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The demand-side management options that water companies have to consider include leakage management—the hon. Gentleman raised that point. Controlling leakage
is a vital component in the management of supply and demand for water. Since 1994, Thames Water has reduced leakage by a third, and I am grateful to him for acknowledging that. It has achieved that progress in part through its commitment to replace more than 1,500 km of mains by 2010, and the programme will continue with increased mains replacement up to 2020. It has also achieved the leakage targets set by Ofwat in each of the past two years. Those targets are set to reduce the leakage of each water company to the economic level of leakage below which it would cost more to address the leak than to produce water from an alternative source. Thames Water is on track to reduce leakage to that economic level by 2009-10.
The water saving group, of which I will be the chair, has made significant progress in the development of a programme of measures to promote water efficiency in households. That includes a project led by Waterwise, working with water companies, to update the evidence base of the cost-effectiveness of water efficiency measures. We have amended regulations to allow water companies in areas of serious water stress, including Thames Water, to consider compulsory metering as part of their water resources management plans. I welcome the hon. Gentleman’s comments on that. Ofwat has also consulted on proposals for water efficiency targets for water companies and an independent review of charging will look at options for metering water supplies.
The hon. Gentleman referred to the figure of 130 litres per person per day. That is an aspiration within “Future Water”, not a target that must be met. It represents our view of what could be achievable by 2030, through cost-effective measures, if all stakeholders—water companies, manufacturers, retailers, plumbers, consumers and others—acted together in a concerted way to manage demand. Water resources management plans contain a water company’s view of future per capita demand based on its own assumptions and modelling.
I am unable to comment, while the statutory process is ongoing, on the contents or merits of Thames Water’s
plans, although the hon. Gentleman is obviously free to do so, as he has done. Water companies need to consider all these options to ensure that the most cost-effective option is chosen, so that customers’ bills are not higher than they need to be. In the cases where demand management by itself does not achieve a sustainable supply-demand balance, or is not cost-effective, new or enhanced supply needs to be considered.
I am sure that the hon. Gentleman will understand that while those plans are following the statutory process, it would be inappropriate for me to prejudge any decisions that my right hon. Friend the Secretary of State might make on the evidence presented. Should Thames Water’s final water resources management plan include a proposal for a reservoir near Abingdon, the water company would nevertheless still need to obtain development consent. Under the terms of the Planning Bill that is making progress through Parliament, that scheme would be a nationally significant water infrastructure project, as the hon. Gentleman acknowledged, and as such, Thames Water would need to apply to the infrastructure planning commission for development consent. However, if Thames Water sought development approval before the Planning Bill proposals reached the statute book, it could apply to the Secretary of State for a compulsory works order under section 167 of the Water Industry Act 1991 or to the local planning authority for planning permission. Again, I will not comment on the merits of any application or prejudge the outcome, because that might fetter the Secretary of State’s discretion in making decisions about any proposals that come before him.
As I said to the hon. Gentleman, I would normally like to respond in greater detail to some of the questions that he rightly asked on behalf of his constituents. I know that he will continue to raise their concerns as the process develops. I undertake to draw his comments to the attention of my right hon. Friend the Secretary of State.
Adjourned accordingly at twenty- five minutes past Six o’clock.
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