Does bigger mean cleaner?

A monolithic environmental agency could do more harm than good, says Ni cholas Schoon

You ask for something again and again, because you really want it. Finally, after dithering for ages, they agree. Eagerly you unwrap the gift and find they've given you the wrong damn one. It's an inferior version and the batteries aren't included . Britain's environmental pressure groups find themselves in just such an ugly Christmas morning scene.

For nigh on a decade they have been calling for a broad-ranging, powerful environmental protection agency. At the last general election all three main parties promised to create such a creature, and now the Tories are finally delivering. The Government'sEnvironment Bill began its journey through Parliament just before Christmas and the Environment Agency should be fully operational before the next election.

But instead of rejoicing, green groups argue that unless the Bill is much amended, the agency will be severely compromised. It may even do more harm than good, they say. Labour, unsurprisingly, agrees with them.

England and Wales already have a fairly effective environmental agency in the shape of the National Rivers Authority. It has become well known since its birth in 1989 (fining Shell £1m for an oil slick in the Mersey Estuary was a good start) and has helped to reduce pollution in rivers, lakes and coastal seas. The new agency will swallow up the NRA - which could be a retrograde step if it turned out to have weaker powers.

John Gummer, Secretary of State for the Environment, is also feeling bruised and let down. He struggled with sceptical Cabinet colleagues to get the Bill into the legislative programme; and now all the environmentalists can do is carp. He has publicly asked them to lay off.

Britain already has an elaborate system for controlling pollution. Broadly speaking, if you carry out any activity that releases harmful substances into the environment, be they solid wastes, liquids draining into a river or gases coming out of a chimney, then you need a license. The authority granting it - which may be local or national - should set limits that reflect what the environment can absorb. It should also monitor and crack down on those who pollute without a licence or ignore its constraints.

In England and Wales, Her Majesty's Inspectorate of Pollution regulates all the emissions of the largest, most polluting industries (such as chemical works, power stations and oil refineries). The National Rivers Authority, created at the time of water privatisation, controls water pollution. And councils are responsible for keeping tabs on the air pollution caused by smaller industries and solid waste being dumped at landfill sites.

When the Bill becomes law Scotland will have an environment agency of its own. The larger body covering England and Wales will bring the NRA, the pollution inspectorate and local authority staff into one very large quango with 9,000 staff and a budget inexcess of £500m.

What could justify the creation of this monolith? First, simply by being one large and, hopefully, well-run body instead of many smaller ones it will give environmental protection more clout. Second, it will allow a holistic approach to the regulation ofindustrial pollution, making possible overall assessments about net damage to air, land and water, rather than defending just one domain. And third, industry will have a "one-stop shop" when seeking licences. The green groups heartily agree with all three justifications. What has upset them are parts of the Bill that set out the agency's overall duties and responsibilities. For instance, there is no legal duty on the agency or the Government to further the conservation of nature in respect of its pollution control function, only a duty "to have regard to the desirability" of conservation.

Weasel words, say the environmentalists. The National Rivers Authority has a duty to further the cause, so why shouldn't the successor agency? The Government's answer is that it is a contradiction to give a body which sanctions the discharge of pollutionsuch a duty; with hindsight, it says, the legislation underpinning the NRA was a little confused.

And then there is Clause 37, which states that the agency must "take into account" costs as well as benefits when exercising its powers. This, say the critics, gives any polluter who does not like being told to clean up a ready opportunity to mount a legal challenge, on the grounds that the quantifiable costs of buying and installing pollution-abatement equipment would outweigh the unquantifiable green benefits.

Why, ask green lobbyists, is there no mention in the Bill of the "precautionary principle" which environment ministers have been talking about for years? This holds that if there is a real possibility that any activity might do severe environmental damage then it should be curbed or banned. And why are most of the overall aims and objectives of the agency being left to guidance which ministers "shall from time to time give"?

While these are reasonable doubts, the critics should look up from the fine print of the Bill. They ought to realise that who will run the agency and how well it will be funded will be just as important, possibly more so, than the underpinning legislation.

The NRA's strong identity and success were largely due to its chairman, Lord Crickhowell, who served for years as Margaret Thatcher's Secretary of State for Wales. He was no environmentalist (his Cabinet legacy is the Cardiff Bay barrage, which is wipingout a Government-designated wildlife site), but when he moved to the NRA this Government-appointed safe pair of hands "went native". He worked hard, he was a political operator and he was determined to ensure that the authority lived by its simple, if slightly clumsy, subtitle - "Guardians of the Water Environment".

John Gummer's choice for the chairman of the new agency caught the green groups completely by surprise. It is to be Lord De Ramsey, a former president of the Country Landowners Association. He is a Tory hereditary peer with a lot of land in Cambridgeshire and a passion for motor racing. On the other hand, he has created some wildlife habitat (planted lots of trees, dug ponds) and when he chaired Cambridge Water Company he launched an important legal action against a polluter.

Lord De Ramsey is an unknown in environmental circles, as are some other members of the eight man and one woman board. Its membership does however include one mainstream environmentalist, a professor of ecology, two members of the NRA's board and two toppeople from local councils which have taken pioneering environmental initiatives.

The greatest threat to the agency's effectiveness is that the Government will starve it of funds and staff. Mr Gummer is not very good with the Treasury. Housing and local government finance were slashed in the Budget and both Her Majesty's Inspectorate of Pollution and the NRA complain, justifiably, that after growing rapidly since the late Eighties they are now under severe financial strain. Environmentalists should worry more about money than about the Bill now going through Parliament.