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Water Bill [HL]

7.37 p.m.

Lord Whitty: My Lords, I beg to move that the Commons amendments be now considered.

Moved, That the Commons amendments be now considered.—(Lord Whitty.)

On Question, Motion agreed to.

[The page and line refer to HL Bill 149 as first printed for the Lords.]

1Clause 1, page 1, line 4, leave out Clause 1.

Lord Whitty: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In so doing, I shall also speak to Amendment No. 82.

The amendment relates to the issue of water conservation, to which your Lordships prefer to refer here. The House of Commons and spokespeople of all parties accepted that the amendments rightly gave greater prominence to water conservation in the Bill, by inserting Amendment No. 82, which we shall reach in due course. The intention of the amendments was to strengthen the duty to conserve water resources. They retain the principle driven at in Clause 1 while addressing concerns about the potentially adverse consequences of such a wide and general duty.

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I note that Amendment No. 1A, in the name of the noble Baroness, Lady Miller, seeks to reinstate Clause 1 with an additional reference to the duty to encourage water conservation.

Baroness Byford: My Lords, I believe that the amendment is in my name.

Lord Whitty: I apologise to the noble Baroness. Indeed, the amendment is in her name. I am not sure to whom I should apologise most, but I apologise to both noble Baronesses.

I note that Amendment No. 1A, to which the noble Baroness will no doubt speak shortly, seeks to go back to Clause 1, whereas the insertion of Amendment No. 82 was intended to replace Clause 1. I believe that the retention of Clause 1 would cause further confusion.

As I explained when the Bill was previously debated in this House, there are difficulties with the wording of Clause 1, and they have not disappeared. It would oblige the Secretary of State to take action, regardless of whether it was beneficial or cost-effective, and, more directly, it cuts across the statutory duties of regulators and water undertakers, which would weaken the provisions for them. It is also unclear how the Secretary of State would implement measures referred to under Clause 1 with no further statutory provision as to how that should be done. As a matter of law it is unclear what entities are in Clause 1, and that could cause additional confusion.

Whether a particular activity constitutes an appropriate use of water or a waste would also be a difficult question and that is not a strong basis for a statutory duty. It will be far more constructive for the Secretary of State to look towards the clear objective of conserving water, which will be placed in Part 3 of the Bill through Amendment No. 82.

By placing the new duty in Part 3 of the Bill it probably also has a wider application than in Part 1, where it may be taken to relate primarily to abstraction and impounding. In that respect the Environment Agency already has a duty to secure the proper use of water resources, and this has been clarified in the Bill to require the agency to secure the efficient use of abstracted water.

Amendment No. 82 places a new duty on the Secretary of State and the Welsh Assembly to take steps to encourage water conservation and report to Parliament or the Assembly on progress and proposed steps. This will advance the interests of water conservation and give Parliament the opportunity to scrutinise the sufficiency of the steps taken.

Moved, That the House do agree with the Commons in their Amendment No. 1.—(Lord Whitty.)



1Clause 1, page 1, line 4, leave out Clause 1 Baroness Byford rose to move, as an amendment to the Motion that the House do agree with the Commons in their Amendment

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No. 1, leave out from "House" to end and insert "do disagree with the Commons in their Amendment 1, but do propose the following amendment to the words so restored to the Bill—

1AClause 1, page 1, line 6, at end insert ", and in carrying out his duty, shall have particular regard to the steps to be taken under section (Duty to encourage water conservation)""

The noble Baroness said: My Lords, in our various discussions during the passage of the Bill through the House we tried desperately to persuade the Government that there was a need to have a duty to conserve water placed at the beginning of the Bill. I am grateful to the noble Lord, Lord Whitty, who wrote to me on 12th September 2003. The letter states:

    "While the intention of the amendment is sound"—

in other words, the Government accept the thrust of what we are trying to do—

    "as drafted it presents a number of significant concerns. The duty is very wide so there is a danger that it might have unforeseen and undesirable implications. In particular, it has been suggested that it could cut across the statutory responsibilities of regulators".

I read that very carefully and I am still not convinced that we should not try to proceed with our amendment.

As noble Lords will realise, last summer was extremely dry. It is said that unless we get rainfall this winter that is 30 per cent higher than average it is likely that we shall have a serious drought next spring. I return to the Minister's letter. I understand the term "unforeseen"; obviously, crises can arise. I have no difficulty with that. However, I should like the Minister to explain further the term "undesirable implications". In what way could such a duty have undesirable consequences unless the Secretary of State took actions which were ill-judged or poorly implemented? I do not see where the Minister is coming from.

I turn to government Amendment No. 82. I am grateful to the Government for having taken on board the thrust behind our original amendment which we pursued at every stage of the Bill's passage through this House. I realise that the measure is an important addition to the Bill but I should like to see it at the beginning of the Bill. I think that the Minister will not be surprised to hear me say that that is where I think it should be. It is very important that one of the first things that a reader of the Bill sees is a duty to encourage water conservation. I cannot understand why there is so much resistance from the Government to that particular aspect.

I am trying to be constructive and helpful, as one does at the end of a Bill's passage. I suggest therefore that my amendment would partly meet the Minister's concerns in that it would make the reader of the Bill refer to the terms of government Amendment No. 82, which I presume he is happy with as he is proposing it. I am in a slightly difficult position, and would like to hear further from the noble Lord on that. My real desire is to see the duty to conserve water resources moved to Clause 1. I beg to move.

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Moved, as an amendment to the Motion that the House do agree with the Commons in their Amendment No. 1, leave out from "House" to end and insert Amendment No. 1A as an amendment to the words so restored to the Bill.—(Baroness Byford.)

7.45 p.m.

Baroness Miller of Chilthorne Domer: My Lords, I support the noble Baroness's amendment. Since we discussed the matter in the House, we have seen rainfall continue to diminish during the year. Indeed, the noble Baroness, Lady Farrington, in reply to my Question only on Tuesday said that we had had the worst rainfall figures for February to October for 74 years, with the exception of 1959. Under those circumstances, even the past few months could show us why it is more important than ever that we have the provision at the beginning of the Bill. After all, many of its clauses are concerned with changing the water regime so that it is more sustainable and more about conserving water. That is what the extraction changes and the drought plans are all about.

As the noble Baroness, Lady Farrington, also said on Tuesday, the drought plans are applied region by region and are for water companies to implement. Of course, what was not said on Tuesday was that we now have Water Grid Ltd, which is to do with moving water around the country. That and Mr Morley's comments at Third Reading in another place—he said that a measure to deal with the very low levels in reservoirs was to pump the rivers out—leads me to lend the noble Baroness even stronger support for the amendment. The scenario that we have seen this year is likely to be repeated in other years if we are to believe, as I do, the forecasts by scientists who study climate change. We cannot afford to be complacent in this area.

I, too, look forward to hearing exactly what the problem is with underlining the importance of conservation as one of the prime purposes of the Bill. The Minister mentioned adverse effects. I cannot understand what the adverse effects of the Secretary of State having such a duty could be.

Baroness O'Cathain: My Lords, I wish to speak to Amendment No. 82. Before I do so, I declare an interest as a director of a water-only company in the South East. As we know, Amendment No. 82 inserts a new clause requiring the Secretary of State and the Assembly in Wales to take appropriate steps to encourage the conservation of water. I agree wholeheartedly with my noble friend Lady Byford that that really should be at the beginning of the Bill, because it is one of the most important issues.

I should like to ask the Minister what action the Government intend to take in respect of the water-resource situation in the south-east of England. We heard from the noble Baroness, Lady Miller, that there had been a huge drought. It makes me smile wryly when I consider that, in Committee, we talked about drought and were not quite laughed out of court, but we were told that the matter was not in our ken, that

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the country had too much water and had not had drought for seven years, and goodness knows what else. The situation is now very serious.

As I explained many times during the passage of the Bill, the south-east region is water-resource deficient. A recent Environment Agency report, State of the Environment 2003—The Environment Agency's assessment of the environment in South East England, showed that Kent, Sussex, Hampshire and the Isle of Wight's water resources were the most precious in the UK. More water is consumed for each person in the South East than anywhere else in the country, which, combined with the fact that it is more deficient there, sets up a real problem. The area receives one of the lowest amounts of rainfall each year.

The amount of water available to each person is already lower than in Egypt, Morocco and Kenya, and less than a fifth of that in Turkey. As the noble Baroness, Lady Miller, has said, drier summers are predicted in Britain in the future as a result of climate change. Added to that, a huge increase in demand for water in the South East is forecast as a direct result of population growth. Our population is going to grow by about 2 million. According to the Environment Agency, that will cause more unsustainable water abstractions unless demand is managed and new resources are developed. We all know about the outcry that greets new resource development such as reservoirs.

At last month's Economist Water Conference, the Environment Minister, Mr Elliot Morley, was quoted as saying that the South East has already been officially recognised as a water stressed area. In that context I want to ask the Minister what the Government's intentions are regarding demand management measures for the South East and, in particular, for water metering? The Defra policy paper, Directing The Flow: Priorities For The Future of Water Policy, published in November 2002, discusses the water resource situation and identifies as a priority for water policy,

    "prudent use of water resources and keeping its use within the limits of its replenishment".

That point was made by the noble Baroness, Lady Miller, and my noble friend. The paper goes on to state:

    "We will continue to use the twin track approach of demand management and development of resources to achieve sustainable management of water resources".

The Water Bill takes forward the main supply measures set out in the Defra paper, putting water resource and drought plans on a statutory basis and makes changes to the abstraction licensing system. The Government are also aware of the need for water companies to reduce their leakage rates. However, as the Environment Agency has pointed out, the majority of the region's water companies achieved a reduction in their leakage rates between 1997-98 and 2000-01.

I turn to demand management measures. The Government's policy is to permit the growth of metering on a voluntary basis. It is now clear that that

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approach is less than equal to the water resource challenges that we face in the South East. The agency's report, State of the Environment 2003, the Environment Agency's assessment of the environment in south-east England, published in June this year, states:

    "All water companies in the South East have seen an increase in the number of metered properties since 1997/98. This increase has mainly been through voluntary take-up, installations in new homes and the metering of sprinkler or swimming pool users".

But it goes on to state:

    "Continuation of this policy is unlikely to achieve the metering levels the Environment Agency believes is necessary. Most of the companies are unlikely to achieve the forecasts for 2004/05 and 2024/35 proposed in their water resource plans".

For some time, the agency has accepted that real water savings from metering will come only when there is sufficient metering penetration to introduce innovative tariffs that dissuade high domestic use.

As I have explained previously, the reality is that pursuit of a policy of optional metering, at the request of customers and free of charge, is ineffective as a demand management tool. Compulsory metering is much more economical than optional or selective metering. Optional metering is more costly because meters may be situated only in every third, 10th or 20th house. In other words, compulsory metering is the only economic way of applying demand management in a scarce water area.

Furthermore, the situation in the South East has deteriorated since we last discussed the Bill and since the agency produced its report. For eight consecutive months, the region has had below-average rainfall. According to the Met Office, 575 mm of rain should have fallen in south-east England during the first 10 months of the year where only 346 mm fell. River flows have continued to fall throughout the autumn, which has been the third driest in the region since records began. As has been pointed out, if we do not have substantial rainfall this winter, the region faces water shortages next spring.

The water companies that serve the region have called on their customers to help conserve water supplies, but it seems ludicrous to suggest to people in the middle of November that there should be a hose-pipe ban, because few hose-pipes are used at this time of year. I note that WaterVoice Southern, which is the voice of the consumer, is backing these efforts.

Therefore, in light of the new Clause 81 and the deteriorating situation in the South East of England, do the Government have any plans to change their policy on metering? If not, do they believe that the situation in the South East is now sufficiently serious to warrant the Secretary of State declaring it "an area of water scarcity" and therefore to be subject to compulsory metering without the need for a company application, which would only delay the inevitable that a change in policy is required to recognise the seriousness of the situation?

Lest I should be accused of worrying only about the South East, although that is where the situation is serious, the whole of England and Wales is seriously water deficient. According to a press notice from the

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Environment Agency this month, throughout England and Wales there is less water available per person than in some countries in Africa and the Middle East. Given the Government's own projection that there will be an increase of 3.3 million households in England and Wales between 1996 and 2016, and that the population is set to increase by 2 million over the same period, the situation is serious. Can the Minister inform the House what other measures the Government are considering in terms of demand management or resource development in order to comply with their new duty to take appropriate steps to encourage the conservation of water?

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