Examination of Witnesses (Questions 60-75)
ENVIRONMENT AGENCY
5 DECEMBER 2005
Q60 Jon Trickett: But I thought you
were just saying that they were charged by the efficiency with
which they were operating.
Baroness Young of Old Scone: No,
I was not saying that they were charged by efficiency. I was saying—
Q61 Jon Trickett: The record will
show that that is what you said.
Baroness Young of Old Scone: Giving
them a true price signal is an incentive for them to use water
more efficiently, so if it is an area with a very expensive water
charge, they need to understand just how expensive that water
charge is.
Q62 Jon Trickett: It is not a measure
of their efficiency. It is a measure of your inefficiency, is
it not?
Baroness Young of Old Scone: I
do not think it is anything to do with our inefficiency.
Q63 Jon Trickett: The charges relate
to your costs and not to the costs of the water authority, do
they not?
Baroness Young of Old Scone: The
charges are related to some of the very real, underlying elements
of the cost, including things like capital assets, the differences
in geo—
Q64 Jon Trickett: It is nothing to
do with their efficiency whatsoever then, is it, really? It is
to do with your efficiency and the historical pricing, is it not?
Baroness Young of Old Scone: I
am merely trying to outline how truly reflective costs can often
help drive efficiency and use of resources. This is a fundamental
principle of environmental charging.
Q65 Jon Trickett: No, but the fact
of the matter is you are not convincing the Committee at all,
since the costs in Northumbria, for example, are the highest in
the whole country, table 10, and do not at all reflect the efficiency
or otherwise of the water company. They reflect the historical
fact that Kielder reservoir is there and regulating the flow down
the Tees and the Tyne, does it not?
Baroness Young of Old Scone: But
in fact, when you look at the Northumbrian charge, the amount
that we charge Northumbrian in respect of Kielder is paid back
to them by an equal and opposite amount that they get from us
for the services that they provide for Kielder, so in fact, the
vast majority of that unit charge to Northumbrian is simply a
book entry in respect of the Kielder settlement that was made
in the past.
Q66 Jon Trickett: Paragraph 2.9 begins
with the statement "An inconsistent approach to cost allocation
means that water resources are unintentionally subsidising flood
risk management work." That is written in the present tense,
and you have signed this Report off. I think you are now telling
the Committee that that is not accurate, because you are saying
this is a historical statement and it should be in the past tense.
Is this still a correct statement or is it not?
Baroness Young of Old Scone: The
work to produce this Report was, of course, in 2003-04.
Q67 Jon Trickett: So is it still
a correct statement or not?
Baroness Young of Old Scone: —and
we have now adjusted £300,000 in 2005-06 and will be adjusting
something in excess of £1 million in 2006-07.
Q68 Jon Trickett: That accounts for
paragraph 2.12, with which I started these questions then. That
is just over £1 million. The figure which I quoted at the
beginning of my questioning was between two-thirds of £1
million and £1.7 million. Is that the same money?
Baroness Young of Old Scone: Certainly,
for the transfer of contributions from the water resource budget
to the flood risk management budget, we are saying something in
excess of £1.3 million and possibly more. We have not yet
finalised that figure.
Q69 Jon Trickett: If I can just get
a final question in then, because my time has expired, would the
regional variations be smoothed out by this one point odd million
pounds that you have taken out? No?
Dr King: No.
Jon Trickett: I wonder if you could provide
us with a note as to what the regional variations will be once
this efficiency process has been completed.[4]
Q70 Mr Bacon: I would like to ask about
East Anglia. Land owners in my constituency, which is immediately
south of the Broads in Norfolk, the River Yare between Norwich
and Yarmouth defines the north-eastern border of my constituency,
have been approached by the Environment Agency, with the Agency
seeking to buy land in order to flood it. Can you tell me why
you are trying to reduce the land area of my constituency?
Baroness Young of Old Scone: I
can assure you it was not a personal thing. Very often, flood
risk management is more efficiently carried out by producing areas
where waters can be directed at times of floods and held in order
to protect other areas. This is as efficient a way of providing
flood risk management protection as building, for example, a wall
or—
Q71 Mr Bacon: It is basically letting
the sea come inland rather than dealing with it at the coast,
is it not?
Baroness Young of Old Scone: In
many cases, we will be looking quite extensively at where a softer
sea defence is a more effective one than a harder one, and that
may mean some coastal areas do reduce their land.
Q72 Mr Bacon: You are basically giving
up on defending the coast, are you not?
Baroness Young of Old Scone: We
are not giving up on defending the coast because there are many
national assets on the coast, economic assets, towns and villages
and other installations. For example, not very far from your constituency
we have a nuclear power station. We certainly will not be giving
that up to the sea.
Q73 Mr Bacon: No. You are talking
about Sizewell, are you?
Baroness Young of Old Scone: Yes.
Q74 Mr Bacon: North of there, which
is where I am talking about, slightly north of Great Yarmouth,
as I understand it, I was actually boating on the Broads this
summer and someone pointed out to me a bridge where they said
the Environment Agency's soft defences begin, and it is miles
and miles inland. I just wonder why it is that we are not committed
to protecting the existing land area. Do you think that in Holland
they would be prepared so easily just to give up areas of land
like that?
Baroness Young of Old Scone: We
are looking right along the coast at what the most effective flood
defence measures will be and in some cases—
Q75 Mr Bacon: Do you think Holland
would be prepared to give up areas of land as easily?
Baroness Young of Old Scone: Much
of Holland's land is artificially created and they have taken
a very different strategy from ours, but you have seen in the
past, and indeed, the Dutch themselves are beginning to worry
about the huge vulnerability if there is substantial land below
sea level behind their flood defence, which is fine as long as
the flood defence is not overtopped, but if it is overtopped,
it is catastrophic. So we have to look at the most robust and
sustainable way of defending people and property right down the
east coast.
Mr Bacon: Is it possible you could send
the Committee a note about this? [5]
Particularly with reference to East Anglia, but I think generally
it would be of interest as well. Thank you very much.
Chairman: Mr Bacon's colleagues have
been trying to get rid of him for years. Thank you very much.
That concludes our questioning.
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