Milk Production

Debate between Lord Berkeley and Lord De Mauley

Thursday 15th January 2015 Lords Chamber

[Lord Berkeley]

I am grateful to the noble Baroness. Does the Minister agree that one way of reducing the cost of production would be to introduce mega-dairies and very big units in the way that has been done for poultry and pigs? Does he have a view on that and what sort of size would the Government welcome?

[Lord De Mauley]

Certainly, my Lords, some producers are able to produce milk at a much lower rate—I met a farmer the other day who claimed to be producing milk in the mid-teens. We do not have strong views on the size of units of farms. What matters is stockmanship.

Health: Diesel Engine Pollution

Debate between Lord Berkeley and Lord De Mauley

Tuesday 6th January 2015 Lords Chamber

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

My Lords, the plan to reduce emissions and pollution is set out in the Sustainable, Resilient, Healthy People & Places strategy. This encourages walking and cycling, which have direct health benefits, and reduces emissions of air pollutants and carbon dioxide. Key to reducing the health impacts of air pollution is reducing emissions at source. We are investing billions of pounds in measures to reduce air pollution, including incentivising low-emission vehicles and sustainable transport.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that Answer, but is he aware—I am sure he is—that, according to Clean Air in London, 55,000 premature deaths a year nationally are attributable to NOx and fine particulates? Already, monitors in Oxford Street and other parts of London have shown that NOx hourly limit values have been breached for the whole of 2015, which is not bad in six days. Why then is Defra consulting on proposals to remove the obligation for local authorities to monitor such pollution? In the absence of that evidence, are the Government trying to avoid blame for denying those 55,000 people their 10 extra years of life, which they could achieve if the policies were implemented?

[Lord De Mauley]

It is helpful that the noble Lord has asked that question. It gives me the opportunity to clarify that nothing in the consultation could lead to the closure of monitoring stations. It is essentially about streamlining and simplifying the reporting system to reduce unnecessary burdens and speed up delivery of air quality action plan measures to tackle pollutants such as NO₂ and particulate materials. We are not proposing a reduction of monitoring by local authorities, but decisions on local air quality monitoring are for them, so ultimately it is up to them to decide what level of monitoring they wish to undertake.

Thames Tideway Project: Contingent Guarantees

Debate between Lord Berkeley and Lord De Mauley

Tuesday 14th October 2014 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government why they have indicated the availability of contingent guarantees in support of Thames Water; and whether this complies with their policies on offshore financial instruments, governance and taxation.

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

My Lords, to be clear, the Government are not providing a contingent guarantee to Thames Water. The Thames tideway tunnel project will be financed and delivered by a competitively tendered infrastructure provider which is an entirely separate entity to Thames Water. Details of a contingent government support package for this entity, which complies with all relevant government policies, were announced in a Written Ministerial Statement on 5 June.

[Lord Berkeley (Lab)]

My Lords, I am grateful to the Minister for that reply. Every week the Government tell us that they intend to outlaw aggressive taxation and leverage policies. The Minister says that Thames Water is not going to be in receipt of these funds but the Thames tideway tunnel project will be. Why are they allowing that to be financed in a tax haven while also promising it a government guarantee? Is there not a conflict of interest here somewhere?

[Lord De Mauley]

My Lords, I have comprehensively answered the noble Lord’s point about tax in earlier short debates on this subject. Perhaps we will come back to that later, but I will address his point about the appropriateness of offering a government support package. The contingencies covered by it are set out in the Written Ministerial Statement. It is common for Government to provide support of some kind to major infrastructure projects—for example, the PFI projects under the previous Government. The government support package here will cover low probability but high impact risks that the market could not take on at a reasonable cost to customers. The infrastructure provider will be incentivised not to call on it and it will exist only during the construction phase. The important thing to bear in mind is that the infrastructure provider will pay for the cover. Furthermore, the financing for the project is sought competitively to help minimise the cost—and that means the cost to customers.

Thames Tideway Tunnel

Debate between Lord Berkeley and Lord De Mauley

Wednesday 14th May 2014 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government whether they have discussed with Thames Water the additional annual charge to its customers to fund the development and construction of the Thames Tideway Tunnel and the duration of this charge.

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

My Lords, the Government have indeed been working closely with both Ofwat and Thames Water to ensure that the Thames tideway tunnel is delivered in a way which minimises the impact for customers and taxpayers.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that Answer. Will he confirm that the latest figure for how much it will cost all Thames Water’s customers—from Swindon to Witney, and Newbury to London—is about £70 or £80 per year extra for the next 50 years? Is that reasonable, given the fact that the tunnel may become redundant in 20 years because of the Government’s own Flood and Water Management Act and the requirement for sustainable urban drainage systems? Is not the best thing now to abandon the tunnel completely and save all this taxpayer and government money?

[Lord De Mauley]

My Lords, of course not. Government estimates at 2011 prices were for a maximum bill impact range of between £70 and £80 per year. These figures remain valid as an upper bound and would take Thames Water customers’ sewerage bills to around the national average. The construction costs are currently out to tender with consortia of contractors. We also consulted last December on a competitive procurement approach for the financing costs, although no decision has yet been made.

Flooding: Somerset

Debate between Lord Berkeley and Lord De Mauley

Thursday 6th February 2014 Lords Chamber

[Lord De Mauley]

I am sure that my noble friend did not mean exactly what the Opposition thought he meant. The Army is on standby if necessary, as I have said. High-volume pumps have been deployed from the National Asset Register and they are in place to prevent further increases in levels of flood water. The pumping operation is in fact one of the largest that the country has seen. My right honourable friend the Secretary of State has asked for a clear action plan for the sustainable future of the Somerset Levels and moors to resolve the problem for the next 20 years. Noble Lords will be aware that I am repeating a Statement later to deal with extra funds for repairs.

[Lord Berkeley (Lab)]

My Lords, has the Environment Agency got its priorities right on the floods? It says that it does not want to do any dredging. I was told by one of its officers that there is no point in dredging, because there is a high tide and the water is coming in, but it must understand that there is also a low tide and it can go out. I had an e-mail this morning from the Environment Agency about the Dawlish Warren, and as we know the railway will be closed for six weeks. The agency says that it will study the bird movement on the beach over the next year to see whether it can move any sand back there. Are we looking after birds before humans?

[Lord De Mauley]

My Lords, the agencies are working together to ensure that measures such as dredging can proceed as rapidly as possible and meet the existing environmental requirements. The Environment Agency, Natural England and the local authorities are working together to expedite this.

Peatlands

Debate between Lord Berkeley and Lord De Mauley

Wednesday 8th January 2014 Lords Chamber

[Lord De Mauley]

I was not quite sure which noble friend was going to ask me a question then. The point on greenhouse gas emission reporting is that the metrics and technology are at a relatively early stage. We are still working on that, but noble Lords may rest assured that it is a key focus for us, and we will not rest until we have achieved that.

[Lord Berkeley (Lab)]

My Lords, the Minister said that they were looking for sponsorship for the management of these peatland areas. Does that mean that the only new areas that will get managed will be those sponsored by McDonald’s, et cetera?

[Lord De Mauley]

No, my Lords; that is why I mentioned the new environmental land management scheme.

Thames Tideway Tunnel

Debate between Lord Berkeley and Lord De Mauley

Thursday 24th October 2013 Grand Committee

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

My Lords, this has been a most interesting and informative debate, with a good exchange of views on many aspects of the Thames tunnel project. I thank the noble Lord, Lord Berkeley, for his assiduousness in pressing the Government on this subject. I will try to address as many of the issues raised as I can, but before I do that, I also thank the noble Lord, Lord Stoddart, for his thoughtful contribution, but no one do I thank more than the noble Lord, Lord Grantchester, for confirming that the Opposition support the project.

I believe that there is widespread acceptance that it is unacceptable for a leading European city in the 21st century to have a major river flowing through it that is increasingly taking on some of the characteristics of an open sewer. However, this situation in London is not new. We have known about it for well over 10 years. In that time, there has been much consideration and study of possible solutions to the problem, from all angles by a range of experts.

The noble Lord, Lord Berkeley, asked what assessment the Government have made of the proposals for the Thames tideway tunnel. A tunnel-based solution first emerged from the Thames tideway strategic study. That group, which was established in 2001 and reported in 2005, comprised the Greater London Authority, Defra, Thames Water, the Environment Agency and Ofwat, in an observer capacity, with an independent chairman. The group considered a range of alternative solutions, drawing on the technical expertise of numerous bodies and professional advisers, before arriving at its conclusion that a full-length tunnel was the preferred solution for reducing the number of combined sewer overflow spills and meeting the environmental objectives for the river.

In 2007, the then Government published a regulatory impact assessment of sewage collection and treatment for London which examined these and a range of other proposed options. The overall conclusion was that only a full-length tunnel would provide a cost-effective solution that met the tideway environmental objectives for the river within a reasonable timescale. Accordingly, the then Government asked Thames Water to proceed with developing detailed proposals for a tunnel. Since then, Thames Water has refined its proposals and consulted extensively on them.

Defra officials are working closely with Ofwat and Thames Water to ensure that the costs are tightly controlled, so that customer bill increases over time to pay for the financing of the tunnel are kept as low as possible and provide value for money. In addition, in November 2011 Defra published an updated assessment of the proposed options to address sewage in the Thames and an updated cost-benefit assessment. These were entitled Creating a River Thames Fit for our Future—A Strategic and Economic Case for the Thames Tunnel and Costs and Benefits of the Thames Tunnel.

In 2012, Parliament considered and approved the Government’s National Policy Statement for Waste Water, with debates in both Houses. This set out the need for major wastewater infrastructure, compared the alternative solutions for the Thames, and concluded that a tunnel was the preferred solution. The National Policy Statement for Waste Water will be used by the Planning Inspectorate in considering Thames Water’s current application for a development consent order for the tunnel. In 2012, my department also published its Thames Tunnel evidence assessment, to ensure that due consideration had been given to the full range of evidence available on all the proposed options to address the problem of sewage pollution in the River Thames. This included an annex listing all 36 of the relevant supporting studies and reports.

Earlier this year, in view of representations being made by the noble Lord, Lord Berkeley, among others, that some US cities were implementing sustainable urban drainage systems, or SUDS, and green infrastructure to address their overflow problems, we asked the Environment Agency to carry out an assessment of the evidence on whether SUDS could deliver the environmental standards set for the River Thames. The review, published last week, concluded that all the available evidence, comprising more than 70 relevant studies, shows that SUDS alone could not achieve this.

The noble Lord, Lord Berkeley, referred to Philadelphia. If I may, I will dwell for a moment on what some major US cities are doing, because the US has federal standards which are not dissimilar to those set by EU law. Washington DC has just started boring a deep five-mile tunnel of similar dimensions to the Thames tideway tunnel. This is part of a 12-mile tunnel system that aims to reduce combined sewer overflows by 96%, a similar standard to that proposed for the Thames tideway tunnel.

Major storage and transplant tunnels are also a key feature of solutions put in place to tackle combined sewer overflows in Milwaukee and Wisconsin. Pittsburgh is attempting to achieve a similar standard through the 25-year implementation of sustainable drainage systems. In Portland, Oregon, SUDS have been used to remove approximately 8 million cubic metres of storm water a year. This is 35% of its total sewer overflow volume, but tunnels still prove necessary to meet the required levels of control. Philadelphia aims to tackle 85% of its sewer overflow discharges using SUDS over a 25-year period. The work has been going on for five years now, but a tunnel solution may still be necessary to meet the required environmental standards.

Unlike London, Philadelphia and Portland have a geology which is suitable for SUDS. The soils underlying the cities’ SUDS areas are more porous and more able to soak up excess rainwater. The main point is that each solution reflects the particular building density, geology, rainfall patterns and existing sewer system of that city.

There does not therefore appear to be any case to revisit the case for the tunnel as it is set out in the national policy statement. I have also seen compelling recent evidence of the scale of the problem with wastewater discharges into the Thames, and I am advised that the serious rainfall event last weekend resulted in more than 1 million tonnes of wastewater being discharged into the river over a very short period of time. A tunnel would have captured these discharges, and transferred them for treatment in time to handle any subsequent heavy rainfall events. I do not believe that supporters of SUDS as an alternative to the tunnel have demonstrated how they would handle events of this type.

The noble Lord, Lord Berkeley, also referred to the work of Professor Binnie. We believe that the environmental criteria set in 2007 remain robust, are not gold-plated, and should not be downgraded. Alternatives such as a shorter western tunnel combined with SUDS would not meet the environmental objectives for the Thames tideway in an acceptable timeframe or at lower cost than the full-length tunnel.

A further important factor is the 2012 European Court of Justice ruling that the UK was in breach of the urban waste water treatment directive in London, which means that there is an increased likelihood of very significant infraction fines if we do not comply within a reasonable period of time. The risk of fines has been reinforced by the very recent fines ruling against Belgium for not complying quickly enough with a previous adverse court judgment with regard to waste water collection and treatment.

The noble Lord, Lord Berkeley, asked what the tunnel solution will deliver. The Thames tideway tunnel would reduce the frequency of spills from the 34 combined sewer overflows in London intended to be caught by the proposed tunnel from around 50 to 60 to just three or four times a year during extreme rainfall events, with the estimated overflow volume falling from around 18 million to 2.5 million tonnes. That would improve water quality, with benefits for wildlife and river users. It will also ensure that we continue to meet the UK’s obligations under the urban waste water treatment directive and the water framework directive. We are clear that the overflow volume to be addressed by the tunnel is 18 million tonnes, not the 39 million stated by the noble Lord, Lord Berkeley, as quoted by Thames.

The noble Lord, Lord Berkeley, also asked about the financing of the project. The Government believe that the private sector can and should finance this project. Although the Government can provide financial assistance in any form in relation to the tunnel, we have stated that this will be contingent financial support for exceptional project risks, to help ensure the cost of financing the project is kept to a minimum and offers best value for money for customers and taxpayers. However, we will want to be assured, when offering this contingent support, that the taxpayer is appropriately protected by measures that minimise the likelihood of these exceptional risks materialising.

The noble Lord, Lord Stoddart, asked about customers outside London paying for the tunnel. It is worth saying that London customers have helped to finance major sewerage investments outside the capital that serve a much smaller population. When improvements are needed, for example, in rural Oxfordshire, the cost is spread among all customers of sewerage services, including those living in London. This approach, which is supported by Ofwat, is standard across England and Wales and is the fairest way of apportioning the costs of investment in water and sewerage services.

The noble Lord, Lord Stoddart, suggested that Thames Water should pay for the tunnel from existing funds. Paying for the project from any accumulated reserves would neither reduce the cost to customers nor remove the requirement for some type of government support. This is a major tunnelling project and has a risk profile significantly beyond that typically expected of a water and sewerage company. That is why the tunnel is expected to be financed and delivered by an independent infrastructure provider with its own licence from Ofwat and backed by some form of government support related to exceptional project risks.

The Government believe that the private sector can and should finance the project but accept that there are some risks that are not likely to be borne by the private sector at an acceptable cost. The Government are therefore willing, in principle, to provide contingent financial support for exceptional project risks where that offers best value for money for customers and taxpayers.

[Lord Berkeley]

Can the Minister explain what these exceptional risks are?

[Lord De Mauley]

My Lords, I am sure I will in a minute. We will want to be assured that when offering contingent support, taxpayers’ interests remain a top priority. The taxpayer must be appropriately protected by measures that minimise the likelihood of these exceptional risks. We are working on the detail with Ofwat, Infrastructure UK, Her Majesty’s Treasury and Thames Water to ensure that there is a minimal likelihood of contingent government support ever being called on.

The noble Lord, Lord Grantchester, asked about the status of planning. Given that Ministers have a quasi-judicial role in the planning process, I hope the noble Lord does not expect me to go into detail at the moment.

The noble Lord, Lord Stoddart, asked about bill increases. We have always made it clear that the estimate of £70 to £80 is, indeed, only an estimate and should not be used, as it was in a recent paper, to reverse engineer a notional investor return. If the project is delivered through an infrastructure provider, the actual figure that appears on Thames bills will be set following the competition for the financing of the project. That will ensure best value for money for customers and keep bill increases as small as possible.

The noble Lord, Lord Berkeley, asked just now what contingent financial support really means. The support will occur in the case of unlikely events such as severe debt market disruption, significant cost overruns due to extreme tunnelling conditions and any caps on commercially available insurance.

Over the past 10 years, the Government have undertaken lengthy and thorough assessments of the Thames tideway tunnel project and alternatives. They have concluded that the tunnel represents the most cost-effective, timely and comprehensive solution to the problem of sewage pollution in the River Thames in London.

Thames Tideway Tunnel

Debate between Lord Berkeley and Lord De Mauley

Wednesday 24th July 2013 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government what steps they are taking to ensure that any support provided by HM Treasury for financing the Thames tideway tunnel project has minimal impact on customers’ bills and provides value for taxpayers.

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

My Lords, we believe that the private sector should finance the tunnel. However, there are some risks that it may not be able to bear at an acceptable cost. We are willing in principle to provide contingent financial support that encourages private sector investment and offers an incentive to delivery partners to manage project risks and minimise costs. The Government are working to ensure that the tunnel offers value for money for customers and taxpayers, while being financed and delivered efficiently.

[Lord Berkeley]

I am grateful to the Minister for that Answer. But how will the Government explain to 6 million households that they are required to pay £80 a year extra on their water bills for 100 years or so to a company which last year paid no corporation tax but managed to pay £231 million in dividends to its offshore owner and which has reduced its assets to the extent that it cannot fund the project, with the Government not only guaranteeing it but agreeing to pay for it if they have to? How can this really be good for customers or the taxpayer?

[Lord De Mauley]

My Lords, we are faced with the problem of London’s sewers being at or close to capacity and millions of tonnes of sewage overflowing each year. The solution costs a great deal of money—more than £4 billion—so we need a sophisticated way to finance it. Thames Water pays its tax, and the entity which builds the tunnel will pay its tax, but water and sewerage companies have to make huge investments in infrastructure, the tunnel being a classic example. Therefore, while all companies are eligible for capital allowances, water companies perhaps appear to benefit more from them than others. We expect Thames Water’s customers’ bills to rise by about £70 to £80 a year to pay for the tunnel, which would still leave them paying below the national average. Removing capital allowances would of course mean that those bills would increase further.

Thames Tideway Tunnel

Debate between Lord Berkeley and Lord De Mauley

Tuesday 15th January 2013 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government what will be the costs to the consumer of the Thames Tideway Tunnel.

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

My Lords, for Thames Water’s 13.8 million domestic sewerage customers, the tunnel is estimated to have an average maximum annual impact on bills of £70 to £80 at 2011 prices. This includes the cost of financing the project. The exact profile and duration of the cost to customers continues to be analysed. Spread over several decades, bills could gradually be affected from 2014-15, with the maximum impact estimated from around 2019.

[Lord Berkeley]

I am grateful to the Minister, and glad that they are still looking at the finances. Does he agree that if Thames Water had paid a reasonable dividend appropriate to a utility for the past 12 years and Macquarie Bank had not taken £48 million a year on management fees, this project could have been funded out of Thames Water’s assets without any extra charge on the customers? Will he therefore instruct the regulator Ofwat to look at all this again—to look at alternatives such as a sustainable drainage system—so that customers can perhaps get a reduction in their fees rather than this horrendous increase?

[Lord De Mauley]

My Lords, Ofwat has ensured that the regulatory ring-fence in Thames Water’s licence was tightened following its acquisition by Macquarie. The ring-fence licence conditions on Thames Water already include a condition requiring Thames Water to ensure that its dividend policy will not impair the company’s ability to finance its functions. As for alternatives to the tunnel, studies have looked at all kinds of alternatives over the past decade but none has shown a viable cheaper solution that would simultaneously address the current sewer overflow problems within a decade, deliver value for money and meet environmental objectives.

EUC Report: EU Freshwater Policy

Debate between Lord Berkeley and Lord De Mauley

Wednesday 5th December 2012 Lords Chamber

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

My Lords, I start by thanking the noble Lord, Lord Carter of Coles, for initiating this debate, and his committee for its report, An Indispensable Resource: EU Freshwater Policy. We are also debating the recent publication of the European Commission’s communication, A Blueprint to Safeguard Europe’s Water Resources.

Like the noble Lord, Lord Granchester, I declare an interest as the owner of a farm, through which a tributary of the Thames flows. I am also the proud possessor of a bore-hole.

As our recent weather has shown, in many parts of the United Kingdom we currently have too much water, but noble Lords will recall—and several have referred to—the position we were in last winter, heading into spring with parts of the country facing severe drought. As the noble Lord, Lord Carter, said, how quickly the rain came, and that position changed. While we cannot, as the noble Lord, Lord Cameron, said, change the weather, we can ensure that we are in the best position to deal with its implications and plan appropriately for those times when there is too much or too little of this essential resource available for both humanity and the environment.

The Government welcome the European Union committee inquiry into the blueprint and its recommendations as a helpful contribution to the debate. The Government are committed to improving the quality of our waters and we welcome the committee’s conclusion that the water framework directive has been a force for good. We are committed to implementing the directive, not merely from a legal point of view but because we believe we have a clear moral imperative, and an economic one. Many of the committee’s recommendations have also found their way, in some form, into the recently published blueprint communication.

A Blueprint to Safeguard Europe’s Water Resources outlines a three-tier strategic approach: first, improving implementation of current EU water policy by making full use of the opportunities provided by the current laws; secondly, increasing the integration of water policy objectives into other relevant policy areas; and thirdly, filling the gaps of the current framework, particularly in relation to the tools needed to increase water efficiency.

The UK Government have welcomed the communication and are pleased that, by and large, new regulatory tools are not proposed as the method for filling in the gaps. We strongly believe that the right framework is in place and efforts must be made to make that work, rather than automatically turning to the regulatory toolbox to provide the magic wand to solve a particular problem.

The majority of the blueprint actions are voluntary measures, such as new guidance documents to be developed with other member states. Other actions involve calling for the integration of EU water policy into other EU policies and improving the enforcement of EU legislation. There is only one possible legislative proposal on developing standards for water reuse. While we would prefer not to assume that regulation is the most appropriate vehicle for achieving this, we can understand the potential benefits for doing so, particularly with regard to meeting commercial and food production requirements on ensuring food safety.

In responding to the committee’s recommendations, I would like to highlight the following developments. We have committed to delivering improvements to our aquatic environment through a catchment-based approach, to which the noble Lord, Lord Carter of Coles, referred. We have established 66 pilots with a range of hosts, including charities, private water companies, established partnerships, and of course the Environment Agency and Natural England. These hosts are engaging with interested parties, and planning water improvement actions at the local level. The evaluation of these pilots will inform the approach for wider national adoption from April next year.

Water catchment plans will help target and share delivery of the measures we need to tackle both urban and agricultural diffuse sources of pollution. This will make a very real difference and up our game in improving the environmental status of our waters. We have recently published a consultation on how to address urban sources of diffuse pollution.

In the rural sector we now have various options available under agri-environment schemes to protect water quality. We will also have invested over £70 million within this spending review period, giving practical advice and grants for water quality improvements to farmers, through the catchment-sensitive farming project.

Last year we published the water White Paper setting out our vision for a resilient water industry that can meet future demands, and we are well on our way to achieving our goals through measures to tackle water efficiency, leakage, pollution, unsustainable abstraction and more. The draft water Bill published in July is another of the tools we are using to help us deliver the water White Paper’s vision for an efficient, resilient water sector that can attract long-term investment. The Bill will reform the water market and remove barriers to competition.

Our reform package will drive forward both innovation and efficiency by bringing in new players and new ways of thinking and by using market forces to keep down customer costs. This will not only benefit customers and stimulate growth, but will also contribute to our future resilience, and the environment.

As regards abstraction, which the noble Lord, Lord Carter, and others spoke about, we know that damaging over-abstraction is happening. We are reforming the abstraction regime to ensure that it is fit to meet the challenges of climate change and increasing demand. These are complex long-term issues. We need to make sure that we get this right. We will be consulting on proposals next year. It is worth saying that the Environment Agency’s “Restoring Sustainable Abstraction” programme is returning around 55 billion litres of water per year to the environment in England and Wales, which represents the domestic water use of a city the size of Leeds. We are also working with Ofwat and the Environment Agency to develop better tools and incentives to help water companies manage their abstractions sustainably.

Noble Lords have raised a large number of questions. I will do my best to address them. The noble Lords, Lord Carter and Lord Grantchester, raised the question of reuse. At this stage the Commission is considering developing a regulatory instrument setting EU standards for reuse of water for irrigation and industrial purposes. This could help remove obstacles to the free movement of agricultural produce irrigated with reused water, encourage reuse, and reduce pressure on water resources. No proposal is likely before 2015. There is not enough information available on the Commission’s thinking to form a view, but any initiative to reduce pressure on increasingly scarce water resources is worth consideration.

The noble Lords, Lord Carter, Lord Cameron and Lord Giddens, all asked about our attitude to metering. Metering can have advantages for some customers, cutting their bills and encouraging efficiency. Although many customers would see reduced bills if they were on a meter, others, especially large families in properties with low rateable values, would see their bills rise. For some, water might seem cheap and for them metering could have a perverse impact; they may say, “I am paying for it, so I shall use as much as I like”. Metering is not a solution in itself; it needs to be supported by good information and help to drive down water use. In view of those complexities, the Government do not propose to put in place a blanket approach to universal metering across the country. Water companies are best placed to find the appropriate local solution in discussion with their customers. They need to consider it as an option in water-stressed areas. As the climate changes and the population grows, the case for universal metering may change, but our view is that it will do so at different times in different areas.

The noble Lord, Lord Carter, asked how we would take forward our plans to deal with enforcement. The Environment Agency and the Rural Payments Agency, where appropriate, enforce the existing suite of regulations that are in place to protect our aquatic environment. In regard to abstraction, we are using a power in the Water Act 2003 to enable licences causing serious damage to our rivers to be removed or altered without compensation.

The noble Lord, Lord Carter, asked about the pricing of water. The independent regulator, Ofwat, sets price limits for water and sewerage companies every five years through a price review. The Government are not involved in price setting, although the Secretary of State uses a strategic policy statement and social environmental guidance to Ofwat to inform the price review process. That sets out policy objectives that Ofwat must have regard to in the performance of its functions. Currently, the Government are consulting on their guidance to Ofwat ahead of the next price review in 2014. That will reflect the Government’s policy objectives set out in the natural environment White Paper and the water White Paper. He also asked how we are making water pricing more transparent. As part of Ofwat’s price review, stakeholders, including the Consumer Council for Water, are working with water companies as part of customer challenge panels with the aim of improving the transparency of water bills.

The noble Lord, Lord Carter, asked about reporting. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. That information will better reveal the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components. At EU level, the water framework directive sets out what has to be reported to the Commission and current reporting information systems are structured accordingly, reflecting the method for assessing the state of the water environment. Updates of the river basin management plans will contain an assessment of progress towards the achievement of environmental objectives and the European Environment Agency is publishing data that show the individual components of good status. Changes to the formal reporting system would require amendments to the directive and restructuring of the information systems, so that may not be achievable in the short term.

The noble Lord, Lord Carter, and my noble friend Lord Caithness asked about urban diffused pollution. We have just published a consultation on how to address pollution from urban areas. A strategy will be developed in 2013 in light of feedback from the consultation and of the views of and report by the committee. There is a wide range of issues in the urban environment and it would be key to work with local authorities to develop solutions to them.

The noble Lord, Lord Carter, asked about sharing experience between catchments. My department and the Environment Agency have put in place processes to foster the sharing of best practice and the things that have not gone so well between catchments. We also promote the work of the catchment-based approach at the European level through the various fora that exist.

My noble friend Lady Miller of Chilthorne Domer asked about public participation in implementing the water framework directive. The UK was complimented by the Commission on the steps that it took to engage people in the first river basin management plans. However, we recognise that we could do more and the development of the catchment-based approach is one step towards engaging more interested people at a more local level.

My noble friends Lady Miller and Lord Caithness asked about control at source of pharmaceuticals. The control of sources is generally more cost effective and better for the environment than trying to clean up after the event. However, current EU pharmaceuticals legislation does not allow for authorisation of a human medicine to be withheld on environmental grounds. DG SANCO is drafting a report into the effect of pharmaceuticals on the environment, which is expected to be published mid-2013. We expect that report to contain recommendations for possible amendments to the current regulatory framework for medicines.

The noble Lords, Lord Cameron and Lord Berkeley, spoke about integrated river basin management. The water framework directive, and its delivery through river basin management plans, essentially forms the basis of adopting an integrated river basin management approach. However, the Government recognised, after the publication of the first set of river basin management plans in December 2009, that we needed to adopt a more local-level approach to water management that brings together quantity and quality issues as well as flooding. That is why we are currently piloting the catchment-based approach to see whether that could form a stronger basis on which to bring together the various parts of the water cycle and to consider issues in a more integrated way.

My noble friend Lord Caithness asked about the Commission’s policy on taking action against member states which do not meet their obligations. The Commission has commenced proceedings against some member states in regard to non-conformity with the water framework directive, such as those that did not publish their river basin management plans by the deadline of 22 November 2009. My noble friend also asked whether we will have a water security task force, as the whole area of water covers so many government departments. We do not propose to have a water security task force, but a cross-government network already exists to deal with water security issues and it was called upon most recently, this year, to deal with our drought problems.

The noble Lord, Lord Giddens, asked about our attitude to the European innovation partnership. We aim to use the participatory process of the catchment-based approach to ensure that those working at practitioner level have the opportunity to engage with the European innovation partnership on water. The Water Sector Innovation Leadership Group will also consider ways in which practitioners and other stakeholders can make the most of the opportunities offered by the water EIP. He also asked about innovation. We are in the process of refreshing the Water Sector Innovation Leadership Group. That comprises representatives from my department, Ofwat, the Environment Agency and the water sector and provides leadership and direction to drive innovation to meet future challenges. It will meet in January 2013. We have provided £1 million towards a water security competition, run by the Technology Strategy Board.

The noble Lord, Lord Giddens, asked how we can develop a national programme despite privatisation. Privatisation does not stop our aim to meet our future resource requirements. We are considering the possibility of water trading between companies and look forward to working with other member states and the Commission to consider how we could use that mechanism. He asked how we can measure virtual water, and several noble Lords spoke about that. My department has commissioned a research project to evaluate the resources that are available to businesses to assess and understand the impacts of their water use. It will be published very soon. We are developing new guidance for businesses on how to measure and report environmental impacts. That will encourage organisations to consider their water use, including along the supply chain and to report against that. He also asked how we can change people’s behaviour to increase efficiency. That is an important point. A number of campaigns have been undertaken by water companies, the Consumer Council for Water, the Environment Agency and others to increase efficiency in water use by the public and by industries.

The noble Lord, Lord Berkeley, raised the issue of the Thames tunnel. He mentioned that we had a meeting recently. It is unacceptable on environmental and health grounds that about 20 million tonnes of untreated waste water currently enter the Thames in London when we receive as little as 2 millimetres of rain. Thames Water’s Thames tideway tunnel project offers the most cost-effective, comprehensive and timely solution compared with all the other solutions that we have seen. We are working with Ofwat, Infrastructure UK and Her Majesty’s Treasury to ensure that the financing and delivery costs of this large and complex project provide value for money for Thames Water customers and UK taxpayers. We are conscious of the impact on local communities and we welcome Thames Water’s two public consultations, which were an opportunity to hear from those affected. Thames Water’s planning application to the Planning Inspectorate is expected to be made in early 2013 and local communities will continue to be able to voice concerns on the proposals within the 18-month process.

[Lord Berkeley]

My Lords—

[Lord De Mauley]

My Lords, I am sorry but I am running out of time and I have a number of questions still to get through. I am sure that the noble Lord, Lord Berkeley, and I will have further discussions on this subject.

My noble friend Lady Byford asked for an update on the chemical status of water samples. Across the EU, the Commission is focusing work under the common implementation strategy in regard to chemical monitoring and reporting for the next phase, commencing next year. This is an area where there is wide variability across the EU. The UK is in a stronger position than a number of other member states, but we recognise that we have more work to do in this regard. That is why the Environment Agency has made reducing uncertainty in classifications a priority in the first half of this river basin planning period. More than 12,500 investigations will be completed by the end of this financial year, which will improve significantly our understanding of the aquatic environment and provide the building blocks for taking decisions and developing the next set of river basin management plans.

My noble friend asked what the Government are doing to improve the “one out, all out” principle. The Government believe that this is essentially a sound way of assessing the state of the water environment. Domestically, the Environment Agency will improve reporting procedures by publicising the number of chemical and ecological components that show an improvement in status each year. This information will show the level of progress that is often hidden by the aggregated description of overall status. Work is already under way to develop a statistically robust system for reporting the number of improved individual components.

My noble friend asked about the £21.5 million available this year from the RDPE. This contributes to the Catchment Sensitive Farming project, which offers practical advice and capital grants to the farming community to make changes on-farm. The majority of this funding goes into the small capital grant scheme to make actual on-farm changes. The farmer also contributes 50% of the payment. This year the £7.9 million that Defra invested in the Catchment Sensitive Farming project has brought in £22 million per annum from European funds and £20.5 million from farmers.

Noble Lords have asked a large number of questions. I have done my best to answer as many as I can. I am trespassing upon the Companion already and I hope that noble Lords will allow me to write in response to any questions that I have not so far answered. I thank again the noble Lord, Lord Carter of Coles, and all noble Lords who have spoken. I will take away the words that they have given me today and think carefully about them.

Aviation: Passenger Duty

Debate between Lord Berkeley and Lord De Mauley

Wednesday 25th January 2012 Lords Chamber

[Lord De Mauley]

My Lords, I recognise the importance that my noble friend places on this issue. As I said, the question of the Caribbean was addressed extensively by my noble friend earlier this week. I have nothing to add at the moment but as soon as I do, I will bring my noble friend up to date.

[Lord Berkeley]

Is not this air passenger duty a way for the Government to levy an environmental charge on the carbon discharged by airlines? Does the noble Lord agree that this is fair given that airlines get tax-free fuel whereas all motorists and truck drivers have to pay a large duty?

[Lord De Mauley]

I have said that it is a tax. I am not prepared to go further than that.

Aerospace Industry

Debate between Lord Berkeley and Lord De Mauley

Monday 5th December 2011 Lords Chamber

[Lord De Mauley]

My Lords, I am sorry if I appeared ambivalent. The noble Baroness is quite right and, yes, I will.

[Lord Berkeley]

My Lords, given the Statement last week by the Chancellor committing not to build any more runways at Heathrow, Stansted or Gatwick and expressing interest in building a fourth airport for London in the Thames estuary as a way of increasing the capacity of London airports as a whole, will the Minister explain to the House how the Government are going to take forward studying this new project?

[Lord De Mauley]

Yes, my Lords. The coalition Government have made clear that they do not support the construction of a third runway at Heathrow because of the unacceptable impacts on local communities and on climate change. In advance of the Developing a Sustainable Framework for UK Aviation consultation next spring, the Government are therefore considering a number of alternative measures, including taking on board the recommendations of the South East Airports Task Force.

Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010

Debate between Lord Berkeley and Lord De Mauley

Thursday 16th December 2010 Lords Chamber

[Lord Berkeley]

On the European network for the GSM-R, my understanding is that Network Rail responded to Ofcom on this some time ago, as well as to BIS. I am concerned about the reported reaction of BIS to these comments, which was, “We understand where you’re coming from, but basically you should have incorporated something into your design in the first place to ensure that the receivers and all the other equipment on the railway were robust”.

The legislation from the commission has been around for a number of years, and I am pretty persuaded that Network Rail and the Department for Transport have got it right, because they take it all very seriously. It seems a trifle arrogant for anyone now to say, “Sorry, mate, something new is coming up and you’d better go and change all your systems—and, by the way, possibly pay for it”. I hope that I have got this wrong. Maybe the Minister could look into that as well.

[Lord De Mauley]

I am grateful to the noble Lord for his comments. If there is some interdepartmental fencing, that is extremely concerning. I will go back to my department and shake some cages. Having said that, I hope that I have addressed as many of your Lordships’ questions as possible and if I have not I will, as I say, write to noble Lords. This is—

Royal Family: Civil List

Debate between Lord Berkeley and Lord De Mauley

Wednesday 10th November 2010 Lords Chamber

[Lord De Mauley]

My Lords, I congratulate the noble Lord, Lord Berkeley, on securing this opportunity to debate a matter that is of considerable interest to people and I thank him for the clarity with which he advanced his arguments and sought information about the royal finances.

I am sure that noble Lords will join me in recognising the Queen’s long and loyal service and her immense contribution to public life, as several noble Lords mentioned. I will in a moment explain the proposed new arrangements for supporting Her Majesty’s official business as monarch, but I should perhaps first give some context.

Since 1760, successive sovereigns have surrendered to the Exchequer their hereditary revenues, such as from the Crown Estate, in return for an annual income, known as the Civil List, and certain other financial support. The Queen’s Civil List covers the central staff costs and running expenses of Her Majesty’s official household. Certain other expenditure of the Royal Household is met by government departments through annually voted supply grants, including, in particular, the grants in aid for royal travel and maintenance of the royal palaces. The Civil List Act 1972 requires the Royal Trustees to keep under review and report on Civil List expenditure and the sums available to meet it, with reports to be made every 10 years.

In the trustees’ 1990 report, the fixed annual amount of the Civil List was set to exceed projected expenditure in the earlier years, with the surplus being accumulated to meet later expected deficits as a result of inflation. Rather than forecasting inflation for the 10-year period, the Royal Trustees recommended £7.9 million as the fixed annual amount of the Civil List for the ensuing 10 years, assuming annual inflation of 7.5 per cent. In the event, of course, annual underlying retail prices index inflation averaged about 3.2 per cent during those 10 years, while Civil List expenditure increased by approximately 10 per cent less than inflation. Additionally, interest of about £12 million was earned on the surplus, leaving a reserve of about £35 million to be carried forward into the 10-year period to the end of December 2010.

In view of that substantial reserve and the expectation of low inflation, in July 2000 the Royal Trustees recommended that the fixed annual amount of the Civil List should remain at £7.9 million. Also, at the suggestion of the Royal Household, it took on responsibility for some £2 million of expenditure previously met from the votes of government departments or from the consolidated fund, utilising a substantial part of the reserve during the new 10-year period.

In his Budget Statement on 22 June this year, my right honourable friend the Chancellor of the Exchequer announced the decennial review of the Civil List. As the noble Lord, Lord Berkeley, said, my right honourable friend also announced that payment of the Civil List for the calendar year 2011 would remain unchanged at £7.9 million. Therefore, the amount provided for the Civil List will have remained unchanged for more than 20 years and is today worth only a quarter of what it was in 1990. The Chancellor also said that he would, in due course, propose a new means of consolidated support for Her Majesty in future. He made it clear that he wanted a durable settlement for the Royal Household that would not require frequent government intervention in future.

Before coming to the new arrangements, let me give your Lordships some details of the principal grants in aid that are made by the Department for Culture, Media and Sport and the Department for Transport. The property services grant in aid is the annual funding provided by DCMS to the Royal Household to meet the cost of property maintenance and other costs at the royal palaces used by Her Majesty in fulfilling the role and functions of head of state, known as the occupied royal palaces. DCMS has overall responsibility for the maintenance of and provision of services to the occupied royal palaces. However, since 1 April 1991, management and operating responsibility has been with the Royal Household.

The royal travel grant in aid is the annual funding provided by the Department for Transport to the Royal Household to meet the costs of official royal travel by air and rail. As with support for the occupied royal palaces, support for official royal travel is one of the expenses met by the Government in return for the surrender by Her Majesty of the hereditary revenues of the Crown. The Department for Transport has overall responsibility for the use made of moneys voted by Parliament for royal travel. However, day-to-day responsibility for that expenditure has been with the Royal Household since 1 April 1997.

In his spending review Statement on 20 October, the Chancellor announced the new arrangements for support of the Royal Household. He announced that grant support will be static in 2011-12 and 2012-13 at £30 million. As Her Majesty has graciously agreed, this will call for a 14 per cent reduction in cash terms for Royal Household spending in 2012-13, as the Civil List reserve will by then have been exhausted. In addition, in order to support the costs of the historic diamond jubilee, to which the whole country is looking forward, as the noble Lord, Lord Brooke of Alverthorpe, said, a one-off additional £1 million will be provided. I am sure that the whole House will join me in appreciating the Queen’s considerable achievements in leading and guiding the country with dignity and grace for such a sustained period.

From 2012, support for the Queen in her official duties will be simplified. It is intended that there will be a straightforward unitary grant to Her Majesty, replacing the current system of multiple grants. From 2012-13, the new sovereign support grant paid to the Royal Household will support Her Majesty’s expenditure on her official business, replacing the Civil List, which is paid directly from the Exchequer, and the voted grants in aid for royal transport and royal palaces. It will be set by a formula related to the revenue of the Crown Estate and paid through the Treasury vote. Her Majesty has graciously agreed that, for the first time, funding through the sovereign support grant will be audited by the National Audit Office, providing transparency and accountability. A single grant structure will allow the Royal Household to set its own priorities and control costs. These arrangements will be transparent, accountable and dignified, generating a durable outcome that gives the Royal Household security over future funding.

Giving effect to these proposals will require primary legislation. The necessary Bill has not yet been drafted, but the Government hope that it will be introduced so that it can pass in time for the start of the sovereign support grant in 2012. The proportion of the Crown Estate’s revenue to be used will be decided by Parliament, but there will of course be safeguards to ensure that the formula is fair.

The noble Lords, Lord Berkeley and Lord Brooke of Alverthorpe, and the noble Baroness, Lady Jones, expressed concern about the volatility of earnings from the Crown Estate and whether it was an appropriate basis for annual funding. I quite accept the question. It is important to be clear: the Crown Estate’s earnings will continue to be remitted directly to the Exchequer as now. They will not be hypothecated to the Royal Household. Several noble Lords mentioned a figure of 15 per cent and I should like to try to correct a misunderstanding. The setting of the formula for the SSG, which is for Parliament to decide, will simply use Crown Estate revenue as an appropriate starting point. It will not continue into the future to be based on a simple percentage. However, I am not clear on that point; I shall write to noble Lords afterwards, as there may be a misunderstanding.

The noble Lord, Lord Berkeley, asked whether the Prince of Wales accepts the need to reduce his costs and how the mode of transport for members of the Royal Family is decided on. In deciding those things, the household will have to bear in mind criteria including the safety not only of the royal person but also of people in their vicinity, security, value for money, the length of the journey, whether the transport is consistent with the requirements and dignity of the occasion, the most effective use of the Royal Family’s time and minimisation of disruption to others.

The noble Lords, Lord Berkeley and Lord Brooke of Alverthorpe, commented on the need for transparency. The new sovereign support grant will mean that all royal expenditure will be audited by the National Audit Office.

My noble friend Lord Addington suggested that a president would be no cheaper. Other countries are strangely coy about publishing the full costs of their presidencies, so it is difficult either to agree or disagree with confidence, but I note the rumoured $100 million cost of President Obama’s inauguration. I wonder whether we perhaps do not enjoy a bargain in this country. My noble friend also made a strong point about security in answer to the question asked by the noble Lord, Lord Berkeley, and I agree with him.

The noble Lord, Lord Brooke of Alverthorpe, asked about the publication of the finances. They are published annually. All trips of greater than £10,000 by air and rail are listed separately from the royal travel grant in aid.

The noble Lord, Lord Brooke, asked about a cap. The formula for the sovereign support grant will be set by Parliament. It is envisaged that there will be a mechanism to ensure that the formula is fair and neither adversely too high or too low.

The noble Baroness, Lady Jones of Whitchurch, asked about the opportunity for parliamentary scrutiny and for more detail about the new arrangements. The details will be set out in a Bill that will be subject to full parliamentary scrutiny.

I suspect that I have not been able to answer all noble Lords’ questions—

[Lord Berkeley]

I am grateful to the Minister for his explanations. It is an excellent idea to put all the different grants from different departments in the one pot, which will come from the Treasury at the end of the day. However, what is the argument for linking it to the Crown Estate’s profit, which goes into the Treasury in the first place? If he does not have the answer now, perhaps he could include it in his letter.

[Lord De Mauley]

I am grateful to the noble Lord for that question. I am conscious that I have not adequately answered it. I am finding it difficult to express the answer in words; I am out of time. I will write to him if I may and put a copy of the letter in the Library.

I hope that in the short time available I have been able to give some help to noble Lords in obtaining a better understanding of the provision of financial support for the Royal Household. The Government are extremely grateful to Her Majesty for accepting a measure of austerity in grant support in the near term and we all hope that she has a continuing long and happy reign.