Environment Bill

Lord Carrington Excerpts

Committee stage
Wednesday 7th July 2021 Lords Chamber

Moved by

[Lord Carrington]

176: Clause 82, page 79, line 37, leave out “No”
Member’s explanatory statement
This amendment seeks to remove the proposals for increased powers to vary or revoke abstraction rights without offering compensation to licence holders.

[Lord Carrington (CB)]

My Lords, I declare my interests as a farmer, as set out in the register. As a farmer, I think it would be more appropriate, in many ways, to discuss ways of stopping the rain than water abstraction licences. However, the climate is a law unto itself, and, unlike the Bill, it defies amendment.

I move Amendment 176 and will speak to Amendments 177 to 187, in my name, including Amendment 178, which is also in the name of the noble Lord, Lord Colgrain. They follow considerable discussion with and the support of individual farmers, as well as the National Farmers’ Union, of which I am a member. I record my thanks to the Minister and his colleagues at Defra for meeting me and the noble Lord, Lord Colgrain, listening carefully and responding to some of the issues.

There is no question over the full support of farmers for measures to protect and enhance water quality. The problem comes with the current lack of detail in the clause to revoke or change water abstraction licences—and, secondly, with the disappearance of compensation. Under current legislation, the Environment Agency has the power to revoke or change licences where environmental damage is being caused and to agree compensation. The new power widens the power of revocation or change to meet environmental objectives and removes the requirement to pay compensation.

If these clauses, as currently drafted, are implemented, they are likely to have severe consequences for agriculture and horticulture, particularly in areas where water abstraction has been the norm for many years. We are talking about some of the most productive land in the country, covering livestock, arable, fruit and vegetable and horticultural farming. We are talking about some of the most efficient farms in the land and some of the most technologically advanced farming in England. We are talking about farms with some of the highest investment costs in specialist buildings and machinery—and about some of the most expensive land in the country. Surely this is the type of agriculture that we should be encouraging, because expertise, technology, productivity and returns attract, and will continue to attract, investment and well-qualified and ambitious people. The threat to abstraction licences and the loss of compensation risks undermining all of this and might cause more agricultural production to locate overseas—to countries that have greater water issues than our own and fewer regulations to mitigate abstraction. Is this really what we want?

As far as Amendment 176 is concerned, this is not therefore a question of seeking to change the Environment Agency’s powers to vary abstraction licences. These can and do change when, for example, new environmental evidence emerges, indicating that abstraction is unsustainable. However, it is also a well-established principle that, when licence changes are made, the abstractor can be compensated for the loss of both the asset and the income resulting from that loss.

Farmer abstractors are vulnerable to licence changes because, usually, they lack the capacity to adapt to them in a timely manner. Water companies can engage with the Environment Agency in advance of proposed changes to agree a structured transition to, for example, an alternative water source. The asset management planning process secures the necessary funding for the water company to invest in the alternative intervention, having obtained customers’ agreement on their willingness to pay for it.

The process for farmers is very different. At present, they do not have the benefit of prior engagement with the Environment Agency, so the effect of the licence change on their business is immediate and often without warning. Access to alternative water supplies for individual farms tends to be limited, and it is unrealistic for them to expect that costs incurred in securing new supplies can be passed on to customers.

--- Later in debate ---

In summary, this debate and the range of opinions it has showcased have shown that abstraction reform is a complex issue. There are good points on all sides. However, I hope noble Lords can see how hard the Government have worked to strike a reasonable and sensible balance to protect our precious water environment while ensuring that we manage the impact on abstractors and farmers. I sincerely hope I have managed to reassure noble Lords and ask them not to press their amendments.

[Lord Carrington (CB)]

I thank everybody who has participated in this debate. There have been some very informative contributions from all noble Lords. I may not agree with all of them, and I must say, with respect to the noble Lord, Lord Cameron, that maybe we should limit our conversations in future to the growing of potatoes in Devon, which he does very well, and the growing of potatoes in Lincolnshire, which I reckon we do quite well.

Leaving that aside, the most important thing that has come out of this debate is the uncertainty about some of the rules and regulations and the data that is used. It is this lack of certainty over the data behind licensing decisions, together with the use of the precautionary approach behind many of those decisions, that is causing great concern to farmers. I repeat my request, as I stated earlier, that proportionality should govern all this.

My other point is that the definition of damage is extremely vague, for understandable reasons. How and why should growers rely on the say-so of the Environment Agency, particularly in the light of the experience of the noble Baroness, Lady Jones of Whitchurch? You can understand where the concern comes in.

In the meeting with the Minister and the noble Baroness, Lady Bloomfield, a helpful promise came out. I shall read from the letter, which states: “We will set out in guidance what we expect the Environment Agency to seek to find collaborative, non-licensed change, such as habitat restoration and mutually agreeable voluntary solutions wherever possible. Responsibility for demonstrating that a licence is damaging or risks damaging the environment will lie with the Environment Agency.”

My conclusion is that the word “damaging” needs, if possible, to be defined very carefully and the guidelines given by the Ministry to the Environment Agency need to be circulated well in advance. I thank the noble Baroness, Lady Bloomfield, for her support for farming and, in particular, the noble Baroness, Lady McIntosh of Pickering. Some were perhaps less concerned about the importance of productive farming in this country than they. I also refer to the excellent speech of the noble Earl, Lord Devon, who mentioned the importance of property rights and the issue of compensation. That is a major issue, and I cannot underline enough how much money has been spent by some farms to put all this equipment in place. Although certainty is difficult, it is required for them.

In the circumstances, I beg leave to withdraw the amendment.

Amendment 176 withdrawn.