Infrastructure Planning (Water Resources) (England) Order 2018

(Limited Text - Ministerial Extracts only)

Wednesday 21st November 2018 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Infrastructure Planning (Water Resources) (England) Order 2018.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, the purpose of the order is to amend the Planning Act 2008. The Act sets out a streamlined national planning process for infrastructure projects which are “nationally significant”. If a project meets certain thresholds set out in the Act, it will be considered under it, with the Secretary of State as the decision-maker.

This order will change the thresholds under which reservoirs, dams and water transfers will qualify as “nationally significant”.

[Lord Campbell-Savours (Lab)]

Can the Minister explain what the driver is behind this order? Who is pushing for it?

[Lord Gardiner of Kimble]

My Lords, the Government are pushing for it on behalf of the nation in so far as we undertook consultation. With climate change and population growth, we need to prepare. We wish to place a greater emphasis on the environment and therefore to deal with overabstractions. We need to find ways of having sufficient water, given the projections of an increase in population. This is about planning. We do not expect the projects to which this measure will apply to take place in the next five years; this is about forward planning. We think that these changes will probably embrace about six projects in England. The noble Lord asked who is driving this. We need to take a public responsibility to ensure that there is sufficient water for the nation. Yes, we should cut consumption where we can, but, because of population growth and climate change, we are bringing forward this measure now as part of our forward planning. It will involve public engagement, but that is the background to it.

On conclusions and criteria, we needed to make sure that we consulted, so we consulted on our initial proposals last November and then held a more detailed consultation in April. There was broad support for our approach from a range of stakeholders who responded, including water companies, environmental groups and other interested groups.

In reaching a conclusion on the new thresholds, we considered a number of factors, including the physical size of the infrastructure in question, the size of population that could be served by its output and the major infrastructure the Government anticipate will be needed in future. This is likely to require developers to engage with a number of planning authorities and other regulatory regimes. We also wished to move to a level playing field so that different water resource schemes are all required to meet thresholds that are as consistent as possible to qualify for consideration under the Act. This should help avoid developers favouring one scheme over another just because they prefer one planning route over another.

In making these amendments, we are introducing a consistent metric to measure the output of each infrastructure type. This metric is known as deployable output and is commonly used by the water industry for water resource planning. Deployable output is an annual average measure of the number of litres of water a particular piece of infrastructure can be expected to produce in a day under drought conditions. We concluded that a project expected to have a deployable output of 80 million litres per day—a level that could serve a population of around half a million people—is a nationally significant infrastructure project.

As explained, the order will amend qualifying thresholds for two existing infrastructure types mentioned in the Act and introduce a third—desalination plants. In the case of water transfers, this order would reduce the size of the threshold that projects would need to meet to qualify as nationally significant in line with the number of people served—that is, 80 million litres per day.

There will now be two ways for reservoirs to qualify for the streamlined planning process under the Act. The order would introduce a deployable output measure, consistent with transfers. However, we have chosen to retain a measure based on physical volume, recognising that the size of reservoirs matters. This is not just because of the impact they can have on neighbouring communities, but because a large reservoir takes a long time to drain down. Thus, with a relatively low deployable output, it can be an important part of overall water resource resilience. We have increased the volume for reservoirs to qualify under the Act from 10 million cubic metres to 30 million cubic metres.

We have also introduced desalination plants as a new infrastructure type. Consistent with the other infrastructure types, if the deployable output of a given desalination plant is expected to exceed 80 million litres per day, the project can be considered under the Act.

While the national level is the right one for decisions on nationally significant infrastructure, it is vital that those communities directly affected have their say and are heard in the decision-making process. The Act and regulations made under it set out the consultation requirements for development consent order applications. I can assure your Lordships that extensive pre-application consultation and engagement with those affected by the proposals will need to be undertaken by applicants. Furthermore, members of the public can participate in the examination process by registering their interest, thus ensuring that local views can be heard.

The main benefit to the developer of projects meeting the criteria in the Act is that they will face a less complex, consenting process with quicker decision-making. A number of consent requirements, such as planning permission, listed buildings consent and scheduled ancient monument consent, are replaced by a single consent, issued by the Secretary of State, following advice provided by the Planning Inspectorate.

It is the Government’s intention to designate a national policy statement for water resources infrastructure under the Planning Act. This policy statement will summarise government policy—

[The Deputy Chairman of Committees (Lord Geddes) (Con)]

My Lords, it has just been drawn to my attention that a Division has been called in the Chamber. Since we have a few seconds to go until 6.25 pm, the Grand Committee therefore stands adjourned until 6.35 pm.

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[Lord Gardiner of Kimble]

My Lords, it is the Government’s intention to designate a national policy statement for water resources infrastructure under the Planning Act. This policy statement will summarise government policy on water resource infrastructure, including setting out the need for nationally significant infrastructure. It will make clear what the Government expect a planning inspector to take into account when examining an application. We plan to lay a draft of this in Parliament by the end of the year. I look forward to engaging with your Lordships on this in more detail next year.

The amendments in this order are part of how we make sure we have enough water now, and in the future. Population growth, climate change and making sure we leave enough water in the environment will become more challenging in the future. We expect proposals for nationally significant infrastructure to originate from statutory water resource management plans, as these are where options to reduce demand and increase supply have been assessed. We know that some new infrastructure will be needed to meet water demand in the future. Our assessment of the current draft water resource management plans is that around half a dozen proposed projects, needing to start in the next decade or so, are likely to qualify as nationally significant under the Act as amended by the proposed order. For all the reasons that I have outlined and because of the Government’s strong view that we need to plan for the future, I beg to move.

[Lord Campbell-Savours]

My Lords, we all want water but we also want safeguards. Much of my contribution is going to be about safeguards. When I saw this order—which was only this afternoon—I had to do some pretty speedy homework and make a few phone calls. I also looked up on the internet the definition of NSIPs, and they are described as,

“major infrastructure project developments in England and Wales that bypass normal local planning requirements”.

Whenever I see those sorts of words, I think immediately: what are the safeguards? There are no safeguards that I can see defined in the order before us.

I want to draw attention to a particular example of where things could go wrong when there are no safeguards. I will tell the story of what happened over the Thirlmere reservoir in the Lake District. I am presuming that United Utilities and other water companies are among those to which the Minister referred when he spoke about the consultation that took place. I am sure that they would have a primary interest in ensuring that this order goes through, because I would imagine that in certain circumstances they will certainly be the beneficiary of it and use it.

Thirlmere is in my former constituency in Cumbria, which I represented for some 21 years. For many of those years, it was a major problem because of the way the legislation had originally been framed in terms of protecting the interests of consumers and residents in the area. The primary use of Thirlmere, as it was described in a letter from one of the senior managers in the Environment Agency, is,

“as a water resource reservoir for United Utilities. In addition, United Utilities has voluntarily drawn down the reservoir to enable some flood storage during winter months. However, as the low reservoir levels during the 2018 dry weather period show, there needs to be a careful balance between Thirlmere’s primary use as a water supply and its use for flood storage”.

That is what I am on about—the balance. There is nothing in these regulations that even refers to the need for safeguards as part of the discussion around the balance between the availability of water and flood risk in local communities.

I want to now refer to some incidents that took place and the response of the local communities. In January 2005, November 2009 and December 2015, Keswick, a town where I have lived for most of my life, was flooded. On the last occasion, 515 properties were flooded during Storm Desmond. As the formidable Lynne Jones, secretary of the Keswick Flood Action Group, said in correspondence to United Utilities:

“I make no apology for continuing to contact you. I know that UU will never really manage the reservoir with a view to our safety without legislation to enforce them to do so”.


That is precisely why I am speaking on this order, because it is not in here. In the end, the solution is in your hands; you who are far away and who cannot understand the fear that so many in our community live with.

There are 2,630 residential properties in Keswick, and 515 properties flooded during Storm Desmond in 2015. Let me explain to the Committee what that means. Keswick is a town in two parts: there is the lower part and the higher part. In the main, the higher part does not flood, although certain parts of it do. But the lower part floods extensively. In the lower part of the town, there has been a dramatic drop in property prices. I do not live there, but the people who do worry constantly about the fact that they cannot sell their properties and have difficulty insuring them. Throughout the winter months, they are haunted by the prospect of being flooded. The river Greta, which runs through the town, has built-in flood defences, which broke down on one occasion. The truth is that the town is living in fear because of inadequate safeguards.

Today, legislation is going through that will make it easier for water companies to pursue the development of reservoirs without the safeguards that the people in Keswick demand for Thirlmere. It is a very clear idea. I imagine that they are the people driving this on because they know that they will be able to bypass much of the planning arrangements that currently exist.

I want to refer to what people think should happen in the future to resolve these problems. Within these regulations, there should be reference to measures to ensure that communities are safeguarded. Lynne Jones has been in contact with me today, and I will refer in this debate to what she said. She said it is obvious that the reservoir should be managed for flood alleviation alongside water supply. However, legislation is needed to make this a reality, and the present Floods Minister refuses to consider this possibility. So we are going to have more reservoirs, without safeguards, and the potential of future flooding. She went on to say—

[Lord Gardiner of Kimble]

I wonder whether I might help the noble Lord. I can see the line of approach he is developing and would be the first to say that all Governments need to address flooding concerns.

Important to the context of this work is that it is all predicated on the Reservoirs Act 1975, which sets out extensively the safety requirements of large reservoirs and contains a number of provisions, which I am happy to outline.

This piece of work is from the Planning Act 2008. There is already legislation on the matters that the noble Lord is raising. I apologise for intervening but I just wanted to say that this is not in isolation; there is other legislation which deals with safety. The noble Lord may well question the 1975 Act but there is legislation, passed by Parliament, which deals with the safety of reservoirs. I hope that is helpful to not only the noble Lord—I am sure he knows about this legislation anyway—but other noble Lords.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, I welcome the Minister’s explanation and echo the thanks of the noble Baroness to him for the courtesy of arranging a briefing on this SI in advance of today’s consideration. We, too, broadly welcome the proposals, which we believe will lead to greater water resilience in the UK. As we know, despite its reputation for rain, England is at increasing risk of water shortages. Extreme weather from climate change, coupled with an increasing population, especially in the drier southern and eastern areas, has put the water system under increasing pressure. We know that that will only rise over the coming decades.

I agree with my noble friend Lord Campbell-Savours that extreme weather is not just about drought; it is also about flooding. We have debated time and again in the Chamber the terrible consequences for local communities—not just in Keswick, but in other areas—which are faced with the same infrastructure breakdown which allows flooding to take place over and over again. The Government need to address that key challenge. I agree that this may not be the right vehicle to do that, but we should not lose sight of the important challenge of addressing the sort of communities which he spoke so passionately about.

Thames Water warned, just last month, that in a little over 25 years a projected population growth of more than 2 million people will leave a shortfall of 250 million litres per day between the amount of water available and that used. We have to address the issue of water shortage nationally. This has not been helped by an ageing infrastructure and a lack of investment from water companies in the past. This means that change is necessary to create a modern infrastructure which can adapt to new demands, which we can already predict will add pressure to the system.

The Minister will be aware that several stakeholders argued during the consultation that demand management techniques should be exhausted before any new infrastructure is developed and that water transfers should be a last resort. We agree that that while reservoirs and dams can play a key role in stabilising water availability, it is imperative that we reduce demand and waste. One area where progress is urgently needed relates to the industry’s inability to get on top of leaks. The noble Lord will know that in June Thames Water was ordered to pay £120 million back to customers, having been found to have breached its licence conditions by allowing millions of litres of water to spew out of pipes through leaks. So we need urgent action to reduce water leaks, with meaningful targets for action by water companies year on year. Will the Minister update us on the agreements that have been reached with water companies to make this a reality? Will he also explain what action is being taken to change consumer behaviour around domestic water consumption? Breaking through this barrier is a real challenge, not least because consumers have a simplistic view of the water cycle and the ease by which turning on a tap can deliver water without any concern to the source of that water supply.

Any government proposals must make sure that the ways we build infrastructure and supply water in the future are sustainable for the environment and for local communities. According to a report published by WWF, nearly one-quarter of all rivers in England are at risk because of the vast amounts of water being removed for use by farms, businesses and homes. Some 14% of rivers were classed as overabstracted, meaning that water removed is causing river levels to drop below those required to sustain wildlife, while a further 9% were described as overlicensed, meaning that the river would fall to a similarly low level if permits to take water were utilised fully. This means that if permits to abstract water from rivers were fully utilised, levels of water would be unable to sustain wildlife and the necessary biodiversity that goes with it. What safeguards are in place to ensure that the increase in nationally significant projects does not lead to more overlicensed and overabstracted rivers? Will the Minister ensure that the national policy statement on water resources prioritises sustainability, not profits?

One of the key challenges of these proposals is the issue of local engagement. The noble Baroness, Lady Bakewell, touched on this and my noble friend Lord Campbell-Savours dwelt on it in some detail. In the proposals for large infrastructure projects there are indeed legitimate local concerns that need to be heard and addressed. I know that the Minister raised this in his introduction and set out the Government’s aspirations, but it would be helpful if he would clarify how he intends to use the powers the Government are taking to guarantee proper community consultation in the future, so that he can give more assurance to noble Lords in this regard.

The Minister will also know that the Chartered Institution of Water and Environmental Management has expressed concerns that the criterion for defining a nationally significant infrastructure project,

“does not consider any regional or supra-regional water resources issues”.

Will he ensure that the Environmental Agency and Ofwat recognise the importance of regional, multisector resource planning in delivering these changes, so that it is not just about local consultation involvement but also proper consultation at regional level?

Finally, while we welcome the introduction of desalination plants as a new category of NSIP, we share the view of many stakeholders that effluent reuse systems should also have been included. While these facilities are used only in times of projected or actual drought, it is likely that we will come to rely more on this type of water supply in the future, owing to the existential challenge of climate change and population increase. Can the Minister explain what more is being done to expand investment in this sector and encourage water recycling? Does he accept that not including effluent reuse as a new category of NSIP may deter investment in such plants?

In conclusion, we welcome the proposed amendments and support the Government’s stated twin-track approach to improving resilience by stabilising supply and reducing consumption. This will be achieved only as part of an ambitious, long-term plan for the environment, including new policies to manage our water resources, a plan to meet our climate change targets and a strategy to reduce domestic consumption—as well, of course, as dealing with the extreme water consequences we have been debating this evening. I look forward to the Minister’s response.

[Lord Gardiner of Kimble]

My Lords, I point out at the outset that although I am not as aware as the noble Lord, Lord Campbell-Savours, is about the flooding in his part of the world, as a Defra Minister, and beforehand, I absolutely understand and have seen the devastation and horror of flooding—indeed, the fatalities there have been—across the country. I am thinking particularly of the flooding experienced in one sense on the west side of the country, while on the eastern side there has so often been coastal flooding where the most terrible events have also happened.

I want to take away all that the noble Lord has said, and would be very happy to hear from any of the people who may have contacted him. I am not the Minister who has direct responsibility for flooding but in this House I take responsibility for all Defra matters, and I want to hear much more about the situation of residents there. I have friends in Cumbria who have suffered from the flooding, and I know that communities have been in a very difficult situation for many years. Perhaps I may spend some time outside of this discussion understanding more about the particular points that the noble Lord raised about Thirlmere and the issue of safeguards.

I know it was probably incorrect of me to intervene as I did, but I wanted to ensure that what we are trying to do here, through the Planning Act 2008, was on the record early on. I would of course want to hear in more detail whether there are issues with safety in reservoirs and the 1975 legislation, or issues arising therefrom, that we need to consider. This provision comes from the Planning Act 2008, and I suggest that it enables us to deal with the small number of what we believe to be nationally significant infrastructure projects for water. This is the route that that Act envisaged. We are seeking to add some detail to it and, as I say, include desalination plants.

[Lord Campbell-Savours]

I am sorry to intervene. I want to ask one question. A part of the town now lives in fear of flooding, as I said, and in a large part of the town there has been a major drop in the property values of people’s homes. I presume that there must be people now who are in difficulty over their mortgages. Because of the lack of legislation at the moment, with no way of controlling the operations of United Utilities, is it not possible for some national fund to be set up to help people who are in difficulty over the sale of their properties? I heard about a house last week that was on the market at nearly £600,000 and is being sold for £350,000. These are huge losses, which do not derive from the actions of the people that own them but directly from the absence of legislation that governs flooding. As I say, the danger in this order is that there will be more in the future.

[Lord Gardiner of Kimble]

I am grateful to the noble Lord. Clearly, I am not in a position to talk about resources, as he will understand very well. But obviously, in a different sense, this is why the Government brought forward Flood Re—there was a lot of consideration in the insurance world vis-à-vis it—to seek to address some of the difficulties that householders had. In fact, the noble Lord and I have had conversations about this and some of the distinct elements of where it has been successful. However, I understand generally that Flood Re has been a considerable success for householders with this problem.