantial barrier to private sector investment. Investors must be able to have confidence that they will be able to enjoy returns on their investments without elevated risk of loss of licence. Should such an amendment be included in this Bill, it would lead to a much higher cost of capital for the industry and higher consumer bills as a consequence. While we appreciate the intent to hold companies accountable, we suggest exploring whether there are more balanced approaches to achieving compliance, without risking instability.

Amendment 97 raises further concerns. The possibility of cancelling debt in the event of special administration proceedings could create moral hazard. This amendment, while aiming to protect consumers from the fallout of financial mismanagement, might inadvertently incentivise risky financial behaviour by companies under the impression that their debts could be forgiven in times of crisis. The bankruptcy route already allows debt to be repaid in part or renegotiated in an orderly manner, respecting the contractual rights of all creditors. This would not be desirable.

As for Amendment 98, this is a matter of significant complexity. We must not overlook the potential costs and operational challenges associated with such transfers. The water industry requires immense resources, infrastructure investment and technical expertise. A shift to public ownership would strain government resources and create operational challenges. We support the Government in not wishing to see a return to public ownership of the industry.

I wish to address Amendments 99 and 102. These amendments would empower the Government to put companies into special administration if they breached certain environmental conditions or held criminal convictions. While we wholeheartedly support stringent environmental standards and rigorous compliance, it is essential that these mechanisms do not inadvertently undermine the ability of water companies to continue their core operations. The amendments could place companies in special administration for relatively minor infractions, which may not warrant such a severe response.

We must be careful not to adopt measures that could disproportionately impact employees, customers and investors who depend on the water industry. I thank noble Lords for tabling these amendments and regret that we cannot support them—and could not even before the noble Baroness, Lady Jones, gave her views on my party.

[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for the suggested amendment in relation to water company ownership.

I come first to Amendment 73, in the name of the noble Earl, Lord Russell. The intention of the amendment is to provide Ofwat with the power to remove a water supply or sewerage licence with six months’ notice. I want to emphasise that the Government’s priority is to ensure that customers have a safe and stable supply of water. We are concerned that the proposed amendment could jeopardise this.

There are already established measures to replace an existing sewerage undertaker, by way of licence removal, under certain scenarios. For example, while it is true that an undertaker’s appointment is made for a period of at least 25 years, I can reassure noble Lords that it is not true that appointments cannot be terminated until 25 years have passed. If an undertaker cannot carry out its functions, Ofwat has powers to terminate the appointment, provided that a replacement can be identified and that the undertaker consents.

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[Baroness Jones of Moulsecoomb (GP)]

Before the Minister sits down, I had better clarify: I want another Labour Government only if I cannot have a Green Government. On the issue about having monopolies where market forces do not operate, can she see that there are inherent problems in having monopolies on something such as water—or any public service that we all need?

[Baroness Hayman of Ullock (Lab)]

I completely get the noble Baroness’s point. I would hope that, when we do the review, we look completely across all the issues to do with a water company, including the way it behaves because of the way it is set up, and that that should be part of any consideration. By the time we have reported, I am sure the noble Baroness will be very happy to have another Labour Government.

[Earl Russell (LD)]

I thank the Minister for her responses on this group. Mine was a probing amendment and I appreciate her response. I fully recognise that there would be issues with six months as a period, but I think it is important that we have a discussion about the power of revoking licences. I appreciate that the Government are keeping that under review. On Amendment 97, I appreciate what she says about the courts and their powers in all this: that was a welcome response. On Amendment 98 on the public ownership of water companies, I think her response to the noble Lord, Lord Sikka, giving those figures and calculations, was useful in moving that debate forward. Obviously, there are costs involved in that and in the Government supporting failing water companies as well. I know that these are difficult matters. Of course, on our Benches we want to have public ownership of water companies, and we will continue to support that, but I thank the Minister for her inclusive responses and I beg leave to withdraw the amendment.

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Moved by

[Baroness Hayman of Ullock]

76: Clause 7, page 11, line 25, leave out from “if” to end of line 28 and insert “—
(a) it is held by a water undertaker or sewerage undertaker, or(b) it is held by a water supply licensee or sewerage licensee, within the meaning of the Water Industry Act 1991, for the purposes of the activities to which its water supply licence or sewerage licence relates;”Member's explanatory statement
This amendment provides that Clause 7 applies to water supply and sewerage licensees only in relation to their licensed activities.

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Moved by

[Baroness Hayman of Ullock]

83: Clause 8, page 12, line 32, at end insert—
“but, in relation to water supply licensees and sewerage licensees, includes those functions only so far as performed in respect of the activities to which their licences relate.””Member’s explanatory statement
This amendment provides that Clause 8 applies to water supply and sewerage licensees only in relation to their licensed activities.

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[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, it is a while since I have taken part in proceedings where a stand part debate has been used to try to remove clauses of a Bill. On our Benches, our departed colleague Lord Greaves was very fond of this measure to enable him to make detailed speeches railing against the Government of the day’s proposed legislation.

The noble Lord, Lord Roborough, has set out his case eloquently for why he believes that Clauses 10 and 11 should be removed from the Bill. Clause 10 refers to England, and Clause 11 offers the same powers to Welsh Ministers. Both clauses are complex and deal with the recovery of losses. I respect the motives of the noble Lord, who appears to be on the side of the water industry and the bill payers at the same time. However, when 15,000 people from around the country are prepared to give up their Sunday to come to London to join a protest against the action of the water companies, I fear that he may have misjudged the mood of the water company bill payers. The public are rightly furious that, while their water and sewage bills have increased, the infrastructure has not been improved, but directors’ bonuses and shareholders’ dividends have not reflected the poor service that some water companies have given. I say “some” water companies, because some are performing well and do meet their targets; unfortunately, it is the ones that do not do so that we hear about on a continual basis.

Removing from the Bill the two clauses, which would have seen some balance being provided to enable costs to be recovered from those water companies that have failed to deliver on their Ofwat targets, is to give a signal to bill payers that the poor service that they have received is acceptable. If Clauses 10 and 11 are removed from the Bill, there would be no clarity on what is happening or how recompense would be achieved. I am therefore afraid that, on the Lib Dem Benches, we are unable to oppose these clauses standing part of the Bill.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for his interest in Clauses 10 and 11 and also thank the noble Baroness, Lady Bakewell, for her support for them standing part. A special administration regime—or SAR—enables a company that provides vital public services to be put into administration in certain circumstances to ensure that the public service will continue to be provided pending rescue or transfer to new owners. An SAR would be required only when there is evidence that a company is insolvent or in serious breach of its statutory duties. It is the ultimate enforcement tool in Ofwat’s regulatory toolkit and, as such, as I said in the last debate, the bar is set high.

Although government has had the powers to place water companies into special administration for over three decades, it is important that we regularly update legislation to reflect modernisation of law and experiences in other sectors. If a SAR occurs, government funding would be required to cover the costs of a special administration, including both operational and capital expenditure—for example, ensuring that statutory environmental obligations were met, as well as for paying the cost of the special administrator.

In the unlikely event that the proceeds of a sale or the repayments agreed as part of a rescue at the end of a SAR are insufficient to cover repaying government funding, there is a risk of a funding shortfall. Clauses 10 and 11 introduce a flexible power, allowing the Secretary of State and Welsh Ministers to recover any shortfall in funding in a manner that is appropriate to the circumstances. They allow for modification of water company licences to recover any shortfall in financial assistance provided in a water industry SAR. These clauses will align the water industry SAR regime with the energy sector. Without this power, there is a risk that taxpayers will foot the bill for the water industry SAR.

The Secretary of State and Welsh Ministers will be able to decide whether or not they should use this power and the rate at which the shortfall should be recovered from customers. This will include which group of customers it should be recovered from—for example, all water company customers, a subset of the sector, or only customers whose water company went into a SAR.

Although the power is flexible, the design of a recovery mechanism will be subject to consultation with all relevant sector stakeholders. The Government must consider these views and explain our approach accordingly. If a SAR occurs and this power is ever required, this will allow a decision to be made, and be consulted upon, on what the fairest cost recovery option is, based on the evidence and circumstances at the time.

I reiterate that the shortfall recovery mechanism does not mean that customers end up paying for water companies’ failures. Any intervention that would increase customer bills would be considered very seriously and as a last resort. In the first instance, the Government would seek to recoup all the funds spent on financing the SAR through the sale or rescue of the water company after the administrators’ conclusion. This new power would be utilised only if it were not possible to recover what the Government spent funding the administration. If there was a shortfall, Ministers would then decide whether they felt that it was appropriate to exercise this power.

This power would allow the Secretary of State to decide, subject to consultation, the rate at which the shortfall should be recovered from customers and which group of customers it should be recovered from, as I just mentioned. This will ensure that the shortfall recovery mechanism is always implemented in a way that ensures that costs are recovered fairly. I hope that noble Lords agree that this power is essential to protect taxpayers’ money in the event of a SAR, and that these clauses should stand part of the Bill.

[Lord Roborough (Con)]

My Lords, the noble Baroness, Lady Bakewell of Hardington Mandeville, may have misunderstood me. Far from speaking in favour of the water industry, I am seeking additional protection for the consumer and companies that have not fallen into a SAR.

The Minister has not fully reassured me that the powers in this clause are necessary. The Government perhaps should stand as guarantor, not the innocent. That this measure is very unlikely to be used is not in itself reassuring to me, but at this stage I will not press my opposition to the clauses standing part.

Water (Special Measures) Bill [HL]

Baroness Hayman of Ullock Excerpts

Committee stage
Wednesday 30th October 2024 Lords Chamber

[Lord Blencathra (Con)]

My Lords, on behalf of my noble friend Lord Bethell, I am pleased to move Amendment 52 in his place. This amendment seeks to increase and improve the monitoring undertaken by water companies after an emergency overflow.

The amendment is quite straightforward. It makes the case that, where there is a discharge from an emergency overflow, the undertaker must regularly assess the environmental health of that inland water within 500 metres downstream of the overflow. My noble friend then suggests that the methods used to make assessments under that subsection must include the use of fish counters or other methods of accurately monitoring the fish population. I accept that there may be a weakness here because, unless one knows what the fish count was before the overflow happened, it may be difficult to come to a conclusion as to the number of fish which should be in the river after the overflow has taken place. The undertaker must also prepare a report on the results of these assessments on a quarterly basis and submit it to the authority, and, after having done so, the undertaker must publish the report within 30 days. In addition, in accordance with everything else which has been said in debates tonight, the information must be in a form which helps the public to readily understand it, be published in a way which makes it readily accessible to the public, and be published in the undertaker’s name.

For those reasons, we on these Benches want to protect our rivers and restore the health of those rivers that have been seriously affected by pollution. Thanks to our efforts in government to drive up monitoring, 100% of emergency overflows are now monitored, and as such, we are able to access information about all emergency overflows that occur. This was a seriously transformative step forward compared with the situation we inherited in 2010 but we accept the need to go further, and we support better monitoring of both overflows and of the overall health of rivers themselves.

With the level of monitoring achieved under the Conservatives, it is now possible to learn far more about these incidents and therefore to take action to prevent them happening again. However, this does not mean that water companies are now taking enough responsibility to publish the results of this monitoring and to report their findings so that they can be held to account.

This amendment focuses on an area that the Bill does not address and ensures that the health of our rivers, not just the extent of pollution incidents, is a central component of the Bill. The inclusion of monitoring 500 metres down the river will give a real insight into the impact that an overflow is having on the overall health of a river over time. This monitoring will ensure that water companies cannot downplay the damage and leave the natural area to be ruined; instead, they will have to take a responsibility for a wider area that these emergency overflows can impact.

We on these Benches support this amendment in its intention to ensure that regular reporting is done so that the public are able to access up-to-date information on the overall health of our rivers beyond the immediate aftermath of any emergency overflow.

I know that many amendments in the previous group were related to monitoring of emergency overflows, and, although this amendment specifically relates to river health, I am sure there will be cross-party support for much of the previous group and for this amendment to ensure that water companies can be held publicly accountable for their action after emergency overflows.

I hope the Minister will take the concerns of my noble friend Lord Bethell as expressed in this amendment seriously and will consider it. Once again, we feel this is a timely opportunity to deliver a positive reform in the Bill today rather than waiting for the wider reform which the Government have proposed. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, I thank the noble Lord, Lord Bethell, for raising this important issue and tabling Amendment 52, and the noble Lord, Lord Blencathra, for moving it in his absence. I start by reassuring him that I always take the concerns expressed in this House very seriously. I think that we agree that understanding the impact of sewage discharges on the environmental health of rivers is vital.

Clause 3 requires water companies to provide information on the frequency and duration of discharges from emergency overflows. These measurements will enable regulators and the public to see, in near real time, when a discharge from an emergency overflow has occurred, and how long it lasted for. This will, in turn, enable resource to be directed to investigate the cause as well as the impact of a discharge, and will enable the regulators to take enforcement action if it is required.

However, this is just one measure that the Government will use to better understand the impact of sewage entering our waterways. New continuous water quality monitors will be installed at storm overflows from 2025 to continuously measure the impact of sewage discharges on the receiving watercourse. The information gathered from these monitors will be key in supporting fish populations. Requiring the installation of additional fish counters downstream of emergency overflows may require additional structures in the watercourse and may impose additional costs on water companies and their customers.

This does not appear to be proportionate, given that emergency overflows should be used on only very limited occasions. The Government will therefore not accept this amendment. However, I hope that I have been able to reassure the noble Lord that the Government are using this Bill to enable quicker action to be taken to investigate discharges from emergency overflows.

[Lord Blencathra (Con)]

I thank the Minister for that response. I regret that she is not accepting the amendment but, if we accept her assurances that the monitoring of overflows will be thorough, that may negate the need for further monitoring downstream. I like to think that we will check the water further downstream than just within a short distance of the storm overflows, because what happens downstream is terribly important. I recall when the creamery at Appleby burst and flooded the River Eden. The damage was considerable for a couple of miles downstream. Checking what happens right beside the factory or the storm overflow is one thing, but it is important that we check downstream when the money allows. I beg leave to withdraw the amendment.

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[Lord Sandhurst (Con)]

My Lords, my Amendments 105 and 106 were commencement blocks when laid that sought to ensure that the Government published an assessment of the justice impact of the Bill before it could come into effect. I thank the Government for publishing their impact assessment, which makes it clear that there will be a small additional burden on our already strained prison estate as a result of the custodial sentences included in the Bill. I am satisfied that the Government’s impact assessment covers the justice impacts of the Bill, so I will not press my amendments.

That said, this is a good opportunity to raise the question of the Government’s priorities. We know the burden on our prisons will be small but is it not the wrong priority to sentence water executives to up to two years’ imprisonment at a time when the Government are releasing violent criminals early? Equally, there is the question of necessity. The Government’s own impact assessment states:

“Defra assumes there could be one case every two years with the maximum sentence of a two-year imprisonment based on the fact there has been four historic cases”.


So is this provision truly necessary? I hope that the Minister will be able to respond to these concerns in her reply.

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for introducing this small group of amendments, and the noble Lord, Lord Sandhurst, for his amendments on the issue of justice. I thank both noble Lords for their interest in ensuring that the Government are fully considering all the impacts of the Bill, on both the environment and the justice system.

Amendment 57, tabled by the noble Lord, Lord Roborough, relates to the reporting of impacts on environmental pollution. This Government share the noble Lord’s concerns that the number of water company pollution incidents has not reduced in the last few years. It remains unacceptably high. That is why the Bill seeks to increase accountability for water companies and their executives where they pollute the environment.

The Bill will enable automatic and severe fines for certain pollution offences, making it possible for the regulators to take swift action where it is clear that an offence has been committed. The Bill will increase transparency around pollution incidents by enabling the public and regulators to see where and how often emergency overflows are discharging and, as discussed in previous groups, by requiring water companies to publish pollution incident reduction plans on an annual basis. As I set out on our first day in Committee, the Bill provides Ofwat with legal powers to ban bonuses where companies fail to meet standards on environmental performance, financial resilience, customer outcomes or criminal liability. Collectively, these measures will strengthen enforcement and disincentivise pollution incidents.

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[Lord Sandhurst (Con)]

My Lords, this is a group of five amendments. Amendment 60 would reduce the maximum custodial sentence to 12 months. Amendment 61 would remove the word “connivance” in respect of a possible offence. Amendment 62 would prevent liability for those purporting to be officers of water companies. Amendment 65 would prevent individuals who impede investigations receiving custodial sentences, and Amendment 66 would reduce the maximum custodial sentence to 12 months.

We on these Benches have been clear that we support tougher measures in order to hold water companies to account. However, to put water executives in prison during a time that the Government have admitted is a time of crisis for prisons because of overcrowding is to us the wrong priority. I am concerned, as I am sure so many are across the Committee, that dangerous individuals are being released from prison having served less than half their sentence. I draw attention to the fact that this Government appear more focused on putting water executives in prison than on keeping violent offenders in, and that seems to be a wrong priority.

In the latest release, 1,100 prisoners were released, and although the scheme claims that none of those offenders are guilty of serious violence, sex crimes or terrorism, this is true only of their primary conviction. An additional 1,800 were released earlier in September. Some mistakes were made, as offenders were released who were not supposed to be. That is the context.

Amendments 60 and 66 in my name seek to reduce the maximum custodial sentence that a water executive can receive from two years down to 12 months. As it stands, prison resources are seriously overstretched, and it seems to be the case that the Government in this Bill are wrongly prioritising those resources. While I do not think that custodial sentences are the right way forward, if the Government insist upon them then can they at least reduce the maximum custodial sentence to 12 months to prevent further overstretching? That would have the added advantage of ensuring that these cases would not need to be heard in the Crown Court under the new provisions, which would prevent further strain on our court backlogs.

The Government’s own impact assessment admits that this measure will put a further burden on our prison services. While it is certainly necessary to hold water executives to account, I believe my other amendments address more appropriate penalties. There is no doubt that the pollution of our rivers is a serious issue. Measures to ensure that those who break the rules are dealt with, and that those who work for water companies do so properly, are necessary. However, these measures appear to be too severe at a time when prisons cannot handle further pressure. Can the Minister set out the Government’s position on releasing domestic abusers, only to put individuals who work on the boards of water companies into the same cells?

In the same vein, Amendment 65 seeks to prevent a custodial sentence from being placed on an individual who has impeded an investigation. While that is indeed a serious issue, our prisons cannot handle further pressure.

Amendment 61 in my name seeks to remove “connivance” as an offence in the Bill. We have tabled the amendment to probe the use of the word “connivance” in this Bill specifically. We understand the use of that word, which exists in other legislation, such as the Theft Act 1968 and, more recently, the Bribery Act 2010. However, we pose the question to the Government as to why they have used it in this scenario. Under what circumstances do they envisage using it? Can they provide the Committee with real-world examples of situations where it will be used?

Amendment 62 seeks to remove the offence in respect of individuals who purport to be executives. This simple amendment would ensure that only those who were actually acting in executive roles could be held responsible for the mistakes of the water company.

[Baroness Hayman of Ullock (Lab)]

I thank the noble Lord, Lord Sandhurst, for his interest in sentencing powers for obstruction investigations and for all the suggested amendments covered in this group.

Amendments 60 and 66, tabled by the noble Lord, both look to reduce the maximum custodial sentence available for those convicted. The obstruction of investigations by the regulators is already an offence, but that has not stopped companies from blocking the regulators’ investigations. For example, in 2019 the Environment Agency prosecuted a number of individuals at Southern Water for removing evidence from the possession of officers. I am sure the noble Lord will agree that such behaviour is unacceptable.

The aim of the two-year maximum custodial sentence is to deter future obstruction. That should support more effective investigations, which should ultimately enable stronger enforcement action against both companies and individuals. I am pleased to confirm for the noble Lord that this sentence is consistent with other provisions in the Environment Act 1995 and the Environmental Permitting (England and Wales) Regulations 2016.

I highlight to the noble Lord that the two-year sentence is the maximum limit. Sentencing will ultimately be decided by the courts, factoring in the specifics of each case and the relevant sentencing guidelines. While I cannot comment on Home Office procedure on prisoner release, I would be interested if the noble Lord could provide some information as to why our prisons became so overcrowded in the first place.

Amendments 61 and 62, also in the name of the noble Lord, Lord Sandhurst, speak to senior leader liability. I hope the noble Lord will agree it is unacceptable under current law that, if water company senior leaders encourage or allow obstruction of Environment Agency or Natural Resources Wales investigations, they cannot be held liable for this wrongdoing. In contrast, senior leaders can be held liable for other environmental offences, as well as obstruction offences in other sectors: for example, the Building Safety Act 2022.

This clause will remedy this gap by bringing the offence of obstructing the Environment Agency and Natural Resources Wales in line with other environmental offences, as well as offences in other sectors. I hope the noble Lord will agree that, in doing so, it should mirror the conventions and language of existing “consent, connivance and neglect” clauses. These make connivance by senior leaders a potential ground for liability and ensure that, where a person “purports to be” a relevant officer, they should also be held liable for wrongdoing. I hope the noble Lord is therefore content that these amendments are unnecessary.

Finally, I turn to Amendment 65, also in the name of the noble Lord, Lord Sandhurst, which proposes to remove increasing the sentence for offences of impeding Drinking Water Inspectorate investigations from the scope of the Bill. As I mentioned earlier, the Yale Environmental Performance Index ranks the drinking water in England and Wales as the best in the world, alongside just 10 other countries. This is in part thanks to the effectiveness of the Drinking Water Inspectorate. To accept this amendment would be to imply that the regulations enforced by the Drinking Water Inspectorate are not as serious as those enforced by the Environment Agency and Natural Resources Wales.

This cannot be right. There are grave public health risks if the DWI does not have the power or the authority to ensure that water supplies in England and Wales are safe and of the right quality. While I accept that this may not be the intention behind the noble Lord’s amendment, it would certainly be its effect. The quality of our drinking water is one of the enduring strengths of the current model and one that the Government want to protect. I once again thank the noble Lord for his contributions and hope my response has reassured him.

[Lord Sandhurst (Con)]

I thank the Minister for her response and for the care with which she delivered it. My amendments were there to ensure that the already overburdened prison sector is not put under further pressure. I hope the Government will bear them in mind and take them on board before Report. We will seek to work with the Government to ensure that the Bill ensures appropriate punishment for water executives. I beg leave to withdraw the amendment.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the noble Lord, Lord Roborough, for speaking to the amendments proposed by the noble Lord, Lord Bethell, in his absence. Amendments 63 and 64 relate to guidance and mandatory training for water company employees on obstruction offences.

One thing that it is important to emphasise on this matter is that Clause 4 amends only existing offences. It does not create any new obligations on companies, so employees should already have some understanding of that in the first place. To be clear, the existing offences are obstruction of investigations of the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate. Prosecutions have already been brought against companies and individuals under Section 110 of the Environment Act 1995. On that basis, we believe that companies should already be very well aware of their obligations under that section of the 1995 Act, and of the obligations to their staff to ensure that they are properly trained to engage in this area.

I reassure the noble Lord that the obligations of companies are set out as well in the Environment Agency’s enforcement and sanctions policy, so it should be very clear. I hope he understands why we do not think it proportionate to put this into legislation.

[Lord Roborough (Con)]

My Lords, I am most grateful for the reply from the Minister. I am not sure that I am necessarily entirely satisfied with it, but—as I have not yet had a chance to say it today—I am most grateful to the Minister for the constructive engagement that she has had with us, as well as all parties in this House. That will continue and perhaps we can discuss it then. I beg leave to withdraw the amendment.

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[Baroness Hayman of Ullock (Lab)]

I thank noble Lords for their contributions on this aspect of the Bill on fines and penalties. Amendment 67 was tabled by the noble Lord, Lord Sandhurst, whom I thank for his points on variable monetary penalties. Currently, there is no limit on the maximum variable penalty for water industry offences, whether the case is tried summarily in the magistrates’ courts or in the Crown Court. This amendment would not provide additional protection or assurance. However, we recognise that there are concerns about ensuring that there are robust protections for civil sanctions. So the Government will consult on the offences for which the civil standard of proof may be used and on the cap for new civil standard variable monetary penalties. This cap will not be limited to offences triable only in a particular court—we believe this is a proportionate safeguard. The House will also have the opportunity to debate and vote on secondary legislation containing the cap before any changes are finally made.

I reiterate that unlimited penalties issued to the criminal standard will still be available to the Environment Agency, along with all its other existing enforcement tools. Existing legal protections, including the right to appeal, will also be maintained. There are proportionate safeguards and legal protections for the use of those penalties, which will strengthen the enforcement of minor to moderate offences. Therefore, we do not believe this amendment to be necessary, and I hope that the noble Lord agrees.

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Moved by

[Baroness Hayman of Ullock]

68: Clause 5, page 10, line 4, at end insert—
“(6) But an offence is to be regarded for the purposes of this section as committed by a water supply licensee or sewerage licensee only if it is committed by such a licensee in the course of the activities to which its licence relates.”Member’s explanatory statement
This amendment provides that Clause 5 applies to water supply and sewerage licensees only in relation to their licensed activities.

[Baroness Hayman of Ullock (Lab)]

My Lords, I turn now to the amendments that we are making to Clauses 5 to 8. Government Amendments 68, 71, 76, 77 and 83 are minor and technical amendments to clarify who is within scope of the measures in Clauses 5 to 8. The inclusion of water and sewerage undertakers remains unchanged by these amendments.

Ofwat issues water supply and sewerage licences, which give the holder rights to provide water or sewerage retail services—for example, billing—or certain services using the public water and wastewater networks. In this remit, businesses are operating as water companies. The amendments make it clear that the measures relating to penalties and the recovery of enforcement costs apply to licensees only in relation to their water supply and sewerage licensed activities. This clarification means that companies can be subject to these measures where this is relevant to their licensed activity.

As businesses with these licences often operate in other sectors alongside the water industry, wider business activities unrelated to the licensing regime should not be brought within scope of Clauses 5 to 8. These amendments ensure that this is the case. For example, a food manufacturer may hold a water supply licence that is issued by Ofwat and permits them to provide billing and metering water services only. Unrelated permitted or licensed activity, regulated by the Environment Agency and undertaken by this business, such as abstraction of water for food manufacturing, would not be in scope of the Bill measures. This is because these activities, which are already regulated and enforced, are not relevant to the company’s operations as a water company.

These amendments minimise impacts on wider businesses and their regulation and ensure that enforcement regimes are consistent within sectors, while still ensuring that water companies are better held to account where they have failed to deliver for the environment. I commend these amendments to the House.

[Lord Roborough (Con)]

My Lords, I thank the Minister for introducing this group. It is essential that the way that this Bill applies to the activities of licensees is clearly laid out, and we are satisfied that the amendments brought by the Minister are necessary to achieve this.

[Baroness Hayman of Ullock (Lab)]

I thank the noble Lord for his support.

Amendment 68 agreed.