Previous Section Back to Table of Contents Lords Hansard Home Page

The Duke of Montrose: I thank the Minister for her clarification. I feel much more at one with what the Bill is trying to achieve and what we are discussing. There is a problem that the usual channels may not always agree to a debate. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer moved Amendment No. 97:

"( ) to have regard to the Water Framework Directive and proposals for Water Framework Directive-related programmes when taking pricing decisions;"

The noble Baroness said: This amendment seeks to probe the water industry's thinking on Water Framework Directive-related programmes, which may well require actions to be undertaken that the Government consider fall under the proposed new subsection (3)(e), which is introduced by subsection (4) of Clause 38,

    Xto contribute to the achievement of sustainable development".

I do not believe that the measure is specific enough. For example, would the planting of a forest in a river basin catchment be the kind of issue that the water industry would have regard to when carrying out its duties? My noble friend Lord Livsey will give further examples. Will the Minister explain to what extent the water industry must take the Water Framework Directive into account as, at this point in time, the directive is not included in the Bill? I beg to move.

Lord Livsey of Talgarth: I shall expand a little on what my noble friend has said, particularly in relation to the Water Framework Directive. Article 9 of the directive refers to the recovery of costs for water services. It states that,

    XMember states shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis conducted according to Annex III".

It goes on to say that,

    Xwater-pricing policies provide adequate incentives for users to use water resources efficiently, and thereby contribute to the environmental objectives of this Directive".

It continues:

    Xan adequate contribution of the different water uses, disaggregated into at least industry, households and agriculture, to the recovery of the costs of water services, based on the economic analysis conducted according to Annex III and taking account of the polluter pays principle".

8 Apr 2003 : Column GC15

In proposing the amendment, my noble friend Lady Miller draws attention to the fact that Article 9 of the Water Framework Directive lays out its stall as regards the matter we are discussing. I refer to the statement that I have just read out. We should like to probe the Minister's thinking on the matter as it seems to me that what is laid out in the Water Framework Directive is eminently sensible when calculating pricing policies.

It indicates clearly that the social dimension has to be taken into account and states that,

    XMember States may in so doing have regard to the social, environmental and economic effects of the recovery as well as the geographic and climatic conditions of the region or regions affected".

Therefore, the social dimension should be taken into account in pricing policies. These are very important issues in relation to the Bill. The amendment seeks to probe the Minister's thinking on whether the Water Framework Directive needs to be integrated into the Bill?

Baroness Byford: I do not want to comment further on what has been said but we come back to the same question and difficulty—that is, that there are issues in the Water Framework Directive that cannot be included in the Bill. It puts us in a ridiculous situation and I wish to log my concern again. I understand why the noble Baroness has moved the amendment.

Lord Whitty: As the noble Lord said, the amendment would require the Secretary of State and the authority to have regard to the Water Framework Directive and its consequent programmes when taking pricing decisions. I do not think that anyone will argue with that. However, we do not need new legislation to do that as it is already in process.

The directive requires us to have regard to certain principles in the recovery of costs, notably the polluter pays principle. As a result of the directive, we have set out in our consultation that the water charging system in this country already takes such matters into consideration without legislative change being required.

We certainly recognise that the directive will require programmes of investment by water companies and others. A process for implementing the directive will identify exactly what needs to be done and the timetable. Once those programmes are defined as legal obligations on the companies under the directive, the Secretary of State and the authority will be under a duty to ensure that their financing carries through. At present that is a responsibility of Ofwat. There is already a very well established procedure—the periodic review of water price limits—under which Ofwat sets price limits relating to considerations now required by the directive. The obligation that companies must meet, and of which Ofwat must take account, will be clearly set out in guidance to the regulator. In January, as I said, we issued new guidance for the next periodic review. That set out how the Water Framework Directive should be treated for

8 Apr 2003 : Column GC16

the purpose of price limits in 2005 under the existing process. It is too early to say what investment will be required. Under the provisions of the Water Framework Directive, the indications may be that most of the investment will be required beyond 2010 but some schemes may need funding between 2005 and 2010, in which case the Water Framework Directive schemes will be included in the guidance that will be issued under existing legislation. There is no need for any new legislation in this field. We have therefore not provided new powers in the Bill.

Baroness Byford: I want to respond to the Minister on that. He clearly said that there is no need for that. The truth of the matter is that the Water Framework Directive will not be adopted until after we have passed the Bill; that is one of the arguments that we have had all along. It has huge implications. The Minister said that guidance was sent out to Ofwat earlier this year, if I understand him correctly—I listened quite carefully, I trust. He also said that there will be clear guidance to come in the future but that it was too early to say as yet.

We are being asked to take an awful lot of things on trust in the Bill in addition to giving the Government powers to do whatever, because we do not have any control over guidance. However, when we debate the Bill and primary legislation, we do have that. I again say that I find where we are unsatisfactory and will continue to say so throughout the Bill. The Government cannot have it both ways. They cannot say on the one hand that that is not necessary and, on the other hand, that we will clearly need to have guidance. Perhaps the Minister will comment on my comments.

Lord Whitty: The point is that we can and do issue guidance under present legislation; we have already done so in anticipation of the implications of the Water Framework Directive. We do not need new powers in that regard.

Baroness Miller of Chilthorne Domer: Before the Minister concludes, will he comment on paragraph (e) at line 27 on page 43? It refers to the need,

    Xto contribute to the achievement of sustainable development",

which is a worthy goal that I fully support. Is it necessary to have that in the Bill?

Lord Whitty: This involves the substitution of a section in the previous regulations, which updates it. Normally, I am pressed by the Liberal Democrats to include sustainable development on virtually every page of the Bill. I am not quite sure what point the noble Baroness is making.

Baroness Miller of Chilthorne Domer: My point is that when the Minister responded to the amendment, he said that the amendments tabled by myself and my noble friend Lord Livsey to the Water Framework Directive were not necessary because that would happen anyway. I suggest that it is necessary to have those amendments in the Bill. I would be very pleased if the amendment on sustainable development were included in the Bill.

8 Apr 2003 : Column GC17

If we keep ignoring the Water Framework Directive and do not include it in any of the matters to which the various bodies must pay attention, guidance will of course later refer to that. As we said at the beginning of the Bill's Committee stage, that is unsatisfactory in terms of the start of the process for introducing the most important piece of water legislation for the past 20 years. We should also consider the fact that if that is not included in the Bill, it will be seen as a less important issue than those matters that are included. If the Minister does not believe that that will be the case, I should be relieved. The fact that it is not in the Bill and is not primary legislation will make it appear to be a less important issue.

When I moved the amendment, I asked the Minister about a specific example. River basin management might require the planting of a forest, which is a very wide point for the water industry authority to take account of. As water cycle issues are increasingly taken into account, a company might be required to regard that as relevant. Without our amendment, the sorts of directive-related programmes referred to in the amendment will be seen as being less worthy than other issues in the Bill. I shall return to this on Report, when we will again discuss the Water Framework Directive. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.45 p.m.

Baroness Byford moved Amendment No. 98:

    Page 43, line 27, at end insert—

Next Section Back to Table of Contents Lords Hansard Home Page