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Baroness Trumpington: My Lords, the Minister said that the Government had no direct responsibility for water but they do have a responsibility for the planning of housing. The other day I asked why they are building so many more houses in the south-east, where there is already known to be a water shortage and a hosepipe ban is in place. Is that not somewhat impractical?

Lord Bach: My Lords, I do not agree with the noble Baroness—I often do but not on this occasion. As I said in reply to the noble Countess a few seconds ago, it is important to draw a distinction between the short-term issue of drought and that of longer-term demand. Where there is a need for more water over a period of years, it is possible to find new sources. We will not build the houses until the infrastructure is in place.

Lord Campbell-Savours: My Lords, the regulatory and enforcement responsibilities of the water undertakings are set out in the regulations of 2000, but many of them are simply refusing to carry out their responsibilities as enshrined in the law. Would it not be wise to transfer some of those responsibilities to local authorities so that enforcement would take place under building regulations?

Lord Bach: My Lords, my noble friend talks about giving more power to local authorities in this instance, and I shall take that matter back with me. However, with regard to the building regulations, the Government are considering how to deliver improved water efficiency in new housing following the recommendations of the Sustainable Buildings Task Group. Those recommendations include revision of Part G of the building regulations to include water efficiency requirements, use of planning conditions to deliver improved water efficiency within buildings and, last but not least, the production of a code for
 
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sustainable building to highlight and disseminate best practice in efficiency. No doubt local authorities will play a leading role in all that.

Lord Dixon-Smith: My Lords, in this country dry seasons have followed wet seasons since time immemorial. The solution proposed in biblical times was to store in the good times in order to have resources when times were bad. Can the Minister tell the House what major reservoir construction has taken place over the past decade? Perhaps more significantly, do the Government have plans to change the planning and regulatory regimes for the future to ensure that more strategic water storage is provided so that this kind of situation is less of a concern?

Lord Bach: My Lords, during drought conditions companies are expected to put measures in place to require customers to reduce their demand for non-essential use. The Government's aim is to ensure that the environment receives adequate protection at times of water stress and to protect customers from the high bills that would result from companies developing systems that could cope with unconstrained demand under any circumstances. In other words, it would be foolish to make the taxpayer pay huge amounts of money for reservoirs that would be needed only at times of heavy drought. We have to have a balance here, of course, between what is necessary for the weather and what is necessary so far as the taxpayer is concerned. Is it the Conservative Party's policy that we should build many new reservoirs?

Lord Livsey of Talgarth: My Lords, I have two questions for the Minister. First, wastage of water and leakage of water have been big issues. In some company areas as much as 25 per cent of the water collected has been lost. What progress has been made on that front by the water companies? Secondly, compensatory flow in rivers during times of drought is a big issue. It could lead to rivers running dry as happens in southern Europe. What is the Environment Agency doing to ensure that compensatory rules are adhered to?

Lord Bach: My Lords, with regard to the noble Lord's question about leakages, most companies are meeting the leakage targets that have been set by the regulator, Ofwat. That means that they are at what is called the economic level of leakage, which is, apparently, the level of leakage at which it would cost more to make further reductions in leakage than to produce the water from another source. Thames Water has had continuing problems with leakage. Indeed, 2003–04 was the first year of new targets for the three areas of Thames Water's operation. This year leakage targets were met in areas outside London, but leakages in south London are also falling. Control of leakages in the north London area remains the main challenge, mainly due to ageing infrastructure.
 
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Six companies failed to meet their leakage targets. Enforcement measures can, of course, be taken if that continues.

Lord Walpole: My Lords, is the Minister aware that at the end of my drive I have a borehole that is owned by the Anglian Water Authority and the University of East Anglia? It is absolutely obvious that even when there is a lot of rain the aquifers are not filling up. That is the big problem—if they do not fill up in wet years, when will they fill up?

Lord Bach: My Lords, I do not know when they will fill up if they will not fill up in wet years. It seems to me that wet years are the years in which they will fill up. I am sorry—

Lord Walpole: My Lords, they do not; that is the trouble.

Lord Bach: My Lords, I am not sure that that question is fairly directed to me. It sounds to me as though the noble Lord should look elsewhere to find an answer regarding his borehole.

Lord Brooke of Alverthorpe: My Lords, as I understand it, in the southern region as the water table falls the quality of the water also falls and the lead content in the water rises. Are the Government aware of that? Who has responsibility for ensuring that the quality of the water is maintained? Is it the local southern water board or is it the Government?

Lord Bach: My Lords, at the risk of replying incorrectly to the noble Lord, my opinion is that the Environment Agency would have a prime role in looking at the quality of the water that is produced.

Lord Inglewood: My Lords, is the Minister aware that it is not merely shortage of water that is a problem? In the city of Carlisle near where I live and where I was born, there was recently a very serious flood. A few days ago the Government announced that they would give £1.5 million, I believe, to assist the cost of the clear up. That amount is considered on all sides to be pretty niggardly. Will the Government review that and, if not, why not?

Lord Bach: My Lords, I do not believe that that amount is in the slightest way niggardly and I am surprised to hear the noble Lord say so. However, I shall take the issue back to the department and make sure that the noble Lord receives a letter. But instead of criticising, the noble Lord should have congratulated us on taking action so soon.

Viscount Tenby: My Lords, perhaps I may revert to the earlier question put to the Minister by the noble Lord, Lord Livsey, and tease out from him a little more on the subject. There is a feeling both within and outside the industry that economies in the workforce in order to maximise profits have had an adverse effect on the water pipe repair programme. Is the Minister
 
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able to confirm this? If so, will the Government remind the water companies of their responsibilities in these matters?

Lord Bach: My Lords, I cannot confirm the question asked by the noble Lord, but his point in relation to the workforce is important and significant. If he will allow me, I shall take it away and write to him.

Lord Roberts of Conwy: My Lords, is the noble Lord in a position to tell the House what progress has been made on the idea of a national water grid? I know that there are difficulties, but obviously the idea could be reconsidered as an answer to our present problems.

Lord Bach: My Lords, that idea is well worth looking at. I shall make sure that the Government do so.

Finance Bill

11.28 am

Brought from the Commons; read a first time, and ordered to be printed.

Business of the House: Debates this Day

The Minister of State, Northern Ireland Office (Lord Rooker): My Lords, on behalf of my noble friend the Lord President of the Council, I beg to move the first Motion standing in her name of the Order Paper.

Moved, That the debates on the Motions in the names of the Earl of Sandwich and the Baroness Finlay of Llandaff set down for today shall each be limited to two and a half hours.—(Lord Rooker.)

On Question, Motion agreed to.

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