Water Bill

Earl of Selborne Excerpts

Thursday 6th February 2014 Lords Chamber

[The Earl of Selborne (Con)]

My Lords, I am always impressed by the fervency with which my noble friend Lord Redesdale promotes the cause of sustainable development. Who could disagree with him that the sustainable use of water is clearly desirable? But does the more specific mention of sustainable development in the Bill help towards those causes or duplicate what is already there and in previous legislation? Does it give a much clearer direction to Ofwat? None of us would dispute that the major issue that must be addressed is long-term sustainable management of water resources. None of us disputes that the new resilience duties on Ofwat are extremely helpful. However, my noble friend Lord Redesdale did not remind us that this issue of whether the situations of Ofgem and Ofwat are totally parallel was looked at by the Gray review in 2011, the advice of which was to reject that. I accept that the Government rejected much other advice—from the Cave review and others—so that is not a roadblock. However, it must be recognised that there are already duties on Ofwat to promote sustainable development.

I am always a little nervous about those who find themselves supporting sustainable development. The concept has three pillars: the economic benefits, the societal benefits and the environmental benefits, all of which must be interconnected. The argument put forward by my noble friend Lord Redesdale was almost entirely based on the environmental and water efficiency benefits. Those are very worthy and very important, but I have also heard sustainable development prayed in aid of some pretty harsh economic messages. Clearly, that is not an appropriate way to interpret it. Is the Minister really sure that this is going to help to clarify Ofwat’s roles? I am not as convinced as my noble friend Lord Redesdale.

[Lord Crickhowell (Con)]

My Lords, at Second Reading I said I was green with envy that the environmental regulators will now have the Bill rather than the legislation that I had to deal with as chairman of the National Rivers Authority when I was in almost continual friendly conflict—I emphasise the word “friendly”—with Ian Byatt the economic regulator. It was so friendly that I have two cartoons at home, which were sent to me by a notable newspaper, showing both of us in the boxing ring. In the first, we are engaged in a vigorous fight, and the second shows us collapsing together exhausted at the end of the exchange. We have made huge progress since then, and the existing sustainable development duty, as I understand it, is now being given statutory authority in the Bill. The clear steer that has been provided by the Government is now being given statutory effect in the Bill. As I understand it, Ofwat now has sustainable development as a central objective. It will have to take account of that. It will have to carry out its functions in accordance with the strategic priorities and objectives identified by the Secretary of State.

So while I entirely understand and, indeed, sympathise with the arguments advanced by the noble Lord, Lord Redesdale—and perhaps it is because we have made such a huge advance from the position with which I had to deal when the economic regulator just did not think he had any obligations to provide for the environment and blocked almost every proposal that came from Europe or from us—I would like my noble friend to clarify what is to be gained or lost if we accept the proposition put forward by the noble Lord, Lord Redesdale, over what we have already in the Bill. I find it very difficult to understand exactly what benefit we would gain. If there is nothing to be lost by including it, I would not be against including it. Against the background of a huge step forward having been taken, I am seeking from my noble friend clarification of the benefits and possible downsides of having this written into the Bill in the way proposed.

--- Later in debate ---

[The Earl of Selborne]

My Lords, I am sure that the Minister will help my noble friend Lord Cathcart, but the short answer is that, unless a water company is operating in an area of water stress, it needs the Secretary of State’s permission to introduce a universal metering programme. As the noble Lord, Lord Oxburgh, has pointed out, that is an unhelpful provision. I am sure that we all agree that, if we could move faster on metering, we would see some of the long-term objectives of the Bill delivered much more quickly.

The White Paper, Water for Life, to which we referred so much at Second Reading, gave one every encouragement that the Government would be promoting universal metering. It points out how universal metering changes our attitude to water, as the noble Lord, Lord Curry, has reminded us. Metering helps you determine where the leaks are, particularly when they are within your property—you suddenly take a great deal of interest when it is going to be reflected in your bill as opposed to that of society as a whole. It allows you, without in any way raising the spectre of de-averaging, to introduce all sorts of innovative incentivisation such as summer schemes, where you pay more on a summer tariff than on a winter tariff, and water reduction devices.

All these measures can and have been achieved once universal metering programmes have been introduced. In the Southern Water area, because we are a water-stressed area, these measures have been introduced and the water industry is looking with a great deal of interest at a number of the lessons which have been learnt from this programme. It is clearly correct that water use goes down. That is the first and most important message, but as the probing amendment of the noble Lord, Lord Oxburgh, points out, there are many other societal benefits. It is a no-brainer and we need to go for it.

[Earl Cathcart]

I thank my noble friend for correcting my wrong conclusion that the power lies with Ofwat. I should probably change my question to ask what the Secretary of State is going to do to change his attitude in this regard.