Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 135-139)




  135. Good morning. Can I welcome you to the second session of the Committee's inquiry into the draft Water Bill. Is there anything you want to say by way of introduction?

  (Ms Taylor) If I may say something that will last less than two minutes, Water UK is the industry association which represents all the water companies in England and Wales and the public water authorities in Scotland and Northern Ireland. We are very pleased that you have decided to hold your own inquiry into the draft Bill and we are very pleased to have this opportunity to answer questions about our evidence. We believe that a new Water Bill is needed now to set a coherent national water strategy after an open debate with all our stakeholders. The aim of the strategy should be long-term sustainability and we mean sustainability in its fullest sense covering economic, social and environmental objectives. In the water industry, we have to meet objectives in all three areas of sustainability and, as you will indeed know, striking the right balance can, of course, lead to disagreements between all parties in the absence of an overall strategy. We are keen that the Water Bill should lead to better and more consistent regulation in the interests of all our stakeholders, whichever set of objectives those stakeholders' interests may hold, and that is why we have drawn particular attention in our evidence to the regulatory regime and also the proposals for changes to abstraction licences. In conclusion, although we would like to see some improvements to the draft Bill, of course, we feel that, as Water UK, we have a responsibility to work constructively and we intend to work constructively both with your Committee, with the DETR, and of course with our regulators.

Mr Blunt

  136. That is an interesting introduction. You have been admirably diplomatic in that statement. Perhaps you could tell us what your opinion is of the proposed new regulatory regime for Ofwat and its associated bodies in the draft Bill?
  (Ms Taylor) I think what we would like to see is an improvement in terms of regulation in general. Nobody would say that the outcome of the last price review, the last periodic review, was entirely satisfactory. There were conflicts that were not resolved and there were disagreements and misunderstandings, not just up until the end but after the end as well, and that can hardly be a definition of a perfect process. The Environmental Audit Committee, indeed, made some recommendations for the way forward. Certainly, as far as we are concerned, we would like to see this Bill take the opportunity to look at matters that need to be addressed and to take those points forward and we feel that at the moment, as the Bill is drafted, it is missing an opportunity in terms of looking at what needs to be done in terms of bringing the regulators together through the DETR, if you like, holding the ring. So we feel an opportunity is being missed at the moment in terms of the Bill and the way it is laid out.

  137. Does that mean you are unhappy that the Regulator will remain as an individual?
  (Ms Taylor) No, we are not necessarily particularly concerned one way or the other as regards the Regulator being an individual or has a panel or is a panel or whatever. What we would like to see is clarity as regards the way in which that is set up, whatever is set up. If we look back to Ofwat in the past where there was a panel of industrial advisers to the Regulator, Ian Byatt as it was then, we do not know what advice was given by those people: we asked repeatedly for whatever advice they gave to be made available to everybody, not just to us, and it never was. So certainly, as far as we are concerned, we believe that what we need is clarity—not just for the water industry but for everybody who has an interest, all of the stakeholders.

  138. Have you had a chance to review Dr Helm's evidence to the Committee last week?
  (Ms Taylor) Yes, we have.

  139. What is your view? Dr Helm was extremely clear on this point, and I have to say so far you do not seem to be entirely clear as to exactly what structure you would like. He was very clear that what is proposed in the Bill is the worst of all three options which is a compromise between having a board, which was his preferred option, or an individual properly empowered. What is the view of Water UK?
  (Ms Golay) Our view is that this matter is not as important as the output of regulation, and there are risks if you complicate regulation, with too many bodies and overseeing commissions, that indeed the matter might become too complicated but eventually what we are interested in is the way regulation is carried out—the decision-making processes, whether they are transparent and whether they take account of the consultations they engage in, and whether the outcome is clear when it is delivered.

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