When I last wrote to you about these proposals on 23 July 2007,[72] it was in the expectation that I would be giving you oral evidence on them this autumn, ahead of any likely decisions in Brussels. In the event it has not proved possible for your Committee to identify a suitable date for this, so I am writing now to bring you up to date ahead of the next Environment Council on 20 December, at which we believe the Portuguese Presidency will be seeking political agreement on a compromise text which is still under active discussion. I am also taking the opportunity to give you a preliminary report on the public consultation exercise which closed on 19 October and to inform you that a further version of our Regulatory Impact Assessment is nearing completion.

PROGRESS AT COUNCIL LEVEL

  The Portuguese Presidency has made a major effort to progress this dossier since July with a view to reaching political agreement at the December Environment Council. Discussions are currently taking place on the basis of a Presidency compromise, which is being further revised in the light of Member States comments. As this is a negotiating text it is not a depositable document. However it now seems likely that this (or a variant of it) will be the basis on which Council agreement is sought, rather than the Commission proposals as originally tabled.

  In the Presidency compromise some useful changes have been put forward that provide additional flexibility. But there have also been some additions to the scope of the Directive. Key positive changes include:

— The focus of the Directive has shifted towards the sustainable use of soil rather than simply soil protection. This approach is more in keeping with the principles of sustainable development recognising the importance of considering current social and economic pressures as well as environmental protection.

— Articles 6 and 8 have been amended to give Member States more flexibility by making it clear that it is for them to decide on levels of risk acceptability, risk reduction targets and the measures they consider appropriate to achieve these targets.

— The duty to provide soil status reports now no longer includes an obligation to undertake detailed chemical analyses.

— The provisions on soil sealing give Member States greater discretion.

— Some additional clarity for example in relation to the boundaries between coverage of the Soil Framework Directive and the Water Framework Directive.

  There has, however, been less progress on other points of concern to the UK, specifically:

— Soil contamination (Article 10-14): these provisions remain prescriptive and potentially onerous. They require identification of an extensive list of potentially polluted sites, including chemical analyses on those sites where a significant probability of risk cannot be ruled out. The costs of this have been estimated at between £2.4billion and £5.8billion over a 25 year period.

— Soil sealing (Article 5): although the Presidency has amended the text to require measures where they can "reasonably be required" the inclusion of this provision continues to raise issues about the potential impact on plans for regeneration and development.

— Preventative provisions (Article 4): these remain broad and open-ended and do not explicitly take account of existing EU and national legislation especially in relation to the prevention of soil pollution.

— Identifying areas at risk of degradation and programmes of measures (Article 6-8): The procedure for identifying these areas remains rigid, the relationship with existing EC legislation and domestic measures remains unclear as does the extent to which restoration of soil functions is required.

  In addition, the scope of the Directive has been broadened to cover acidification, and, to put more emphasis on restoration of soil functions and the protection of soil biodiversity.

  The United Kingdom's concerns on these issues are shared by a number of other Member States and discussion of further possible compromise texts continues.

EUROPEAN PARLIAMENT

  The European Parliament completed its first reading of the proposals on 14 November, adopting by 510 votes to 160 a substantially amended text.

Some of the amendments voted by the European Parliament would help to bring the Directive more into line with principles of subsidiarity, proportionality and better regulation, particularly in respect of:

— Identification of "priority areas" (Article 6-8): greater flexibility for example by making Annex I, which sets out the methodology for identifying these areas, indicative.

— Soil Sealing (Article 5): inclusion of a threshold for additional regulation of soil sealing and recognition that this needs to be considered within the broader context of sustainable development (see recital 13).

— Contaminated land (Article 10-14): a shorter list of potentially polluting activities reducing the number of potentially polluted sites identified.

— Preventative measures (Article 4): a higher threshold at which action must be taken.

  But the European Parliament's text makes also certain additions to the scope of the Directive. For example it would require codes of practice on soil sealing (Article 5); add a further obligation to monitor the state of soils which goes beyond what is currently required (Article 5(a), require the identification of "priority areas" in respect of additional threats including subsidence, desertification, and soil biodiversity loss as well as acidification; and make the duty in respect of pollution prevention more complex and potentially burdensome (Article 9).

  The Council has yet to take a view on these amendments, but it is already clear that a first reading agreement will not now be possible.

UK PUBLIC CONSULTATION

  A full GB public consultation has been carried out and a summary and analysis is in the process of being finalised. 68 responses UK-wide and 19 relating to Scotland only were received from a wide range of stakeholders, including NDPBs, local authorities, the agricultural community, the property, development and construction sectors, environmental groups and others. The key messages to emerge from the consultation exercise were:

— On contaminated land, the proposals were too restrictive and burdensome with a number of calls for the proposals relating to soil contamination to be dropped altogether.


— On soil sealing, mixed views with the environmental and research sectors supporting additional regulation primarily on the grounds of reduced flood risks. Industry were far more negative as to the need for additional legislation.

— General support for the principle of a risk-area/programme of measures approach to soil degradation threats but with strong support for greater flexibility for Member States as to how they address risks, and clarity that they may use existing measures and also non-regulatory measures such as voluntary codes as well as regulation.

— Overall, the environmental NGOs, environmental protection agencies (Environment Agency, Natural England included) and soil scientists/research bodies were in favour of an EC Directive and industry and agriculture were against.

IMPACT ASSESSMENT

  An updated version of the initial Regulatory Impact Assessment is in preparation. The key conclusion that this Directive is likely to present disproportionate costs remains. Our current best estimate of the costs of implementing the Portuguese Presidency text are that they would be in the region of £3.3—5.7billion over a 25 year period. However as the Presidency text is in the process of revision these costs may change in the next few weeks.

UK POSITION

  The Government's position remains broadly as previously indicated. We do not believe the Commission's proposals are sufficiently proportionate or evidence-based, or that they are sufficiently consistent with the principles of subsidiarity and better regulation. The Presidency compromise appears to be moving in a more positive direction, but further work is needed before we can judge whether an acceptable text will result. On present expectations the Presidency will be pressing for political agreement in December, on a basis which is not yet clear. It is therefore likely that we will not be able to determine a final UK negotiating line before your Committee next meets or before the House rises for the Christmas recess. In those circumstances it may be necessary for us to take a position without clearance, in which case I would write in the usual way to explain what has occurred.

30 November 2007

  Your letters of 23 July 2007 and 30 November 2007 were considered by Sub-Committee D at its meeting of 12 December 2007.

May I first take this opportunity to thank you for agreeing to give evidence to the Committee in the autumn and we very much regret that it has not been possible to arrange a date due to a range of pressures on the Committee's evidence programme.

  Your most recent letter offers a useful summary of progress in Council. We continue to believe that any legislation must be fully justified. Like you, we do not consider that the proposals are sufficiently proportionate or evidence-based, or that they are sufficiently consistent with the principles of subsidiarity and better regulation.

  Your letter refers to the potentially high costs of the Presidency compromise text and we would share your concerns on that issue.

  We note that you have not yet decided on your final negotiating line for the Council meeting but that you will be pressing for more flexible and less burdensome legislation, an objective with which we agree.

  Sub-Committee D will meet on 19 December and would have an opportunity to consider at that meeting any further information prior to the Council meeting on 20 December.

  We have decided to maintain the proposal and the Strategy under scrutiny and we urge you to keep us informed of developments.

13 December 2007

  I am writing in response to your letter of 13 December to inform you of the outcome of discussions at the Environment Council on 20 December.

As you will know the Portuguese Presidency were seeking to achieve political agreement on this dossier and tabled a number of compromise texts for this purpose. However, despite their best efforts Ministers were unable to reach political agreement.

  In a final table round the UK joined Austria, France, Germany and the Netherlands in indicating that the changes did not resolve a number of outstanding issues, particularly in relation to provisions on contaminated land and soil sealing, or do enough to bring the proposals into line with the principles of better regulation and subsidiarity, in order to avoid unnecessary additional administrative burdens and disproportionate costs.

  The UK nevertheless made it clear that it remained supportive of the aims of the Commission's Thematic Strategy for the protection of soil and of the need for all Member States to take action to improve efforts to preserve this vital natural resource.

  The Slovenian Presidency has yet to indicate whether it intends to continue work on this issue.

14 January 2008