§ Mr. Crouch
I beg to move amendment No. 7, in page 15, line 38, leave out clause 16 and insert—'16. At the end of section 60 of the Water Resources Act 1963 (exemption from and reduction of charges payable to water authorities) the following subsection shall be inserted—1080(7) No charges shall be levied in respect of water authorised by a licence to be abstracted for use as a source of energy if and so far as such water is returned to the same source of supply".'.
Mr. Deputy Speaker
With this we are taking amendment No. 8, in page 15, line 43, leave out from `inhibiting' to end of line 44 and insert`the use of water as a source of energy;".'
§ Mr. Crouch
It is a very late hour. It is the remarkable extension of procedures in democracy that we have established in the House over many years which enables me to bring this matter forward at this late stage in the consideration of the Bill. The Bill originated in another place and came to this House only later. The problem was considered and well argued there, but did not succeed. Lord Strathcona and Mount Royal sought to remind the other House that in considering energy conservation and the use of the nation's energy resources the widespread and diffuse production of energy from small-scale renewable sources such as water power generation was very important. He argued very well that the generation of energy from such sources should be encouraged and that nothing should be done to inhibit such activity. Unfortunately, he did not succeed in persuading the Government to allow the matter to proceed in an entirely satisfactory way.
My noble Friend pointed out that some water authorities had felt it necessary to impose dramatic rate increases upon those using water to generate power.
Even though such users did not take water away but only used it and put it back so that not a drop was wasted, some water authorities, in their wisdom, and with their power and authority, saw fit to increase the charges to users of machines which generate electric power from water so dramatically as to make the whole process uneconomic and thus to inhibit its use. My noble Friend argued strongly that this was no part of energy conservation and that in a Bill of this kind such activities should be encouraged, not inhibited.
The Bill proceeded on its way and, having come to this place, was eventually considered in some detail in the Committee of which I had the honour to be a member. My hon. Friend the Under-Secretary of State dealt with the matter in some detail in Committee. On the question of the possible inhibition of power generation by the owners of water power generators, such as water wheels, who produce renewable sources of energy in this way, he thought that nothing was being placed in the way of such activity. If he was not extensively questioned on that reply it was perhaps the fault of members of the Committee who did not spot a gap in the Bill which, to say the least, would not encourage the generation of power in that way. Indeed, having studied the matter since then, I go as far as to say that it positively inhibits the use of machinery such as water wheels to generate electricity.
This may seem a small matter when we have been considering enormous questions of power generation, heat and energy saving, and so on, but it is not. Just as we have considered many other matters, it is important that we should not neglect this one.
I maintain that clause 16 as it stands carries a prejudicial implication. If a turbine or water wheel user challenges the view of a water authority that he is an abstractor—I use the word as a non-lawyer but in a legal sense because 1081 everything hinges on its interpretation in a court of law—he is liable to be prosecuted in a magistrates' court, and the water authority will do its best to prove that water power is an abstraction. No doubt the water authority will call on and brief learned counsel to argue its point about abstraction. I suggest that counsel will do that with great authority and force in a magistrates' court. There, in such a lowly legal place——
§ Mr. Crouch
It is not the High Court, appeal court or the House of Lords; it is an honourable but lowish level of legal authority and decision. Does my hon. Friend the Member for Fulham (Mr. Stevens) wish to intervene? Apparently not.
I suggest that it is unlikely that the owner of a water wheel will be able to compete with the legal weight and strength of learned counsel briefed to argue the meaning of the abstraction of water.
Some water wheel owners who are lawyers may be able to cope. My hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) is a lawyer and would own to being the owner of a water wheel. I think that he would also own to being a lawyer. I cannot say whether he qualifies for the title "learned" that we give in the House.
It will, no doubt, come later. At least, he is a producer of energy in the House and elsewhere. Others not so gifted would not be able to argue their cases in a court of law.
Lay magistrates may incline to the view of counsel arguing the interpretation of the parliamentay drafting of the meaning of abstraction. I suggest that, as the Bill is drafted, the likelihood of conviction is real. I would argue, therefore, that even at this late hour—the late hour of consideration of the Bill in the timing of Parliament rather than the late hour of the day; "at this eleventh hour" would perhaps be a more appropriate phrase—we should amend the Bill by removing the possibility of a court, at any level, low or high, assuming that abstraction should be charged at a higher price.
I suggest that "abstraction" is not appropriate. Persons who use old or new machinery—water wheels or turbines—to generate power from water are not consuming water and, therefore, are not abstracting the water. I should like to remove any possible misinterpretations. No water authority should be able to suggest that this is abstraction and that a higher charge should be made for such use. As a common man and not a lawyer, I believe that that is commonsense. Therefore, I urge the house to accept the amendment.
The power user does not abstract water, and the charges raised by water authorities should therefore be without legal authority. All that I am asking my hon. Friend to do is to tell me that he agrees with me and will remove this possible suggestion from the Bill.
§ Mr. Eadie
When the official Opposition gave me the responsibility of handling the Bill I went over in great detail the debates that occurred in another place and I paid particular attention to the debates and arguments to which the hon. Member for Canterbury (Mr. Crouch) referred. 1082 I have the correspondence from the water power users and I know that the hon. Gentleman makes a point about the whole question of legality and the bringing in of lawyers or solicitors. I must say, without wishing in any way to deride the legal profession—because a member of my family has practised law for many years—that it is better to keep lawyers out of some of these problems. We are all politicians, and have experience of this. It is far better to make sure that the law and the lawyers do not come into this. Indeed, to some extent we deserve to be criticised if we pass legislation that then becomes the subject of legal challenge and long-drawn-out legal arguments.
My interpretation, on reading the report of the debates in another place, is a very serious one, in a sense. I have always tried to act on the basis that one's word is one's bond, and I am sure that all hon. Members have done the same. I think that it is very important that one's word is one's bond. The inference of the debates in the other place was that a promise was made. I have gone over the discussion and I believe that that promise has now been broken. That is a very serious thing to say, and I think that the Government have some responsibility tonight to try to explain why, when they gave an undertaking that something would be done, nothing has happened. I certainly believe that the hon. Gentleman owes the House some clarification.
§ Mr. Lennox-Boyd
I support my hon. Friend the Member for Canterbury (Mr. Crouch), particularly in terms of his advocacy of amendment No. 8. I just want to make one or two comments by way of clarification of the past history of this matter.
I must declare an interest, as the owner of a water wheel, but if anyone saw it he would think that it was more of a liability than an asset, and it is not in use at the moment. I am also a member of the National Association of Water Power Users, which is based in the constituency of my right hon. Friend the Member for Westmorland (Mr. Jopling) and is a very powerful and important body in that area.
In the past some water authorities have used their powers under the Water Resources Act 1963 to penalise those people who operate water wheels and to charge them on a compulsory basis for the abstraction of water. This unfairness is manifest when we realise and understand, as anyone who considers this matter will, that all the water that is taken out by someone who is using it for power generation is put back into the river about 10 ft lower down—in height—in the stream.
The bureaucratic hypocrisy of the imposition of rates in this way has been justified on the basis that in return for this charge the water authority will guarantee a secure source of supply of water in the river. In North-West Lancashire it is not very difficult to guarantee a secure source of supply of water, and that argument has given rise to a considerable feeling of grievance among many people. As a result of this definition of the word "abstraction" a great deal of resentment has been generated.
I understand that my hon. Friend views amendment No. 8 with some favour. He may, however, feel that it is unnecessary in the circumstances. It should be noted that the amendment is completely satisfactory to those who represent the National Association of Water Power Users. In due course we shall know whether the Government will accept it.
1083 In the past, confusion has arisen because "abstraction" has become a hated word to the National Association of Water Power Users. Therefore, its members are anxious that the amendment should be accepted, even if the legal advice is that it is unnecessary and does not take the matter much further. Of course, water power users merely borrow the water that they use; they do not consume it. To describe such borrowing as an abstraction may be more correctly described as an abstraction of the truth.
§ Mr. Peter Viggers (Gosport)
I rise only to assure the House that support for my hon. Friend the Member for Canterbury (Mr. Crouch) on such an important amendment is not confined to the owners of water wheels. To take a broader view, we do not know which of the alternative energy sources of sun, geothermal power, water, tides, and so on, will eventually yield a major harvest, but I am confident that one of them will and that science will allow one of those alternative sources to become extremely important in terms of world energy supplies. An alternative battery may be involved. We do not know.
It is wrong to allow one of those alternative sources of energy to be inhibited. This comparatively minor use of water power should not be inhibited by an incorrect rating or taxation system. Therefore, I urge the Government to accept the amendment. It is wrong that the water authorities should be able to assess a rate according to such use. We should take this matter clean out of their hands. Therefore I urge the Government to accept the amendment.
§ Mr. John Moore
This has been an interesting example of the way in which a sensible and modest sector of our economy can bring legitimate pressure to bear through our parliamentary processess. It reminds me of one of my first days at the Department of Energy. I obtained an invitation to visit Mr. Osmond Goring. He, is an example of British ingenuity in developing low-power water usage in a lovely part of our country.
If that, together with the pressures imposed by the National Association of Water Power Users, were not enough to persuade me, I might have been persuaded by the Government Chief Whip—my right hon. Friend the Member for Westmorland (Mr. Jopling). He has been with us for many years. Although silent, he has for many years been the protagonist of this cause. To the last he is here to ensure that everything that the water power users legitimately desire goes on to the statute book.
Both in Committee and in the House I have had many discussions with the hon. Member for Midlothian (Mr. Eadie) on various matters, including coal. I know him to be an honourable man in every sense of the word. I hope that he will listen carefully to my remarks. I share his blissful ignorance of the legal trade. Perhaps I should say "legal profession". Even at this late hour there is some inhibition about the word "trade". However, I am sure there is no such inhibition about that word in a mercantilist party. Those of us who are not privileged to be members of the legal profession will understand the difficulties of some outsiders. I think that I shall remove all the hon. Gentleman's doubts if I put certain matters on the record.
Water power has a modest but important energy potential for our country. The small users of water would 1084 like us to make the position as clear as we can. Amendment No. 7 would completely remove charges for the use of water as a source of energyif and so far asthe water is returned to the same source of supply. When clause 16 was discussed in Committee I set out fully the Government's view on the appropriate level of charges for the abstraction—a word that I know raises many hackles—of water for hydro power generation. I said then that hydro power could make a worthwhile contribution to United Kingdom energy supplies and that the Government wished to make sure that there were as few constraints as possible on the activities of small-scale hydro power users, and in particular that they were not inhibited by charges imposed by water authorities.
I explained that in December my hon. Friend the Under-Secretary of State for the Environment had written to the chairmen of the water authorities in England and Wales to point out the importance attached by the Government to the use of water for power generation. My hon. Friend suggested that anything seen as an obstacle to the development of hydro power should be removed. I am delighted to see my hon. Friend present tonight, showing the support that he has shown throughout on this important matter for water power users.
My hon. Friend also said that a good case could be made for charging for such abstractions only at a minimal rate, not calculated on a volume-related basis but covering only the administrative expenses of granting the licence. I went on to make it clear that it remained the Government's view that where the water charges might have an inhibiting effect on the use of water for power generation the principles set out in the Department of the Environment's letter of last December should remain the guiding principles.
That explanation is clear and specific. It represents an unequivocal assurance to water power users about the Government's position. We do not believe that it would be right to abolish all water charges for all hydro power users in all circumstances. The new clause on this matter, introduced in another place, recognised that it would be reasonable for a water authority to make a charge to cover any expenses that it might have incurred in ensuring the flow of water to the hydro scheme. It is also clearly reasonable that the water authority should be able to recover its administrative expenses in issuing a licence.
Circumstances will be different in different cases. That is why the Government's approach has been to leave the matter of the precise level of charges, if any, imposed in any individual case to agreement between the water authority and the water users, subject always to the general considerations set out in clause 16 and the right of recourse to the Secretary of State contained in section 60 of the Water Resources Act 1963.
I think that there is no disagreement in the House about the general objective that we are trying to achieve in the clause. We are trying to ensure that charges imposed on hydro power users do not make the hydro schemes concerned uneconomic. I believe that the clause secures that objective. It amends section 60 of the 1963 Act so as to require water authorities to have regard tothe need to conserve sources of energy … and the consequent desirability of preventing the charges in question from inhibitinghydro power usersfrom abstracting water to use as a source of power".1085 It will also provide hydro power users with a power of appeal, because section 60 contains a provision enabling water users, if a water authority does not agree to waive charges or to abate them satisfactorily, to refer the matter to the Secretary of State. Therefore, once clause 16 is enacted a hydro power user will be able to take such a dispute about charges to the Secretary of State for decision.
Amendment No. 7 goes well beyond what is proposed in the clause. It would abolish all charges for the use of water as a source of energy where the water is returned to the river from which it was taken, as it almost invariably is. I do not think that that would be reasonable.
I hope that in the light of what I have said about the Government's attitude to water power charges for hydro power generation my hon. Friend will feel able to ask leave to withdraw the amendment.
On amendment No. 8, my hon. Friend has raised the question whether the use of water for hydro power generation is an abstraction within the meaning of the Water Resources Act 1963. This is obviously a very important and crucial point. If a hydro power user is abstracting water he is required to obtain a licence from the water authority and pay charges. If he is not abstracting water he need not have a licence or pay charges.
The Government are aware that this is an issue on which opinions are divided. Three of the water authorities in England and Wales do not regard the use of water for hydro power generation as licensable. The majority, on the other hand, consider that where the water is diverted from a stream through a separate mill-race or channel an abstraction is taking place. But whether or not a particular individual water power user is abstracting water is ultimately a matter which only the courts can decide in the light of the particular circumstances of the hydro scheme. It is not an issue which the House is called on to decide today.
My hon. Friend has expressed concern that clause 16 as drafted might prejudice this issue. It might carry the implication that any use of water for power generation was necessarily an abstraction, so that the water power user would have to possess a licence and pay water charges. I can say categorically that this is not the case. Clause 16 adds a further provision to section 60 of the Water Resources Act 1963. Section 60 of the 1963 Act, as amended by the Water Act 1973, provides thatA water authority may, on the application of any person who is liable to pay charges to the authority for the abstraction of water under a licence under this Act, make an agreement with him either exempting him from the payment of charges or providing for charges to be levied on him at reduced rates specified in the agreement".Clause 16 would therefore affect only someone who is liable to obtain a licence and to pay charges to a water authority for the abstraction of water. It cannot be interpreted as creating a liability to obtain a licence or to pay charges. Whether or not an individual water power user was abstracting water and, hence, required to obtain a licence or to pay charges, is a matter which only the courts can decide. It is a question which has not so far been tested in the courts. But I am advised that the clause cannot possibly be regarded as prejudicing the question one way or the other.
Amending the clause in the way that my hon. Friend has suggested would not, alter the position at all, and I do 1086 not think that it would serve to clarify the intention of Parliament, since the intention is already clear—to make provision for the alleviation of water charges for hydro power use in particular cases where an obligation to pay such charges exists.
I am grateful to my hon. Friend for giving the House the opportunity to look at the matter again. As I said earlier, the Government fully share his concern that unreasonable obstacles to the development of hydro power—in particular, small hydro power schemes—should be removed. The Government's position—as I said in Committee, and as was explained again in another place—is clear and unequivocal on this point. I hope that my hon. Friend will feel able to accept the specific assurance that I have given about the effect of the clause and will seek to withdraw his amendment. But, at the same time, and recognising what my hon. Friend has said, if he does not feel able to do so, as the amendment makes no difference to the substance of the clause—I understand the worries and the concern that have been expressed throughout all the discussions—the Government obviously will accept it if it is pressed.
§ Mr. Crouch
My hon. Friend the Under-Secretary will realise that, as a non-lawyer, I am somewhat confused by his convoluted reply—helped, no doubt, by his legal advisers in the Department. It is quite clear that my hon. Friend and the Government are not prepared to go the whole hog and take belt and braces to safeguard the users of water power and the energy conservers, as I have tried to describe them, who are referred to in this clause.
I had hoped that my hon. Friend would say that he was prepared to encourage rather than inhibit these users of water power because they are practising the business of energy conservation. They use water as an energy source. They derive power from it but they do not abstract the water. My hon. Friend touched on that point but seemed to argue legally that what I suggest might be wrong. I am suggesting that the courts might find this wrong and might find against the users of water power in this way and permit high, or not-so-high, charges to be made by the water authorities.
My argument is that there should be no inhibition on people seeking to conserve energy. I am prepared not to press amendment No. 7—the whole hog or belt-and-braces amendment—to rewrite this part of the Bill so that there can be no doubt about the matter. I hope, however, in view of the plea that I now make, that my hon. Friend will realise that I feel strongly that he should recognise the views that I have expressed. There is a doubt in my mind and, I believe, in the minds of all water users. The rewriting of the clause as suggested in my amendment No. 8 is necessary to satisfy those who are not lawyers but who want to be certain in any court of law that there can be no misunderstanding about where they stand, that they are not inhibited, and that they are regarded as conservers of energy. I beg to ask leave to withdraw the amendment, but I urge acceptance of amendment No. 8.
§ Amendment, by leave, withdrawn.
Amendment made: No. 8 in page 15, line 43, leave out from 'inhibiting' to end of line 44 and insert
`the use of water as a source of energy;":.—[Mr. Crouch.]