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We have to find ways of discussing these matters as concisely, but as effectively, as we can. If, because of the timetable, it is impossible to effect any changes to the Bill, which is a possibility, we need a clear statement on the record. That is the task before us in the next three or four weeks before we are all sent home to go on holiday while people from the House of Commons do other things.

4.50 pm

Lord Cameron of Dillington: My Lords, I declare an interest as a farmer and landowner and a member of the CLA and NFU. These are quite modest interests compared with those of the noble Lord, Lord Taylor, but we on these Benches try our best.

The Bill is relatively uncontroversial and is much needed to create certainty in an area in which the problems can get only worse in the decades to come. Furthermore, I believe that the Bill has greatly improved since its first appearance and my remaining concerns are relatively minor.

My biggest concern all along has been that we might inadvertently lose our very valuable heritage of managing our water on a catchment by catchment basis. As has been said on numerous occasions, water flow does not organise itself to follow our political administrative boundaries, although as it happens in my county of Somerset, our historic boundaries are based on catchments, and with the exception of one or two minor tributaries, all our rivers rise in Somerset and fall to the sea within our county boundary. But we are an exceptional county in a variety of different ways.

On the other hand, most local authorities either receive water from their neighbours or pass it on to others-or sometimes both. In other words, they are part of a greater whole known as a catchment. There was a time when I went to two or three water conferences on the Continent, largely to do with the absurd nitrate directive, which I shall not go into here. But the point

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that was again and again rammed home to me was how lucky we were to have our water industry and flood protection administration on a whole catchment basis. Those involved in water issues on the Continent were extremely jealous of what we had here. They, of course, could not achieve that. Some of their rivers crossed boundaries not only of local administrations but of countries, some of which were not always on good terms with each other and might not even speak the same language. Downstream administrations have to work harder on their diplomacy to ensure that the upstream policies on abstraction, discharge and flood protection do not inconvenience them.

My starting point in considering the Bill was that catchment based water management is a pearl that we must never surrender. I believe that the Bill is a very good attempt to compromise between that priority and the desire to have local democratic accountability whereby the buck stops with somebody or some organisation that can be voted out of office when they let down their constituents. The Bill recognises that there are a host of activities largely controlled by local authorities, such as planning and highways, that impact on water management. The Bill rightly arranges for the reskilling of local authorities-I shall leave the proposed financial arrangements for others to discuss-so that they can devise and implement their local flood risk management strategies in line with the national strategy devised by the Environment Agency. Various clauses in the Bill encourage local authorities to co-operate with one another under the guidance of the Environment Agency, but while co-operation is encouraged I am concerned that there seem to be few powers for the Environment Agency to drive catchment co-operation. I am not certain whether the EA even has the power to mediate between an upstream and a downstream local authority. Above all, it is not clear that the EA has the power to ensure that the river catchment system actually works and that the series of flood-risk management plans in a large catchment will work together. I believe that the Environment Agency should have some overarching power in that respect.

Maybe the co-ordination of the river catchment is the responsibility of the new regional flood and coastal committees. After all, if the current arrangements apply, they should have a majority of local authority members which could ensure better co-operation. But will they still? Clause 24 is remarkably unclear about membership. The Minister in the other place indicated that guidance on this issue would be forthcoming in due course-I think autumn was mentioned-but at any rate, under a new Parliament and when we have all taken our eye off the ball. Furthermore, these regional flood and coastal committees could be organised on a catchment basis, which would help, but again there is doubt on this issue. Reading between the lines of the Minister's reply in the Commons, we are unlikely to know how they will be organised territorially until guidelines emerge-maybe in the autumn again, I cannot remember. In any case, he made it clear that catchments are only one of many criteria to be considered. That again gives me mild cause for concern.

Sticking to my theme, the art of flood management on a catchment basis is all about flood prevention rather than flood defence. By that I mean that you do

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not want large concrete defensive walls and pipes in the upper reaches of a river, which prevent the flood water covering your land and the streets in your town, but which thus channel the water quickly downstream and out of your administrative area where it becomes someone else's problem. Instead, you need voluntary contracts with upstream land managers to hold the water back and reduce the speed of flow and run-off so the whole catchment benefits from your action. There are various loose references in the Bill to these so-called softer defence mechanisms and phrases such as "maintaining or restoring natural processes", and how authorities,

There is also Schedule 3 on SUDS-though this is not quite the same thing, and in any case leaves some unanswered questions.

It may be that the explicit references to soft flood defence systems I seek are not suitable for inclusion in the Bill. If this is the case, I hope that any guidance on the matter will, first, come out before the autumn-which seems to be the aspirational timescale for most of the guidance needed to make this Bill work-and secondly, that such guidance will spell out how to achieve the sort of soft flood defence systems I seek. I say this because I am well aware that there is still an overwhelming tendency among drainage engineers to fall back on their training and experience which makes them favour a hard flood defence route, based on a risk analysis system they can understand, rather than taking a more imaginative and preventive holistic approach.

I have a couple of other points. In the discussions in the other place about Schedule 1 and the designation of features, I am glad to say it became clear that the appeals system was going to include the right to appeal not only against the designation and its terms, but also against any refusal of consent to alter or remove, et cetera. As far as I can gather, guidelines will also emerge on this matter in due course-no doubt in the autumn. However, I am slightly concerned that the only criterion that seems likely to be considered is whether the feature,

Can we please have a duty to assess the actual risk involved, so that a small risk-for example, if the feature is only relevant in a one-in-10,000-year flood-does not automatically outweigh any economic, social or environmental gain to be achieved by the alteration? All too often, experts deciding on these issues believe that their area of expertise is paramount, and they tend to get things out of perspective. For instance, if you try to get planning permission which would create 100 new jobs but disturb a badger, you will come up against a brick wall: for the person granting the licence, the badgers reign supreme and that is the end of it. I hope in this case that considerations other than those purely of flood risk can be taken into account.

Finally, I gather that we have been promised a regulatory impact review of the reservoir safety clauses, to take place 12 months after the legislation has been in place. This is a good idea, because although the Environment Agency says that managers of low-risk

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reservoirs will not incur any extra costs, it is important that those farms and golf courses which practise sustainable water management should not have to suffer extra costs because of the new rules.

All in all, my concerns about this Bill are negligible, and I feel sure that a few probing amendments answered by the Minister will probably be sufficient to alleviate them.

4.58 pm

The Lord Bishop of Exeter: My Lords, I add to the apparent broad unanimity of all Benches in warmly welcoming this Bill and recognising its vital importance. However, from the perspective of community groups, churches and charities, a number of potential concerns remain; perhaps unsurprisingly, they focus on Clause 43.

Most of your Lordships will be aware of the background to this, so I will try to be brief. Under Ofwat's preferred charging scheme, the utility companies began to introduce site-based charging for surface water drainage for all customers. Churches, scout groups, village halls and the like had not paid rates on their buildings, and therefore had been exempt from the old system of water rates. Under the new system, they were presented with bills for surface water drainage for the first time. A number of concerns have arisen from this, which we have been pressing, and they are threefold.

It was not the principle of the payment that was the problem but the scale of the new charges and the wide variation in charging schemes between the utility companies implementing the new system. For example, St Cuthbert's, Seascale, in the diocese of Carlisle, was facing an annual increase of 591 per cent over three years: from £34.14 in 2008 to £205 in 2009, £364 in 2010 and £543 in 2011. Secondly, the situation was made worse by the fact that, although permeable ground, such as lawns, does not count for the purpose of the charge, some of the utility companies implementing the new system often did so simply on the basis of the site boundaries on the Ordnance Survey map, leaving it to the unfortunate customer to commission and pay for an independent site survey in order to prove which parts of the site were permeable and which parts drained into the sewer. Finally, when one utility company, Severn Trent, decided to continue treating places of worship as it had done in the past, it was told by Ofwat that the new charging regime did not allow it to do so.

Community groups have pressed Ministers hard on this and the issues raised here, and I am very grateful for Clause 43, which is the result. It is an acceptance by government that community groups should not be treated on the same basis as commercial customers. Most churches and charitable groups warmly welcome this change of heart on the part of government. I acknowledge how hard they have worked to give us Clause 43, which, together with the very helpful draft guidance published by Defra, appears to go a long way to meeting our concerns.

However, there is one other major point which we think requires further clarification. Subsection (1) says:

"An undertaker's charges scheme under section 143 of the Water Industry Act 1991 may"-

I repeat: may-

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So, as drafted, the subsection is permissive rather than mandatory. Our understanding is that this is because, first, not all utility companies have yet introduced surface-water drainage charging; secondly, not all of them intend to do so, although we are not quite sure how this squares with Ofwat's preferred policy on charging; and, thirdly, if the terms of the clause were mandatory, utilities that had no intention of introducing surface-water drainage charging systems would be obliged to do so willy-nilly. Therefore, there are some points for further clarification here.

In addition, there are two minor points that we think also need clarification. First, paragraph 3.1 of the draft guidance that was made available to the Public Bill Committee in another place states:

"The Government is clear that it does not want to see community groups facing unaffordable increases in their water bills as a result of site area charging for surface water drainage. We expect undertakers to ensure that this is the case and Ofwat will ensure that undertakers have had regard to this guidance in its approval of individual charge schemes".

Unfortunately, however, the draft guidance does not provide a definition of what is a "fair and affordable" charge for community groups. Ofwat is charged with overseeing the concessionary schemes and making sure that water companies have regard to the guidance, but at the moment Ofwat is expected to guess at what is fair and affordable. I think that a little more work is needed in this area.

Secondly, the draft guidance talks about "places of public religious worship". Does that include church halls as well as churches themselves? Alternatively, are church halls included in the category of village and community halls, community centres and similar buildings owned or leased by community associations? Do the Government expect a differentiated approach to the various categories that might be adduced here? At some point during the passage of the Bill, clarification on both those points would be welcome.

In conclusion, I am looking for an assurance from the Minister as to whether our reading of Clause 43 and the word "may" is correct. If it is, we would like a further firm assurance that, in spite of the wording of the clause, all utility companies that have introduced surface-water drainage charging or which intend to do so will be obliged to make provision to reduce those charges for community groups, which is what the draft guidance seems to imply, and to levy what will be a fair and affordable charge in reality, not merely in some theoretical sense yet to be determined. I fully expect that the Minister will be able to give such assurances but, in their absence, we will no doubt wish to come back to this matter in Committee.

5.05 pm

Lord Smith of Finsbury: My Lords, I declare an interest as chairman of the Environment Agency. In that capacity, I saw at first hand the devastating impact of the floods that hit Cumbria last November, when, as noble Lords will recall, the highest concentration of rain falling in a 24-hour period ever recorded in one location in England hit the Cumbrian fells. During that incident 1,800 properties were flooded, 200 homes were evacuated in Cockermouth alone, six bridges were washed away and water in some people's homes was up to 8 feet deep.

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This was a very real reminder to us all of the huge impact that flooding can and does have. It can devastate people's lives and homes not just during the event itself but, as the noble Lord, Lord Taylor, reminded us, for many months and even in some cases years subsequently. It was also a signal that, with the onset of climate change, it is very likely that we are going to face even more severe flooding over the coming years than we have done in the past. We are likely to see more extreme and erratic weather patterns, more concentrated downpours-with the impact that that is likely to have on surface water as well as on rivers and coasts-and the perversity of more droughts during summer months and more floods during other times of the year.

This Bill is therefore a welcome step in raising our game as a nation to address these challenges. However, it is a welcome first step, because it must not be seen as the end of the story. There will be much more to do even after this Bill is safely on the statute book. The most important and central thing that the Bill does is to clarify the roles, responsibilities, duties and powers of all the various parties for the management of flood risk. It applies to us in the Environment Agency especially, to local authorities, to internal drainage boards and to the new RFCCs. However, it is especially important in relation to surface water flooding, where, up to now, as Sir Michael Pitt graphically identified in his valuable report, there has been real confusion about who is responsible for doing what. The Bill spells out exactly who is responsible for doing what. It places a duty on all of us to work very closely together in order to make sure both that we prevent flooding in the first place and that we respond to it well if and when it does occur.

Once the Bill has identified the responsibilities, it will be up to us to take the action: to map, to identify, to set priorities, to start to improve the drainage networks and-I add this for the benefit of the Minister and his Treasury colleagues-to secure the funding that will be necessary in order to do the work. I cannot emphasise too strongly how important the central feature of clarification of responsibility is in this Bill. If the Bill ends up in wash-up at Prorogation, I very much hope that at least that central feature will emerge intact at the end of the day.

I wish to make three other points. First, the Environment Agency recognises absolutely the need for us to consult with, to work with and to co-operate with local communities and stakeholders in everything that we do on flood and coastal risk management. A central theme that I have put in place since I became chairman of the Environment Agency is the need to do everything that we possibly can to work with the stakeholders involved in any local community, which especially means the local authorities in relation to the management of flood risk. That is the most important theme that I have put in place. We have to ensure that there is full consultation and engagement with landowners, occupiers, communities and local authorities. As the noble Lord, Lord Taylor, identified, that will be especially important in relation to the powers of the Bill in Clauses 38 and 39.

Secondly, the reduction in the qualifying capacity of reservoirs for designation is a matter of some concern, especially to landowners and farmers who have to store water. Increasingly, there will be a need

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to store water in winter months for use during the summer. Of course, that is coupled with a move towards a risk-based approach to regulation and inspection that looks specifically at the safety of reservoirs and the communities that might be affected if something happens to a reservoir. The Institution of Civil Engineers has said, rather helpfully, that it supports the 10,000 cubic metre threshold for registration. It has said that that volume is the minimum that should be adopted for the proposed measures and it is believed to be the volume proposed by the experts in the reservoir safety industry, based on a sound assessment of the risks of the impact of the volumes of water should a breach take place. We have to ensure that that is all about safety and not about regulation for the sake of regulation. We need a proper risk-based approach, so that we lighten the burden of regulation wherever there is no question of the safety of a reservoir at the same time as we bring down the threshold of capacity for registration.

Thirdly, I very much welcome the proposals in the Bill for sustainable drainage systems. The days of developers blithely assuming that they could link a new development into an already overloaded drainage system without any adverse consequences will, happily, be over. We have to ensure that, as we seek to have much needed new development in our country, we think about the impact on drainage and sewerage systems at the same time.

I warmly welcome the Bill. We cannot stop the rain falling and, with increasing occasional intensity, I suspect that things will become even more difficult. We cannot stop floods happening but we can try to prevent, as best we can, the potentially damaging consequences to life and property that may arise. We can do our very best to combat all types of flooding, from whatever sources and causes it may arise. The Bill is a very useful step towards doing just that.

5.15 pm

The Earl of Selborne: My Lords, the Pitt review did a good job. It pointed out the overarching requirement for the clear and appropriate allocation of roles and responsibilities for the management of the different sources of flood risk. As the noble Lord, Lord Smith, has just said, the clarification of responsibilities is a key requirement. This Bill sets out how this allocation of roles and responsibilities is to be determined, which is clearly to be welcomed. It is a great privilege to follow the noble Lord, Lord Smith, who is chairman of the Environment Agency, and to recognise the key role that the Environment Agency is called on to play as the delivery body for the strategic overview for England and Wales. It is perfectly appropriate that that role should lie with the Environment Agency and that the responsibilities for risk management should be shared with a number of other organisations-local authorities, whether unitary or district council, internal drainage authorities, water companies, highway authorities, consultative committees and the like. This Bill clearly helps to determine just how these responsibilities are allocated.

Sir Michael Pitt was asking for an integrated approach to flood risk management, which is what the Bill sets out to achieve. However, there is a slight problem in

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that the legislation is not integrated. The Minister has recognised that this Bill is only part of the draft Bill that was being looked at earlier in the year. We understand why that is. Time would not allow a fuller look at the other parts of the legislation, which an incoming Administration will have to deal with. Others have pointed out that this is just an instalment, but it is an important part.

Another even more perplexing bit of legislation, which we dealt with in a rather cursory way in December through a statutory instrument, implemented the EU flood risk regulations. My noble friend Lord Taylor had a debate on this last month. Again, the timing was forced on the Government simply because a bit of well intentioned legislation coming out of Europe to ensure that flooding across the borders of member states could be dealt with in a coherent way had to be implemented into national legislation by December 2009. As so often happens with any Government, two years passed rather faster than expected and the statutory instrument was enacted just a month before this Bill came into this House. That was a great wasted opportunity. No sensible negotiation was able to take place with the Commission to point out that in England and Wales you cannot possibly have cross-border flooding so it is not really an issue for the EU to worry about. We could have said, "Give us a little bit more time and let us take advantage of the opportunity of discussing this Bill to ensure that the measures that the statutory instrument requires on flood risk regulation are appropriately enacted". I know that the Government had originally intended that this Bill would take into account the EU flood risk directive, but the transposition is already happening and you cannot enact that directive in practice without some of the measures in this Bill. Therefore, the legislation is not integrated, although we understand why we have the cart before the horse.

Clause 3, headed "Risk management", has in subsection (3) a helpful list of examples of things that might be done to manage flood or coastal erosion risk. There are 10 measures listed, including maintaining and restoring natural processes and carrying out work in respect of a river or other watercourse. The ninth measure, which I would like to dwell on a bit and which the noble Lord, Lord Smith referred to in passing, is,

This is absolutely central to assessing flood risk. I would like a requirement in the Bill for the Environment Agency to prepare water catchment maps, showing where risks have been identified, who is the manager of each river, highway, bridge, area of land, reservoir or whatever impacts on the risk, and who is responsible for managing the risk. This should all be put in a spatial form. It would feed helpfully into the water framework directive because, when that is implemented, we will require that scale of mapping.

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