Orders of the Day — Water Bill [Lords]

House of Commons, 10 November 2003.

New Clause 2 — Commencement and Expiry of Licences

Bill Wiggin (Conservative, Leominster)

I beg to move, That the clause be read a Second time.

Michael Martin (Speaker, Glasgow Springburn)

With this it will be convenient to discuss the following:

New clause 3—Renewal of licences (mines and quarries)—

'After section 46 of the WRA there is inserted—

"46ZA Renewal of licences (mines and quarries)

(1) An application to renew a licence granted under this Chapter to abstract water—

(a) to prevent interference with any mining, quarrying or engineering operations (whether underground or surface); or

(b) to prevent damage to works resulting from such operations ('de-watering abstractions'),

shall be subject to the three tests specified in subsection (2).

(2) Those tests are that it can be reasonably demonstrated that—

(a) environmental sustainability can be achieved;

(b) the need for the licence is demonstrable; and

(3) If the tests specified in subsection (2) are met, the licence will be renewed for a minimum of six years.

(4) Where an application to renew a licence under the preceding provisions of this section is refused, a person who made the application may appeal to the Secretary of State within such period and subject to such procedures as may be prescribed by order.

46ZB Renewal of licences (mines and quarries): compensation

Where an application to renew a licence is refused under section 46ZA above, or the terms of the licence are varied and the effect of the resultant restriction or working rights would be such as to prejudice adversely to an unreasonable degree—

(a) the economic viability of operating the site; or

(b) the asset value of the site,

compensation shall be payable in accordance with arrangements prescribed by order.".'.

New clause 12—Presumption of renewal of licences—

'After section 38 of the WRA there is inserted—

"38A Presumption of renewal of licences

There shall be a presumption of renewal of a licence, subject to the provisions of section 38(1A) above, where the Agency is satisfied that—

(a) abstraction under the new licence is environmentally sustainable;

(b) there is a continued justification of need; and

Government amendments Nos. 54 to 58.

Amendment No. 10, in clause 6, page 7, line 23, at end insert—

'(1A) Where the construction of a bore hole in connection with an exempt abstraction could affect the essential characteristics of water resources used by the licensed natural water abstractor, the consent of the Environment Agency must be sought.'.

Amendment No. 24, in page 8, line 5, at end insert

'if it is to address an issue of national importance'.

Government amendment No. 59.

Amendment No. 25, in clause 14, page 17, line 39, leave out 'in prescribed cases' and insert

'where it would be against the interests of national security'.

Government amendments Nos. 60 to 70.

Amendment No. 4, in clause 17, page 21, line 42, leave out 'four' and insert 'six'.

Government amendments Nos. 71 to 73.

Amendment No. 9, in clause 19, page 23, line 31, at end insert—

'( ) The expiry date shall take into account the availability of water in the source of supply to which the licence applies and the investment needs of the applicant.'.

Amendment No. 11, in page 23, line 33, at end insert—

'(5B) In determining the period that a licence under this Chapter shall remain in force, the Agency shall take into account—

(a) the life expectancy of any associated infrastructure works (existing and prospective),

(b) the costs of those works (actual and projected), and

Government amendment No. 74.

Amendment No. 12, in clause 20, page 24, line 27, at end insert—

'(5) There shall be a presumption that any licence in respect of which the conditions of this section are met shall be renewed unless the Agency is able to show that revocation is necessary in order to protect any waters or underground strata, or any flora or fauna dependent on them, from serious damage.'.

Government amendments Nos. 75 to 82.

Amendment No. 126, in clause 24, page 31, line 11, at end insert—

'(5A) In this section "loss or damage" shall mean loss occasioned by physical damage to tangible property.'.

Government amendments No. 83 and 84.

Amendment No. 32, in clause 25, page 31, line 43, at end insert

'and

(b) at the end there is inserted "except in the case of licences where water would otherwise be abstracted for use on land which is subject to phytosanitary restrictions.".'.

Amendment No. 33, in clause 27, page 33, line 17, at end insert

'or such later date as the Secretary of State may by order prescribe'.

Government amendment No. 85.

Amendment No. 26, in clause 30, page 36, line 39, leave out '£20,000' and insert '£50,000'.

Government amendments Nos. 117 and 104 to 106.

Bill Wiggin (Conservative, Leominster)

The new clause would ensure that the commencement and expiry of abstractor licences occurred simultaneously with planning permission, so that as long as a business had planning permission it should be able to go ahead with abstracting water if it is environmentally safe to do so. If the dates of an abstraction licence are separate from those of the planning permission, the abstraction licence may expire before the planning application. That undermines the long-term certainty of a water abstraction business, restricting its competitive edge. Businesses wishing to abstract should have just one course of action to take. For quarries and mineral water companies, for example, the legislative burden is not sufficiently streamlined and may jeopardise their ability to compete on a level playing field with companies from abroad. The new clause would ensure that the expiration date of a licence must take into account the commencement and expiry dates of any planning permission. That would be fairer on abstractors, who would have a much more stable basis on which to attract investors. Long-term industries such as water abstraction, watercress growers and quarries need assurances of certainty, but the Bill does not offer them. The new clause would provide them with that assurance and with the certainty that they need for long-term investment.

New clause 3 is focused on the quarrying industry and its need for certainty in the renewal of its de-watering transfer licences. It would include in the Bill three clear tests by which a renewal licence may be granted. To make it fair to the industry, the presumption of renewal needs to be made explicit by including in the Bill test renewals such as those set out in "Taking Water Responsibly". The industry is well aware of the assurances that the Minister has given to the House and to the other place. I am also conscious that during the past month my hon. Friend the Member for Eddisbury (Mr. O'Brien) and the hon. Members for Sherwood (Paddy Tipping) and for High Peak (Tom Levitt) have taken part in meetings with industry representatives in the Minister's office, and that the assurances given have been confirmed in writing. That may provide safeguards for the immediate future, but they have no long-term credibility. The new clause seeks to redress that. Equally, it would include the steps for appeal and compensation to be taken when a licence is refused renewal under the tests. It is imperative that the presumption of renewal is included in the Bill, not hidden away in statements or policy documents—otherwise, long-term industries will not have any real assurances that their investments will be safe.

The second part of the new clause would ensure that if a de-watering transfer licence is not renewed or the Environment Agency changes the conditions, thereby making an operation unviable, the operator can claim compensation. The problem with the Bill as it stands is that the agency can give an operator six years' notice of non-renewal and simply not renew and not provide compensation. That is unacceptable, especially when the agency is clearly a law unto itself and not directly accountable to the House. The new clause would put in place the genuine assurances of licence renewal, appeal and compensation that the water abstraction sector needs.

John Bercow (Conservative, Buckingham)

It is clear that the new clause is extremely well thought through, but my brow is furrowed by my hon. Friend's reference to circumstances in which exploration takes place and a licence is not renewed. It sounds deeply unjust. Is my hon. Friend telling me that there is no right of appeal?

Bill Wiggin (Conservative, Leominster)

My hon. Friend is right to have a furrowed brow about the Bill. Indeed, my brow has been furrowed for some time. It is especially difficult for those who abstract water because he is right about the difficulties that they will face if their licences are not renewed. There is an appeals procedure but I believe that it is to the Environment Agency, not the Secretary of State.

Elliot Morley (Labour, Scunthorpe)

It is to the Secretary of State.

Bill Wiggin (Conservative, Leominster)

The Minister corrects me, but a lesser agent of the Secretary of State would fulfil the duty. The essence of the problem is not so much that licences cannot be renewed—environmental damage may be taking place—but the lack of compensation. I am therefore grateful to my hon. Friend for his intervention. As usual, with his incisive mind he has put his finger on the nub of the problem instantly.

Amendment No. 10 deals with the fears of drinking water abstractors, who are rightly subject to an enormous number of inspections to ensure that their water quality is the finest. However, if abstractors of less than 20 cu m sink a borehole into the substrata and start abstracting water for use as drinking water, the licensed abstractor's water quality could be affected. The safeguards in the Bill are not quite strong enough to prevent the risk of small abstractors causing damage to the business of water bottling. I am worried about the risk of others sinking boreholes into the same substrata as the original business, thereby damaging the quality of the water that it abstracts.

Many bottled water companies bottle their water at source and depend on the spring to market and sell the brand—for example, Hildon and Radnor Hills. They cannot move their water aquifer. Water bottling operations are extremely expensive to start up. As long-term investments, they need the protection that the amendment offers. It would enable the Environment Agency to police abstraction for the good of our environmental quality, which must be the overriding consideration. The Environment Agency should monitor abstractors, no matter how small, for the damage that they cause the environment. Damage done to a business aquifer by another drilling into it could take a company out of business. That problem must be resolved but the Bill does not currently address it.

It is vital to support the British bottled water industry. Domestic bottled water companies comprise nearly 80 per cent. of the total that we drink in the United Kingdom. The issue therefore affects us all. Now is an opportune moment to have a quick sip of water. We must not only protect the industry, but ensure its long-term plan for the future.

The licensing that the Bill introduces raises concerns that the scope of the investment will be limited. Small, unlicensed boreholes must not be able to undermine a company's investment. I know that the Minister has sympathy with the point. In Committee, he said that if there were problems the Environment Agency would have the power to lower the existing thresholds to reduce the number of boreholes. He said that the agency had powers to deal with problems should they arise. If so, why does not the Bill include such a provision? We want to prevent damage to the aquifer and ensure that the Environment Agency has more responsibility to protect it. The amendment would protect the important British drinking water industry and ensure the high quality of our environment through giving the Environment Agency such policing powers.

Amendment No. 4 deals with a time limit on licences that will be certain for only 12 years. Clause 17(8)(a) provides for a time limit of four years for those who are not using their licence. That reflects neither the seven-year weather cycle nor the catchment abstraction management strategy. The amendment, which provides for a time limit of six years, takes into account the extended period that allows for crop rotation. That was part of the Government's intention and would also influence their ability to license genetically modified crops.

Reasons for non-use of a licence might be as basic as having sufficient rainfall as to render irrigation unnecessary, or growing another crop on the land due to the basic rules of crop rotation under good agricultural practice to avoid the build-up of, for example, pests and diseases in the soil. A much more serious reason might be a the presence of a notifiable disease such as potato brown rot having resulted in a ban on the extraction of water from water courses for use on vulnerable crops.

In Committee, the Minister managed only to fumble his way through this issue and did not give us a good enough reason why the limit should be four years. He stated that the four-year period could be extended by the Environment Agency if the licence holder had a legitimate case for wanting a longer period, but what qualifies as a legitimate case for extension? This is all a bit vague and uncertain, and we should like a provision in the Bill that would clarify the matter.

The Minister's argument in Committee for the reduction from seven years to four was that it struck a balance between meeting the needs of the abstractor and being fair to those who wanted to start abstraction but were unable to do so because others were just sitting on their licences. He then admitted, however, that there had been a grand total of zero incidences of people being denied licences for abstraction because others were holding on to unused ones, thereby undermining his own argument. My amendment to change the time limit from four years to six would allow for changing cycles, which the licence holder would deal with, and bring the provision into line with the catchment management scheme.

Amendments Nos. 9, 11 and 12 also deal with the time periods relating to licences, which are currently too short in that they are meaningful for only 12 years. Amendment No. 9 seeks to ensure that the expiry date on licences takes into account water availability and the investment needs of the abstractor. Amendment No. 11 would ensure that the life expectancy of associated infrastructure works was taken into account by the Environment Agency, in that it should make a decision on the life of an abstraction licence only when it had considered the infrastructure costs and investments associated with the abstraction. That would provide the benefit of a more consistent and transparent framework for decision making. The British Soft Drinks Association is extremely concerned about this matter as that industry is dependent on high-cost machinery, and that is not reflected in the length of time a licence lasts. The length of a licence must take into account the type of investment involved and compensation when licences are cancelled.

Amendment No. 12 seeks to write a presumption of renewal into the Bill. In Committee, the Minister read out the four test criteria for consideration of licences longer than 12 years, as set down in the policy document "Taking Water Responsibly". He also read out two sets of criteria to comfort companies that have a presumption of renewal. These are clear tests, which is why they should be included in the Bill rather than in separate documents, which would be most unfair to companies that would consequently have to ask for investment on the basis of trust, as the abstractors would not be properly financially protected in the legislation. We want to amend this unreasonable and disproportionate provision.

Furthermore, the reason given by the Minister for not putting such measures into the Bill was that the tests for renewal could be changed at a later date, which would create a further fundamental problem for anyone investing in an affected business. The Government have completely failed to consider the effect that this uncertainty would have on businesses that were unable to find willing investors because the measures could be altered. My amendment would ensure that abstraction licences would take into account longer-term considerations by putting the presumption of renewal and the compensatory element into the Bill.

Amendment No. 32 would retain the seven-year period during which compensation would be available on the removal of a licence due to non-use, plant health reasons or the more normal crop rotation reasons. The Bill would reduce the period from seven years to four.

Amendment No. 33 seeks to ensure that the revocation of any licence causing damage would be undertaken only when a thorough examination under the habitats directive of all sites had been completed, rather than trying to do so on an arbitrary basis on 15 July 2012 as is provided for in the Bill. The Minister and the Environment Agency should have some flexibility in the Bill to avoid a potentially difficult situation in 11 years' time if, due to unforeseen circumstances, the assessment of an abstraction licence had been delayed and abstractors had been caught by a guillotine. The addition of such a measure to the Bill would provide assurances to all those involved. The amendment does not seek to set a later date, or even to remove the right of the Environment Agency to revoke a licence that is causing serious environmental damage; it would simply provide a mechanism for the Minister to delay, should that become necessary.

Experience has shown that deadlines do slip. In that event, such a serious consequence as the removal of a valuable property right would not be acceptable without being based on transparent and robust examination of the facts. Any removal of the right of abstraction must be supported by robust scientific evidence, and not driven merely by the precautionary principle or a looming deadline.

The revocation of a licence is a serious matter, especially when the continuation of a producer's business depends on access to water. It is clearly not in the abstractor's interest to cause serious environmental damage, and it must be a minority of licences that fall into this category. Sustainable abstraction is the goal that the Environment Agency, farmers and growers work towards, and should not be jeopardised by a last-minute administrative panic by the regulator, who is bound by a rigid end-date. Our proposal would allow the flexibility that is reasonable.

Norman Baker (Liberal Democrat, Lewes)

We are under some time pressure, especially as many Members will probably want to speak about fluoride, so I shall be fairly brief.

I am grateful to the Government for tabling the programme motion last week. That helped a little. I am bound to say, however, that a day and a half for discussion would have been more appropriate than a day, which is why my colleagues and I voted against the motion.

The hon. Member for Leominster (Mr. Wiggin) was right to raise the presumption of renewal of licences. New clause 12, tabled by me and by my hon. Friend the Member for Guildford (Sue Doughty), seeks to achieve approximately the same end. It takes its wording from the Environment Agency's guidelines on the presumption of renewal. Many industries requiring licences have expressed a fear that it will be difficult to obtain investment with time-limited licences. That applies to the watercress industry, in which my hon. Friends the Members for Mid-Dorset and North Poole (Mrs. Brooke) and for Winchester (Mr. Oaten) have rightly expressed an interest. It also applies to quarrying, which I know interests my hon. Friend the Member for Somerton and Frome (Mr. Heath). He has been assiduous in protecting the industry in his constituency.

We should strike a balance between environmental protection and the necessary limiting of licences, and providing a degree of certainty for businesses so that they can plan ahead. That means legislating for a presumption of renewal such as that in new clause 12. Such a move would go a long way towards satisfying industries that have rightly and understandably expressed concern, while also protecting the Government's agenda.

Amendment No. 26 seeks to increase the maximum penalty for those who fail to deal properly with enforcement notices served on them. There is a great deal of money to be made in many industries, and it is wrong for people to be able to calculate that failing to reply to a notice is more beneficial financially than replying. Amendments Nos. 24 and 25 simply seek to tie down the issue of when the Secretary of State should be able to exercise what is, in the Bill, a wide discretion by limiting the matters in question to those involving national security. In Committee the Minister indicated that national security was the reason for the provision in the Bill, and no one dissented at the time. The amendments seek to prevent it from being interpreted too widely.

Amendment No. 126 deals with the watercress industry, about which my hon. Friend the Member for Mid-Dorset and North Poole may wish to speak later.

These are modest amendments, but I think that they will go a long way towards improving the Bill, and I hope the Government will view them sympathetically.

David Heath (Liberal Democrat, Somerton and Frome)

I want to say a little about quarry de-watering, in which, as the Minister knows, I take some interest. I know that the Minister and his colleagues have been very active in trying to discuss it with the industry, and to find a way out of the impasse that has developed.

The issue is simply stated. The difference between the lifetime of a de-watering licence and the lifetime of a permission for mineral extraction means that there can be no certainty, which is a necessary component if investment is to be made in a quarrying undertaking. That has a knock-on effect on the company's profitability and on the more general environmental interests of the type of community that I represent. The Minister will know that probably the highest concentration of limestone extraction workings in the country is found in the east Mendips. I accept some of the reasons why the Minister would reject establishing a link—I realise that it would set a precedent for other industries—but if there is no link and no clear presumption in favour of renewal, certain problems will arise.

First, as I said, it will be difficult for companies to make the investment decisions that they need to make when approaching a new permission, which will have a knock-on effect on the profitability and viability of the industry. I have some experience of this issue, having sat on a minerals planning authority for 12 years and gone through a long phase of arm-wrestling in some cases, co-operation in others, with the quarrying industry to establish a sensible regime for the granting of permissions. The second problem I foresee is that if quarrying companies cannot go deeper and use the present spatial extent of their permissions to go below the water table, which inevitably requires a degree of water abstraction, their alternative is to use extant planning permissions to go wider. Often, those extant planning permissions are not in areas that the local community, the local planning authority or the Government want the industry to turn to for the stone reserves that national and local interests require.

The issue harks back to interim development orders and the regime with which the Minister is familiar, which has produced difficulties over the years. I vividly recall the long debate that we in Somerset had before giving permission for the first sub-water table working. We had difficulty identifying the hydrogeology of the east Mendips and determining whether we would destroy aquifers and what the long-term consequences would be. It seems to me that, despite the undoubted difficulties of sub-water table undertakings, managing them in an environmentally sensible way is probably preferable to the alternative, which is opportunistic use of existing planning permissions balanced by neither a compensatory regime nor a control regime.

Paul Tyler (Liberal Democrat, North Cornwall)

As one who represents another part of the country with quarrying interests, I strongly support my hon. Friend's views. Does he agree that this is a classic case of, "If it ain't broke, don't fix it"? The Environment Agency is happy with the way in which the regimes are working, and the lack of synchronisation between the existing regimes and the proposed new regimes in terms of time scale is extremely worrying from the point of view of effective planning.

David Heath (Liberal Democrat, Somerton and Frome)

I agree. That is the difficulty we face. We do not want to throw the doors wide open to anyone to abstract water over any period simply because they have a planning permission. I understand the Government's position, which is shared by my hon. Friend the Member for Lewes (Norman Baker). However, there are differences between the quarrying industry and other industries that might seek abstraction licences. Essentially, quarrying is a non-consumptive industry. First, it does not take the water away, which would be a clear potential environmental threat, but stores it and replaces it in a manner determined via the licence and permission. Secondly, a quarrying company has few alternatives. If a company that wants to abstract water for its use cannot do so because of an environmental licensing argument, it can go elsewhere, but a quarry cannot go elsewhere. It remains where it is and it has to be de-watered; otherwise, it is a large hole with water at the bottom and is of no use to anyone. There is a case for individual treatment of the quarrying industry.

I have examined the amendments and new clauses carefully. I can understand the argument of the hon. Member for Leominster (Mr. Wiggin) in support of new clause 2, but I also understand why the Government may not be entirely satisfied with it. I must tell the hon. Gentleman that I am worried about the compensation provisions of new clause 3 because I have some experience of the effect of compensation on the quashing of inappropriate interim development orders. In fact, it paralysed the planning authorities and prevented them from taking any sensible decisions on behalf of local communities simply because the costs were out of all proportion to the resources available to the local community. If I have a quibble, it is simply that. I am aware of that particular difficulty.

I am certainly taken by the Liberal Democrat new clause 12, which is very simple and states what we believe to be the policy of the agency, on which the Minister has provided assurances, and we would like it to be incorporated in the Bill. I enthusiastically support new clause 12, not only in the interests of the industry, which is important in my constituency, but in the interests of the local environment.

Annette Brooke (Liberal Democrat, Mid Dorset and North Poole)

I wish to speak briefly to amendment No. 126, which was tabled by me and by my hon. Friends the Members for Winchester (Mr. Oaten), for Lewes (Norman Baker) and for Guildford (Sue Doughty). It is similar to an amendment that was moved in Committee, but it has been reworked to reflect the ensuing debate.

The amendment is designed to draw attention to the fact that loss or damage is not defined in the clause, and that consequently it could become a charter for claims against long-established and ecologically valuable businesses such as watercress growers. Special natural conditions have led to the bulk of UK watercress growing occurring in Hampshire, Wiltshire and Dorset. In Dorset, watercress is grown in Bere Regis. It is a long-established and sustainable activity, but the Bill has created concerns about its future.

I thank the Minister for meeting representatives from the industry, me and hon. Members with constituencies in Hampshire. However, concerns remain about clause 24, which provides a new means for persons who suffer loss or damage arising from the abstraction of water to bring a claim against the extractor. Previously, the grant of a licence by the Environment Agency was a defence, and any action had to be taken against the Environment Agency for issuing the licence in the first place. The National Farmers Union is concerned that watercress growers might be exposed to unreasonable claims from those who might perceive that their property value has been adversely affected by variations in the flow of watercourses and winterbournes.

Officials from the Department for Environment, Food and Rural Affairs have agreed that there was no intention for the legislation to provide a means of prosecution of business by residents in an area where the change of watercourses or winterbournes was felt to affect the amenity value of properties by removing a desirable characteristic such as the noise of a babbling brook in the garden. By their very nature, many watercourses on chalk down land are intermittent and the extraction of ground water by a watercress farm will not be the only factor in determining how long and how high such a stream will run.

Subsequently, officials said that they did not feel that such claims were likely, but the Watercress Association has already heard of homeowners who want to take legal action against businesses for precisely that reason—despite the positive contribution of the industry to employment, tourism, inward investment, ecological gains and the preservation of a traditional industry. I hope that the Minister can respond positively today and provide further reassurances to watercress growers.

Elliot Morley (Labour, Scunthorpe)

I was very interested in the points put forward by hon. Members because those points were not unreasonable, and it might be helpful if I repeat the assurances that I have given the industry groups that have come to see me about a number of issues addressed in new clauses 2, 3 and 12 and amendments Nos. 9, 11 and 12.

It might be helpful if I first stress some of the safeguards in the system. I know that hon. Members are united in the desire to ensure that the Bill is an effective and sustainable resource management tool for a resource that is under increasing pressure of demand. That aim is not particularly controversial. Indeed, I am glad to say that the various industry groups have been united in saying that they support the principles behind the Bill. Not unreasonably, they want some safeguards for their own sectors and I understand that. I have tried to go as far as I can in providing safeguards without undermining the basic principle of the Bill, which is sustainable water management. I shall give details of some of the safeguards for the benefit of hon. Members.

First, new licence applicants can provide a business case to the Environment Agency to support the need for a licence with a longer duration. The agency must have regard to all relevant considerations and if there is a strong business case for a licence longer than 12 years—which is a guideline only, and not set in stone—the agency can take that case into account.

Secondly, as I have stressed on several occasions, the policy presumption is in favour of licence renewal. That was initially set out, as the hon. Member for Leominster (Mr. Wiggin) said, in the Government's policy document, "Taking Water Responsibly" in 1999. If a licence is still required and water is being used efficiently, the licence will be severely curtailed or not renewed only if the activities are causing unacceptable damage to the environment. Indeed, companies will have opportunities to discuss mitigation measures, which, in some cases, may not lead to curtailment. However, the means to curtail or refuse a licence is a powerful tool to enable the Environment Agency to deal with unsustainable extraction of water, as has happened in some cases. Abstractors will be given six years' notice of likely non-renewal or changes in the terms of their licence, which will give them time to find a sustainable arrangement, such as a negotiated solution with the Environment Agency.

As the hon. Gentleman mentioned, rights of appeal to the Secretary of State already exist under the Water Resources Act 1991 in relation to agency decisions on the granting of licences, including licence length and licence revocation or variation. The Bill does not take those rights away. Therefore, rights of appeal exist if abstractors feel aggrieved by the Environment Agency's decision.

Bill Wiggin (Conservative, Leominster)

I apologise for missing the first 30 seconds of the Minister's speech. Why is it important that the safeguards that he has just mentioned—I am sure that the industry is grateful for them—are not included in the Bill?

Elliot Morley (Labour, Scunthorpe)

To put it in a nutshell, it is to do with the Environment Agency's need for flexibility and the risks of restraint and unforeseen consequences if such requirements are included in the Bill.

Paddy Tipping (Labour, Sherwood)

My hon. Friend met representatives from the Quarry Products Association and subsequently wrote to its chairman, Lord Sutherland. Where will the Bill leave the quarrying industry? It is right that new licences can be for a longer period. It is also right that the presumption will be that licences will be renewed. However, is it not the case that in only three instances the Environment Agency has been concerned about water abstraction by quarrying and that all were resolved satisfactorily by technical solutions? Can my hon. Friend give the industry an assurance that it will have a long-term future and the opportunity to make long-term investment?

Elliot Morley (Labour, Scunthorpe)

My hon. Friend, like my hon. Friend the Member for High Peak (Tom Levitt) and the hon. Member for Somerton and Frome (Mr. Heath), is concerned about quarrying, and I understand that. I believe, of course, that quarrying has a long-term future in this country. The idea of putting points in writing to the Quarry Products Association, after my meetings with members on both sides of the question and with the association, was to clarify formally what is intended in the Bill. It is important to any company or trade organisation to have such clarification, and the industry has what I am saying now, on the official record, and what I said in the letter, which gave the reassurances that the QPA sought. There is a fair degree of flexibility in the Bill for dealing with a range of issues.

There are compensation provisions in the Water Resources Act 1991 for when licence revocation or modification results in loss or damage. Clause 102 of the Bill provides powers to make regulations governing compensation to be paid to any previously exempt abstractor who is not granted a licence or is granted a licence that will constrain his activity when the Bill takes effect. In addition, the Environment Agency has published draft guidance on how it will address the duration and renewal of licences. The agency will review, consult on and reissue that guidance once the Bill has been passed. It will take account of views expressed in Committee and on Report. We believe that the legislation has been framed in such a way as to provide an equitable, flexible and sustainable approach to abstraction licences.

David Heath (Liberal Democrat, Somerton and Frome)

The Minister is being very helpful. Will he say something about the relationship, if any, between the Agency's approach to licensing and the minerals plans for specific areas? Is there any correlation between the two? Does he expect one to inform the other?

Elliot Morley (Labour, Scunthorpe)

One will inform the other on the planning boundaries and the long-term availability of mineral resources. One of the new clauses suggests that we should link the length of planning permissions to the length of licences. I cannot accept that, and I shall explain why. New clauses 2, 3 and 12 and amendments Nos. 9, 11 and 12 would all limit the Bill's operations and would fetter the Environment Agency's ability to manage our water resources sustainably. They would also fetter the Secretary of State at appeal. That is my concern about them.

There is a question of balance, which has come up a few times. We must recognise the needs of industries that may be affected by our proposals, and we have tried to take them into account. The other side of the balance must be sustainable management. The Bill is about giving the Environment Agency the tools to do its job, and to do it effectively, while still providing the checks and balances on the agency's operations that one would expect in a democratic society. Getting the balance right is the problem, but I believe that it is right in the Bill, right in how we have tried to take account of the legitimate concerns of hon. Members, right in how I have given assurances on the record and in writing, and right in how concerns will be addressed in the Agency's guidelines.

Norman Baker (Liberal Democrat, Lewes)

In what way would new clause 12 fetter decision making? Surely it provides the balance that the Minister wants by containing a presumption that licences will be renewed while setting out conditions under which they may not be.

Elliot Morley (Labour, Scunthorpe)

I shall come to that point. I think in a linear way and the hon. Gentleman keeps jumping in and throwing me off my nice linear thought patterns. I assure him that I shall get there, along my linear course, so he should not worry.

New clause 2 would remove from the Environment Agency responsibility for determining the time limit applying to licences granted for de-watering activities. The effect would be to transfer to planning authorities the responsibility for determining a key abstraction licence condition—the duration of an abstraction licence. It is not appropriate for the planning authorities rather than the Environment Agency to have that responsibility. Furthermore, if planning authorities were concerned about possible water problems, they might restrict the length of the permission. The proposal could have that unforeseen consequence.

Bill Wiggin (Conservative, Leominster)

The Minister may have missed the point. The whole point of planning is to allow a company to know how long its business will be viable. If the planning authority has to take de-watering into consideration and has to issue planning permission of an appropriate length, investors can look at the situation and decide whether they want to invest in the company. We should not have that certainty under the two-part planning system. The Minister may have put his finger on the nub of the problem but he has not come to the right conclusion.

Elliot Morley (Labour, Scunthorpe)

I understand the hon. Gentleman's point although I do not necessarily accept that it is as significant as he thinks. Companies may require different permits for a range of operations. Some permits are annual and some are reviewed and renewed from time to time. I come back to the point about the presumption of renewal, which provides some comfort in relation to long-term planning. As I said, if the business case merits it, the length of the abstraction licence may be greater in some circumstances. The Environment Agency is always consulted about mineral plans, as are mineral planning authorities about catchment abstraction management. There is a link between the two, which relates to the question put by the hon. Member for Somerton and Frome.

Paul Tyler (Liberal Democrat, North Cornwall)

The Minister has come to the point about which I asked my hon. Friend the Member for Somerton and Frome (Mr. Heath): if it ain't broke, why fix it? The Minister has just said that the Environment Agency has a proper and effective role, so why must we change it?

Elliot Morley (Labour, Scunthorpe)

Because there have been some severe problems. My hon. Friend the Member for Sherwood (Paddy Tipping) is right. Offhand, I can think of only three cases that were resolved. The Environment Agency has been asking for those powers, so the hon. Member for North Cornwall (Mr. Tyler) should not think that everything in the mines sector is problem-free. If people are de-watering, they are abstracting from the aquifer. There may be ways of mitigating that, as the hon. Member for Somerton and Frome pointed out, but it should be within a regime that gives the Environment Agency some tools for managing the process. That is an important general principle in the Bill and I think that it is accepted; we are talking about the detail in certain circumstances. Although I understand the points that are being made, I cannot accept them. I feel that we have addressed the concerns raised in the discussions and that the balance is right.

New clause 3 would introduce two new features, both concerned with the renewal of time-limited licences and both relating only to quarries. Our provisions are intended to create a system for sustainable water resources management that applies to all abstractors. There cannot be a separate regime with one sector being treated differently.

The new clause would provide that compensation be paid to a quarry if a licence was not renewed or if it was curtailed. However, the only reason that a licence for quarry de-watering would not be renewed or would be curtailed would be that there was an environmental problem that could not be overcome. We should not compensate people for causing environmental damage. That is another principle in the Bill: the polluter pays.

The proposal would include the presumption of renewal for mines and quarries as a statutory requirement. It would also introduce, in a well-established statutory decision-making process, a requirement that, where certain conditions were met, the decision would effectively be taken out of the hands of the proper decision-making body—the Environment Agency.

New clause 12, tabled by the hon. Member for Lewes (Norman Baker), would place the presumption of renewal in statute, for all abstractors. My concern is that such a provision would fetter the agency's ability to consider other relevant factors. It is difficult to define in a Bill every factor that might arise in sufficient detail for all those cases where the presumption cannot apply. The presumption of renewal reiterates the effective presumption of grant existing at the time of the original application, provided that there is continuing need and that environmental sustainability is not threatened.

The Environment Agency must have concrete grounds for not granting or not renewing a licence, and its decisions can be challenged by appeal. We have to be careful about including undue restraints in the Bill because one of the considerations that the agency must take into account in renewing a licence is the efficient use of water. The hon. Member for Lewes has not included that in his criteria, as far as I am aware.

Norman Baker (Liberal Democrat, Lewes)

That is covered by environmental sustainability and water abstraction in new clause 12.

Elliot Morley (Labour, Scunthorpe)

I accept the hon. Gentleman's assurance that that is his intention, but new clause 12 does not say that. [Interruption.] He can imagine how such meanings could be argued over in court. We should be as clear as possible in framing legislation. If it is impossible to deal with every circumstance in relation to the presumption of renewal, there must be flexibility to allow the agency to do its job. That is why it is unwise to stipulate in the way that the hon. Gentleman suggests in new clause 12. It could lead to great difficulties in the future. My worry is that it could tie one hand behind the agency's back, and I would not want that to happen.

David Heath (Liberal Democrat, Somerton and Frome)

I am concerned about how the agency can deal with the cumulative effect of a number of permissions on a single aquifer. Each planning permission and each licence may well not have an environmentally unsustainable effect on the aquifer, but the cumulative effect may be unsustainable. In those circumstances and under the Minister's scheme, would the agency be right to cancel all permissions in a given area?

Elliot Morley (Labour, Scunthorpe)

The hon. Gentleman goes into hypothetical detail. However, as a rule of thumb, the agency will certainly take into account the cumulative effect of abstraction. If a further application could add to the overall effect of a number of existing licences that would certainly affect whether a new application was granted. Of course, there is nothing new about that—the agency currently operates in that way in respect of its resource management duties—so the existing situation would not change.

Of course, we have powers to direct the agency in how it deals with such issues if it becomes necessary to do so in the light of experience, so the presumption of renewal need not be included in the Bill, as that could be too restrictive. The presumption of renewal exists, as has been emphasised on a number of occasions, and I do so again now, so that there is no doubt or argument about it.

Amendments Nos. 9 and 11 would impose particular considerations in specifying the expiry date of a licence. Incorporating criteria, such as fixed duration, or the need to relate licences to asset-lifetime criteria could have the effect of overriding other criteria, not least environmental considerations. So those amendments are unacceptable.

Amendment No. 12 would significantly limit the ability of the agency to refuse to renew a licence to the very narrow set of circumstances set out in that amendment. It would remove the tests to ensure whether water continues to be used efficiently or is still required. The hon. Member for Lewes says that such things are covered by sustainability, but there could be argument about that.

I come now to amendment No. 10. I met representatives of mineral water companies, and I understand their concerns about what might happen if someone wishes to construct a borehole adjacent to the site of their existing abstraction licence. Of course, existing licence holders do have protected rights in respect of quantities. I realise that the hon. Member for Leominster (Mr. Wiggin) is concerned that boreholes might affect the chemical composition of the water, and I pointed out in my discussions with mineral water companies that I would ask the agency whether it could take such issues into account. However, there are real problems. The agency does not have a duty to take into account the effect of boreholes on the mineral composition of water. The agency's duty relates simply to quantities, so amendment No. 10 would not have the effect that the hon. Gentleman argues for. Moreover, there would be real technical problems. The greater protection is on the quantities and on the rights of existing licence holders. As has rightly been stated, there is deregulation under a certain threshold, but if a problem arose the threshold could be lowered.

Amendment No. 24 would restrict the Secretary of State's ability to direct the agency to apply for a threshold order under new section 27A of the Water Resources Act 1991. The Secretary of State would be able to exercise this power only in relation to issues of national importance. The power to intervene, exceptional as it is, may be used to make changes to reflect important national policy matters, but it could also be used in respect of matters on which the agency had yet to have the opportunity to take action. To enable full accountability between the Secretary of State and the agency, it is necessary to have the ability to intervene in unforeseen circumstances, which may encompass wider issues than those of national importance. Again, we must ensure that the agency has flexibility.

Amendment No. 25 deals with advertising regulations—a matter to which Members did not give a great deal of attention—and amendment No. 4 is concerned with protected rights. There seemed to be some confusion in Committee about the question of the time limit, and I must make it clear that we are talking about protected rights, not the right to abstract. Clause 17 preserves the protected right of those abstractors who no longer require a licence as a result of the Bill's various deregulatory measures—in other words, those who are below the current threshold. But where the right to abstract is not exercised, the protected right may lapse after four years, or—as was rightly pointed out—after another such period, as agreed by the agency. The intention is to prevent any unused abstraction rights from blocking access to water resources by preventing the issuing of new licences. But I must stress that that the loss of a protected right after four years does not prevent an abstraction from taking place. Unlicensed abstraction can continue lawfully at any time because it is below the threshold; it is simply the status of the abstraction that changes.

Amendment No. 4 seeks to change the period from four years to six years—an issue that was discussed in Committee. We believe that the proposed normal four-year period achieves a balance between the needs of an abstractor for the resources that they have a right to abstract, and the needs of other licence applicants, and, of course, of the environment.

Clause 24 introduces the right to sue an abstractor who causes damage. Abstractors will therefore need to remain alert to the possibility that they are harming others, if they are to avoid being subject to claims for damages. That will ensure that the law on water abstraction is entirely consistent with long-established rules in other areas—for example, the requirement for property owners and other occupiers or users of land to respect the interests of their neighbours. I understand what the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) said about the concern that that might lead to some house owners taking action. She gave an example of people in the watercress industry, and amendment No. 126 would provide a restricted definition of loss or damage. Different rules would apply to loss or damage under these provisions compared to the usual principles that apply to other cases.

Although the most common type of damage will be tangible damage to property, people who have suffered kinds of otherwise recoverable harm should have the ability to obtain the appropriate compensation. However, if the hon. Lady thinks that that might provide an excuse for someone to take legal action because they might argue that the water flow in the stream outside their house has devalued their property because it is on the waterside, I assure her that that is not the intention of clause 24. Just like anything else, such a case would have to be made in a court of law, and our legal advisers inform me that it would be very difficult to make such a case. In the end, it is for the court to decide, but it is not the Bill's intention to provide such a right. The Bill simply intends to put in place provision for similar rights to apply in similar circumstances so that there is consistency. I do not believe that it will necessarily bring about major changes.

I think that I have covered the main points that have not unreasonably been raised. I hope that I have addressed those points in a serious and detailed manner and provided reassurance to Members who have spoken on behalf of companies in their constituencies. I emphasise that we take such points seriously and are seeking to address them as far as possible as we seek a balance between sustainable management, the powers of the Environment Agency and the rights of abstractors.

Bill Wiggin (Conservative, Leominster)

The Minister was correct when he said that he had addressed these important and well made points.

Will the Minister consider a suggestion about the letter that he sent to the chairman of the quarrying industry? I accept that the Minister is worried about putting the contents of that letter in the Bill, and he made very clear the reasons for his not doing so. However, is there anything more that we can ask him to do to clarify the contents of the letter? I suggest that putting a copy of the letter in the House of Commons Library might be the easiest way of allowing everyone to see its contents. [Interruption.] There is some nodding in the distance. I hope that that is a positive sign.

We talked about the presumption of renewal being needed in the Bill. The Minister says, "No, I do not agree on that one." We also talked about contamination affecting the bottling sector.

Elliot Morley (Labour, Scunthorpe)

Although the letter was written to a third-party organisation, I confirm that, as far as we are concerned, it is a matter of public record. I am quite sure that we can arrange to put a copy in the Library.

Bill Wiggin (Conservative, Leominster)

I am delighted by that good news. It is a positive response and I know that many people have worked hard to obtain such assurances from the Minister. I am grateful to him for allowing everyone to see the letter's contents by putting a copy in the House of Commons Library.

To return to the point that I was about to make about bottling rights, the Environment Agency is responsible for the quantities abstracted but not for the quality. I completely accept and understand that, but I was not so happy with what the Minister said about the contamination effect. Although in most cases this would not happen, drilling into an aquifer can have a negative effect and pollution might reach the public through bottled water. I accept that many checks and balances are in place.

Elliot Morley (Labour, Scunthorpe)

I want to make it clear that although the principal consideration is quantity, quality and the potential for pollution are other criteria that the agency must take into account. Whether there is potential for pollution is an important consideration in whether a licence is granted.

Bill Wiggin (Conservative, Leominster)

I am clearly on a roll today because the Minister is being very helpful.

The Environment Agency must also be responsible for environmental impact and if that is manifested by pollution, it should be responsible for that, whether it wants to be or not. Pollution causes environmental damage, so it does not matter how it occurs. The agency should examine its remit on the damage of aquifers carefully. I am also grateful to the Minister for touching on protected rights.

The majority of what the Minister said was extremely helpful. I am grateful for his words and the letter that he will put in the Library, but we do need to amend the Bill somewhat.

Clause 1 — Licences to Abstract Water

Clause 2 — Restrictions on Impounding

Clause 3 — Existing Impounding Works

Clause 10 — Orders under Section 33 of the WRA, etc

Clause 15 — General Consideration of Licence Applications

Clause 17 — Protected Rights

Clause 19 — Form, Contents and Effect of Licences

Clause 23 — Transfer and Apportionment of Licences

Clause 24 — Claims Arising out of Water Abstraction

Clause 27 — Withdrawal of Compensation for Certain Revocations and Variations

New Clause 5 — Regulatory Methodology

Bill Wiggin (Conservative, Leominster)

I beg to move, That the clause be read a Second time.

Michael Lord (Deputy Speaker, Central Suffolk and North Ipswich)

With this it will be convenient to discuss the following:

New clause 6—Health and Safety Commission—

'After section 2 of the WIA there is inserted—

"2A Health and Safety Commission

(1) The Secretary of State, the Assembly and the Authority shall from time to time consult the Health and Safety Commission, and relevant undertakers, about all safety matters which may be relevant to the carrying out of any of their and relevant undertakers' respective functions under this Act.

(2) The Secretary of State, the Assembly and the Authority shall, in carrying out their functions under this Act, take into account any advice given by the Health and Safety Commission about any safety issue, whether or not in response to consultation under subsection (1).".'.

New clause 7—Appeals against enforcement orders—

'(1) Section 21 of the WIA (validity of enforcement orders) is amended as follows.

(2) At the end of paragraph (a) of subsection (1), there is omitted the word "or".

(3) After paragraph (b) of subsection (1), there is added—

"(c) that the making or confirmation of the order was based on an error of law or fact; or

(d) that in the circumstances of the case, the making or confirmation of the order was not reasonable."

(4) For subsection (2) there is substituted—

"(2) On any such application, the High Court may, if satisfied that any of the grounds set out in subsection (1) above are proved—

(a) quash the order or any provision of the order; or

(b) vary the whole of the order, or any part of the order whether the application relates to that part of the order or not.".'.

New clause 10—Duty to carry out regulatory impact assessments—

'After section 5 of the WIA there is inserted—

"5A Duty to carry out impact assessments

(1) This section applies where—

(a) the Authority is proposing to do anything for the purposes of, or in connection with, the carrying out of its functions; and

(b) it appears to it that the proposal is important;

but this section does not apply if it appears to the Authority that the urgency of the matter makes it impracticable or inappropriate for it to comply with the requirements of this section.

(2) A proposal is important for the purposes of this section only if its implementation would be likely to do one or more of the following—

(a) to involve a major change in the activities carried on by the Authority;

(b) to have a significant impact on persons carrying on business in the markets for any of the services and facilities in relation to which the Authority has functions; or

(3) Before implementing its proposal, the Authority must either—

(a) carry out and publish an assessment of the likely impact of implementing the proposal; or

(b) publish a statement setting out its reasons for thinking that it is unnecessary for it to carry out an assessment.

(4) An assessment carried out under this section—

(a) may take such form, and

(b) must relate to such matters.

as the Authority considers appropriate.

(5) In determining the matters to which an assessment under this section should relate, the Authority must have regard to such general guidance relating to the carrying out of impact assessments as it considers appropriate.

(6) Where the Authority publishes an assessment under this section—

(a) it must provide an opportunity of making representations to it about its proposal to members of the public and other persons who, in the Authority's opinion, are likely to be affected to a significant extent by its implementation;

(b) the published assessment must be accompanied by a statement setting out how representations may be made; and

(c) the Authority is not to implement its proposal unless the period for making representations about it has expired and it has considered all the representations that were made in that period.

(7) Where the Authority is required (apart from this section)—

(a) to consult about a proposal to which this section applies, or

(b) to give a person an opportunity of making representations about it,

the requirements of this section are in addition to, but may be performed contemporaneously with, the other requirements.

(8) Every report under section 192B must set out—

(a) a list of the assessments under this section carried out during the financial year to which the report relates; and

(b) a summary of the decisions taken during that year in relation to proposals to which assessments carried out in that year or previous financial years relate.

(9) The publication of anything under this section must be in such manner as the Authority considers appropriate for bringing it to the attention of the persons who, in the Authority's opinion, are likely to be affected if its proposal is implemented.".'.

Amendment No. 19, in schedule 1, page 135, line 8, after 'chairman', insert ', a chief executive'.

Amendment No. 29, in page 135, line 8, leave out 'and'.

Amendment No. 20, in page 135, line 8, leave out 'at least two' and insert 'no fewer than three'.

Amendment No. 30, in page 135, line 9, at end insert

'and one other member appointed by the National Assembly for Wales'.

Amendment No. 21, in page 135, line 9, at end insert—

'(1A) Including the chairman, the majority of members of the Authority shall be nonexecutive members.'.

Amendment No. 31, in page 135, line 24, after 'State', insert

'or the National Assembly for Wales in the case of a member appointed by the Assembly'.

Amendment No. 14, in page 136, line 15, at beginning insert—

'(1) The Secretary of State shall, after consulting the chairman and the Assembly, appoint a person (who may, subject to subparagraph (2), also be a member of the Authority) to act as chief executive of the Authority on such terms and conditions as the Secretary of State may think appropriate.

(2) A person appointed as chief executive may not at the same time be a chairman.'.

Amendment No. 18, in clause 38, page 42, line 20, at end insert—

'(2A) That description must include, so far as the Authority believes it to be relevant for the financial year in question, a statement concerning how the Authority intends thereby to meet its objectives and duties.'.

Amendment No. 127, in clause 41, page 48, line 34, after 'research', insert 'and regulatory impact assessment'.

Amendment No. 128, in page 48, line 47, at end insert

'and

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

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

Amendment No. 129, in clause 42, page 50, line 17, after 'research', insert 'and regulatory impact assessment'.

Amendment No. 130, in page 50, line 30, at end insert

'and

Government amendments Nos. 87 to 89.

Amendment No. 22, in schedule 4, page 174, line 35, leave out from 'which' to end of line 39 and insert 'represents either—

(a) the amount which the water undertaker—

(i) reasonably expected to recover from relevant customers; but

(ii) is unable to recover from those customers as a result of their premises being supplied with water by the licensed water supplier; or

(b) the amount which represents the costs incurred by the water undertaker in carrying out its functions insofar as they are—

(i) directly related to the customer in question, or

(ii) represent an allocation of the water undertakers' fixed costs,

as the Authority may in any case determine.

(3A) The Authority may, in determining the appropriate amount for the purposes of subsection (3) above, take account of the benefits to consumers of determining an amount which promotes competition in wholesale water supply by secondary water undertakers.'.

Government amendments Nos. 123, 107 and 110.

Bill Wiggin (Conservative, Leominster)

The new clause would require the water services regulation authority to publish a statement of policy on its determination of charges. The statement would have to include how it had carried out its duties, the applied methodology and the extent to which functions had been performed. Six months before publishing the statement of policy, the authority would also have to consult relevant undertakers about the determination of charges, which would allow each relevant person the opportunity to make an oral representation on any objections. If the authority did not meet such conditions as are laid out in proposed subsection (8), the policy would be referred to the Competition Commission for determination. The new clause would hold the authority accountable for publishing its intentions of determined charges in order to make the process more open, transparent and inclusive for the water industry.

New clause 6 seeks to ensure that health and safety is maintained in the functioning of all relevant water bodies and undertakers by regular monitoring. That would be carried out through consultation between the Secretary of State, the National Assembly for Wales, the authority and the Health and Safety Commission. The Secretary of State, the Assembly and the authority must take on board any advice given about any safety issue in carrying out their functions. I am concerned that the Bill does not address safety carefully enough, but the new clause would ensure that it does so.

New clause 7 seeks to expand the appeals mechanism through which water undertakers can challenge enforcement orders. Any enforcement order proved to be an error of law or unreasonable, where that is agreed by the High Court, will either be quashed or varied so that it is correct. As the Bill stands, there are not enough provisions for appeal against enforcement orders. New clause 7 would make the arrangements fairer by allowing affected businesses to continue their work if there is an unreasonable or unlawful confirmation of order.

Amendment No. 14 follows best practice in regulatory structures by seeking to ensure that the chairman and chief executive of the water services regulation authority cannot be the same person. I am concerned that combining the posts would give one person too much power over regulation of the water industry, which could be dangerous and which the Bill addresses. A wider range of options is surely more desirable—after all, the Environment Agency separates the posts. In Committee, the Minister said that he would consult the Secretary of State to provide on Report clear guidelines on the exact structure of the procedure and on the views of the Welsh Assembly. I look forward to hearing about that. The amendment would ensure more open, diverse and discursive procedures in the structure of the water services regulation authority—for the good of not only the industry, but the consumer, whom I am, as usual, keen to protect.

Amendment No. 17 reflects my concern that although the new consumer council's access to information about licensed water suppliers is welcome, the availability of that information is too restricted. At present, the Secretary of State has the power to make regulations prescribing circumstances in which water companies or suppliers may refuse the council information. We are worried that there will be fewer duties to provide information than under the Freedom of Information Act 2000. The criteria by which a request for information can be refused should be in the Bill. Up-to-date information is essential if the council is to act in the best interests of consumer protection. As consumers have no choice of supplier in the first place, they should be able to access information to resolve any problems. My amendment would enable the council to publish information if the benefit to the consumer was greater than the prejudicial effects on the interests of the body. Moreover, it reflects the view of the consumer council for water, which welcomes an independent consumer council, but wants the Bill to ensure that it has the right powers and resources to improve consumers' representation.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful for the opportunity to speak to new clause 10 and the other amendments in my name. The Minister will be familiar with the arguments that surround them, although in some cases I have tried to draft them more accurately—and perhaps more acceptably, from the Minister's point of view—to reflect my intentions.

New clause 10 would require that where the water services regulation authority undertakes something of significance in relation to the industry and water undertakers, and where it is not a matter of urgency, it is under an obligation to carry out and to publish regulatory impact assessments. I shall not dwell on the subject of what those should cover, but hon. Members will note that subsection (5) of the new clause would require the authority to

"have regard to such general guidance relating to the carrying out of impact assessments as is considered appropriate."

That would include the Cabinet Office guidance that was updated in the latter part of last year. There have been some helpful innovations in respect of regulatory impact assessments, not least the inclusion of a competition assessment. The quality of such documents is a matter of continuing debate that I shall not explore further. It is important, however, that regulators should themselves have regard to the impact assessment process.

The text of the new clause is modelled directly on section 7 of the Communications Act 2003, reflecting the duty that the Government properly laid on that sector's new regulator—Ofcom—to undertake regulatory impact assessments. I cannot see why there should be a distinction between the manner in which Ofcom is to undertake its responsibilities as a new regulator and the manner in which the new water services regulation authority is to do so. I am therefore—perhaps over-optimistically—hopeful that the Minister will say, "Thank you very much", and agree to it.

Amendment No. 19 would insert into schedule 1 the provision that the new water services regulation authority should have not only a chairman, but a chief executive—with the implication, of course, that they should be two separate people. That is in line with current regulatory best practice. It is also increasingly regarded as best practice in the corporate sector. Although I do not suggest that everything in the Higgs report is right, the importance of distinguishing between the roles of chairman and chief executive did not cause great controversy.

It is important for business to distinguish between the person who is responsible for strategy and the person who has responsibility for the body's executive functions. It is even more important for regulatory bodies. As my hon. Friend the Member for Leominster (Mr. Wiggin) suggested, there is a danger—it is not theoretical; it has been demonstrated in the past—that a regulator who is one person can be the subject of speculation about personal views and, when a new regulator is appointed, about the way in which the policy will change simply as a consequence of a change of personality.

We cannot remove the problem entirely but the Better Regulation Task Force's report on economic regulators said that it was desirable to move away from having the regulator as one person and that an element of greater regulatory certainty was introduced if the regulator was perceived as a corporate body rather than a personality. We are moving towards the water services regulation authority being a corporate body by looking to an authority rather than a single person such as the director general. It is no reflection on Philip Fletcher as the director general of the Office of Water Services and the way in which he has done his job that all regulators are moving in that direction. It is a retrograde step to reintroduce speculation by combining in one person the role of chairman and chief executive. If I remember rightly, the new combined code for companies reflects the desirability of distinguishing between the role of chairman and chief executive.

Amendments Nos. 20 and 21 would establish that a majority of the new authority should be non-executive members. Amendment No. 20 would establish that, in addition to the chairman and chief executive, there should be a minimum of three additional members, thus making a minimum of five and rendering practical a non-executive majority in an authority of five. Again, that is in line with best practice in corporate governance terms in the companies sector and is reflected in the structure of most regulators, including, to give a recent example, Postcomm.

Paddy Tipping (Labour, Sherwood)

The hon. Gentleman rehearses arguments that we had in Committee. He and the Minister will recall that voices from all parties in Committee called for best practice. Amendments Nos. 19, 20 and 21 reflect good practice. Although there is no need for the Minister to change the Bill, he gave an undertaking in Committee to reflect on the points that were made and give us more information on Report.

Andrew Lansley (Conservative, South Cambridgeshire)

The hon. Gentleman is right. In Committee, he suggested that I should quit while I was ahead. Having engaged his support, if I may interpret his remarks in that way, I shall quit while I am ahead on the amendments. It is in the nature of things that we have to table the amendments again to stimulate the debate. As the hon. Gentleman says, the Bill does not have to look different to produce a different outcome in the composition of the authority. I hope that when the Minister replies to the debate, we may have some good news from him. On the assumption that I am quitting while I am ahead, I shall keep moving and hope that I can win again. I appreciate that I have not won yet, but I hope to do so.

Amendment No. 18 would take account of the fact that when the Better Regulation Task Force considered economic regulators, its recommendations reflected the fact that several regulators had been given a range of additional objectives and statutory duties that could at times come into conflict. At that time, that was not true of the director general of water services. However, we are now incorporating into the legislation some additional objectives and duties for the new water services regulatory authority—not least in relation to the pursuit of consumers' interests whenever appropriate through competition, and to environmental and social objectives.

At the time, the Better Regulation Task Force said that that could create uncertainty for industry, which would be inherently undesirable. We want regulation to be predictable whenever possible, and we therefore want any possible conflicts of interest within the statutory objectives of the regulator to be interpreted in a way that is relatively predictable for the industry. The taskforce recommended that this should be done each year through the business plan of the authority concerned. In this case, the authority describes its business plan as its forward work programme, and clause 38 contains a number of provisions relating to the forward work programme of the authority. It does not, however, include an obligation to set out in the programme how the authority intends to reconcile its objectives and duties. That is an omission in comparison with the legislation that we passed last year on the establishment of Ofcom, which does have such explicit obligations built into its structure. I hope that the Minister will be able to look positively at this issue.

The purpose of amendment No. 22 is to reflect regulatory practice among a number of regulators when considering the question of access pricing. I will not bore the House on this subject in the manner in which I detained and bored the Committee. I will simply say that, in recent examples, other regulators looking at access pricing for the purpose of stimulating competition have taken different views on how that should be done. The different approaches can be characterised either as a retail-minus or a cost-plus approach. The former looks at the retail price of what has been a monopoly undertaking and subtracts from it the avoidable costs of providing the service to customers, which is to be substituted for by a new entrant to the marketplace, and to say to that new entrant, "It is your responsibility to ensure that the amount paid to the monopoly or statutory undertaking is the equivalent to the amount that it would have expected, less the avoidable costs."

The cost-plus approach says, "Let us find out the costs to the statutory undertaking of providing the service to the new entrant, and, through the new entrant, to the customer." Of course, that triggers a debate about what costs are properly attributable. Members who are interested in this subject will find exactly that kind of debate taking place in the current Postcomm decision about access pricing to the Royal Mail network, where they will find a full discussion of the subject. It is therefore a matter of debate as to what extent the fixed overheads of the statutory undertaking are attributed to the new entrant or, via the new entrant, to the customer. That is why I have tried to make life simpler than it was in Committee by restructuring my proposals.

Amendment No. 22 is therefore very straightforward. It incorporates in paragraph (a) the structure that reflects the legislation as it is currently drafted, which takes the retail-minus approach. Paragraph (b) contains a simple description of a cost-plus approach. In addition, however, I have added sub-paragraph (3A), which would provide the authority with a discretionary power to determine which of those approaches to pricing the authority may use, and, in doing so, to take into account the effects of such a decision on competition. The Minister and other Members who served on the Committee will recall that I was very concerned that the structure of pricing that has been written into the Bill will make the reality of competition far less than it ought to be, even in the limited industry to which competition is to be applied.

John Redwood (Conservative, Wokingham)

Does my hon. Friend agree that when challenges have been proposed, they have normally resulted in a 10 to 20 per cent. proposed reduction in water supply prices? That does not sit easily with the monopolists' view that they need a price increase. How might the matter be dealt with under the formula that my hon. Friend suggests? The monopolists will clearly say that they can only offer the price because they are cherry-picking, while the challengers will say that it is because they are more efficient.

Andrew Lansley (Conservative, South Cambridgeshire)

At least two mechanisms will operate. There is the extent to which the regulator can deliver price reductions as a consequence of regulatory contestability, and there is the actual impact of competition. My right hon. Friend and I will probably have no trouble in agreeing that regulatory proxies of contestability have proved only modestly successful in comparison with the benefits of competition in delivering cost and thereby price reductions to consumers.

My right hon. Friend's point about a 10 to 20 per cent. reduction is an indication—a modest indication—of what has often been delivered by the introduction of competition. I well remember that when BT introduced competition, certain people who had better be nameless were willing to go to the wall for the defence of the retail prices index formula, claiming that if the reduction went below RPI minus 1 the world as we know it would cease to exist. In fact I think the telecommunications formula reached RPI minus 12 within a few years.

I do not know what degree of cost reduction is available in this case. As we said a number of times in Committee, the actual cost of water in relation to the cost of the fixed infrastructure that the undertaker will have to continue to maintain is very low. That means that it will be difficult to find opportunities for competition to deliver a margin to new entrants to the marketplace while also delivering a benefit to consumers. That is one reason why the amendment is needed, especially in relation to determining the appropriate amount for access pricing by reference to the need for competition. Otherwise I think it will be squeezed out. If the primary undertakers are to receive the amount they expected, less identified and avoidable costs—which constitute a very small part of the overall price to customers, even the very large customers who will be the subject of competition—it will be difficult for secondary suppliers to enter the marketplace and deliver a margin against that.

I am grateful to my right hon. Friend for his intervention, which has allowed me to extend the argument a little. This is not just about offering the authority the flexibility that it ought to have in relation to access pricing; we should also provide a statutory power to help the delivery of competition. As I said in Committee, I am surprised that having talked of the introduction of competition, the Government have framed the Bill in a way that makes it extremely unlikely that it will be effective. It is important for us to challenge that now.

The benefit of the cost-plus route, as opposed to the retail-minus route taken by the Bill in its present form, is that it would expose the costs of primary water undertakers. In the case of Royal Mail, the principal difficulty for the new regulator was the lack of any accurate attribution of costs, or even an understanding of them, in the Post Office on which prices could be based. If the calculation had been made on a retail-minus basis, all the inaccuracies and inflationary elements of costs would have been set in stone, and Royal Mail's management would not now be having to deal with them.

I have gone on longer than I intended to, but that often happens when we discuss access pricing. It is not everybody's cup of tea, but it is terrifically important. It may be hidden away in schedule 4, but in the absence of amendment, I fear that one of the main objectives of the Bill will be damaged.

Sue Doughty (Liberal Democrat, Guildford)

I shall speak first about Liberal Democrat amendments Nos. 127 to 130, then comment on new clause 5.

Our amendments reflect our concern to ensure that any new standards are based on common sense and that there are no unforeseen results. The Bill gives the Secretary of State the power to introduce new standards of performance in water supply and sewerage services for water companies. Until now, standards of performance have been set either by legislation—for example, on drinking water or bathing water quality—or by the director general of water services. In making recommendations, the director general has to strike a balance between the duties given to him by Parliament towards present and future customers. Within the limits of those powers, the director general has been independent of short-term political pressures.

We are worried because the proposals in the Bill infringe both the independence of the authority that will replace the director general of water services and the principle of parliamentary supremacy in setting the framework for water industry regulation. The proposals risk imposing unwarranted costs on customers in pursuit of standards of performance set in accordance with short-term political pressures. It is not realistic to expect the proposals on standards of performance to be deleted outright; instead, there should be a duty on the Secretary of State when setting those standards to carry out a full appraisal of the standards and to implement them only if the benefits outweigh the costs.

John Redwood (Conservative, Wokingham)

Can the hon. Lady explain what the Secretary of State and the regulator should do in the event that, say, the quantitative evaluation is positive, but adverse qualitative matters have to be taken into account? If not all the factors are quantified, how are they to form a judgment?

Sue Doughty (Liberal Democrat, Guildford)

We should be examining the cost of changes. There are times when we have to consider standards, sustainability, regulation and other aspects of change, but in cases in which those aspects are neutral and the costs of minor changes outweigh the benefits, we want the Secretary of State to take a view. We do not want a change that will cost an arm and a leg to implement but will bring about no real benefit. Perhaps the Secretary of State has taken a view on public health or on the environment and minor changes are proposed, but the cost of those changes far outweighs the benefit. We are therefore concerned about the regulatory impact assessment. Our aim is to ensure that the Secretary of State takes account of such matters. We want to ensure that unrealistic costs are not placed on water companies and thereby on their customers, and that the checks and balances are determined by Parliament.

We were inclined to support new clause 5, but we have some concerns, in particular about proposed new subsections (8) and (9), which refer to percentages of the relevant undertakers that have to be in agreement. A policy must be considered in the light of the number of objectors

"weighted according to their market share in such a manner as may be prescribed."

The nature of the water industry is such that a small number of companies control the largest market share. The result may be a policy that is skewed in favour of a few companies, as the proposals would allow them to club together to oppose the authority's proposals on a policy statement. We fear that some of the regulatory teeth would thereby be removed.

Bill Wiggin (Conservative, Leominster)

I am sympathetic to the hon. Lady's fears, because the new clause is long and complex. However, does she agree that the reason it is weighted towards market share is to give due consideration to the consumer? I know that she is keen on supporting consumers, so I suggest that she looks again at the new clause. As I said, I sympathise with her fears, but they should be allayed on the basis that it is important for consumers to gain proper weighted representation. That provision is built into the new clause.

Sue Doughty (Liberal Democrat, Guildford)

I understand what the hon. Gentleman says and I have considerable sympathy with his view of consumers. It is one way of looking at the issue, but it also puts disproportionate weight on businesses. I believe that the authority should act on behalf of consumers—that is what it is there to do. My fear is that the water companies, as businesses, would benefit disproportionately. Consumers might benefit sometimes, but otherwise business considerations are paramount.

Sadly, on balance, we cannot support the new clause. We believe that, in the end, the authority should have a written statement of policy and maintain independence.

Simon Thomas (Plaid Cymru, Ceredigion)

Before I speak to amendments Nos. 29, 30 and 31, I want to support the amendments moved by the hon. Member for South Cambridgeshire (Mr. Lansley) on best practice within what could be called "corporate social responsibility" in the widest context. His point about the separation of powers between the chief executive and the chair of the authority is important. Several hon. Members made that point in Committee and I look forward to hearing the Minister's views on it tonight, so that we may have a better idea of how the Government think the authority should be run according to best practice.

My amendments are simple, though quite far-reaching. They would ensure that the two statutory bodies established by the Bill—the water services regulation authority and the consumer council for water—have among their membership a representative not only from Wales but directly appointed by the National Assembly for Wales. I want to explain in just a couple of minutes why I believe that that is important.

Under the Bill as it stands, members of the important statutory regulation authority will be appointed after the Secretary of State has consulted the National Assembly for Wales. That amounts to consultation, but the National Assembly for Wales has no right directly to make appointments. I dare say that it could suggest names, but it could not ensure that its favoured person sat on the board of the authority, because it is for the Secretary of State to make the appointment.

In respect of the consumer council for water, consultation with the National Assembly applies only to appointment of the chairman, but there will also be a member on the body who is directly appointed by the National Assembly, so a twin level of devolution is going on there.

The Government have accepted that it is important, in view of devolution and the water industry's importance to Wales—or, I should say, because there are cross-boundary issues, within the areas covered by Dwr Cymru, Welsh Water—that Welsh consumers have someone on the consumer council directly appointed by the National Assembly. However, the wider regulatory framework allows only consultation with the Assembly rather than allowing it to appoint directly to the board.

A similar process—I accept that what we are dealing with here is indeed consistent with it—applied to the office of communications. When Ofcom was established, similar processes were taking place and I recall hearing the hon. Member for South Cambridgeshire make similar arguments about the regulatory framework. We examined the issue of users or consumers having representation from Wales, but the Secretary of State made appointments to the statutory or regulatory body on the basis of a different level of consultation with the National Assembly.

The point behind the amendments is simple. Now that devolution is bedding down and the National Assembly is becoming a mature body that is able to take strategic decisions, and given that water is so important to Wales, should there not be a mature relationship of equality between Westminster and Cardiff? When we consider England and Wales provisions—water in Scotland is outwith the Bill—it is not too much to ask that the Assembly have the right to make a direct nomination to the authority. That non-contentious suggestion would not create any problems. However, the Government might have difficulty with it if it set a precedent for other regulatory frameworks, such as communications and broadcasting, which I mentioned earlier. Considering the importance of Welsh water to both England and Wales, I doubt whether such a right would be a problem. I accept that the Government's approach is not to hurry devolution, but if I would like it to move a little quicker, that is not an unacceptable position for a member of Plaid Cymru.

Although my amendments are buried in a group of amendments and we will not have the opportunity to vote on them, I hope that the Minister will take the opportunity to expand a little on what he said in Committee about the relationship between the National Assembly, the authority, the consumer council and the Secretary of State in making the appointments. I want to hear a description of how the relationship will work when the appointments are made, and how the National Assembly Government will be involved in them. I would also like to know how the Assembly will be able to relate to the authority over time and make its views clear on priorities for Wales, which will also affect many English water users, and their context in the work of the authority.

The amendments are straightforward. They touch on larger issues, but we need to have the context for the consumer council and the services authority set out.

John Redwood (Conservative, Wokingham)

I rise in support of new clause 5 and some of the other amendments before us. The Bill is a wasted opportunity. I strongly believe that the successful introduction of competition into the water industry would improve the service and the level of investment, and lower prices. I am disappointed that schedule 4 is still unamended, with a 50-megalitre threshold for the introduction of competition and a ban on any competition in the household sector. I have declared my interests in the register, and they include owning a household for which I would like to have a competitive water supply. I see that I shall have to await another Bill and another day to see that ambition fulfilled.

In new clause 5, I welcome the requirement that

"The Authority shall prepare and publish a statement of policy with respect to its determination of charges in periodic reviews and interim determinations".

However, the authority will find that difficult, because it will experience conflicting pressures. As I suggested in an intervention, some will seek to challenge the existing incumbents in the industry and will claim that they could deliver water for 10, 15 or 20 per cent. less than the current prices. They will claim that they could do that universally, if they were given access to the water resources; if they were allowed to tap into the rising water tables; if they were able to extract from rivers with sufficient to extract; and if they were allowed to route their product, in part or wholly, through the pipelines of the existing monopolists. The regulator will have to take that into account and the challengers will certainly present an interesting proposition. The incumbents in the industry will say that it is unrealistic. When companies offer to undercut prices at the higher end of the market, the incumbents will claim that those companies will not sort out the problems of the existing network, solve the investment backlog or offer such prices to all users. Under this legislation, that will never be tested, because competition will be so restricted.

New clause 5 is hopeful, but I would like some reassurance from my hon. Friend the Member for Leominster (Mr. Wiggin)—and from the Minister, if he intends to accept it—that the authority, when preparing and publishing its statement of policy, would give due influence to what a competitive market could provide and would not merely consider the claims of the incumbents that they need a certain percentage increase in prices regularly in order to make good the defects of the current structure.

The industry was nationalised for all too long. During that time, it got itself into a position in which about a quarter of its product disappeared between its collection in a reservoir and its routing to a household or business premises. That was a most remarkable degree of waste. I do not think that competitive food companies would accept the loss of 25 per cent. of food products between farm and shop or in the lorries that transport them around the country; yet, until recently, we lived, apparently comfortably, with the idea that a quarter of the product could go missing. That is the kind of issue that the regulator should take into account under new clause 5 when reaching a determination about the efficiency of businesses and a sensible price.

I am pleased that new clause 5 contains the possibility that matters can be referred to the Competition Commission for review. That gives some cause for hope. There is a case for doing just that, given current prices and efficiency in the industry. All too often pressure is low in relatively warm conditions, and we are now hearing, once again, warnings from the industry that, because we had a longish period this summer of not much rainfall, there could be problems ahead. It beggars belief that we find it difficult to guarantee a plentiful supply of water at all times in an island that is regularly soaked with rain.

From some people, we hear that it is somehow not environmentally friendly to want rising water use. Yet anyone who understands the water cycle knows that we do no damage by using water. We use it, it passes through and it is returned to the environmental system. All we need is regulation to make sure that it is taken out in the right way and put back in the right way. Let us use it as often as possible. In a growingly prosperous society, we should expect rising water demand. I trust that the regulator will take account of the growing popularity of water when reaching his or her determination under new clause 5, if it is passed, and under the Bill in general.

I have some sympathy with new clause 10. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) is right to say that we need impact assessments. I was pleased to hear that he thinks that those must also refer to competition assessments and must try to deal with the cruel dilemma that competition may point in one direction on price while the claims of the incumbents may point in another.

We should understand that price is the crucial issue. Water is the exception to the rule in being a utility that was privatised without our introducing competition. As one would expect, it has rising prices while those utilities that were privatised with the introduction of competition showed very sharp declines in prices over a short period. That is true of gas and electricity, as well as the telephone industry to which my hon. Friend referred. In each case, we were warned when we started to introduce competition that it was quite inconceivable that prices would go down. In each case, the monopolist told us that having businesses coming in and creaming the best business from them would increase their costs and make it difficult for them to invest and survive. In each case, that was quite wrong. In each case, competition made the overall market grow and, in spite of falling prices, produced better profitability for, in most cases, the incumbents as well as the challengers. I am glad that my hon. Friend has tried to open that argument by requiring, in new clause 10, that proper impact assessments be carried out and all those issues be considered.

My hon. Friend also tabled amendments in Committee and on Report to try to encourage best corporate practice in the regulator. I did not approach that idea with an immediate spring in my step; as my hon. Friend knows, I am not someone who would have too many public sector posts. If I thought one could get away with one person instead of two, three or five, I would normally welcome that greatly.

I see the point that my hon. Friend is making, however: all the businesses to be regulated by that regulator would be expected to come up with high standards of corporate governance; to split power between, usually, a non-executive chairman and an executive chief operating officer or a chief executive; and to have non-executives on their board to provide some balance and criticism and to intervene when things go wrong. We probably owe it to those businesses to be a little more generous than I should normally be in public sector staffing and accept that there should be a non-executive power balance on the board. Non-executives are always much cheaper than executives and my hon. Friend recommends a non-executive chairman and non-executive board members. That expenditure may be sensible, and it could be false economy to ignore such advice.

I am pleased to hear that the Minister is moving in that direction. I urge him to do the honourable and decent thing and accept the amendments. If his intentions are honourable, why not include the amendments? Why not protect us from some evil future Government who may not share his wisdom and common sense and might want to run the regulatory body without the non-executive counterbalance so wisely thought through by my hon. Friend the Member for South Cambridgeshire and formulated in his amendments?

I hope that the Minister is in listening mode and that he will be prepared to surprise us by his generosity and common sense. He is rare among Ministers in this Government: he understands what he is doing, listens carefully to the arguments and has some influence over what the Government do. I very much welcome that in a Minister and wish there were more like him. He is stranded without promotion because he is so much better than those who are promoted—[Hon. Members: "He was promoted."] But not to the Cabinet. He is obviously too good to get into the Cabinet; one has to reach a low standard to achieve Cabinet rank. I am sorry that the hon. Gentleman is too good for this Cabinet.

The amendments suggesting that Wales be properly represented also appealed to my generous and emollient spirit this evening. As a former Secretary of State for Wales, how could I say that I was against proper representation for the Principality on such an important body? I trust that as a party we shall offer support for the proper representation of Wales.

I do not find myself in the same sympathy with the Lib Dem amendment, moved without a great deal of understanding or force by the hon. Member for Guildford (Sue Doughty)—[Hon. Members: "Ooh."] I asked a simple question of the hon. Lady. Her amendment states that there should be an assessment based on things that can be quantified and an assessment based on things that require qualitative judgment. I asked her how the Minister and the regulator could come to a conclusion if quantities pointed one way and qualities pointed another, but there was no answer from the hon. Lady. She seems to have designed an extremely ambiguous proposal, which would make the legislation more rather than less difficult for the Minister and the regulator. Surely, the art of legislation is to keep it simple, short and clear. The amendment would do none of those things; it throws many things into the pot, as we are used to the Lib Dems doing, and leaves us in a grey area about what might emerge.

Norman Baker (Liberal Democrat, Lewes)

rose—

John Redwood (Conservative, Wokingham)

Does the hon. Gentleman want to intervene?

Norman Baker (Liberal Democrat, Lewes)

No.

John Redwood (Conservative, Wokingham)

When somebody stands up in this place, it is normal for them to intervene. However, I see that the hon. Gentleman really wanted to leave. He obviously accepts my criticisms of Lib Dem policy on the matter and is so embarrassed that he has had to flee the Chamber. Perhaps he has gone to look for the person who actually wrote the amendment to find the answer to those interesting questions. The Lib Dems do not have the benefit of a Box of officials to scribble answers when they are under pressure in the Chamber. We saw that lack today when they could give us no answers. Given the performance from the Lib Dem Benches, I urge my hon. Friends not to support their amendment No. 128, as it would create muddle and confusion in a Bill that will benefit from no such extra proposals.

My hon. Friend the Member for South Cambridgeshire has introduced another good proposal: amendment No. 22, which deals with access pricing and returns us to earlier contributions that he and I made in this evening's short debate on these vital matters. Again, that amendment represents a clarification. It would put a little more pressure on the regulator to explore why water prices are so high, to ask why the leading water companies think that prices should go considerably higher and to ask why, so far, so few of the inefficiencies in the leading water undertakings have been squeezed out.

Why is so much of the product still lost between reservoir and market? Why has there not been the same competitive and aggressive promotion of the product as we have with things such as mobile telephony in the now very competitive telephone sector? Why is there so much reluctance to deliver new products and to produce the reserves necessary so that water can be more aggressively sold to the marketplace? Why do we still have such very defensive attitudes to the water industry, thinking that it is somehow wrong to buy and sell the product and wrong for people to want more of it?

I would draw an analogy with the hot cross bun industry. It would be rather odd if, around Easter time, that industry issued a note saying, "It is most inconvenient that everyone wants hot cross buns at the same time. Would people please delay their purchase of hot cross buns until August?" Yet the water industry does that at times. When we want water in August to water our plants, we are often advised that it would not be a very good idea to water them in August. I suspect that, if we have a rainy November and December, we will soon be told that it is all right to water our plants. The only trouble is that they are sodden and most of them died in the drought anyway.

I hope that the important issues that have an impact on consumers—water shortage, advice not to use water when it is needed most, high price, poor investment and poor quality of pipes and the network—will be dealt with under the Bill, but they would be dealt with even better if the proposals made by my hon. Friend the Member for South Cambridgeshire, including amendment No. 22, were passed tonight, and it is with great pleasure that I strongly support them.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

I am fascinated to hear the right hon. Gentleman outline a new Tory stealth tax. I wonder what the extra reservoir capacity that he is clearly proposing would cost the consumer?

John Redwood (Conservative, Wokingham)

As I have explained, the competition under my model would produce cheaper prices for consumers. The Liberal Democrats have not yet grasped the point that there was a massive expansion of telecoms capacity after the introduction of competition. Consumers did not have to pay more for the extra capacity; they paid lower prices because the market expanded so much. The same would happen with water if competition was allowed. As always, the Liberal Democrats are 50 years out of date and very keen to have subsidised, poor quality nationalised services for more or less everything. I was not at all surprised to hear them argue that case yet again tonight. At least the hon. Member for Lewes (Norman Baker) argued it a little more cogently than the hon. Member for Guildford, who is their official spokesman on the issue.

I have been sidetracked, but I wish to conclude my remarks by saying what good amendments and new clauses have been tabled by my hon. Friend the Member for South Cambridgeshire. I am very happy to accept new clause 5—tabled by my hon. Friend the Member for Leominster (Mr. Wiggin), the Conservative Front-Bench spokesman—in the context that I suggested, but I hope that the House will reject the Liberal Democrat amendments, which are full of muddle and confusion.

Elliot Morley (Labour, Scunthorpe)

Before I turn to this group of amendments, it is worth responding to a few of the comments made by the right hon. Member for Wokingham (Mr. Redwood), who made a very interesting contribution. We touched on such issues on Second Reading. Although he is right about the problems of leakages, the regulator sets targets for leakage reduction, in which there has been a 30 per cent. reduction.

The Bill reflects the Government's view of taking a pragmatic approach to competition. We may differ about that, but the right hon. Gentleman is right to suggest that competition can produce greater efficiency and reduce prices. However, we also need to balance that against the possible effects on health, the environment and consumer prices, particularly if there is an element of cherry-picking that disturbs the cross-subsidy that can occur in water companies, especially between rural and urban areas, an example that has already been mentioned. The 50-megalitre target has been set to give the potential benefits of competition to some 2,300 water users—generally the larger water users—in the public and private sectors. Under the Bill, they will be able to examine the potential for incomers who may wish to offer a different service and different prices in a competitive way. The provision will be reviewed in due course, so that we can examine its impact and potential benefits. If this element of competition is considered a success, it could be extended. This is a pragmatic approach to a provision that could bring benefits.

Nor do we ignore the point that the right hon. Member for Wokingham made about water management and long-term projection. Water companies are already obliged to have a 25-year forward plan that considers changes in water consumption and demand, and to have drought plans in times of water shortage, for example. Given this year's exceptionally low rainfall, water management has been pretty good overall, although our reserves are getting very low. If normal winter rainfall occurs, there should be no problem, but there may be a need for some short-term measures such as recharging reservoirs from rivers. However, that is all catered for through existing mechanisms.

Amendments Nos. 19 and 14 would require the Secretary of State to appoint a chairman and chief executive to the proposed new authority. I have no problem with the idea of a separate chairman and chief executive. After our discussion in Committee, I re-examined the recommendations in the Better Regulation Task Force report and discovered that the Bill is indeed drafted in such a way as to comply with them. The report recognises that there are advantages and disadvantages to separating the roles. Although splitting them may be preferable, to do so may not be appropriate in all cases. The report states that, for example, there are merits in combining the roles when a regulator is first set up. Doing so can help to smooth the transition and the teething pains associated with setting up or reconstituting a new body. Later, it might be appropriate to split the roles, but it makes sense to retain flexibility, so that we can make the right decision based on all the current circumstances.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the Minister for at least partially answering the question, but of course, the Better Regulation Task Force report that he quotes from predates the Higgs report and the new combined code of corporate governance. When the Government constitute the authority, do they intend to appoint a non-executive chairman and a chief executive, or to combine the two roles into one?

Elliot Morley (Labour, Scunthorpe)

It would be premature to give an opinion on that, because the legislation is not in place and we have first to consult the devolved Welsh Assembly, as is only right and proper. There are also consultation procedures that must be gone through.

Amendments Nos. 20 and 21 deal with the board's size and non-executive make-up. Again, I have checked, and the Bill's provisions fulfil the taskforce's recommendations. The report clearly states that, although the taskforce recommends that all regulators should have a board, its size is for the regulator and the parent Government body to decide. The Bill is in line with that conclusion, in that it provides broad parameters but does not dictate the structure. Given the regulator's existing duties, I would certainly expect it to have rather more than just three members. But the taskforce's earlier report pressed for a reduced regulatory role if the market allows for that, which would suggest a much smaller regulator.

On the balance of executive and non-executive directors, the taskforce recommends that at least half the board, excluding the chairman, should be non-executive. The make-up of the non-statutory Ofwat board already meets that recommendation. When Ofgem was set up, it had five executive and six non-executive members; such an alternative is also a possibility. We agree that there is value in the point made by the hon. Member for South Cambridgeshire (Mr. Lansley), but we prefer to avoid the problems that could arise if such a provision were set down in the Bill and operated in, for example, the case of vacancies. However, the structure of the non-statutory board of Ofwat provides a very fair balance and meets the points that he made.

The taskforce report also emphasised the need for flexibility and the importance of avoiding a one-size-fits-all approach to setting up and managing a regulatory body. Although it is too early for the official Government response to the taskforce recommendations, I can reassure the hon. Gentleman that, in appointing the board, the Secretary of State will apply the recommendations and any other developments in best practice. That will also take into account the report "Independent Regulators" of October 2003.

Under new clause 10, the authority would have a duty to carry out impact assessments of any proposals that it makes that may lead to a change in its activities or that may have a significant impact on the water and sewerage industry or the general public. Ofwat's work with the greatest impact is, by its very nature, the periodic review of water prices. The whole review process is structured like a regulatory impact assessment but on a huge scale. It includes the preparation of broad methodology, the proposal and challenge of investment options, assessment of possible efficiency gains and financing prospects, and repeat consultation with companies and other stakeholders. We are in the middle of that detailed and thorough process, so new clause 10 is effectively asking for a regulatory impact assessment on a regulatory impact assessment. Such a provision is not necessary in the Bill.

We concede that RIAs are good regulatory practice and Ofwat is already committed to carrying out such assessments of new policies or policy changes that are expected to have a direct effect on water and sewerage companies or other stakeholders. That is set out in Ofwat's recently published code of practice, which will become a statutory requirement under the Bill. The requirement for RIAs will be a statutory requirement in the Bill. As I have recognised, such duties have been placed on other economic regulators, most notably Ofgem under the Sustainable Energy Act 2003.

The new clause would require the authority to carry out an impact assessment for all major activities regardless of where the initiative originated. One problem with that is that many water initiatives originate in the European Union, and we already carry out RIAs on them. By leaving such a requirement out of the Bill, the authority will be able to decide when an impact assessment is genuinely needed, reflecting the context of this particular regulator.

Amendments Nos. 127 to 130 seek to put into statute the requirement on the Secretary of State to carry out an RIA whenever standards of performance are proposed under these clauses. The amendments would apply only when the initial proposal was the Secretary of State's, but not when Ofwat was proposing the standards. We certainly support the intention behind the amendments, but we do not think it necessary to place such a provision in the Bill. The Secretary of State is already committed to producing an RIA as well as to widespread statutory consultation whenever these clauses are used to propose standards of performance. Hon. Members may recall that we reaffirmed that commitment in the RIA that accompanied the Bill, stating that a separate RIA would be prepared every time the power was used. We are also committed to producing separate assessments that take account of the environmental, public health, competitive and social impacts of proposals.

Amendments Nos. 128 and 130 would seek to prevent the Secretary of State from making regulations if the RIA showed that the costs outweighed the benefits. That consideration is an integral part of the RIA process.

Amendment No. 22 proposes to allow the authority discretion to apply an alternative pricing principle. That risks access and wholesale prices being unduly linked only to costs incurred in serving a particular customer while ignoring certain other common costs. I am not content that such a pricing process would deliver the Government's objectives for competition in the water industry.

Andrew Lansley (Conservative, South Cambridgeshire)

I am disappointed that the Minister has not read amendment No. 22 to find out that its structure expressly allows for fixed costs to be attributed, so it does not address only costs that were directly attributable to the customer in question.

Elliot Morley (Labour, Scunthorpe)

I understand the hon. Gentleman's point but risks would accompany that approach. We are worried that incoming competitors could cherry-pick benefits. That would work against the interests of consumers, especially those in high-cost areas such as rural areas.

I listened carefully when the hon. Gentleman cited the examples of Postcomm and Ofgem, but water is not like other utilities. There is no national network for water and costs are inevitably highly localised. Within any tariff group, therefore, there are geographical cross-subsidies. Allowing access and wholesale prices to be based on direct costs alone would lead to the unwinding of those geographical cross-subsidies, which would permit the entry of suppliers in low-cost areas even if they were less efficient than the undertaker. That would prompt undertakers to raise prices in high-cost areas, such as rural areas, to cover their costs, which is my worry.

Although there are essentially no cross-subsidies between tariff groups, there are common costs that undertakers have to incur to meet important statutory and social obligations, such as providing free fire-fighting water and lead pipe replacement programmes. Those costs are not associated with a specific customer, so under the amendment a new entrant could avoid some or all of them. The result of that would be that other customers, including households, would have to bear a greater share of the total cost.

New clause 5 would give water and sewerage companies greater certainty about the policy intention, and likely outcome, of the periodic review. Despite the intention that the provision should clarify the review process, I do not think that it is necessary and fear that its impact would do more harm than good. Ofwat already produces and consults on a comprehensive methodology for the periodic review. It is in the regulator's interest to understand concerns about the review and the impact that it might have on those that it regulates. Given the thorough nature of the periodic review process, I cannot understand how it would benefit from the additional long and rigid timetable that the new clause would impose.

The new right of appeal that new clause 5 would offer to companies would be excessive and could considerably lengthen an already long process. It would strengthen the interests of companies against those of consumers still further. The balance has to be right but the provision would not achieve that. The Better Regulation Task Force report on independent regulators that was published in October had important things to say about regulatory appeals. It commented on stakeholders' ability to appeal, including those on whose behalf regulation is carried out, who include consumers. It also said that stakeholders should not be able to use an appeal mechanism merely to delay a decision that a regulator has to make. New clause 5 fails to address both those points.

New clause 7 would widen the scope for companies to question the validity of enforcement orders issued by Ofwat or the Secretary of State if conditions of appointment or relevant statutory duties had not been met. That is not necessary because the Water Industry Act 1991 already provides a transparent appeal system that ensures that Ofwat acts appropriately when issuing an enforcement order.

New clause 6 would require the Secretary of State, the Assembly and the authority to consult the Health and Safety Commission and undertakers about safety matters. I reassure the House that that has already been agreed in a memorandum of understanding between the HSC and the water regulators.

Amendment No. 18 would require the authority to include in its forward work programme a description of how the projects that it plans to undertake would deliver its wider objectives and duties. Although I do not disagree with the general intention of the amendment, it is not necessary because the authority will have the power only to carry out an activity that complies with its overall duties, and Ofwat is already committed to monitoring performance against objectives.

Amendments Nos. 29 to 31, which were tabled by the hon. Member for Ceredigion (Mr. Thomas), would strengthen the role played by the National Assembly for Wales in the appointment of the authority. There is careful consultation between the Secretary of State and the Assembly and they have a close relationship that works very well. The amendments would ensure that the Secretary of State would consult the Assembly before appointing any member of the authority. The Secretary of State is committed to working with the Assembly constructively and openly, as has been demonstrated on many occasions. With that in mind, I believe that the amendments are unnecessary.

I hope that I have answered all questions asked by hon. Members and commend the Government amendments to the House.

Bill Wiggin (Conservative, Leominster)

I am grateful to my right hon. Friend the Member for Wokingham (Mr. Redwood) for making an excellent speech in which he drew attention to the importance of Wales; I am more than inclined to agree. He accurately drew attention to the 50-megalitre limit and loss through waste.

Having listened to the Minister's reply, I feel strongly that he failed to answer the excellent question put by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley). Therefore, it is our intention to support amendment No. 19. With that in mind, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Schedule 1 — The Water Services Regulation Authority

Clause 35 — Consumer Council for Water

Clause 54 — Determination References under Section 12 of the WIA

Clause 55 — Conditions of Appointments under the WIA

New Clause 14 — Schemes for the Adoption of Sewers, Lateral Drains and Sewage Disposal Works

Elliot Morley (Labour, Scunthorpe)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss the following:

New clause 8—Discharges to watercourses—

'(1) After section 165 of the WIA, there is inserted—

"165A Power to discharge to watercourses

(1) Subject to the following provisions of this section, every sewerage undertaker may, for the purpose of carrying out its functions, discharge water with or without other matter from any relevant pipe into any watercourse.

(2) Nothing in this section shall authorise any discharge which—

(a) damages or injuriously affects the works or property of any railway undertakers, navigation authority or riparian owner; or

(b) floods or damages any highway.

(3) Nothing in this section shall be construed as permitting the making of any discharge without the authority of any consent that may be required by virtue of Part III of the Water Resources Act 1991.

(4) The provisions of paragraph 6 of Schedule 12 to this Act shall apply to the exercise of the powers conferred by subsection (1) above.

(5) In this section 'relevant pipe' means any sewer, stormwater overflow, sewer, disposal main, lateral drain or outfall owned by or vested in a sewerage undertaker."

(2) In section 219(1) of the WIA (general interpretation), in the definition of "accessories", after "washout pipes," there is inserted "outfalls (with ancillary works)".

(3) In Schedule 12 to the WIA (compensation etc.in respect of pipelaying and other works powers)—

(a) in paragraph 6(1)(a), after "section 165" there is inserted "for section 165A"; and

(b) in paragraph 6(2)(b), after "section 165 of this Act" there is inserted ", or of water or effluent under section 165A of this Act.".'.

New clause 13—Power to require adoption of private sewers in Wales—

'After section 102 of the WIA there is inserted—

"102A Power to require adoption of private sewers in Wales

(1) As regards Wales the National Assembly for Wales may by regulations establish a scheme to enable a sewerage undertaker to be required to adopt a sewer to which this section applies.

(2) A scheme under this section may apply to any sewer which is—

(a) situated within the area of a sewerage undertaker or which serves the whole of or any part of that area; and

(b) not vested in a sewerage undertaker.

(3) Regulations under subsection (1) may amend section 105 so as to extend the appeals procedure to the scheme, provided that the appeal shall be heard by a person other than the person imposing the requirement to adopt.".'.

Government amendments Nos. 100 and 101.

Government amendments Nos. 103 and 121.

Elliot Morley (Labour, Scunthorpe)

In Committee, my hon. Friend the Member for Sherwood (Paddy Tipping) tabled an amendment that aimed to tackle the serious problems caused by private sewers. Indeed, that issue was raised by Committee members from all parties. The Government are well aware of these problems and are keen to take positive action, which is why we commissioned an extensive research project into the extent of private sewers and published a public consultation document. With that in mind, I told my hon. Friend that we would introduce a suitable Government amendment to deal with the thrust of the argument that he and other Committee members had made.

We considered a number of alternatives, and I am pleased to say that we thought that my hon. Friend's proposal was the most appropriate. New clause 14 gives the Secretary of State power to make regulations to allow schemes for the adoption of private sewers. Government amendment No. 103 ensures that the Welsh Assembly has the power to make regulations under the proposed new section if it so chooses. It is important to note that the new clause is an enabling power, and is not a recipe for the wholesale transfer of private sewers to sewerage undertakers. Furthermore, the regulations are subject to the affirmative procedure to allow full parliamentary scrutiny before they are made.

The Government have not yet made any decisions on the best way forward on private sewers. The new clause allows adoption, if a decision is made to pursue that course of action, and offers flexibility to ensure that we introduce a sensible solution following full consideration of the range of options. As my hon. Friend knows, we discussed in Committee the fact that we would hold a public consultation and respond to the options that people favour. We still have a lot of work to do on the best way forward on private sewers. The new clause gives us an opportunity to introduce adoption in various forms, but the Bill includes the enabling powers for which my hon. Friend, supported by other Committee members, was arguing.

David Drew (Labour/Co-operative, Stroud)

May I tell my hon. Friend how much we welcome the provision? I am sure that all Committee members share that sentiment. However, will my hon. Friend give me an idea of time scale? I accept that the new clause is an enabling provision, but some people who welcome it will want to know how long it will be before the consultation is complete and the Government have considered its implications. More particularly, with regard to cases where there is a crucial need for action, when will the provision be implemented?

Elliot Morley (Labour, Scunthorpe)

I understand my hon. Friend's point. The most important thing is to respond to the public consultation, and we hope to reach that milestone in the near future. There is, as I have said, a great deal of work to do, not least in taking stakeholders' views into account. That will take time, but it is difficult to say how long. However, as a rough guide, I expect the Government's response to the public consultation to be made within the next six months. Inevitably, however, further work will need to be done. It is difficult to give an exact time scale, but there is quite a lot to do before we can put the provision in place, which is why the enabling power was included in the Bill.

We have provided for an appeals procedure and appropriate consultation, both on the regulations and each scheme. Work is under way to evaluate the responses to the consultation, and further consultation is likely as we narrow down the choices on the best way forward. Following discussions with the all-party group on sewers and sewerage, I know that its members have views on the subject to which the Government would like to listen. Considerations will include obvious financial implications for the generality of customers, and clearly it will be important to weigh up the balance of the different interests. We will continue to make that a priority and involve everyone with an interest, including, of course, colleagues in the House. Indeed, I am grateful for the interest that has been shown in this matter, and found discussions with the all-party group helpful.

The new clause was tabled to demonstrate that we are serious about tackling the problems faced by householders, and I am pleased to commend it to the House. I should also like to commend Government amendments Nos. 100, 101 and 121, which are minor, consequential amendments.

Bill Wiggin (Conservative, Leominster)

I shall speak to new clause 8, which seeks to ensure that sewerage industries can discharge water into any watercourse that will not flood or damage any of those covered by subsections (2)(a) and (b) of proposed new section 165 of the Water Industry Act 1991. Sewerage undertakers' former power to effect discharges from public sewers and their other pipes needs to be restored, subject to certain safeguards for affected landowners, riparian owners and public bodies. No damage or interference must be caused to the property or operations of railway undertakers, navigation authorities, riparian owners or highway authorities; all necessary consents to discharge to watercourses must be obtained from the Environment Agency in accordance with the Water Resources Act 1991 for the avoidance of pollution; and full compensation must be paid to those adversely affected by such discharges, in accordance with paragraph 6 of schedule 12 to the Water Industry Act.

Sewerage undertakers should have the right to discharge the contents of public sewers and other pipes into watercourses and canals because, without that right, they currently have to obtain a compulsory purchase order, which can take up to two years. This is what proposed new section 165A of the Water Industry Act seeks to achieve, reflecting the principles of section 165 of that Act, which authorises the discharge by water undertakers of water to watercourses for the purpose of facilitating the carrying-out of works.

New clause 14, which the Minister introduced, is obviously welcomed by people who are discharging into private sewers, and I am delighted that he listened to comments by Committee members from all parties. Strong feelings were expressed, especially by Members representing areas where large numbers of people were discharging into, or taking their water from, a single source. Members on all sides of the House believe that the issue needs to be addressed positively, for the benefit of both water companies and customers. Obviously, there are significant cost implications for water companies, and the Minister recognises how important they are.

I shall not say any more as I know that we need to cover a great deal more business.

Paddy Tipping (Labour, Sherwood)

I wish to place on record my thanks to my hon. Friend the Minister, his officials and, looking at the complexity of new clause 14, parliamentary counsel. I am delighted that we are making progress on the issue with which the new clause deals and that my hon. Friend has responded to constituency concerns throughout the country. The powers are permissive and enabling, and the next task of my hon. Friends the Members for Stroud (Mr. Drew) and for Rugby and Kenilworth (Andy King), who have campaigned long and hard on this issue, and I will be to put them into practice. The aspect of the W. S. Atkins report—an initiative brought forward by the Department for Environment, Food and Rural Affairs—that struck me most was the scale of the problem. We all knew that there was a problem, but we were astonished at its degree and depth across the country.

As the hon. Member for Leominster (Mr. Wiggin) said, there are significant cost implications. We will have to wait and see the outcome of the consultation. I do not want to prejudge that outcome, but the responses received so far suggest that the option of passing ownership of the sewers to water and sewerage undertakers, as set out in the Atkins report, is probably the easiest and most popular way forward. That has clear cost implications. The only meaningful way forward would apply over a period of years. I repeat that point—it is over a period of years that one would want to share the cost with consumers in general. That issue will have to be taken into account in discussions on the next price review period.

I am delighted that we have made so much progress. I know that people in Newark and Sherwood, in a small part of my constituency where 1,441 people are affected, are delighted that we are making progress. We must now ensure that the principles agreed to in the Bill are put into practice, but I accept that that will take time.

Simon Thomas (Plaid Cymru, Ceredigion)

I welcome the new measures. We debated them in Committee, where hon. Members from all parties mentioned the various parts of their constituencies that they will affect. I could spend the next 20 minutes listing some wonderful Welsh names in referring to places that are affected by bad sewerage, but I do not think that that is necessary to secure the progress of the measure. What the Minister has said makes new clause 13 redundant—a proposal that attempted to achieve the same purpose as new clause 14 in the Welsh context. Government amendment No. 103 will insert into the Water Industry Act 1991 the measures in new clause 14 so that the National Assembly for Wales will be able to make its own scheme.

Further down the line, there will be huge issues about costs, surveying and so on. As constituency Members of Parliament, we all know about the problems that will arise, but a very important principle has been established tonight—we are dealing with a public health issue. What we call private sewers fulfil some of the most essential functions in our public health system. If we cannot get this matter right, what we are seeking to achieve in the Bill in securing higher environmental standards, water quality and water saving and conservation will be for naught. That will be the case if we cannot ensure over the next 10 to 20 years that our sewerage system is updated to meet the needs of an expanding 21st century economy, rather than those of the expanding 19th century economy, as at present.

Those are the important principles to which the Government have agreed. I will not say that they have conceded those points, as that might suggest that some sort of battle has occurred. Instead, there has been a debate, progress has been made and the Government have rightly acknowledged that those issues need to be resolved and have recognised that the new clause is probably the best way of resolving them in the context of the Bill. I am sure that many of us would have liked to see a bit more detail in the provisions and that we could all suggest what the best approach might be. Nevertheless, an important principle has been laid down. There will be schemes and each of them will be considered on its merit, and a proper authority will look at that process—the National Assembly for Wales and the Secretary of State in England.

We now have an opportunity to improve our sewerage system to meet the required needs, as well as to make a huge impact on the environment and on some aspects of public health. Everyone who has had sewage in their garden will be thankful for what has happened in the House tonight.

David Drew (Labour/Co-operative, Stroud)

I wish to make a very narrow point. I could have intervened on my hon. Friend the Minister a second time to raise it, but I thought it better to do so in a short speech. We have been reassured about the time scale—I heard what he said and welcome it—but my next point follows from what my hon. Friend the Member for Sherwood (Paddy Tipping) said and relates to cost implications. When we see the different options and get some clarity about which we prefer and how we might adopt more than one, if that is what is proposed, can the process be dealt with in secondary legislation? Having introduced the enabling powers, we would not want to have to wait until the next water Bill was introduced to carry into action exactly what all of us want to achieve in respect of the adoption of private sewers. If my hon. Friend the Minister clarifies that situation, an awful lot of people will be listening. I am sure that they will welcome the moves that the Government have already made, as well as their intentions.

Andy King (Labour, Rugby and Kenilworth)

I shall be extremely brief; as my hon. Friend the Member for Sherwood (Paddy Tipping) rightly said in Committee, "Enough said—job done."

The Minister and his Department must take enormous credit for allowing the new clause into the Bill. Originally, such provision did not feature in the Bill at all, and many of us were afraid that we would miss a once-in-a-Parliament opportunity to remedy a serious situation. Although the new clause does not go as far as we would have liked, it has gone a long way in beginning to put right the anomalous situation that has arisen. I look forward to working with my hon. Friend the Minister, his officials and the water companies through the all-party group on sewers and sewerage, of which colleagues in all parts of the House are members and to which he has made a valuable contribution. I look forward to discussing these matters with him and W. S. Atkins in the near future. The people of the Woodlands residents association, of which I am a member—I have declared my interest—will be very happy.

Elliot Morley (Labour, Scunthorpe)

There is still some time to go.

Andy King (Labour, Rugby and Kenilworth)

It will happen some time in future, but we look forward to that day.

Elliot Morley (Labour, Scunthorpe)

I think that there is an argument for protecting controlled waters, and that may sometimes involve compensation and protection against pollution, so I cannot accept new clause 8, which was tabled by the hon. Member for Leominster (Mr. Wiggin).

The hon. Member for Ceredigion (Mr. Thomas) rightly said that I had dealt with the concerns he raised in new clause 13. Furthermore, I appreciated very much the points made by my hon. Friends the Members for Stroud (Mr. Drew), for Rugby and Kenilworth (Andy King) and for Sherwood (Paddy Tipping).

I repeat that there is obviously a lot of work to be done, and the matter will not be dealt with in the short term. Nevertheless, the powers in the Bill allow us to deal with what we recognise to be a very serious problem throughout the country.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 11 — Consultation On The Cost Of Environmental Protection Measures

Norman Baker (Liberal Democrat, Lewes)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss the following:

Amendment No. 132, in clause 57, page 75, line 5, at end insert—

'(11) In section 222 (application to Isles of Scilly)—

(a) in subsection (2), after the word "NRA", there is inserted the words "the Chief Inspector of Drinking Water"; and

(b) after subsection (2) there is inserted—

"(2A) The Secretary of State shall, within a period of one year after the coming into force of section 57 of the Water Act 2003, make proposals to the Council of the Isles of Scilly for the making of an order under subsection (2) in relation to the carrying out of the functions of the Chief Inspector of Drinking Water in those Isles.".'.

Amendment No. 131, in clause 62, page 83, line 36, at end insert—

'(3A) A water resources management plan that contains proposals for infrastructure investment intended to meet the requirements of an estimated growth in the quantities of water required, made by an undertaker for the purposes of subsection (3)(a) above, must include—

(a) a least cost planning assessment that shall address in particular the potential effects of investment in—

(i) water conservation promotion and education;

(ii) water efficiency technology; and

(iii) compulsory metering;

(b) a comparative risk assessment for each infrastructure investment option or alternative proposal considered; and

Amendment No. 16, in clause 83, page 100, leave out lines 40 and 41 and insert

'have a duty to promote water conservation.'.

Government amendments Nos. 95 and 96.

Norman Baker (Liberal Democrat, Lewes)

I am grateful to hon. Members who spoke in the previous debate for making their comments brief so as to allow discussion on the next group of amendments. I did not speak in that debate, but I wish to say that the Minister also has the support of the Liberal Democrats in respect of the measures on private sewers. He may reflect on the fact that he has managed to unite the whole House in supporting the Government on that measure. Perhaps he should look for other policies of the same nature. The new clause in question was tabled two hours before a public meeting on sewers that I attended in Polegate in my constituency, and it went down well with the voters.

New clause 11 deals with water pricing, which is a big issue for consumers and others. The cost of water varies widely, and wildly, from one area to another, and not always on the basis of any deep logic. The post-privatisation arrangements were somewhat unfair, and water pricing inequalities have continued ever since.

A particular problem is that some water and sewerage companies have had to bear disproportionate costs because of the need to undertake environmental improvements. All hon. Members will be in favour of those improvements. Over the past 10 to 15 years, for instance, the quality of bathing water has improved markedly. However, that has had a disproportionate impact on water and sewerage companies in certain areas. The south-west has 30 per cent. of the English and Welsh coastline, but only 3 per cent. of the population—as well as a comparatively high amount of poverty. As a result, a disproportionate burden of environmental protection falls on that population. The Ofwat report, "Tariff structure and charges 2002–2003", shows that the average sewerage component of annual water bills is £125 in England and Wales, but £211 in the south-west. Combined with water provision costs, that makes an average annual combined bill of £326 in the south-west, compared with an average of £228 in the rest of the country.

The Government's position has always been that as the improvements benefit the local population, it is only right that that population should pay for them. As a principle, that cannot be faulted, but the problem is that environmental improvements in the south-west are not necessarily for the benefit of that region, but for that of the nation as a whole. A nationwide benefit derives from cleaning up our bathing waters that goes beyond that derived in the south-west. Although one could argue that there is a beneficial impact on tourism, for example, the current water pricing system does not take account of the national aspect.

We all want to enjoy clean beaches and unpolluted coastline, wherever we live. As a Member representing a coastline in the south-east, I do not want to be nimbyish by saying that as long as my coastline is all right, it does not matter what it is like in the south-west. I want the south-west and other areas to be as clean as the south-east. Nevertheless, a different method of pricing is required. The same principle applies to any region where the sewerage costs of domestic bills are particularly high because of the need to meet environmental regulations and requirements. New clause 11 seeks to establish the principle that where it can be assumed that a national benefit derives from environmental improvements, their cost should be spread more widely than the water and sewerage company that has to implement those benefits and, by extension, consumers in that area. The position has been made worse by the higgledy-piggledy post-privatisation water pricing arrangements, which should have been sorted out before now.

Amendment No. 132, which stands in the name of my hon. Friend the Member for St. Ives (Andrew George), relates to a water inspectorate for the Isles of Scilly.

Andrew George (Liberal Democrat, St Ives)

I am grateful to my hon. Friend for drawing attention to that amendment, which is very important to the 2,000 of my constituents who are inhabitants of the Isles of Scilly. The Isles of Scilly have been excluded from some of the provisions in the Bill and in previous Acts. If we are to raise standards in water-related environmental matters, particularly drinking water, on the Isles of Scilly, it is important that such amendments are accepted in order to bring them up to the standards that are taken for granted in other parts of the country.

Norman Baker (Liberal Democrat, Lewes)

My hon. Friend makes an important point. It is correct that the Isles of the Scilly are excluded from some legislation, but my hon. Friend looks after his constituents assiduously, and I am sure that any omissions are flagged up in this House through amendments and by other means. I hope that the Minister will respond to the point.

Amendment No. 131, which was tabled in my name and in that of my hon. Friend the Member for Guildford (Sue Doughty), would introduce a rather radical approach to water infrastructure development—radical in this country, that is, but less so elsewhere. It reflects aspects of best performance in the United States, where energy suppliers are not allowed to build new capacity for generation until they have demonstrated that they can meet by other means the requirements that are placed on them. That is the correct environmental approach, which the amendment would apply to the water industry in this country. It says, in effect, that in meeting the challenge of growing demand for water, it cannot and should not, for environmental reasons, be assumed that the only option is to find a way to supply that extra demand. The Government should not base their framework on "predict and provide". Increased abstraction, new reservoirs and new treatment facilities have a considerable environmental impact. We must consider ways of reducing demand, whether by encouraging water efficiency measures or considering metering in certain areas. Various levers can be pulled to reduce demand for water in a more environmentally-friendly way than churning up the countryside to produce new reservoirs. The water companies have not always paid attention to those alternatives: they need a bit of encouragement from the Government to do so.

Groundwater levels have reached record lows in some areas—for example, in Chilgrove in west Sussex, Ardingly in Sussex, and Arlington in my constituency—where levels are down to 22 per cent.—but there has been no concerted, high-profile campaign to persuade consumers to reduce their water usage. On 5 November, the Environment Agency received its first application from a water company for a drought permit, which affects the Cuckmere and Ouse rivers in my constituency. There is not much evidence that the water company in question had done much to restrain consumer demand. I mention examples from my constituency, but doubtless there are others all over the country.

Water companies do not appear to have in mind alternatives to providing new infrastructure; they therefore need encouragement. It is possible to meet legitimate water demands through alternative means such as water efficiency and metering. We should adopt that approach, which is tried and tested in other countries. I hope that the Minister will view that with the seriousness with which the amendment was tabled.

Bill Wiggin (Conservative, Leominster)

I shall restrict my remarks to amendment No. 16, which would insert a requirement to

"have a duty to promote water conservation."

All hon. Members should recognise that wording, because it was widely supported in Committee. My amendment would strengthen the wording of the Bill with regard to water conservation by further emphasising the need for each public authority to have a stricter duty to conserve water in order to improve water efficiency. Proper conservation of water must take place at every opportunity, but the Bill does not enforce that duty strongly enough. Public authorities should have a greater degree of responsibility to promote better management of water; my amendment would ensure that.

I remind the Minister that Conservative Members voted for this amendment, but that he and his colleagues voted it down. The hon. Lady who tabled it is unavailable at the moment—I believe that she is unwell—but it is most important that this duty is included in the Bill. The existing wording is not nearly strong enough—indeed, it is rather weaselly in comparison with what it should be. I therefore urge the Government to support the amendment: I am sure that in their heart of hearts they would like to do so.

Richard Younger-Ross (Liberal Democrat, Teignbridge)

I was heartened to hear on the radio that the new leader of the Conservative party accepts that some of its past policies were wrong and that the poll tax was a mistake. I was less heartened when the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) went on to say that water privatisation was a great success because it had created vast investment in the industry. Although I accept that the increase in funding has created the clean sweep schemes and the environmental improvements that we all supported, it has been done at a specific cost, which consumers throughout the country have borne.

As my hon. Friend the Member for Lewes (Norman Baker) said, the cost has not been equal across the board. Some people in specific areas have borne a disproportionate amount, especially those whom I represent in Teignbridge and those in my hon. Friends' constituencies in the south-west. Devon and Cornwall have 3 per cent. of the population of Britain, but 30 per cent. of the nation's beaches, and we continue to pay for cleaning them up. It is argued that there is a benefit to the south-west and the Minister nodded earlier when tourism was mentioned. However, a benefit to tourism does not directly benefit pensioners, people on fixed incomes and those on low incomes. There is little to help them to pay their water bills, which have more than doubled since water privatisation and will increase even more.

I ask the Minister to consider the wording of the new clause carefully. It would not force him to take action but empower him. It would make him examine the financial implications and empower him to ensure greater justice throughout the United Kingdom and to introduce water justice. The two words "water justice" are important to people in the south-west. I suspect that, as time goes by and other environmental improvements are introduced and other areas have to bear the cost, people in other parts of the country will also say, "There was a missed opportunity—we could have had an equalisation scheme. We want water justice and we want it now."

Andrew George (Liberal Democrat, St Ives)

I should like to speak to amendment No.132, which stands in my name. I especially want to draw the Minister's attention to the specific circumstances on the Isles of Scilly. Water supplies and services there were not privatised under the original legislation. The Isles of Scilly were specifically excluded from section 222 of the Water Industry Act 1991. The position is not only legally but locally complex, in that the council has taken responsibility for water services and drinking water to St. Mary's and Bryher, but the Duchy of Cornwall is largely responsible for the private water arrangements of the islands of St. Agnes and St. Martin's and Tresco Estates is responsible for the residents of Tresco island.

Many constituents have expressed anxiety about drinking water standards. Although the council is doing its best to ensure that drinking water is properly monitored, it would be helpful if the Minister and the Department considered amendment No. 132, which would at least allow for the sort of improvements that may be required in due course. I do not suggest that we should introduce mainland circumstances and privatisation to the Isles of Scilly because that would not be appropriate but I hope that the Minister will at least reflect on the specific, special circumstances that pertain there and ensure that the islands and drinking water customers in particular are properly protected in the same way as those on the mainland.

Elliot Morley (Labour, Scunthorpe)

New clause 11 offers a new system of paying for environmental improvements and I understand the case about high costs in the south-west. Like other companies, water companies must meet their costs, including those of environmental standards. Ultimately, all those costs come from their customers. Ofwat sets an upper limit on customer prices, but there is a strong and visible link between what the company spends and the customers who fund that through their bills. Water companies understand that, and it could be argued that it has made them far more sensitive to the views of their customers, whom they rightly perceive as a key concern. Strong evidence in the current periodic review shows that companies' business plans pay more attention to customers' priorities. That is no bad thing.

Although I can understand the reasoning behind new clause 11, I am worried that it would weaken the connection between the company and the customers by creating a national environment fund that drew its money from customers throughout the country. There is a question about whether companies would pay as much heed to their customers if customers throughout the country met the cost of their plans. There would be a lack of accountability and a weakening of the driver that encourages individual companies to keep their costs as low as possible.

Nick Harvey (Liberal Democrat, North Devon)

Holidaymakers throughout the country get the benefit of the capital work that is undertaken. Will the Minister at least consider the point that by opting for a water meter, wealthy owners of second homes in the south-west opt out of contributing to sewerage services and cleaning up the beaches because they have remarkably low bills that reflect their occasional visits? Will he consider the principle of insisting on a standing charge to ensure that they share the burden with regular residents?

Elliot Morley (Labour, Scunthorpe)

That is an interesting idea. Of course, it is Liberal Democrat policy to have compulsory water meters. The hon. Gentleman mentioned one of the potential downsides. The issue of second homes is serious and too wide for me to tackle in the debate, but I understand his point.

There are other problems with the new clause. Depending on the details, the proposal might remove the incentive for companies to spend efficiently. If a company currently undertakes an agreed investment programme at a lower cost than planned, the saving benefits the company and can be passed on to its customers at the next price review. That would not be the case if there was a national scheme such as the new clause proposes. It provides that the company be reimbursed for the estimated cost. What happens if the company manages to undertake the programme for less cost? Who keeps the difference? If the national fund meets the cost, there is no motive for the company to invest efficiently. If it pays the estimated cost regardless of the out-turn cost, that asks customers in the rest of the country to fund a windfall saving to a company from which they will never benefit.

I understand the issue of prices in different parts of the country and fairness, but we must consider fairness to other customers. The hon. Member for Teignbridge (Richard Younger-Ross) said that although benefits in clean beaches and good bathing water quality go to the south-west economy, they may not affect individual pensioners. That is a fair point. However, there are pensioners throughout the country, not only in the south-west, and we must consider their costs and the way in which the new clause would apply to them.

Although I understand the argument, I am not convinced that there is a genuine distinction between the environmental measures that benefit a locality and the national benefit. We have mentioned that in the context of tourism and the local economy. We must ensure that prices are as low as possible in all companies. That is an issue for the price review. When making decisions that affect water company obligations, we take account of customers' costs and bill levels in each company but I do not believe that it is necessarily to consumers' advantage to release companies from their responsibility to manage their investment programmes efficiently and justify them. I fear that the proposal might yield a short-term gain, but a cost disadvantage to consumers in the south-west in the long term.

Andrew George (Liberal Democrat, St Ives)

Does the Minister not accept that Ofwat assesses the efficiency of the companies, along with the appropriateness of their proposed schemes, and sets a K factor that takes into account all those measures? Surely the same principles could therefore be applied to this task?

Elliot Morley (Labour, Scunthorpe)

The difference there is that the K factor formula is applied across the whole country; it is a national formula. What is being proposed here is to even out what I accept are regional disparities by getting consumers in other parts of the country to make a contribution to—in this case—the south-west. I understand the points that have been made, but I would want to approach this issue by ensuring that efficiency drivers and investment programmes were in place to bring down costs for all consumers. That is the best way forward.

Amendment No. 132 applies to the Isles of Scilly. The hon. Member for St. Ives (Andrew George) will be interested to learn that I know the area very well; in fact, I have visited all the main islands. I understand his point, and he is quite right about the provision for the opt-out. There was always a provision for the council to apply to the Secretary of State to make an order so that the water undertakers' functions under the Act could be performed either by the council or by the relevant water undertaker. I understand the split that the hon. Gentleman mentioned in that regard.

An order was made in 1990 to give the council on the Isles of Scilly various functions. Its provisions, which include enabling powers to make drinking water regulations, place certain emergency duties on water undertakers that could prove very costly for the council. I understand that the arrangements on the Isles of Scilly for monitoring drinking water quality might not be wholly consistent with arrangements on the mainland. I assure the hon. Gentleman, however, that we are already considering how best to use the powers under section 222 of the Water Industry Act 1990, and we shall consult the council about costs and other implications. We therefore accept the thrust of his argument. There are powers available to provide what he is seeking, and we are prepared to talk to the council about how we can address the issue. On that basis, I hope that he will not press his amendment to a vote.

Amendment No. 131 seeks to give greater prominence to certain demand management options, and we recognise that that is important. We had this discussion in Committee. I would say to the hon. Member for Lewes (Norman Baker) that water companies are already obliged to produce 25-year plans, so in that respect I believe that the Bill already covers his proposal.

Amendment No. 16 deals with water conservation. We do not disagree with the general principle advanced by the hon. Member for Leominster (Mr. Wiggin), but the fact that the Bill does not mention a duty does not mean that a requirement that public authorities "shall" do something is not a statutory duty. The Bill contains a statutory duty in respect of water conservation. As with other matters that we have discussed, difficulties might arise if we are over-prescriptive in our wording. We have no problem with the hon. Gentleman's arguments about the promotion of water conservation, but there is a statutory requirement in the Bill that meets the thrust of his arguments. In that regard, too, I hope that he will not press his amendment to a vote.

Norman Baker (Liberal Democrat, Lewes)

I am grateful to the Minister for addressing the amendments and new clauses tabled by the Liberal Democrats. I am a little disappointed by his response to new clause 11 in particular. I understand his point about not weakening the connection between a water company and its consumers. That is exactly right, but the fact that Ofwat has control over water companies in a way that does not normally apply to private companies undermines his argument. The connection is still there in terms of a company having to justify its investment and forward planning.

The Minister showed, by picking at the new clause, why he thought it was inappropriate. He did not, however, recognise the thrust of our argument or come up with an alternative that would address the legitimate concerns of the south-west and other areas in which there is disproportionate expenditure on environmental matters because of the geography of the area—the coastline, in the case of the south-west. I said earlier that the south-west has 30 per cent. of the English and Welsh coastline, but only 3 per cent. of the population. That does not change, and there must be a way of recognising the disproportionate impact of that fact on consumers in the region.

The Minister recognised that some investment schemes had, at least in part, a national benefit. If there is a national benefit, there should be a national way of paying for it, rather than simply relating it to the local consumer. The Minister has been his usual charming self, and as emollient as ever, but he has not quite convinced me on new clause 11. I therefore wish to press it to a vote.

Clause 57 — The Chief Inspector of Drinking Water and the Drinking Water Inspectorate

Clause 62 — Water Resources Management Plans

Clause 83 — Water Conservation by Public Authorities

Clause 92 — Self-Lay and Adoption of Water Mains and Service Pipes

Clause 96 — Adoption of Lateral Drains

Clause 98 — Communication with Public Sewers

New Clause 1 — Prohibition of Artificial Fluoridation of Water Supplies

Simon Thomas (Plaid Cymru, Ceredigion)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

With this it will be convenient to discuss the following:

Amendment No. 1, in page 75, line 7, leave out clause 58.

Amendment No. 28, in clause 58, page 75, line 20, at end insert—

'(2A) With regard to Wales, neither shall a water undertaker be authorised by subsection (1) above unless and until a referendum on increasing levels of fluoridation has been held in accordance with the provisions of Part 7 of the Political Parties, Elections and Referendums Act 2000 seeking approval of the arrangements from the population residing in the area proposed to be affected.'.

Amendment No. 8, in page 75, line 23, leave out from 'a' to end of line 25 and insert 'local authority'.

Amendment No. 34, in page 76, line 2, at end insert 'or the water undertaker'.

Amendment No. 35, in page 76, line 16, after 'authority', insert 'or a water undertaker'.

Amendment No. 36, in page 76, line 23, leave out from '(9)' to end of line and insert '—

(a) a combined reference may be made by the relevant authorities; or

(b) a reference may be made by the water undertaker.'.

Amendment No. 37, in page 76, line 42, after 'authority', insert 'or the water undertaker'.

Amendment No. 38, in page 77, line 26, after 'authority', insert 'or the water undertaker'.

Amendment No. 39, in page 77, line 30, after 'authority', insert 'or the water undertaker'.

Amendment No. 40, in page 77, line 41, leave out from 'Assembly' to end of line 47 and insert—

'or the water undertaker may refer the matter for determination by such person as the Assembly may appoint; and

(b) the determination of that person shall be final.'.

Amendment No. 41, in page 78, line 6, at end insert—

'(4A) In making any determination under this section, the person making the determination—

(a) shall secure that the arrangements, their variation or termination (as the case may be) are effected in an operable and efficient manner; or

(b) if this cannot be achieved, shall refuse to require the entry into, variation of, or termination of, the arrangements.'.

Amendment No. 42, in page 78, line 9, leave out from beginning to 'undertaker' in line 11 and insert—

'(a) the person who made the determination shall give notice of his determination to the relevant authority or authorities and the water undertaker in question; and

(b) except when there has been a refusal under subsection (4A)(b) above, such relevant authority or authorities and the water'.

Amendment No. 45, in page 78, line 35, leave out 'or'.

Amendment No. 46, in page 78, line 40, at end insert—

'or

(c) for accommodating any other operational circumstance which necessitates variation of the source of the water being supplied to the area the water supply to which is required to be fluoridated.'.

Amendment No. 6, in page 79, line 44, after 'consult', insert 'all households'.

Amendment No. 23, in page 80, line 34, at end insert—

'(5A) After section 89 there is inserted—

"89A Assessment and analysis of effects on human health of fluoridated water

(1) Following an increase of the fluoride content of water as a result of arrangements entered into under section 87, a relevant authority shall—

(a) undertake an ongoing assessment of the correlation between fluoride consumption and changes in the dental health of the affected population;

(b) undertake an ongoing assessment of the correlation between fluoride consumption and the incidence of any known or suspected adverse effects of fluoride consumption in the affected population;

(d) periodically publish an analysis of the data obtained for the purposes of paragraphs (a) and (b) above.

(2) The Secretary of State shall by regulations make provisions about the requirements which must be satisfied by relevant authorities for the purposes of subsection (1) above.".'.

Amendment No. 47, in page 80, line 34, at end insert—

'(5A) After section 89 there is inserted—

"89A Fluoridation arrangements: technical guidance

(1) Without prejudice to Chapter 3 of this Part and the Health and Safety at Work etc. Act 1974, the Secretary of State and the Assembly shall jointly prepare and issue a code of practice containing guidance on the technical standards that must be met by water undertakers in relation to the fluoridation of water supplies.

(2) Such a code of practice shall—

(a) include such provisions, and

(b) be prepared and made in such manner,

as shall be prescribed by regulations made by the Secretary of State.".'.

Amendment No. 48, in page 80, line 37, leave out from 'State' to end of line 48 and insert—

'shall indemnify every water undertaker which enters into arrangements under section 87(1) above against all liabilities that any such undertaker may incur in complying with such arrangements, other than liabilities arising from the undertaker's own fault or negligence.

(2) The Secretary of State shall indemnify every licensed water supplier against all liabilities that any such supplier may incur—

(a) in supplying water to which fluoride has been added by a water undertaker by virtue of any such arrangements; and

(b) (if the licensee is introducing water into the water undertaker's supply system) in complying with any obligation imposed on it by the undertaker in consequence of the arrangements,

other than liabilities arising from the licensee's own fault or negligence.

(2A) Subject to the preceding provisions of this section, each indemnity shall be on such terms as (with the consent of the Treasury) may be agreed between the Secretary of State and (as the case may be) the undertaker or the licensee.'.

Amendment No. 7, in page 80, line 37, leave out from 'State' to end of line 40 and insert—

(1A) Subject to subsection (1) above, each indemnity shall be on such terms as (with the consent of the Treasury) may be agreed between the Secretary of State and the undertaker.'.

Government amendment No. 91.

Amendment No. 49, in page 81, line 13, after 'authority', insert 'or the water undertaker'.

Amendment No. 50, in page 81, line 23, leave out from first 'the' to 'to' in line 24 and insert—

'person who has made the determination shall give notice of his determination to the relevant authority and'.

Government amendments Nos. 92 and 93.

Government amendment No. 102.

Government amendment No. 122.

Amendment No. 2, in schedule 9, page 227, line 10, at end insert—

'Sections 88 and 89.Section 91.'.

Government amendment No. 125.

Government amendment No. 114.

Simon Thomas (Plaid Cymru, Ceredigion)

To date, the Bill has been disagreed with in detail, but not in principle. Now, we come to the part of the Bill with which there is disagreement in principle—a disagreement that crosses the House and runs throughout the parties. The amendments deal directly with whether we should fluoridate our water supplies, whether we should continue the fluoridation of water supplies that are already fluoridated and, if we are to fluoridate further water supplies, how we should consult local populations. New clause 1 and amendment No. 1, which stand in my name, and amendment No. 8, which stands in the name of the hon. Member for Llanllienni—or Leominster (Mr. Wiggin), although in view of his appointment, we should refer to his constituency by its Welsh name—go to the heart of the debate on fluoridation.

In the next hour and a half or so, I hope to hear the views of hon. Members on both sides of the House on how the House wants to come to a view—whether it wants to make a firm ruling on the principle of fluoridation, or whether it wants to make a more practical ruling on whether to extend fluoridation by means of the Bill. Given that this is, for the most part, a free vote—hon. Members on both sides have already expressed different ideas on how we should proceed—I hope that the House will be able, by means of the necessary votes, to make a firm declaration on fluoridation, and I hope that that declaration will be no: we do not have the evidence, the public support or the confidence at this stage, in this Bill, to pass such an important public health measure.

Stephen Hesford (Labour, Wirral West)

The hon. Gentleman is making an interesting, if very backward-looking, point. Does he seek to examine the principle of current law, as I understand it, and to remove it? What has been wrong with that for the past 15 or 16 years?

Simon Thomas (Plaid Cymru, Ceredigion)

I am sure that the hon. Gentleman wants to hear precisely that argument, and I promise him that he will hear it from me, if he gives me a little time. To pick up one of his points, two views are reflected and two ways forward are offered. It is for the House to decide what it wants to do. A new clause and an amendment stand in my name—I have given the House a choice.

Let us examine the practical grounds for fluoridation first. I shall discuss the civil liberties aspects and whether we should compulsorily medicate the population later. I have no doubt that putting the measure into the Bill has been justified on public health grounds. That justification is based on the York review, a Government-commissioned review of all the science, the studies, and the peer-reviewed investigations to date on the effect of fluoridation on the population. That review found several important facts, which I want to put on the record.

The review found that fluoridation appeared to reduce caries by 14 to 15 per cent.—that is, 0.4 per cent. of a tooth—but in the same context, it found that the science was poor and not without bias. The review also found that 48 per cent. of people living in fluoridated areas have dental fluorosis—a brown mottling of the teeth, which is medically accepted as a sign of fluoride overdose. We must not have too much fluoride in the water, and the Bill, by setting a limit on the amount of fluoride that may be put in the water, implicitly accepts that too much fluoride is possible, although it purports that there is an effective level.

Andy Burnham (Labour/Co-operative, Leigh)

The hon. Gentleman says that fluorosis affects 48 per cent. of the population and results in brown mottling. Is he not aware that the most common appearance of fluorosis is a pearly appearance of the teeth, not brown mottling?

Simon Thomas (Plaid Cymru, Ceredigion)

I do not know about the hon. Gentleman's pearly gnashers, but as he knows, the 48 per cent. examined in the York review identified that as the effect on their teeth. It is the York review that says that, not me, and it is for individuals to judge for themselves. Fluorosis is fluorosis: it is evidence of too much fluoride in the body, and that is the end of it.

Kevin Hughes (Labour, Doncaster North)

Did not the York review find that there was a 15 per cent. increase in fluorosis? If there is a 14 or 15 per cent. improvement in the quality of teeth and a 15 per cent. decrease in the quality of teeth, especially children's teeth, because of fluorosis, does not the one cancel out the other? Is not the pro-fluoridation proposal an absolute nonsense?

Simon Thomas (Plaid Cymru, Ceredigion)

I tend to agree with the hon. Gentleman, except to say that I do not think that one cancels out the other. However, the two pieces of information are evidence that we should use when taking decisions as Members of Parliament. We should not simply swallow one line or another, but try to work out what we should do.

It is clear that the effects of fluorosis include not only the chalky or pearly appearance to which the hon. Member for Leigh (Andy Burnham) referred, but brown staining and pitting of teeth. Those are fairly severe effects. Are we proposing to put something in the water that will have that effect on 48 per cent. of the population? That serious question must be answered.

Andrew Robathan (Conservative, Blaby)

Did the hon. Gentleman receive, as I did a couple of days ago, a document from the British Dental Association and the British Medical Association in favour of introducing fluoride into water? It stated that in some areas that are fluoridated the incidence of caries in children was twice as bad as in areas that are not. What conclusion does he draw from that?

Simon Thomas (Plaid Cymru, Ceredigion)

I think that the hon. Gentleman is referring to the document that I have in my hand, which I did indeed receive recently. It shows that although fluoridated areas tend to have better dental health—I should say better health in terms of caries, not dental health, because there is more to dental health than simply caries; gum disease and cancer and mouth cancer have to be considered as well—there are fluoridated areas that have an above-average incidence of decayed, filled or missing teeth among five-year-olds. The science is unproven.

To return to the York review, following its publication, four eminent members of the NHS centre for reviews and dissemination at York university—Professor Jos Kleijnen, Professor Trevor Sheldon, Sir Iain Chalmers and Professor George Davey-Smith—made the following statement in a letter to the then Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears):

"As far as we are aware, no other review"—

they refer to the York review—

"of this topic is of comparable scientific standard, and we are concerned about some continuing misinterpretations of the evidence which could have implications for public policy."

I think that their use of the word "misinterpretations" refers to the Government's attitude, but that is for them to say.

Three points were made in the letter. The first is about the effectiveness of fluoridation in reducing caries—the very point raised in an intervention by the hon. Member for Blaby (Mr. Robathan)—and the letter states:

"We could discover no reliable, good-quality evidence in the fluoridation literature world-wide. What we found suggested that fluoridation was likely to have a beneficial effect, but in fact the range could be anywhere from a substantial benefit to a slight disbenefit to children's teeth."

The second point was about the effectiveness of fluoridation in reducing inequalities in dental health across social groups—I understand from our debates in Committee that this will be a strong argument, which the Government will want to advance. The letter stated:

"The evidence is weak, contradictory and unreliable".

Are we to legislate on the basis of weak, contradictory and unreliable evidence?

The third point was on the safety of fluoridation:

"Apart from an increase in dental fluorosis (mottled teeth)"—

it is the scientists, not me, who describe it as mottled teeth—

"we found no clear pattern among the possible negative effects we examined, and we felt that not enough was known because the quality of the evidence is poor"—

a point to which I shall return in a few moments.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

Did the survey provide any assessment of the number of children who have died under general anaesthetic as a result of tooth decay? I can tell the House that, on the basis of figures released for 1998, three children died. We would all agree that that is a serious and devastating health argument.

Simon Thomas (Plaid Cymru, Ceredigion)

That is so irrelevant to this debate—[Interruption.] I shall tell the hon. Gentleman why. It is because modern medical practice is not to give general anaesthetic to children undergoing dental examination and treatment. The hon. Gentleman should know that. It is precisely because of those unfortunate deaths that it is not now general practice to give general anaesthetics to children in dental surgeries on the high street. The hon. Gentleman knows that and he should not adduce that evidence to support his position.

Andy Burnham (Labour/Co-operative, Leigh)

rose—

Adrian Bailey (Labour/Co-operative, West Bromwich West)

rose—

Simon Thomas (Plaid Cymru, Ceredigion)

I am not giving way for the moment, because I want to continue with my speech.

As emphasised in the York review, only high-quality studies can fill the gaps in knowledge about those and other aspects of fluoridation. The question that we must ask is whether the Government have, since the York review, commissioned those high-quality studies. No, they have not. They have not even received the report that they said they would commission from the chief medical officer and the chief dental officer. That report is not yet published; not yet given to Members; not yet available to the public. The one thing that the Government said they would do in response to the York review has not been done. Yet we are being told to rush this Bill through as a great opportunity to improve the dental health of children and our population. It is not. It is too fast and based on too little evidence.

Richard Burden (Labour, Birmingham, Northfield)

The hon. Gentleman is describing the York review and I understand that he wants all the facts out. Will he also confirm—he has not said it in his speech so far—that the York review found no evidence to substantiate allegations by anti-fluoride campaigners to the effect that there was a link between fluoridation and bone cancers, thyroid cancers, Down's syndrome and hip fractures?

Simon Thomas (Plaid Cymru, Ceredigion)

I am grateful to the hon. Gentleman, who makes a reasonable point. We have all received material from all sides of the argument—particularly perhaps the side to which he refers—about fluoridation. I agree that some of it comes across as rather hysterical, shall we say. However, I would not like the hon. Gentleman to believe that the points made on that side of the argument are completely without validation in the York review, which said that there could be possible negative outcomes such as IQ and congenital defects. They acknowledged that that could not be proved, but argued in favour of further high-quality research. That was the York review's recommendation—we do not know enough about the effects, so may we have further high-quality research, please?

The Government's response, which had unfortunate consequences, was to ask the Medical Research Council to advise on any further priorities for research into water fluoridation. The MRC concluded that research on a number of other possible negative health outcomes—including the IQ and congenital defects mentioned in the York review, to which the hon. Member for Birmingham, Northfield also referred—was of a "low priority".

Thus the York review asked for higher-quality research as a priority, but in response to the Government the Medical Research Council declared that such research was a low priority. I cannot step into that argument. I acknowledge that I do not have the scientific ability to do so, but I do know one thing: if I am to support legislation, I want to be able to examine relevant studies and reviews. I want to be convinced that what we put into our water supply will not have adverse effects.

As I said earlier, much of the publicity and propaganda on the issue verges on the hysterical. Although it remains the case that there is no evidence to prove the negative, as legislators we surely remain in difficulties. We need to be absolutely certain about what we are putting into our public water supply before we make any progress in that respect.

I now want to move on to consider in more detail the Government's view of these matters.

Gareth Thomas (Labour, Clwyd West)

I am inclined to support the hon. Gentleman's viewpoint. For the sake of clarity, however, is he saying that if the medical evidence were stronger, the human rights arguments would effectively be overruled?

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman makes a good point. From my perspective, I am opposed to compulsory medication. It may be good for me to have a little aspirin for my heart, particularly in debates such as this, but I do not want to be forced to take it. I want to be able to choose whether to take any medication. A little later in my speech, I shall deal with the question of whether fluoridation counts as water treatment or medication, which is at the heart of the hon. Gentleman's question. We must think clearly on these matters. If it is clear that we are trying to achieve a medical result, I would say that civil liberties is an absolute issue. If it is clear that it is a different matter of water treatment, then a rather different argument applies. I hope to persuade hon. Members this evening that what is at stake here is a medical matter and that we should not proceed down those lines.

Stephen Hesford (Labour, Wirral West)

Having examined the hon. Gentleman's amendment, the logic of his argument seems to be that we should not fluoridate water because there is no proof either that it works or that it is not harmful. However, I have seen no amendments on the amendment paper that require water companies to withdraw fluoridation from the 5 million people who receive fluoridated water and have done so for about 40 years.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman is absolutely right that no amendment is designed to achieve that, but new clause 1 would do precisely what he says. I am afraid that the hon. Gentleman misleads the House in going down that road. New clause 1 withdraws fluoridation from those who receive it. I hope that those who believe in civil liberties will support it, as well as those who have a more practical or pragmatic view. It is for hon. Members to decide.

Alan Williams (Labour, Swansea West)

Is there not an alternative, which goes closer to meeting a point of principle: to refuse to allow clause 58 to stand part of the Bill?

Simon Thomas (Plaid Cymru, Ceredigion)

That is amendment No. 1. I would say to the right hon. Gentleman that that at least keeps the status quo, but it will continue to allow fluoridation to be decided by water companies, which is the real problem. We all agree that water companies should not decide that sort of thing, and I want to argue that we should not decide it either.

The Government have usefully copied to members of the Committee their own arguments based on a briefing from the chief dental officer of why we should fluoridate. I understand that we have a free vote tonight, but also that the Government are clearly behind fluoridation as a method of dealing with the problems of NHS dentistry, to which I shall return in a few moments. The review examined alternatives to water fluoridation. Let us accept for a moment that fluoride benefits teeth. I can accept that at a personal level because I use a fluoride toothpaste, but it is my own choice to use it. In a letter to Committee members, the Government said:

"Dental decay can also be largely prevented on an individual basis by dietary means. However there is no evidence that it is possible to alter people's diet to this extent on a population basis and it is therefore not currently a practical public health option."

That strikes me as a defeatist attitude from the Government. Just today, the Government addressed the issue of obesity in young children. At other times, they have talked about too much salt in our diet and, in an apparently constant stream of initiatives from No. 10, have stressed the need to change our diet. I do not disagree with that. Let us have exhortations from the Government about changing our dietary habits, how we look after our health, not smoking and not drinking too much. But let us not then use the same argument to impose compulsory fluoridation, because—it is claimed—people are too thick to learn how to look after their teeth. That is a ridiculous argument.

The situation is even more ridiculous, because the letter continues:

"It is also cheaper—water fluoridation costs around 50p per person per year; a year's supply of toothbrushes and toothpaste costs around £10. So there are important reasons to consider water fluoridation as the preferred method of preventing tooth decay."

Are the Government honestly suggesting that we should all drink fluoridated water and throw out our toothbrushes and toothpaste to save £9.50 a year? That would not improve oral health, gum disease or rates of mouth cancer. It would not help us to address the increasing problems of the NHS dental service, with one third of children in Wales not having an NHS dentist. Some 69 per cent. of the population in my county do not have an NHS dentist—

John Redwood (Conservative, Wokingham)

rose—

Simon Thomas (Plaid Cymru, Ceredigion)

Here is a man who was partly responsible for that.

John Redwood (Conservative, Wokingham)

I was going to say nice things about the hon. Gentleman, but not after that calumny. Does he agree that it is odd that the Government want to boss us all around to stop us having tooth decay, but they allow smoking? All their medical advice is that smoking causes awful health problems that then need to be remedied by the NHS, but they have not banned it. The Government are being illogical in allowing us to smoke, but making us have fluoride when we do not want it.

Simon Thomas (Plaid Cymru, Ceredigion)

I agree that that is illogical, but I will not be tempted further down that path as it would be outside the scope of the new clause and amendments.

The British Dental Association has written to all hon. Members to ask them to support fluoridation. It makes no bones about wanting fluoridation, and that is fine, but my children have a drink called Ribena ToothKind, which is approved by the British Dental Association. Is the BDA urging legislators to put fluoride in everyone's drinking water, but at the same time willing to take money from a commercial company to say that a sweet soft drink is good for your teeth?

Elliot Morley (Labour, Scunthorpe)

There is no sugar in it.

Simon Thomas (Plaid Cymru, Ceredigion)

That is true. I do not know whether the Minister has children—

Elliot Morley (Labour, Scunthorpe)

indicated assent.

Simon Thomas (Plaid Cymru, Ceredigion)

He will know, then, that if one lets children have sweet drinks, they ask for more. When one is out and about, one does not always have access to nice tooth-kind drinks. The children want Coke, lemonade or Fanta. Let us be clear about the facts—the British Dental Association does not have clean hands on the issue. If it is prepared to back sweet drinks, it should not tell us what we should put in our clean, fresh water. We should bear such facts in mind when interest groups tell us how we should legislate.

John Butterfill (Conservative, Bournemouth West)

The hon. Gentleman mentioned the cost of fluoridating the public water supply as opposed to the cost of toothbrushes and toothpaste. We are concentrating on the problems of a small minority of children in deprived areas who are not getting the necessary dental care. Would it not be better and cheaper to concentrate directly on their needs, rather than do something that would affect the whole country?

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman has put his finger on the heart of the argument. We have in many of our communities a recognised problem of severe tooth decay in young children. That is a feature of poverty, lack of education, culture, bad diet and lack of access to dental services. None of those factors is affected by fluoridation. There is no evidence that a young child in, say, Manchester or Aberystwyth who drinks fluoridated water but continues with those bad health habits will have significantly improved teeth. They might have an improvement of 0.4 per cent. in one tooth, but that is no reason to change our whole water supply. The hon. Gentleman is right—we need to target improvements in dental health directly on those who need it most.

I know that many hon. Members wish to speak, so I shall conclude. Is fluoridation medication? When the hon. Member for Leominster (Mr. Wiggin) pressed the Under-Secretary on the issue in Committee, she said that she did not consider fluorosilicic acid—the substance used to fluoridate water—to be a medicine, and she mentioned the guide to medicinal and health care products. I take it that she was referring to the Medicines and Healthcare Products Regulatory Agency, which has published a guide to what should be considered a medicinal product. It states, on page 4, that medicines include

"Any substance or combination of substances presented for treating or preventing disease in human beings or animals."

According to that, fluoride is a medicine.

Bill Etherington (Labour, Sunderland North)

The hon. Gentleman will be aware that fluoride is not a registered medicine. It is, however, a registered poison.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman is right. Under the Poisons Act 1972, it is registered as a part II poison, alongside arsenic and paraquat. I do not think that there are many useful benefits of arsenic.

Gordon Prentice (Labour, Pendle)

Are those people who live in areas that have naturally fluoridated water being poisoned?

Simon Thomas (Plaid Cymru, Ceredigion)

Those individuals who live in areas that are naturally high in radon are being poisoned. Many areas have natural features that have an impact on our bodies—such as fluoride and radon. The hon. Gentleman cannot wriggle out of that one. If it is a poison, we should not add it to our water supply.

It is illegal to add fluoride to the water supply as a treatment. In other words, fluoride is not regulated as a water treatment agent. The Water Supply (Water Quality) Regulations 2000 list those substances that may be added to our water, and fluoride is not one of them. It is curious that fluoride is not regulated as a medicine, it has never been tested on the population as a medicine, it cannot be bought over the counter and it is even banned in Belgium as a treatment for teeth, yet we seek to achieve a medicinal effect by putting it in our water. I know that many hon. Members represent the 5 million people in England who already have fluoride in their water and they will not be happy to hear that argument, but we have to look at the hard evidence. The York review and other evidence make it clear that insufficient evidence is available to decide to add fluoride to our water. There is insufficient evidence of the effects that the Minister will no doubt claim.

There are better alternatives, such as improving access to NHS dentistry and increasing education on personal dental care—including cutting down on sugar in the diet—which could achieve similar effects to water fluoridation, but without as much controversy or the potential negative health effects, even if those stop at fluorosis. Fluorides are not the way forward for the NHS dental service. Fluorides are not the way forward to treat the population as a whole. I urge the House to reject mass medication and to support the important principle of individual choice in how we look after our own bodies and teeth, how we take medicines and how we interact with the rest of society. This is not a matter for this House.

Jimmy Wray (Labour, Glasgow Baillieston)

May I ask, Mr. Deputy Speaker, for a Division on amendment No. 8? There is cross-party support for the amendment. Quite a number of people have added their names to it; I did not table it, but I have added my name.

Stephen Hesford (Labour, Wirral West)

Will my hon. Friend give way?

Jimmy Wray (Labour, Glasgow Baillieston)

Give me a chance to get started.

I have watched this matter over the years. From 1983, the Water (Scotland) Act 1946 was taken up in the Court of Session, and one of the reasons was that the Government wanted to fluoridate water supplies in my country of Scotland—part of the United Kingdom. The people were against that, and the case ended up taking five years to be settled in the Court of Session. That was the reason for the Water (Fluoridation) Act 1985. The Government produced a Bill in 1983 because they found that it was ultra vires and outwith the remit of a water engineer to "treat" the people who drink water. All the additives that have been mentioned as being in the water are there to make it wholesome. It was important in the early 1980s to keep additions under strict control by local authorities, which are the democratic authorities accountable to the electorate. They consult the people and listen to their views. At that time, they certainly did listen. Lord Jauncey decided the case. Three or four items were put to him, including the medical, moral and legal aspects.

Local authorities all over England and Scotland were not really interested in fluoridating public water supplies, but an organisation called the British Fluoridation Society has spent money to the tune of £185,000 to brainwash the whole of Britain to try to get fluoride into all the waters in all the local authority areas. The Government have been dishonest.

Stephen Hesford (Labour, Wirral West)

My hon. Friend talks about dishonesty. On representation in the House, is he aware that two early-day motions were tabled and that one, in favour of fluoridation, was signed by more than 150 Members? Of the two EDMs, one was an amendment against anti-fluoridation moves and the other was anti-fluoridation in itself. Only 21 Members signed for the anti position.

Jimmy Wray (Labour, Glasgow Baillieston)

That does not really matter.

John Butterfill (Conservative, Bournemouth West)

On a point of order, Mr. Deputy Speaker. The hon. Member for Wirral, West (Stephen Hesford) is misleading the House—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. I am sure that the hon. Gentleman, with his experience, would not wish to use that expression and accuse another hon. Member of misleading the House.

John Butterfill (Conservative, Bournemouth West)

I am sure that the hon. Gentleman did not intend to mislead the House, but he certainly had that effect.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. The hon. Gentleman has great experience of chairing proceedings in the House, and he should know that he is trying to pursue on a point of order what is really a point of argument.

Jimmy Wray (Labour, Glasgow Baillieston)

Many early-day motions are tabled. Some get hundreds of signatures, but they never go anywhere. Neither will that one.

The jewel in the crown was Birmingham, which has been fluoridated for 30 years—[Hon. Members: "For 40 years."] That is even worse. The Government never reported back on the professor who went into five primary schools and found that 34 per cent. of the children had dental fluorosis—caused by chronic fluorine poisoning. That is where the disease comes from—a poisonous waste. No one from the medical profession ever discovered that fluoride was attracted to bones and teeth; they knew nothing about it. Cattle were found down in England with skeletal fluorosis, which came from people dumping fluoride, which was very expensive to dump. People wanted to find a cheap way of getting rid of that, so they sent an agent to have a look. It was him who discovered that it was attracted to bones and teeth. That is where chronic fluorine poisoning and skeletal fluorosis came from. I think that the company at the time may have been Fisons.

Under the 1926 food and drugs legislation, it is a crime to add any kind of fluoride to foodstuffs. The Medicines Act 1968 clearly states what is a medicinal product. Why would a Government who believe in democracy want to transfer a non-medicinal product to a health authority and take away the democratic right of a local authority?

Gerald Kaufman (Labour, Manchester, Gorton)

I am interested in amendment No. 8, but I would be grateful if my hon. Friend could clarify one point. I understand entirely that he recommends that the requirement should come from a democratically elected local authority. What would be the basis on which such an authority would make such a request?

Jimmy Wray (Labour, Glasgow Baillieston)

The reason for wanting to take the decision away from local authorities is that local authorities up and down the country refused to fluoridate. It was then put in the hand of water authorities, but they cannot do it because of the Water (Scotland) Act 1946, so the Government have to try to persuade the water authorities. Because of indemnification, the water authorities will not like that because they have heard public complaints about the fluoridation of public water supplies and dental fluorosis. They will not implement fluoridation. In fact, an attempt was made to force authorities in the north of England, and that case was lost because the judge said that the water authority had a responsibility to its shareholders and customers.

David Marshall (Labour, Glasgow Shettleston)

In the event of fluoridated water being eventually proven harmful to the health of human beings, who does my hon. Friend think will be liable if the victims sue? Would it be the manufacturers of fluoride, the water companies, the strategic health authorities or even the Government?

Jimmy Wray (Labour, Glasgow Baillieston)

If any of my children get dental fluorosis or chronic fluorine poisoning, I will sue everybody until I get the right one—the Government, the fluoride company, whoever. One reason why fluoride is said not to be a medicinal product is that a product licence would be needed to procure the fluoride. That licence would state clearly what the product is—a fluorosilicate, under European Union directives, and something that is certainly not on the approved medicines list. I have heard Ministers speak about fluorspar and natural fluoride. Natural fluoride comes from fluorspar. It is insoluble. With fluorosilicates, as soon as they hit the water, they dissolve. With fluorspar, the actual fluoride comes from the fluorspar and is insoluble. There is a very big difference.

I do not care who takes fluoride. Give it to your sons, give it to your daughters—in toothpaste or in tablets, as long as it is self-administered. Once we start to use water as a panacea, as mass medication for the whole population, half of whom do not even have teeth, we might as well put the fluoride into buckets.

We have a socialist Government and they should never medicate people against their will. It is illegal in English law to medicate someone against their will. It is as though a doctor diagnosed all his patients and prescribed them fluoride without seeing them. We have never done that in this country. That is what bothers me—the fact that a Labour Government who believe in democracy want such demagoguery and want to fluoridate public water supplies.

The Government know the moral aspects and the medical aspects; they certainly know the legal aspects. Why are fluorides forbidden and criminal under the Poisons Act 1972? Why are the human rights of the individual being taken away by a few Members of Parliament who are not even taking the time to read exactly what will be going into our water? Why do they not find out what fluoride is and where it comes from?

Out in the commercial world somebody will be making big bucks. That is what this is all about. If the whole UK water supply is fluoridated, somebody will get their palm greased. They will be ready when the Government decide to put fluoride in the water.

There will be no way of really measuring one part per million. How will the Government know how many children are already taking fluoride tablets at school? How will they know how many people already brush their teeth with fluoridated toothpaste? If a baby ate a tube of toothpaste she would die. There is enough fluoride in a tube of toothpaste to kill a child.

Bill Etherington (Labour, Sunderland North)

Earlier my hon. Friend was asked about the democratic processes that might be used by local authorities to ascertain the wishes of the public. Does he share my view that whatever the system is I would have more confidence in it than if the matter were left to a strategic health authority?

Jimmy Wray (Labour, Glasgow Baillieston)

I certainly do.

What worries me is that the Minister is misleading the House. The chairman of the York university review committee, Professor Trevor Sheldon, sent a letter to the press about the statements—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. Did I hear the hon. Gentleman accuse the Minister of misleading the House? If I did, I hope that he will very quickly withdraw that statement.

Jimmy Wray (Labour, Glasgow Baillieston)

Yes, Mr. Deputy Speaker, I withdraw it.

Trevor Sheldon wrote an open letter that stated:

"The review team was surprised that in spite of the large number of studies carried out over several decades there is a dearth of reliable evidence with which to inform policy. Until high quality studies are undertaken providing more definitive evidence, there will continue to be legitimate scientific controversy over the likely effects and costs of water fluoridation."

Why does the Minister not promote the comments of the director of the Medical Research Council, Dr. Paul Harrison? He said:

"But there is a lack of research on some important aspects, which is why we're highlighting the need for more research . . . Because of the wide use of toothpastes and other dental health care products containing fluoride, we need a better understanding of how much fluoride we're all absorbing."

Everybody else is worried, so why does the Minister say that it is safe to take fluoride? All those bodies have looked at the evidence and considered the studies.

In 1997, Wolverhampton fluoridated its water supply, so why did dental costs rise by 112 per cent? Should not those costs have been lower after fluoridation? We are not getting the right facts in this case.

I hope that hon. Members will vote for the democratic right of local authorities to retain control under amendment No. 8 and that they will vote against the fluoridation of public water supplies. That is a criminal act and it is illegal under various Acts passed by the Government.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. May I appeal to the House? It is obvious that only a short time is left for this debate so I hope that in future contributions, including those from the Front Benches, Members will bear in mind the fact that there is a great deal of interest in taking part.

Bill Wiggin (Conservative, Leominster)

I shall try to keep my comments as brief as possible, Mr. Deputy Speaker, but I want to address a large number of amendments.

Members on both sides of the House feel very strongly about amendment No. 8, which the hon. Member for Glasgow, Baillieston (Mr. Wray) has just discussed. We shall certainly press it to a vote and on the Opposition Benches it will be a free vote.

Greg Knight (Conservative, East Yorkshire)

Some time ago when we held a debate on the composition of the other place there was a series of genuine free votes. To indicate that they were genuinely free votes, the Government Whips Office put in Tellers for both sides. Has my hon. Friend received any notification from the Treasury Bench that Government Whips will be telling on both sides when we vote on this group?

Nick Ainger (Labour, Carmarthen West and South Pembrokeshire)

indicated assent.

Bill Wiggin (Conservative, Leominster)

I see that the Government Whip is nodding. I am grateful to my right hon. Friend the Member for East Yorkshire (Mr. Knight) for making that vital point; if we are to have a free vote, free it must be.

Currently, the Bill gives strategic health authorities the role of consultation with local communities to determine whether fluoride should be added to their water supply. We want that to be undertaken by local authorities. The Minister has insisted that any decision to fluoridate water will be determined by "local" people after "local" consultation. Strategic health authorities are not local. The SHA for my constituency is in Coventry, which is a long way from Herefordshire so it is not local in any sense of the word.

Strategic health authorities are neither democratically elected nor accountable. Their accountability comes only through the Secretary of State, which is not a direct local mechanism. They do not match up with the Government's insistence on local consultation and I should prefer an element of democratic decision making with elected and accountable local authorities having that power.

David Drew (Labour/Co-operative, Stroud)

I shall be voting with the hon. Gentleman on the amendment. Not only am I unhappy about the level at which the decision will be taken, but I have received two letters, one from the Greater Manchester SHA and one from my SHA, Avon, Gloucestershire and Wiltshire, urging me to support the provisions on the basis that we should have a fluoridated water supply. How can those authorities carry out open, honest and democratic consultations when they are telling us which way to vote?

Bill Wiggin (Conservative, Leominster)

The hon. Gentleman makes an extremely important point. We want not only democratic accountability, but at least proper information to be provided to all people, so that they can decide how they would like their water supplies to be treated. Of course, that is difficult if the strategic health authority has already made that decision.

Andy Burnham (Labour/Co-operative, Leigh)

The hon. Gentleman makes a point about the decision being in the hands of the wrong body. Why did the then Conservative Government leave the decision in the hands of the health authorities when they passed the Water (Fluoridation) Act 1985?

Bill Wiggin (Conservative, Leominster)

rose—

Bill Wiggin (Conservative, Leominster)

I do not think that they left the decision in the hands of the health authorities. [Hon. Members: "They did."] I thought that the decision was left in the hands of the water authorities. [Hon. Members: "No."] I thought that that was what the Government were seeking to change. Anyway, like the hon. Gentleman, I was probably at school at the time, so I was not privy to the full debate.

Andy Burnham (Labour/Co-operative, Leigh)

rose—

Bill Wiggin (Conservative, Leominster)

Hang on; let me answer the first question. The important point that the hon. Gentleman is trying to make is that the then Government probably acted—I am sure that they did—on the best scientific evidence at the time. One of the biggest criticisms of the Bill is that the York report has requested further research, but the Government have not carried it out. I can see that the hon. Gentleman is highly exercised, so I shall give way.

Andy Burnham (Labour/Co-operative, Leigh)

The hon. Gentleman asks me to explain further. The original Conservative legislation said that the health authorities would undertake the consultation, but that the water companies may choose to fluoridate on the back of the health authorities' request. The word, "may" is the loophole in the 1985 Act that people are exploiting to open a debate on the question per se, but the hon. Member responsible for that legislation—the right hon. and learned Member for Rushcliffe (Mr. Clarke)—is wholly in favour of the change that other hon. Members and I are proposing tonight.

John Butterfill (Conservative, Bournemouth West)

May I just make it clear that the previous legislation left it free to health authorities to recommend fluoridation, but that it was up to the water authorities to decide whether to go ahead and, since most of them were worried about getting sued, they did not do so?

Bill Wiggin (Conservative, Leominster)

I shall make some progress not only because it is important that hon. Members have the chance to make their own speeches, but because we have moved on about 20 years, and there seems little advantage in debating what happened 20 years ago.

Kevin Hughes (Labour, Doncaster North)

Water authorities will not take the decision because they are not convinced that it is safe and they fear they will be sued if they do so. That is what they fail to say.

Bill Wiggin (Conservative, Leominster)

I am grateful to hon. Members for all their interventions. One of the Bill's fundamental flaws is that it does not give us the decision on fluoridation, but the rights and wrongs of what has happened in the past are not for us to debate. I would prefer it if they were, but that is not the case, so I must make progress.

I would prefer to see democratic decision making, so it is right that such powers should be in the hands of local authorises, as elected and accountable bodies. Strategic health authorities have an overwhelming bias in favour of fluoridation. Such an issue needs neutrality—the point made by the hon. Member for Stroud (Mr. Drew)—with each local community given an equal amount of information from both sides of the debate, so they can make up their own minds.

The right hon. Member for Manchester, Gorton (Mr. Kaufman) asked in an earlier intervention why local authorities should take that decision. The answer is that it must be in their interests to ask their electorate and, when they get the answer, to act accordingly.

Gerald Kaufman (Labour, Manchester, Gorton)

My question was not why. I find it very attractive that local authorities should take the decision. What I am interested in having elucidated to me is by what process the local authority would make its decision.

Bill Wiggin (Conservative, Leominster)

I shall come to my amendments slightly later on, but I would prefer a proper referendum to be conducted—every household should be consulted. We are talking about mass medication, whether we want to call it that or not, so we must have mass consultation to go with it. That is the least that we can do.

Simon Thomas (Plaid Cymru, Ceredigion)

The right hon. Member for Manchester, Gorton (Mr. Kaufman) makes an important point, but it is also important to note that the Bill does not specify what the current consultation with the strategic health authorities—or, indeed, in Wales, with the National Assembly—should involve, so that criticism should be channelled at the Bill as well.

Bill Wiggin (Conservative, Leominster)

I agree with the hon. Gentleman, and I shall come to that in speaking to my amendments.

Richard Burden (Labour, Birmingham, Northfield)

The hon. Gentleman sees this as a health issue. Does he think that any other health issue should be decided by local authorities, rather than by part of the health service?

Bill Wiggin (Conservative, Leominster)

The hon. Gentleman puts his finger on the real misunderstanding. He talks about a decision being made by a local authority or by a strategic health authority; I am talking about local people being able to take that decision. That is why I would prefer local authorities to make the decision. They start from an unbiased position, so they can undertake proper consultation without pursuing their own agenda, and they are elected and accountable. None of those things applies to strategic health authorities, so we need to move on from whether they should make the decision or whether local people should make it. That is why the hon. Gentleman and I will not agree, but he can now understand why his comments are not the same as mine and are not relevant. It does not matter what other health decisions are made by local authorities because they are not covered by the Bill.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

The hon. Gentleman has not said what would happen if there were different types of local authority in an area—a county council, a district council or even a district council and a parish council—and they were at odds with each other.

Bill Wiggin (Conservative, Leominster)

The hon. Gentleman makes an important point. We have referred to local authorities, but I imagine that the county council would be involved in my area, for example. I have a unitary authority in Herefordshire, but a county council and a district council in Worcestershire, both of which are in my constituency. There are difficulties, but why would strategic health authorities do a better job? They are not accountable and not elected. [Interruption.] I will not ask the hon. Gentleman to respond, but I am sure that he will comment on that in his speech. In answer to his question, my feeling is that, so long as an authority conducts proper consultation, it will be able to make the decision. As the Minister said in Committee, the majority of people must be in favour of fluoridation before it takes place.

Alan Williams (Labour, Swansea West)

Will the hon. Gentleman give way?

Bill Wiggin (Conservative, Leominster)

I will. I have been very generous; I do not see why I should stop now.

Alan Williams (Labour, Swansea West)

I appreciate that fact, and I am grateful to him for giving way. Does he not understand that he is giving the argument away? Either we believe in compulsory medication or we do not. If we do not believe in compulsory medication, it does not matter whether it is done by the Government, by a quango or by a local authority, it is still wrong. I believe that compulsory medication is wrong in all circumstances.

Bill Wiggin (Conservative, Leominster)

I am grateful to the right hon. Gentleman for that intervention, but it is wrong to say that I am giving the game away or behaving in any way like that. That is not what I seeking to do with my amendments. I want to ensure that the Bill, which only deals with whether fluoridation may or may not take place, guarantees accountability—that is the bit that is missing.

Gerald Kaufman (Labour, Manchester, Gorton)

Will the hon. Gentleman clarify whether, regardless of the fate of any other amendment, he will nevertheless press amendment No. 6 to a Division, because that amendment refers to consulting all households?

Bill Wiggin (Conservative, Leominster)

I would love to press amendment No. 6 to a Division. I cannot confirm whether I will do so because we will be under a lot of time pressure; otherwise, the Bill will not receive a Third Reading. If we are successful with amendment No. 8, however, perhaps it will be possible to press amendment No. 6 to a Division. That is an important point, and I am grateful to the right hon. Gentleman for making it.

Amendments Nos. 34, 35, 36, 37, 38, 39, 40, 42 and 46 all relate to the same purpose: including the water undertaker in the decision-making process. The Bill only takes account of the health authority in such decisions, and those amendments would enable water companies, as well as health authorities, to initiate variations in arrangements to accommodate changes in circumstances, including operational emergencies. Under the Bill, only health authorities can request changed arrangements, but it is only fair that water undertakers should also apply the same provisions. There should be statutory provision for water undertakers to make arrangements for changes in their obligations to take on operational contingencies. Those amendments would ensure that the water company, as well as the health authority, could request such a provision.

Amendment No. 37 would ensure that the decision on the level of fluoridation concentration could be taken by the water company, as well as the health authority. It is only fair that water companies have an input into what concentration of fluoride should be added.

Amendments Nos. 36, 38, 39, 40 and 42 would place the water companies on the same footing as health authorities in a disagreement over a requested variation. Water undertakers should be able to appeal to the Secretary of State and relevant authorities when the terms of a requested variation cannot be agreed. Again, that relates to the point made in amendments Nos. 34, 35 and 37 that express statutory provision should be made whereby water companies can request variation of their obligations to accommodate operational contingencies.

Amendment No. 41 would require that in the references of disputes under section 87B, the Secretary of State or the Welsh Assembly should be empowered to ensure that new or revised fluoridation schemes are operable and efficient. If a scheme failed to be so, entry into the arrangements would be refused.

Amendment No. 46 would add to the circumstances under which suspension of, or variation of, fluoridation takes place, and suggests the addition of necessary changes to source of supply. The boundaries of operational supply zones often have to be varied to accommodate seasonal changes in weather patterns and other operational exigencies.

Amendment No. 6 is very important. It seeks to ensure that every person affected by the proposed fluoridation scheme must be consulted, or at least invited to participate in the consultations. I had to concede that invitation because the Government do not intend to hold the proper referendum that I would have preferred. Consultation literature must be sent to every household in the affected area. In Committee, the Under-Secretary said:

"That is the sort of thing that we have in mind."

I welcome that comment. Furthermore, she added that

"we believe that some sort of door-to-door consultation must be part of the overall consultation."—[Official Report, Standing Committee D, 23 October 2003; c. 461.]

Is she therefore proposing that the Government will ensure that every door of every household in every area will be knocked on to discuss fluoridation? I find that highly unlikely. Equally, we must ensure that all households in an affected area receive neutral, unbiased information from both sides of the debate, and that the information is understood by all. Will that happen? I should like to see a referendum on a topic as controversial as fluoridation. Given its health effects—to say nothing of the civil liberties factor, to which reference was made—it is all the more vital to ensure that everyone has their say after a fully informed debate. We have still not had an answer as to what democratic result the Government consider right in order to fluoridate water supplies. Fluoridation will affect individual freedom, because people have to drink water. Their choice and right to drink non-fluoridated water—indeed, fluoride can even be absorbed through the skin when in the bath—will effectively be eliminated, unless the Government are going to give every opponent to fluoridation the money to buy bottled natural drinking water if they live in a fluoridated area, which, of course they are not. It is important that all households be consulted on whether they want fluoridation to take place, and if the Government are serious about their promise to let local communities decide, my amendment should be included.

On amendment No. 47, Water UK believes that, in relation to fluoridation of water supplies, there should be statutory provision by the Secretary of State for specifying construction and operational standards. This code of practice, prepared by the Secretary of State for water undertakers, is in the interests of safety and of the avoidance of arguments over the standards that have to be met and paid for. The amendment would provide clear assurances in that regard.

Amendment No. 48 is very similar to amendment No. 7, except that it adds a subsection (2) to accommodate licensed water suppliers in indemnity arrangements against all liabilities incurred in fluoridation. Amendment No. 7 would ensure that the Secretary of State grants indemnities to water suppliers that agree to fluoridate a water supply under clause 58; we should surely welcome that. In Committee, the Minister stressed that a water supplier that agrees to fluoridate should not incur any additional liabilities, compared with a water supplier with no fluoridation scheme. She is right, but my amendment seeks to be sure of exactly what liabilities are covered in the indemnity, what is excluded, and the costs. It should be expressly provided that the Secretary of State must indemnify water companies against all liabilities that they may incur as a consequence of fluoridation, other than those arising from their own fault or negligence. We want proper protection for consumers in all areas.

Amendment No. 48 adds to amendment No. 7 by attaching subsection (2) in order to accommodate licensed water suppliers. Of course, the question arises of why indemnities are needed in the first place. Is it because there is a risk associated with mass water fluoridation? And it is because of that risk that water companies must be protected against future action? However, just because we recognise that the Government may know of the dangers of fluoridation—hence the indemnity—does that mean that we can skip over the harmfulness of fluoride? As has been said, fluoride is a class 2 poison. We should not legislate without the necessary high-quality research. The high-quality research that the York review itself requested has not been undertaken; indeed, in Committee the Minister told us that it was marked as "a low priority". We need to assess the proportionality of the risk of tooth decay in children, and the risk posed by fluoride for people of all ages. The scientific research is contradictory, and the satisfactory evidence is non-existent. The safeguards are clearly not in place. The matter is in no way resolved, so the clause in question should not be included. Giving an indemnity to water companies does not detract from the doubt and uncertainty that surrounds the issue; and it certainly is not a reason why we should accept fluoridation.

I want to know how much the proposed indemnities will cost, what legal advice is being taken, and whether the Bill fulfils its human rights obligations.

David Kidney (Labour, Stafford)

On the York review's recommendation for further research and the Medical Research Council's 15 recommendations for such research, the hon. Gentleman points out that we have yet to receive the results. But even if this House were willing to legislate without knowing the results, would he think it odd that we consulted the public without their knowing the results?

Bill Wiggin (Conservative, Leominster)

As I said earlier, it is important that the public be properly informed and consulted.

John Butterfill (Conservative, Bournemouth West)

Does my hon. Friend accept that although the Government may be indemnifying the water companies, they will not get an indemnity themselves? There is no doubt that they will face legal action if they proceed with the Bill.

Bill Wiggin (Conservative, Leominster)

I share my hon. Friend's concern. I, too, have heard that the provision will be tested in law and I am very worried about that, because ultimately the consumers will pick up the bill, whether they wish to or not. For that reason, this part of the measure makes me extremely nervous.

Have the Government received the advice of the chief medical officer and the chief dental officer, commissioned in September 2002? We were promised in Committee that a great deal more information would be available on Report. We all look forward to knowing what that information is. If these amendments were accepted, they would provide assurances for all water undertakers that liabilities are covered by the indemnity arrangements, which would be most helpful.

Amendments Nos. 49 and 50 would enable water companies, as well as health authorities, to initiate changes to pre-1985 fluoridation arrangements, which would be fairer to water companies. Water undertakers should be included in statutory provisions that will affect their industry.

I look forward to hearing the rest of this debate. This is an extremely important issue, and I regret very much the sneaking of this clause into the Bill. It is clear that this issue needed a great deal more time in which to debate it.

Andy Burnham (Labour/Co-operative, Leigh)

In fact, the clause has not been snuck into the Bill; 150 Members of this House signed an early-day motion, which I tabled, on this issue. That shows the strength of feeling in this place—on both sides of the House—which the Government recognised by introducing the clause.

Today, we have an opportunity to correct a loophole in the law that has thwarted the will of the House for 20 years, and left health inequalities between rich and poor communities that are wider than they need be or should be. Tooth decay is almost entirely preventable, and water fluoridation has been shown to be a safe and effective way of preventing it. Yet we rarely get the chance—

Kevin Hughes (Labour, Doncaster North)

Can my hon. Friend justify his statement by saying by whom it has been so shown?

Andy Burnham (Labour/Co-operative, Leigh)

The justification is the figures, provided for every constituency, from the British Dental Association. In respect of five-year-olds, the constituencies with the best dental health in the country all have a fluoridated water supply. Those with the worst dental health are the poorest communities, which do not have a fluoridated water supply.

Andrew Lansley (Conservative, South Cambridgeshire)

rose—

Kevin Hughes (Labour, Doncaster North)

rose—

Andy Burnham (Labour/Co-operative, Leigh)

I shall make progress as others want to speak.

We have a once-in-a-generation opportunity to pass legislation that will have a rapid effect on the nation's health, particularly in our most deprived communities, and we must seize it. In fact, it was a Bill passed in 1985 by the previous Conservative Government that made water fluoridation legal, although pointing that out will not help me on this side of the House. The Government's proposed change simply gives effect to the spirit of that legislation.

David Drew (Labour/Co-operative, Stroud)

I was under the impression that, when the clause was added, it was an all-party move that the Government did not instigate, but which they may have been sympathetic to. If the Government are in favour of fluoridation, let them say so, but they are not saying that. They are sitting on the fence and hoping that this place will vote in favour of fluoridation. Can my hon. Friend clarify that point?

Andy Burnham (Labour/Co-operative, Leigh)

I referred to early-day motion 247, which I tabled. It was signed by Members on both sides, including the right hon. and learned Member for Rushcliffe (Mr. Clarke), who introduced the original legislation—a powerful voice—and the hon. Member for Cheadle (Mrs. Calton) among many others. The Government are right because they are giving communities the chance to decide for themselves. I do not believe that a single Member of the House has the right to deny my constituents the ability to make their own decision on this issue.

Alan Williams (Labour, Swansea West)

Does my hon. Friend not understand that he is not doing what he says? He is not giving his constituents the right to do what they want. He is taking one minority—a local government minority—and getting that to force-feed fluoride, as opposed to having a regional health authority do that. He is still force-feeding fluoride and compulsory medication.

Andy Burnham (Labour/Co-operative, Leigh)

I am not force-feeding anything to anyone. I support the amendment that gives effect to the original water fluoridation legislation that was passed by the Conservative party and incorporated in its privatisation legislation. It said that, on the back of consultation with local communities, health bodies should make a request to fluoridate. That was the spirit of the legislation that the House passed, and on what basis should we deny our communities the chance to choose for themselves in accordance with the spirit of that legislation?

Jimmy Wray (Labour, Glasgow Baillieston)

When my hon. Friend reads the paper from the British Dental Association, does he not notice that inner London has the best dental care? The water in that area has never been fluoridated.

Andy Burnham (Labour/Co-operative, Leigh)

I am grateful to my hon. Friend for making that point. I am looking at the league table for the worst dental health in the country. If he does not mind me saying, Glasgow has the worst children's dental health in the whole country. When we know a safe and effective means of doing something for the children in Glasgow, we should do it.

On my hon. Friend's specific point, I see that Cities of London and Westminster is No. 10 on the list of the worst constituencies for children's dental health. Under-fives there have, on average, almost three missing, filled or decayed teeth. Right below that constituency are Kensington and Chelsea, which is at No. 11 on the list, and Regent's Park and Kensington, North, which is at No. 12. Inner London is right at the top of the league for the worst dental health in the country.

Jimmy Wray (Labour, Glasgow Baillieston)

Glasgow also has the four most deprived areas in the whole of the United Kingdom.

Andy Burnham (Labour/Co-operative, Leigh)

My point is that, as a supporter of a socialist Government and member of the Labour party, I ask my colleagues in my party to vote for water fluoridation. We know that it is the most effective way of improving the dental health and quality of life of children in our poorest communities. We should all take that opportunity as members of the Labour party.

Kevin Hughes (Labour, Doncaster North)

Will my hon. Friend look at the British Dental Association report? Does he not see that in 19 of the best 20 constituencies for dental health the water is not fluoridated?

Andy Burnham (Labour/Co-operative, Leigh)

I have looked in detail at the figures and I point my hon. Friend to the constituency with the best dental health in the country. The best is Tamworth, where the water is fluoridated. Tamworth does not have the social profile of the wealthiest parts of the country, but it has the best children's dental health. I put it to him that that has something to do with water fluoridation.

I shall now attempt to make progress. This is a controversial issue and the Government deserve credit for taking it on and seeking to resolve it. However, I take the view that the issue has been allowed to become controversial not because most people oppose fluoridation—surveys of the public show that they do not—but because a noisy minority send long letters to Members of Parliament. The chief medical officer unequivocally endorses water fluoridation as the most effective means of improving the health of the nation. What Member of the House has more evidence than he does to make such a recommendation?

Bill Etherington (Labour, Sunderland North)

My hon. Friend suggests that a majority are in favour of fluoridation, and he has already made the point that he is trying to do what he thinks is right for his constituents. A poll carried out by a local newspaper showed that more than 90 per cent. of my constituents were against fluoridation. I hope that he will bear that in mind when he talks about MPs being influenced by noisy minorities. That is not always the case.

Andy Burnham (Labour/Co-operative, Leigh)

The latest poll carried out by NOP found that 67 per cent. of people support fluoridation if it can be shown to reduce tooth decay—and it can.

Kevin Hughes (Labour, Doncaster North)

On a point of order, Mr. Deputy Speaker. I wish to apologise to the House and to my hon. Friend. Another hon. Friend has just pointed out that there is another page in the report and that I was looking at the wrong one.

Alan Haselhurst (Deputy Speaker, Saffron Walden)

That was not a point of order for the Chair, but a personal correction. I hope that we can now proceed to allow as many Members as possible to speak before the debate concludes.

Andy Burnham (Labour/Co-operative, Leigh)

In my view, the health arguments do not stack up. They are chucked around by people opposed to fluoridation because they know that the civil liberties argument advanced by the hon. Member for Ceredigion (Mr. Thomas) is not strong enough. That is what it comes down to: a choice between the civil liberties of the individual and the common good, and particularly the common good of our most deprived communities.

I readily accept that there may be a cost to the individual's liberties in drinking one part per million of fluoride in water. But what is the benefit? Water fluoridation has been shown to improve the dental health of an entire population, cutting needless suffering and improving people's quality of life. Given that choice and that cost and that benefit, I will always opt for the common good over civil liberties. It is morally wrong for us to know of a safe and effective means of cutting children's suffering and then not give local communities the power to choose it for themselves. But that is what some propose we do tonight.

New clause 1 is a backward-looking piece of nonsense from the Flat Earth Society that deserves rejecting out of hand. It would end water fluoridation in parts of Birmingham and the west midlands without giving those communities any say about it whatsoever. On what basis does the hon. Member for Ceredigion have the right to do that to the communities that currently have water fluoridation?

The rest of the debate is in Hansard.