Water Companies: Fines

Baroness McIntosh of Pickering Excerpts

Thursday 6th February 2025 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the noble Baroness, Lady Grender, on securing this debate, and I am delighted to follow the noble Lord, Lord Browne. I welcome the Minister as ever to her position. I am delighted that the noble Baroness, Lady Grender, has given such a warm welcome to the outgoing Conservative Government’s Plan for Water and the water restoration fund. I declare my interest as on the register: I am an honorary vice-president of the Association of Drainage Authorities; and I co-chair the All-Party Parliamentary Group for Water.

We were fortunate enough to hear this week from Sir Jon Cunliffe, who has been charged by the Government to produce a report for the water commission by the end of June this year, and I very much look forward to his conclusions. In the meeting of the All-Party Parliamentary Group for Water, he told us that the model that was introduced by the then Conservative Government for water privatisation factored in a level of debt, and I think that is something to which he will refer. He has not been asked to review the water privatisation model in that sense of nationalising the water sector, and I think we should recognise that in the debate today.

I repeat my request to the Minister: when does she imagine that Schedule 3 of the Flood and Water Management Act 2010 will be introduced, so that there will be an obligation for all major new developments to have sustainable drains? That will help the situation and reduce flooding.

Some of the project bids invited by the previous Government are still on the table. For example, farmers were invited to make environmental improvements to prevent flooding downstream by slowing the flow, as we saw in Pickering in North Yorkshire, by creating dams, including by planting and felling trees. Can she confirm that such projects will benefit?

As I had long called for them, noble Lords can imagine my welcome for the Plan for Water and the subsequent launch of the water restoration fund as precisely the types of measure that would benefit farmers and local communities under ELMS and other schemes such as the SFI. A number of groups applied for these schemes to bolster their capacity and capabilities to deliver such on-the-ground projects, and they were invited to put forward bids by June 2024.

They were applied for by farmers and landowners—I imagine in Yorkshire, Northumbria and other parts of the country—but they never heard any more. Can the Minister say what has happened to those projects? As the noble Baroness, Lady Grender, asked, what has happened to the water restoration fund? Farmers, landowners and the environmental organisations working with them were led to believe that these were just the types of projects that the water restoration fund was meant to help.

I have read only the one report in the Guardian to which the noble Baroness, Lady Grender, referred, but if these reports are to be believed, it would be entirely inappropriate for the Treasury to hijack these funds and allocate them to other—I am sure very worthwhile—causes. The fact is that, as the Minister will know, it takes time, resources and money to put a bid in for such schemes as the projects invited through the water restoration fund did. They were invited in good faith to put in these bids in April 2024. I understand that the bids closed in June 2024. They were very exciting bids; they ticked a number of boxes for wildlife and the environment, and they were also appropriate to be conducted by farmers and landowners.

I have long believed that, if the ELM and SFI schemes and the water restoration fund are to work successfully, they should benefit local communities and reward farmers for the work they are already doing. The noble Baroness will be aware of the work of drainage boards in low-lying areas such as Lincolnshire, North Yorkshire, possibly Cumbria and other parts of the country.

It sends out a very bad message from Parliament if one Government invite people to apply for these schemes and the next Government then do not allocate the money. I hope the Minister might be able to share the Government’s thinking in this regard and can confirm that these schemes are still viable and may still go ahead in short order this year.

Water (Special Measures) Bill [HL]

Baroness McIntosh of Pickering Excerpts

Consideration of Commons amendments
Wednesday 5th February 2025 Lords Chamber

[Lord Remnant (Con)]

I declare my interest, having been a non-executive director of Severn Trent, the largest of the listed water companies, for eight years between 2014 and 2022, chairing the board’s remuneration committee during that time.

I support Motion 2A in the name of my noble friend Lord Blencathra and will address the reasons given by the Minister in the other place, and essentially repeated just now by the Minister, for objecting to the clauses this Motion this seeks to reinsert. Those reasons are that the additional process of requiring an SI risks compromising Ofwat’s independence, that it would represent significant government interference in the independent regulatory process, and that that kind of interference could have adverse effects on investor confidence.

These arguments have little merit. Ofwat is a government department, and the Secretary of State is responsible for appointing, and has the power to remove, the chair and members of the board. In no way is Ofwat independent of government; nor can the Government escape association with and responsibility for the rules generated by Ofwat, and their consequences. Ofwat is directly accountable to Parliament. If that is so, why should it not account to us for these rules when drafted?

In any event, independence is a red herring when considering the impact on investor confidence. Investors will focus on the rules themselves and their effect on the ability to attract and retain management, and so on the investability of the water sector. In this, they have legitimate cause for concern. The Government are choosing to abrogate their responsibility in this area to Ofwat—an economic regulator, the core competence of which is certainly not the setting of rules on remuneration, and for which it is unsuited.

There are already signs that Ofwat’s approach will be unduly punitive, particularly regarding its retrospective application. However, I thank the Minister for her letter to me at the end of last November following Report, when she confirmed that Ofwat would look closely at the impact retrospectivity has on long-term incentive plans, but the intent was for the provision to cover performance for the 2024-25 financial year onwards only.

None the less, taken as a whole, these rules may discourage the best people from working in the industry, restricting water companies in rewarding good performance and, which is just as important, penalising poor performance. They are likely to force companies away from bonuses and long-term incentive schemes linked to performance, towards a compensating increase in fixed pay. Thames Water has already indicated that this is the line it is likely to take, and others will surely follow. Is this really the result we want to achieve? At the very least, Parliament should have the opportunity to consider the proposed rules and assess for itself the potentially damaging impact on future investment in the sector.

The scale of investment required to clean up our waterways and rebuild our broken water infrastructure is unprecedented. Institutions have a choice of where they invest. In such a heavily regulated sector, they will make a critical assessment of the quality of management tasked with the delivery of the financial plans underpinning that essential capital programme. If Ofwat gets it wrong, it risks starving the water sector of the investment it desperately requires and which all noble Lords wish to see. At best, it will increase the returns investors demand, with the cost inevitably passed on to consumers.

Given the stakes, it must surely be right that Parliament has the opportunity to scrutinise and approve the relevant rules before they come into effect, so I am very much in favour of Motion 2A, tabled by my noble friend Lord Blencathra. I have listened closely to what the Minister has said this evening, but the opportunity for noble Lords to ask questions in a drop-in session is a poor substitute for further parliamentary scrutiny.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the noble Lord, Lord Cromwell, on his work. I will briefly lend my support to my noble friend Lord Blencathra and put a question to the Minister in regard to the letter that she sent to us on 31 January, where she says that she wishes

“to give parliamentarians the opportunity to engage with Ofwat”,

but she prefers “alternative, non-legislative means”. It is more appropriate to put this in the Bill, as in our original amendment. I urge the Minister to respond favourably, in that regard, to Motion 2A.

--- Later in debate ---

[Baroness Hayman of Ullock (Lab)]

My Lords, I will speak also to Commons Amendments 4 to 9.

I will begin by speaking to Commons Amendments 5 to 7, which amend the commencement provisions for Clause 1. These amendments will see Ofwat’s duty to set rules on remuneration and governance brought into force on Royal Assent, rather than through the use of commencement regulations. This emphasises the Government’s expectation that Ofwat’s rules should be in place as soon as possible following Royal Assent, as well as providing greater certainty to Ofwat and water companies as to when Ofwat’s duty will come into force.

I know that many noble Lords—in particular the noble Lord, Lord Roborough—previously spoke to the importance of ensuring that Ofwat’s rules on remuneration and governance will be set promptly after Royal Assent. I hope that these amendments provide further reassurance that the Government expect these rules to be brought forward at pace, and I hope that the House is supportive of them.

Commons Amendment 3 is another minor and technical amendment, this time to Clause 10. It ensures that the Environment Agency and Natural Resources Wales’s cost recovery powers are broad enough to enable the recovery of costs associated with the enforcement of the requirement on water companies to produce implementation reports.

Noble Lords will recall that this requirement was added to Clause 2 on Report following calls from across this House to strengthen requirements around the implementation of measures set out in water company pollution incident reduction plans. However, an expansion in the regulators’ cost recovery powers—as set out in Clause 10—was not enabled at the same stage, which left a potential funding gap. Commons Amendment 3 addresses the gap, ensuring that the Environment Agency and Natural Resources Wales can recover all costs associated with the enforcement of the new requirements introduced by Clause 2.

Commons Amendment 3 also clarifies that cost recovery powers concerning pollution incident reduction plans and the implementation reports are available for plans covering areas that are wholly or mainly in Wales, as well as plans covering England. I again hope that noble Lords will feel able to support this amendment, which will help to ensure the regulators can carry out their enforcement duties and functions effectively.

I will speak now to Commons Amendment 4, which introduces a new clause to the Bill, and Commons Amendment 8, which is consequential to Commons Amendment 4. During the Bill’s passage through this House, many noble Lords voiced concerns about vulnerable customers and their ability to absorb forthcoming increases in their water bills. I thank all noble Lords who shared their views on this critical matter, particularly the noble Baroness, Lady Bakewell, who worked with her team to ensure that the discussion continued in the other place.

I reassure the House that the Government absolutely recognise and share these concerns. That is why the Government introduced Commons Amendments 4 and 8, which add to existing powers for water companies to provide for special charging arrangements for customers in need. This will enable water companies to provide consistent support for water consumers right across the country, replacing the current postcode lottery of existing support schemes, which vary from company to company.

The new clause will allow for the possible automatic enrolment of vulnerable customers on to future schemes, enabling them to get the full support to which they are entitled without having to proactively apply. This will be enabled through improved information sharing between public authorities and water companies.

The details of any scheme brought forward will be established through consultation, as required by the new clause and secondary legislation. In the meantime, existing schemes will continue to operate to ensure that vulnerable customers across the country are supported. Separately, we remain firm on our expectation that water companies will hold themselves to account for their public commitment to end water poverty by 2030 and will work with the sector to ensure appropriate measures are taken to deliver this. I hope that noble Lords will welcome this addition to the Bill and will support the Government in ensuring that the necessary powers are in place to enable support to be brought forward through secondary legislation.

Finally, briefly, Commons Amendment 9 was tabled simply to remove the privilege amendment made in my name in this place. Tabling such an amendment is standard practice; I therefore believe no noble Lord will oppose the Government doing so.

I again thank all noble Lords for the time and attention that they have given to the Bill. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I shall speak briefly to Amendment 4 and the consequential Amendment 8. I support the Government in this regard. I put a question or two to the Minister on the correlation between energy poverty and water poverty. Is this something that her Government will look at closely? The Minister wrote to me with the level of bad debt, which is a staggering figure: between 2019 and 2024, it cost the water sector £2.2 billion. Will this be addressed by the amendments that she has brought before the House? That would be very welcome indeed. Obviously there are those who can pay but will not pay, but there are those vulnerable customers to which she referred, and I welcome the fact that continuity of support will be secured by these amendments. Although I lend my support, I would be grateful if the Minister could address those two brief points.

Avian Influenza

Baroness McIntosh of Pickering Excerpts

Tuesday 4th February 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

Well, in Defra, we work actively with all areas that are affected by avian influenza, including the areas that my noble friend refers to. All I can say is that Newcastle United appear to be having a better season than Leicester City.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the noble Baroness share sympathy with producers of poultry and eggs, who are deeply worried at this time? My noble friend asked from the Front Bench about the status of vaccination. Is she able to say what that status is, at this time, for domestic production?

[Baroness Hayman of Ullock (Lab)]

Yes. The vaccination of poultry and captive birds—clearly, we are not talking about wild birds—is not currently permitted. Avian influenza vaccination is not considered to be a viable option for this season. We have a cross-government and industry task force exploring the potential for vaccination to be used as a preventive measure in the future. In spring this year, we expect the task force to publish its initial report and there will be a statement on that. We realise this is something we need to work on.

Separation of Waste (England) Regulations 2024

Baroness McIntosh of Pickering Excerpts

Monday 3rd February 2025 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, these regulations were laid in draft before the House on 3 December 2024 and confirm the final policy position for simpler recycling in England. For too long, households in England have been presented with a muddled and confusing patchwork of approaches to bin collections. The Government’s simpler recycling reforms will ensure that across England people will be able to recycle the same materials, whether at home, work or school, putting an end to confusion over what can and cannot be recycled in different parts of the country.

We are all responsible for addressing our country’s waste problem, and we know that citizens want to play their part and recycle as much as possible but that they are frustrated by the limited and confusing recycling services. Through these reforms, we are empowering citizens to turn their good intentions into simple, effective actions. Simpler recycling is one of the three core pillars of the Government’s ambitious collection and packaging reforms, alongside the forthcoming deposit return scheme and the extended producer responsibility scheme for packaging. Together, we estimate that the collection and packaging reforms will support 21,000 jobs in our nations and regions and stimulate more than £10 billion of investment in recycling capability over the next decade. The reforms are also estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide equivalent by 2035, valued at over £10 billion in carbon benefits.

Since 2015, household recycling rates in England have plateaued at around 45%, decreasing to 43% in 2022, so we urgently need to take steps to improve the nation’s recycling performance. Simpler recycling will end the postcode lottery of bin collections in England by ensuring that all households and workplaces can recycle the same core waste streams: plastic, metal, glass, paper and card, and food waste, with garden waste for households upon request. Simpler recycling will improve services for householders by introducing weekly food collections for all households in England and kerbside plastic film collections. This will make a significant contribution towards meeting our ambition to recycle 65% of municipal waste by 2035 and our target to reduce residual waste generated per capita by 50% by 2042 compared with 2019 levels. Furthermore, these changes represent a critical first step towards meeting the commitment in our manifesto to transition to a resource-resilient, productive circular economy which delivers long-term, sustainable growth.

I draw noble Lords’ attention to the exemptions introduced by the instrument. The legislation to implement the core legislative requirements for simpler recycling was introduced by the previous Government through the Environment Act 2021. This legislation has already come into force; in practice, this means that simpler recycling will automatically come into effect, beginning in March 2025 for workplaces and March 2026 for households.

Sections 45A, 45AZA and 45AZB of the Environmental Protection Act 1990, as amended by the Environment Act 2021, require that the six recyclable waste streams—plastic, glass, metal, paper and card, food waste, and garden waste—are collected separately, alongside residual waste. The legislation states that local authorities and other waste collectors can make use of an exception to collect these recyclable materials together, if it is not technically nor economically practicable to collect them separately or if there is no significant environmental benefit from doing so. However, if using an exception, waste collectors must produce a written assessment to record the justification.

This instrument sets sensible exemptions from this condition, allowing any combination of the recyclable waste streams of metal, glass and plastic to be collected together, at all times. This exemption applies to collections from both households and workplaces. It also allows food waste and garden waste to be collected together from households, at all times. Waste collectors will not have to justify co-collection of any of these materials, as they would have to under the primary legislation as it stands.

We have taken this decision because the Secretary of State has determined, based on the evidence, that co-collection of those materials does not affect the potential for those materials to be recycled. We will not include paper and card in the exemption. This must, by default, be collected separately from the other dry recyclable waste streams. This applies to collections from both households and workplaces. This is because paper and card are particularly vulnerable to cross-contamination from food and liquid commonly found on other recycling materials, which could significantly reduce the potential for collected material to be recycled.

However, we want to provide flexibility for local councils and other waste collectors. Where waste collectors consider that it is not technically or economically practicable to collect paper and card separately, or where there is no significant environmental benefit from doing so, they may collect paper and card together with other dry recycling, if they provide a written assessment to document the justification.

Waste collectors will decide where an exception applies. There is no need to request permission from Defra or the Environment Agency to co-collect paper and card where an exception applies. We have published guidance for local councils and other waste collectors to support their decision-making regarding the co-collection of paper and card with other dry recyclable materials, where appropriate. All exemptions will be automatic and local councils and other waste collectors will not need to apply for them. They will need to produce only a written assessment to co-collect paper and card with other recyclable materials. To reiterate, without this instrument, they would have had to produce written assessments to co-collect any combination of recyclable materials.

These exemptions mean that the new default requirement for most households will be four containers: for food waste, mixed with garden waste if appropriate; paper and card; all other dry recyclable materials, these being plastic, metal and glass; and non-recyclable waste. As we are maintaining flexibility, councils and other waste collectors may choose to separate materials further if this suits local need. We believe that this is a sensible, straightforward approach to the collection of recycling for every household and workplace in England.

This instrument will also mean that micro-firms—workplaces with fewer than 10 full-time equivalent employees—will not need to arrange for the recycling of the core recyclable waste streams, as required by the Environmental Protection Act 1990, until 31 March 2027. Without this exemption, under the primary legislation, micro-firms would have had to meet the simpler recycling requirements at the same time as all other businesses—by 31 March 2025. We recognise that micro-firms, of which there are an estimated 1.8 million, may face more challenges introducing the changes, so this phase-in period provides additional time for them to prepare.

These are substantial reforms. We will support local councils and workplaces to deliver these new requirements in the most cost-efficient way. Right now, we are focused on raising awareness and providing guidance, including webinars and toolkits, for both local councils and workplaces on how to deliver efficient services. For local councils, we are working to distribute funding for food waste collections as soon as possible; we have already provided £258 million of capital funding, and we will also provide resource and ongoing funding. We will continue to engage with stakeholders in order to understand the challenges that they are facing and to ensure the successful delivery of simpler recycling.

In conclusion, the need for simpler recycling has never been clearer. By simplifying what households and workplaces across England can recycle, these long-awaited reforms will jump-start England’s faltering recycling rate, maximising environmental benefits, ensuring that we keep our precious resources in use for longer, and unleashing investment and economic opportunities. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the Minister on introducing the regulations before us, which I broadly support. I will direct my questions to two specific areas.

The Minister mentioned that guidance will be given to councils on the separate collections. My concern is around what guidance will be given by councils to households in particular. I remember chairing the Environment, Food and Rural Affairs Select Committee at the time of the “horsegate” scandal, where people found that they were eating prepared foods—usually lasagne—made from horsemeat, not beef. It ended, I think, a lot of people’s desire to carry on eating these pre-prepared, highly expensive, undernutritious, highly salted foods. However, if you are a householder and you have one of these trays in front of you, it normally goes, I assume, in your food waste because it is highly contaminated—or the packet that the lasagne I have eaten was in will have to be rinsed sufficiently to ensure that it is not contaminated.

Who is going to guide households on what to do with such prepared food, where it is difficult to get rid of the residual food waste? How does the Minister intend to ensure that, if it goes into the paper recycling, which will now be a separate collection, this will not lead to greater contamination? How will guidance be given to households to ensure that there is no cross-contamination? How does the Minister plan to ensure that there will be no increase in cross-contamination because of the contaminated stuff going into the wrong recycling bin or plastic bag—whatever it is called—that we are going to be issued with?

I would also like to press the Minister on ensuring that a strong message will go out from the Government to councils that there will continue to be a mandatory weekly food waste collection. Anything less frequent than that will lead to vermin and a lot of highly undesirable threats to households, through no fault of their own.

[Baroness Coffey (Con)]

My Lords, I made my maiden speech last week simply to make sure that I could speak in today’s debate. I congratulate the Minister on bringing these regulations forward; it is fair to say, I think, that they have been a long time in gestation. I recall, back in 2018, the resources and waste strategy setting out the idea of trying to get consistent recycling. I have to say, when I became the Secretary of State a while ago, I worked quite hard on this issue to try to get simpler recycling to achieve the outcomes that the Minister has set out.

Thames, Yorkshire and Northumbrian Water: Ofwat Proposed Fines

Baroness McIntosh of Pickering Excerpts

Wednesday 29th January 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

It is important to be clear that Ofwat has to act within existing legislation. It is also important to point out that the Government are absolutely clear in wanting to clean up the water industry, which is why we have set up the commission. Since 2015, the Environment Agency has concluded 66 prosecutions against water companies, which has secured record fines of over £150 million. Meanwhile, in the last five years, Ofwat has secured a total of around £38 million in rebates to customers, in addition to another £150 million in other undertakings, as a result of its enforcement action.

[Baroness McIntosh of Pickering (Con)]

My Lords, the noble Baroness will be aware that a number of applications were attracted for the Water Restoration Fund, including by a number of farmers from Yorkshire, in July last year, since when they have heard nothing. When does the noble Baroness think these applications will be successful?

[Baroness Hayman of Ullock (Lab)]

Defra is evaluating how water company fines and penalties can best be reinvested into improvements to the water environment, which includes looking at the Water Restoration Fund. We hope to make a final decision on that some time this year.

Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2024

Baroness McIntosh of Pickering Excerpts

Monday 20th January 2025 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank the Minister for introducing the instrument before us. I support its contents but I want to clarify a couple of issues.

Can the Minister clarify the situation in Wales? I understand her to say that the scheme will not be offered in Wales and that the Government are no longer engaging with Wales. Do they have a commitment from Wales? I just want to clarify that because, obviously, the situation in Scotland is welcome.

I am grateful to both Coca-Cola and the Food and Drink Federation for their briefings and preparation for today; I am an officer of the All-Party Parliamentary Group for Food and Drink, which is why I asked them for a briefing. They welcome the concept but, in their view, it is important that it is rolled out across the United Kingdom.

The Minister referred to other jurisdictions. I am familiar with how the scheme operates in Denmark; it has had rather perverse consequences. I sometimes feel as though I could pay for my whole Danish holiday if I went around collecting all the bottles and cans left after picnics in parks across Copenhagen and took them back. The deposit—it is called Pant—is actually set at quite a high level, so it would be helpful to know what level the Minister and the Government have in mind. Obviously, it has to be set at a level that is affordable for the consumer, ensuring that they are willing to go back and return a container to the place where it was bought.

Obviously, we must have a deposit management organisation on side. Who will be the deposit management organisation in England? Will it be the supermarket? As consumers, we are concerned about the impact this will have on small convenience stores, which will perhaps not have the facilities to take these returned bottles or whatever after use. It would be helpful to have clarification on what the costs will be and who will provide the service, because they are going to require a very large facility to accommodate the containers being returned.

Coca-Cola is keen to see the DRS—the deposit return scheme—considered as part of the extended producer responsibility. Is that something the Minister can confirm this afternoon?

The Minister concluded by saying that the monitoring and enforcement will be done by, among others, trading standards and local authorities. Are the Government convinced that they will have the resources to do this? Obviously, it is an additional responsibility over and above what they are currently doing in relation to food standards and other commitments.

Finally, if glass is to be excluded at this time, when do the Government envisage glass being included? As I understand it, glass is included in most other jurisdictions, so a big chunk of deposit returns will be excluded if glass is not included.

With those few queries, I lend my support to the scheme.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I thank my noble friend the Minister for presenting the case for the deposit return scheme. I declare my interest as a member of the Secondary Legislation Scrutiny Committee in your Lordships’ House. I welcome this SI and agree with my noble friend that it will make a major contribution to the reduction of littering. Numerous cans and other types of litter are strewn across the countryside and nobody appears to take responsibility, apart from local neighbourhoods that engage in their own collection schemes. I laud them for doing so.

I have some questions in relation to Northern Ireland. Normally this would be a devolved measure. I suppose that the UK Government were trying to ensure that there was a collective approach on the part of the Government and the devolved nations and regions. Perhaps my noble friend could explain the purpose of including the devolved nations and regions. Also, will the money collected from this scheme in Northern Ireland go to the Treasury, or will it go to the Department of Finance, where it can be invested in local schemes, and into the general exchequer for the delivery of lots of different types of service? I am well aware of the value of the plastic bag scheme in reducing litter but also in terms of the money. It has added to the portfolio of money available for the enhancement of services.

Secondly, I have a couple of questions in relation to Wales, which, I note, has not signed up to this scheme. How can the interoperability of the four UK schemes and the avoidance of unique identifiers in the Welsh market be assured? With Welsh proposals not yet published, how can the October 2027 introduction date be assured to avoid material switching under the EPR scheme? Will the Government ensure that the divergence of the Welsh scheme does not impact the governance of the UK, Northern Ireland and Scotland deposit return scheme and the appointment of a scheme administrator?

Those are the issues that most interest me in this SI, which I strongly support.

--- Later in debate ---

[Lord Hayward (Con)]

In referring to locations in and around Westminster, the Minister said that they were close to 100 square metres and would therefore be required to operate the scheme. That is not quite my understanding from what the noble Lord, Lord Blencathra, said. Could I clarify whether shops and other outlets below that figure will be required to offer those facilities?

[Baroness McIntosh of Pickering (Con)]

Could I add a rider? Will there not be a de minimis rule? I asked about the size of stores; surely there will be a de minimis rule below which stores will not be required to participate.

[Baroness Hayman of Ullock (Lab)]

I have further information around size, which I will come to. The noble Lord, Lord Blencathra, referred to all the shops selling drinks containers in the Westminster area being bigger than 100 square metres. The regulations set out that supermarkets and convenience stores will be required to host a return point unless they are subject to an exemption, which would be given if they did not meet that size and had applied for that exemption—that is how it is set up—or they could opt in. So takeaways are not included, but they could opt in, as the idea is to have a bit of flexibility in the regulations. I think that is correct.

--- Later in debate ---

The noble Baroness, Lady McIntosh, asked about local authorities in particular. We anticipate that the scheme will collect upwards of 90% of DRS containers placed on the market from the third year of its operation. It is likely that many of the containers that are not returned will continue to travel through local authority waste streams, such as kerbside recycling. We think that the introduction of a DRS will have a varying impact on local authorities, as there will be losses in sales and material for those who sell on recycled material but also efficiency savings from collecting and processing less material.

[Baroness McIntosh of Pickering (Con)]

I asked specifically about the Minister’s point on monitoring and enforcement by local authorities. Will they have the resources to do that going forward?

[Baroness Hayman of Ullock (Lab)]

We want, as we bring the scheme in, to work closely with local authorities to be aware of any impacts on them and to ensure that they have the resources they need to manage the scheme effectively. I shall move on because I have been speaking for a long time.

Implementation timelines came up. The Government are not faffing around. Some people think that we are moving too quickly while others think that we are moving too slowly, but there is a scale to this challenge and a lot of effort from industry will be required to deliver the DRS. We believe that our timeline will provide the industry with the amount of time that it needs to implement the scheme properly. It assumes 12 months for the DMO to scale up, to make key decisions and to make the relevant appointments in its delivery partners, then 18 months of practical implementation time. That is why this timeline, which was agreed with industry and represents international best practice, has come in.

The noble Lord, Lord Blencathra, asked about costs of set-up and implementation. Following an impact assessment last year, we updated the previous figures, but it is important to consider that some costs will be compensated through the retailer handling fee, paid by the DMO. There are also benefits from increased footfall. Obviously, some costs could be passed on to consumers, but international evidence suggests that this would be relatively minor and well within the scope of the normal cost variations in the sector.

The noble Lord, Lord Hayward, and the noble Baroness, Lady Bakewell, asked about the impact on small businesses. There are exemptions for small retailers, as I mentioned earlier. The DMO will be required to consult with businesses of all sizes before it makes any of the key scheme decisions, such as on fees.

My noble friend Lady Ritchie asked about Northern Ireland. The Environment Act, under which this statutory instrument is established, provides powers for the Secretary of State to legislate on behalf of Wales and Northern Ireland, with their consent. On Northern Ireland, DAERA asked Defra to legislate on its behalf, which is why we are including Northern Ireland in the legislation.

I have been talking for some time. I hope that I have covered most of the questions asked by noble Lords; a lot of questions were asked. I assure the noble Baroness, Lady Bakewell, that Defra is determined to make this work; I thank her for her support for these regulations. I hope that I have answered most of the questions asked and trust that noble Lords accept the need for this instrument.

Water Bills

Baroness McIntosh of Pickering Excerpts

Thursday 9th January 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

I assure the noble Baroness that Defra is regularly in contact with the Treasury about all issues such as this, particularly about how to support people going forward. Many of the challenges farmers in particular face—my colleague is at the Oxford Farming Conference today talking to farmers—are to do with long-term security and the ability to bring in long-term investment. Water affordability is an important part of that.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister have the most recent figures for the level of bad debt in the water sector, particularly among vulnerable households? If she does not have the figures, could she release them by letter to the Library? Will she inform the House of how she intends to address the level of bad debt at this time?

Flooding

Baroness McIntosh of Pickering Excerpts

Tuesday 7th January 2025 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

I am hoping that we will see it very soon. The target we are working to is that we are hoping to see it some time later this month.

[Baroness McIntosh of Pickering (Con)]

My Lords, would the Minister like to take this opportunity to renew her commitment to not building on functional flood plains, such as zone B, which she was kind enough to support in an amendment in my name to an earlier piece of legislation, the levelling-up Bill? I add my congratulations to all the emergency services and others and add the drainage boards and declare an interest as an honorary vice-president of the Association of Drainage Authorities. Will the Minister explain how many kilometres of minor watercourses she expects to be dredged and maintained during the course of this year?

I recognise the extra funds that the Government have awarded to drainage boards for this purpose. One issue is that we do not currently have a total—totex— budget. As the noble Baroness, Lady Humphries, referred to earlier, the budget is divided between maintenance spending and capital spending, with endless arguments. If there was a total budget such as there is for water companies, which also do some of this work, flood defences and flood maintenance would be in a much better state.

[Baroness Hayman of Ullock (Lab)]

Clearly, drainage is an important part of managing any kind of flood risk. If the water cannot go through the drains, it will sit on the surface and cause problems. It is always difficult keeping drains clear throughout a whole flood event, because water inevitably brings with it things that will cause blockages in drains. But it is important that we manage the drains as effectively as we can ahead of flooding and that we also support internal drainage boards.

Internal drainage boards clearly do important work managing water levels and reducing flood risks to farmers and rural communities. The Government have committed to providing an additional £50 million to internal drainage boards over this year and next, to improve, repair or replace the flood-risk assets. This builds on the £25 million that was already being provided. As I have said, we are committed to continuing our work with internal drainage boards and also with MHCLG. With so much of this, the two departments need to come together to get a consistent and effective approach for the long term.

Rural Economy

Baroness McIntosh of Pickering Excerpts

Thursday 19th December 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the right reverend Prelate on calling this debate and for all his work on rural affairs. I am delighted to sit with him on the rural interest group of the Church of England Synod. I pay tribute to the role of the Church in rural areas in times of crisis, as I witnessed during the foot and mouth outbreak in the early 2000s. I declare my interests: I work with the rural doctors—my father and brother were dispensing doctors—of the Dispensing Doctors’ Association. I am also a patron of Upper Teesdale Agricultural Support Services, honorary president of the Huby and Sutton agricultural show and vice-president of the Association of Drainage Authorities, which have a role to play in preventing flooding in low lying areas.

As a proud Yorkshire lass, I would say that there is lots to celebrate in the rural economy, not least farming, countryside and food—and the best show in town, the Great Yorkshire Show. There is also a role for auction marts, which set the price and have a presence in market towns. They have a role in the rural economy and the community, playing a specific social function. Farmers are fiercely proud and independent, often visiting the auction mart well into their retirement as well as during their active farming lives. When the auction marts closed during the foot and mouth outbreak, there was really nowhere for the farmers to gather and chat. Country shows show the best local farm produce and educate the next generation in the joys of the countryside and farming. The Great Yorkshire Show showed children livestock first hand, and I am delighted to say that I have attended since I was a schoolgirl in Harrogate.

What are the current barriers to the growth of the rural economy? As others have said, the whole rural economy has been impacted by the employers’ national insurance contribution increase—doctor’s surgeries, care homes, hospices and veterinary practices specifically, and every walk of life. The inheritance tax proposals and the revision of agricultural property relief, as well as the removal of capital grants, will severely impact on the farming community. There is also a shortage of farm workers as a result of a shrinking rural population, poor local transport and the cost of housing. All this could be remedied in part by increasing the number of seasonal workers on farms and the length of time they spend on the farms. Rural broadband and mobile phone coverage is still below par, making farm and rural businesses less efficient and competitive. There is less access to banking services, with bank branches and post offices having closed.

The Government should encourage productive farming. We should not build solar farms on grade 2 or grade 3 productive land, as in the test cases currently in Old Malton and east Yorkshire. Tenant farmers have a particular contribution to make, especially in the uplands. Some 48% of farms in North Yorkshire are tenanted, yet their future is bleak and uncertain, given the Government’s Budget proposals.

I pay tribute to the charities supporting the farming community in rural areas; their role is valuable and, sadly, increasing. I am mindful of the mental ill-health and state of anxiety among farmers, which is now sadly also affecting their children. I am also mindful of the levels of farm vehicle theft and other rural crimes, the impact of marital breakdowns, and the fact that farmers are reluctant to visit their doctor and often neglect their own health.

Others have mentioned tourism, hospitality and leisure in the rural economy, and I support their impact. I am delighted to be the honorary president of the North Yorkshire Moors Railway. I hope all noble Peers will take the opportunity to visit it during one of the forthcoming recesses.

The UK is on average only 60% self-sufficient in food, yet only 16% in fruit and vegetables. The power of the supermarkets is great; that of growers and the supply chain is weak. The Groceries Code Adjudicator’s role needs to be addressed to ensure that it can undertake reports on its own initiative and not identify those who seek to make a complaint.

What is the way forward? All government policies should be assessed and rural-proofed. That used to happen in the past; it should happen in the future. We should recognise that farmers are key to growing the rural economy, but they need help in meeting the current challenges, whether climate change, flooding on farmland or the increases in oil prices and in the cost of fertilisers and pesticides. Environmental land management schemes are rolling out at a slower pace than the reduction in basic farm payments, leaving farmers with a huge gap in their income.

I beg the Minister not to play Scrooge, as in A Christmas Carol, but to be as generous as the Government can possibly be to farmers. Farmers face an uncertain future. If you want something done, ask a farmer, but they are asking whether we want them to produce food for us anymore. The future of our food system, our rural communities and even our environment is in question. Their future—for the farmers and for growth of the rural economy—is in the Government’s hands. We look to the Minister to provide answers today.

Domestic Animals: Welfare

Baroness McIntosh of Pickering Excerpts

Monday 16th December 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

The noble Baroness makes a very good point. We are aware that there are some digital challenges within the department, and we are looking at that very carefully.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the noble Baroness agree that not enough is being done about puppy smuggling? How many prosecutions for puppy smuggling and for boiler-house productions have there been following the Animal Welfare Act? Boiler-house puppies could be relieved if the mother—the bitch—was present at the sale of the puppies. Will the Government enforce that?

[Baroness Hayman of Ullock (Lab)]

The noble Baroness makes a good point. On puppy smuggling, we have made a clear commitment to end puppy farming. We are also supporting a Private Member’s Bill in the other place on puppy smuggling, because we are determined to do our best to stop these abhorrent practices.