 House of Commons |
Session 2006 - 07 Publications on the internet General Committee Debates Greater London Authority Bill |
Greater London Authority Bill |
The Committee consisted of the following Members:Gordon
Clarke, Keith Neary, Committee
Clerks
†
attended the Committee
Public Bill CommitteeTuesday 23 January 2007[Ann Winterton in the Chair]Greater London Authority BillFurther written evidence to be reported to the House for publicationGLA
5 Institute of Historic Building
Conservation.
New Clause 6Utilities
‘(1)
The GLA Act 1999 is amended as
follows.
(2) In section 351(3),
after paragraph (k)
insert—
“(l) the
efficiency of the suppliers of water and
energy,”.
(3) In section
351(4), after paragraph (c)
insert—
“(cc) the
suppliers of water and energy to Greater London or any part of Greater
London,”.
(4) In section
61, after subsection (5)
insert—
“(5A)
This subsection applies to persons holding the office of regulator of
any supplier of water or energy to Greater London or any part of
Greater London.”
(5) In
section 61(1) for “or (5)” substitute “, (5) or
(5A)”.’.—[Tom
Brake.]
Brought
up, and read the First
time.
Question
proposed [18 March], That the clause be read a Second
time.
10.30
am
Question
again
proposed.
The
Chairman:
I remind the Committee that with this
it will be convenient to discuss new clause 7—Water
and sewerage
strategy—
‘(1) In
section 41 of the GLA Act 1999 in subsection (1) after paragraph (ef)
insert—
“(eg) the
water and sewerage strategy prepared and published under section 361F
below.”
(2) In Part 9 of
the GLA Act 1999 (environmental functions) after section 361E
insert—
“361F The
water and sewerage strategy
(1)
The Mayor shall prepare and publish a document to be known as
“the water and sewerage strategy for
London”.
(2) The water
and sewerage strategy for London shall
contain—
(a) the
Mayor’s assessment as to the consequences of actual and planned
development of whatever nature upon the water and sewerage
infrastructre within Greater London;
and
(b) the Mayor’s
proposals and policies for ensuring the water and sewerage
infrastructure is adequate for the development referred to in
subsection (a) above.
(3) The
Secretary of State may give to the Mayor
guidance—
(a) about the
content of the strategy;
and
(b) in relation to the
preparation or revision of the
strategy.
(4) The guidance that
may be given under subsection (3)(b) above
includes—
(a) guidance specifying or describing the bodies,
persons or organisations which the Mayor must consult;
and
(b) guidance as to the
consequences of development to which the Mayor must have
regard.
(5) In preparing or
revising the strategy the Mayor must have regard to any guidance given
under subsection (3)
above.”.’.
Tom
Brake (Carshalton and Wallington) (LD): I had nearly
concluded my remarks, but shall recap for the benefit of
Members.
The
Chairman:
Order. I am reliably informed that the hon.
Gentleman had drawn his conclusions to an end in the previous
sitting.
Michael
Gove (Surrey Heath) (Con): It is entirely understandable
that the hon. Member for Carshalton and Wallington should have risen at
that point because when the clock stopped at five o’clock last
week, he was frozen in the middle of what I considered to be an
exemplary analysis of the requirement for the Mayor of London and the
Greater London authority to have a water sewerage strategy.
Talking of
things being frozen, many of us might remember that in April 2006 there
was a magnificent ice sculpture on the other side of the Thames that
contained galleries, a bar, an auditorium and, of course, a skating
rink. To construct that magnificent ice sculpture and provide that
tourist attraction, it was necessary to have 200,000 litres of water
frozen. What was striking was that the water was not British, but had
had to be imported from Canada simply to provide that attraction and
amenity for London citizens. I mention that because London, like many
parts of east and south-east England, is in the grip of an acute water
shortage.
Just one
month after we all enjoyed the ice installation, the Environment Agency
pointed out that there is less water in London, per head of population,
than in parts of the Sudan, Morocco, Egypt and Kenya. When one thinks
of the water situation, particularly given the last couple of weeks,
they are probably more inclined to think of flooding, inundation and
the effect that they have on homes and other insured properties.
Flooding is certainly a problem across the country, but the acute water
shortage faced by Londoners is chronic and goes beyond seasonal
alterations in
rainfall.
Martin
Linton (Battersea) (Lab): Did the hon. Gentleman write his
speech before the hosepipe ban was lifted three days ago, or did he not
notice?
Michael
Gove:
I am well aware that the ban has been lifted and I
am very grateful for it. I am particularly grateful that Sutton and
east Surrey had their ban lifted, allowing the hon. Member for
Carshalton and Wallington to water his garden this weekend, if he so
wishes. However, he will not need to, for the reasons that I mentioned
earlier—we had rather a lot of rainfall in Surrey, where I was
lucky enough to spend the weekend. [Interruption.] The hon.
Member for Chatham and Aylesford, from a sedentary position, refers to
Surrey, where I spent many happy hours.
Funnily enough, on Friday
night, while other hon. Members were perhaps watching “Ugly
Betty” or “Celebrity Big Brother”, I was presiding
over a flood
forum dealing with issues of flooding that have afflicted many parts of
south-east England. But as I said, while climate change can lead to
flooding in some parts of the country, it is also contributing directly
to the water shortages being faced by
Londoners.
Mr.
Andrew Slaughter (Ealing, Acton and Shepherd's Bush)
(Lab): I rise in part to query whether the hon. Gentleman
writes his speeches. I thought that they were more streams of
consciousness. On London’s water problems, does he agree that if
one single factor contributes to it, it is privatisation? My problems
with Thames Water are mainly down to the fact that its ownership
changes regularly and that the priorities of the management are always
its share price and investors, not the people to whom they supply
water.
Michael
Gove:
The hon. Gentleman makes an interesting point in
attempting to row back on privatisation. Of course, the question that
we must ask is whether it is now Government policy to invest a
considerable amount of public money in renationalising those
companies.
I incline
to the view—I think it is also Government policy—that
privatisation can bring particular benefits, but one needs a strong and
effective regulator and a clear role for publicly accountable and
elected representatives. On the specific point about Thames Water, the
company faces real problems in delivering water to Londoners and I am
aware that it loses something like 197 million gallons of water every
day. However, one point that we must bear in mind is that the
infrastructure of Thames Water has suffered because of a lack of
investment over many years, indeed over generations, in London’s
water and sewerage infrastructure. That lack of investment pre-dates
privatisation.
One of
the arguments for privatisation, not just of water but of railways, was
that private companies could bring capital in, which would enable them
to invest in upgrading an infrastructure that had been neglected when
water and rail were in public ownership. An argument that transcends
party politics—it is now just a matter of accepted common
sense—is that, when certain utilities are in public ownership,
what one may apparently gain in terms of public accountability, one
also loses in certain respects. That is because it is sometimes the
more unfashionable utilities—utilities that must rely on
Treasury funding to ensure that their infrastructure is up to
scratch—that lose out in the allocation of public money. That
has certainly been the case when one looks at the history of both water
and rail in this country. During the period when British Rail was
nationalised and water was a utility in public hands, I would submit
that both parties—Labour and the Conservatives—failed to
invest adequately. Since privatisation, private sector capital has
played a part in improving the water
infrastructure.
I
entirely sympathise with the hon. Member for Ealing, Acton and
Shepherd’s Bush when he argues that there is a lot more that
Thames Water can do. Thames Water serves my constituents in the same
way that it serves Londoners, and it is undoubtedly the case that many
of my constituents would like to see Thames Water raise its
game.
One way that Thames Water could
be more effectively equipped to raise its game would be if it operated
in partnership with a Mayor who had the power to set a strategic water
and sewerage policy. New clause 7 would give the Mayor that power. In
many respects, it is complementary to new clause 6. Although vanity of
ownership would incline me to believe that new clause 7 would be a more
effective way of achieving those aims, if the Government were minded to
accept new clause 6 and reject new clause 7, then, in the spirit of
public-spiritedness, I would entirely acquiesce in that manoeuvre. If
you are the Minister, you pays your money and you takes your choice
between those two options.
The position that Londoners
face when it comes to their water supply is precisely the type of issue
that should allow us to transcend party political trenches. That is
why, although the Conservatives have been characterised as being
opposed to Mayor Livingstone and anxious to clip his wings, we are
joining the Liberal Democrats in proposing that this Mayor or future
Mayors should have greater power and authority to shape a water
strategy.
The hon.
Member for Battersea pointed out that the hosepipe ban has been lifted
recently, and we all welcome that development. However, many of us
would ask why the hosepipe ban, which we would expect to be an
emergency measure introduced only perhaps during the summer or periods
of drought, lasted until the middle of January. Those of us who
remember last summer in London will remember the use of standpipes, the
fact that vans were delivering drinking water to some neighbourhoods
and that those vans had “Ban the drought” on the side of
them. We will all remember the effect that hosepipe bans had on
particular households.
I suspect
that we are also all aware that the level of water usage in London is
particularly high, in both national and European terms, with figures
suggesting that the average Londoner uses between 160 and 170
litres of water a day.
There are already agencies that
have helped to ensure that Thames Water fulfils its obligations, not
just to its shareholders but to its stakeholders, as I am sure the hon.
Member for Ealing, Acton and Shepherd’s Bush would wish to see.
Ofwat has made a number of suggestions as to how Thames Water might
raise its game. However, with respect to the hon. Gentleman, Thames
Water is not the only player in this game. There are things that can be
done by others. For example, we can try to ensure that new housing
developments are as water-neutral as possible. We can introduce
measures in such developments that will enable people to monitor more
accurately, and thereby limit, the water that they use without having
an adverse impact on their lifestyle or their family
obligations.
Moreover, London’s water
position links in with the water position of neighbouring areas. To
meet London’s water needs, Thames Water is planning to build a
reservoir in Oxfordshire. It therefore seems appropriate that the Mayor
should have a role in negotiating with other local government and
central Government bodies to ensure that any water strategy for London
is a joined-up
phenomenon.
We
heard earlier in the debates on both planning and housing about how
London, if it is to survive as a
successful global city, will need new housing
development. If it is to have such development and if that development
is not to impact adversely on the quality of life of London’s
existing residents, we need a coherent way of dealing with water and
sewerage supply. Our new clause and that tabled by the Liberal
Democrats offer competing but complementary ways of providing provide
that, and I hope that the Minister will look favourably on either of
the
proposals.
The
Parliamentary Under-Secretary of State for Trade and Industry (Jim
Fitzpatrick):
Good morning, Lady Winterton. It is a
pleasure to see you this morning, refereeing our final
sitting.
The
new clauses would extend greatly the Mayor’s responsibilities
for energy and water companies. New clause 6 would require him to
detail in his state of the environment report the efficiency of
suppliers of water and energy services in the Greater London area. The
Mayor is already required to report on water quality, emissions to
water, ground water levels, energy consumptions, emissions of
greenhouse gases, and any other matters in relation to Greater London
that he considers appropriate. That requirement already ensures that
the Mayor will be reporting on fundamental energy and water issues
relating to
London.
Tom
Brake:
Clearly, the Minister is setting out the effect of
the new clauses, but does he agree that one significant omission in the
Mayor’s responsibilities is water leaks over which he currently
has no
remit?
Jim
Fitzpatrick:
I hope to explain later to the hon. Gentleman
why we think that what the Mayor does at present is adequate and why
the additional requirements proposed under new clauses 6 and 7 would be
burdensome, bureaucratic and unnecessary. Perhaps the hon. Gentleman
will attract my attention if I do not respond fully to the issues that
he has
raised.
It
is unclear what value the new reporting requirements would add. The new
clause would duplicate the ongoing work carried out by the economic
regulators for such sectors. Extensive reports on the efficiency of
water and sewerage companies are already published by Ofwat. Each year,
water companies in England and Wales, the Environment Agency and the
drinking water inspectorate provide information to Ofwat on the
performance of companies against various aspects of service and
performance. Through that process, Ofwat can make comparisons and
assess publicly the efficiency of individual companies against
well-established standards of
performance.
Ofgem
similarly oversees the efficiency of the national transmission and
regional distribution of energy in the United Kingdom, and the
operation of effective competition in the UK wholesale and retail
energy markets. It ensures that suppliers meet environmental
obligations, for example under the energy efficiency commitment. Ofgem
produces regular reports on the state of competition and quality of
service in the United Kingdom energy
markets.
The interests
of London water and energy consumers in respect of the companies that
serve them are already defended ably by Ofwat, the Consumer Council for
Water, Ofgem and, pending the creation of
a new consumer body that will replace it,
Energywatch. The Secretary of State has also directed the Consumer
Council for Water to maintain a statutory regional committee in the
Thames area. It is difficult to see how providing the Mayor with
similar duties in respect of water and energy companies could be
justified.
New
clause 6 would simply create additional bureaucracy and, I suggest,
could be seen to be a waste of public funds. It would also give the
assembly powers to require water and energy regulators to appear before
it and to produce documents. Currently, the assembly has powers to
summon certain categories of people to give evidence at its meetings
and to produce documents as we discussed earlier in Committee. However,
at present. they are people with whom it has a direct relationship,
such as assembly members and
contractors.
10.45
am
The
new proposed power is wide-ranging and would set an important
precedent, significantly widening the power of the assembly to require
organisations working in London, with which it does not have such a
direct relationship, to appear before it. It would also be an entirely
new departure to extend the power to national and independent economic
regulators who, by virtue of their statutory duties, are answerable to
Parliament rather than the assembly. Those regulators regularly appear
before various Committees of the House to report on their functions.
Water and energy companies also occasionally appear before Committees
to contribute to other aspects of those Committees’
work.
New clause 7
will give the Mayor a duty to produce and keep under review a water and
sewerage strategy that will include proposals and policies for ensuring
that the water and sewerage infrastructure is able to cope with
“actual and planned” developments. That would, in effect,
make the Mayor another water regulator in an already heavily regulated
area. The water sector in England has three core regulators: Ofwat, in
relation to economic regulation; the drinking water inspectorate, which
looks after drinking water quality; and the Environment Agency, which
is responsible for water resources and the
environment.
On
development, the Environment Agency is already a statutory consultee in
relation to sewerage infrastructure and water and sewerage companies
are consulted locally when new developments are being considered. The
Environment Agency advised Ministers as recently as last September that
large-scale water transfers for south-east England are not currently
necessary before 2025. However, development matters relating to water
and sewerage infrastructure are already under consideration by
regulators and the companies. Water companies already produce long-term
water resources management plans and that is due to become a statutory
requirement, with effect from April this year. Those statutory plans,
which will be published, already make provision for additional people
living in and around London and the
south-east.
The
regulation of water is also more complex than that of other utilities.
Regulation is based on water company areas, which are largely based on
river catchment boundaries rather than political borders. Any policies
or proposals that meant increased expenditure in London, for example,
by Thames Water, would have an impact on the water bills of all Thames
Water customers, including those outside the Mayor’s
jurisdiction.
The net effect of new clause 7
on the regulation of water would be to reduce the discretion of
regulators and water companies without giving the Mayor any additional
real powers. It would also duplicate much of what happens already. It
is possible that there would be implications for customers who fell
outside the Mayor’s
jurisdiction.
I
understand that the Mayor intends to produce a non-statutory water
action framework for London. That could usefully add to the debate on
water resources and water efficiency. The Secretary of State for
Environment, Food and Rural Affairs has already said that he will take
that into account in the run-up to the next price review for the water
sector. I hope that the hon. Member for Carshalton and Wallington will
ask leave to withdraw the motion and
clause.
Tom
Brake:
I understand what the Minister said regarding the
extra regulation that would be created if my amendment were included in
the Bill. I will not pursue new clause 6, but I hope that the Minister
asks the regulator about the failure to date of Thames Water
significantly to eat into its high leakage rate. I beg to ask leave to
withdraw the
motion.
Motion
and clause, by leave,
withdrawn.
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