Planning and Infrastructure Bill

Debate between Lord Hendy of Richmond Hill and Lord Jamieson

Committee stage
Thursday 24th July 2025 Lords Chamber

[Lord Jamieson (Con)]

My Lords, I will address these important amendments concerning water infrastructure, each of which touches on the future resilience and efficiency of our water sector. These amendments reflect a shared desire to ensure that the regulatory framework keeps pace with the demands of modern infrastructure delivery while safeguarding value for money and service quality for consumers.

Amendment 59, tabled by my noble friend Lady Coffey, proposes to remove the size and complexity test currently embedded in water regulations. This is a timely and helpful amendment, particularly in the light of the Cunliffe review published on Monday. The review highlights that, under specified infrastructure projects regulations, this test can apply only where projects are of such scale and complexity that they risk threatening the water company’s ability to provide services and value to customers. The Government have recently signalled their intention to relax this criterion. In this context, will the Minister clarify when the Government intend to relax it by? How will they do so? Could the opportunity presented by my noble friend Lady Coffey’s amendment be used to implement such a relaxation? We need a regulatory environment that is more flexible and better suited to facilitating timely delivery of much-needed infrastructure projects without unnecessary procedural hurdles that can cause delays and cost overruns.

Amendments 61 and 62 relate to reservoir construction and regulation. We recognise the importance of the delivery of new reservoirs, and we acknowledge their vital role in enhancing water security and supporting our long-term infrastructure goals. While I would like to support my noble friend Lord Lucas on his Amendment 61, we have a concern about whether introducing new, possibly burdensome regulation is necessary or whether it would risk creating delays or have unintended consequences.

In contrast, Amendment 62 tabled by the noble Baroness, Lady McIntosh of Pickering, seeks to deregulate low-hazard reservoirs. We believe that this approach could streamline processes where the risk is minimal, allowing resources to be focused on the highest-risk infrastructure.

Water infrastructure is a critical national priority. In the light of these differing proposals, I ask the Minister to give the Committee a clear answer on the Government’s position. How do the Government intend new reservoirs to be built? What regulatory approach will be taken to balance safety, efficiency and the urgent need for water infrastructure? I look forward to the Minister’s response on these important matters.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, it was of course a pleasure to hear the noble Lord, Lord Gascoigne, introduce these amendments. He referred to the success of the Thames Tideway project, and there were a number of references to who did it. The person in charge of that project is Andy Mitchell, who has done an extraordinarily good job, so it is quite right that his name should be referred to next to the project itself.

The amendments seek to insert new clauses specific to water infrastructure. Amendment 59 tabled by the noble Baroness, Lady Coffey, seeks to remove the size and complexity test from the specified infrastructure projects regulations, known as SIPR. The Government are resisting this amendment because we have already committed to reviewing the SIPR framework. That was set out in the Chancellor’s New Approach to Ensure Regulators and Regulation Support Growth policy paper, published in March 2025, which confirmed that Defra will amend the SIPR framework to help major water projects proceed more quickly and deliver better value for bill payers. It is important that the planned review goes ahead so that any changes are properly informed by engagement with regulators and industry. Removing the size and complexity threshold now would pre-empt that process and risk creating a regime that does not reflect the sector’s diverse needs or long-term priorities.

We will continue to work closely with stakeholders to ensure that the specified infrastructure projects regime remains targeted and proportionate and delivers value for customers. The noble Lord, Lord Jamieson, asked by when this review will be completed, and I can assure him that it will be completed in this calendar year. I therefore thank the noble Baroness, Lady Coffey, for tabling the amendment, but I kindly ask the noble Lord, Lord Gascoigne, to withdraw it on her behalf.

Amendment 61 tabled by the noble Lord, Lord Lucas, seeks to introduce enabling regulations for milestones and enforcement for various delivery phases of all water undertakers’ reservoir proposals. The Government have already taken urgent steps to improve water security. This involves action to improve water efficiency and to reduce water company leaks alongside investing in new supply infrastructure, including new reservoirs and water transfers. We are taking action to speed up the planning process for new reservoirs. For example, we recently revised the National Policy Statement for Water Resources Infrastructure to make clear that the need for the proposed reservoirs in the water companies’ statutory management plans has been demonstrated.

Ofwat’s price review final settlement in December 2024 for the water sector has also unlocked record investment, around £104 billion of spending by water companies between 2025 and 2030. This includes £8 billion of investment to enhance water supply and manage demand, such as enabling the development of nine new reservoirs. As part of that, leakages will reduce by 17%. We have taken steps with Ofwat to improve water company oversight by increasing reporting and assurance requirements on companies’ delivery, improving protection for customers from companies failing to deliver the improvements by returning the funding to customers, and encouraging companies to deliver on time by applying time-based incentives.

The Government, as the Committee has already heard, also commissioned Sir Jon Cunliffe to lead the Independent Water Commission, to which the noble Lord, Lord Lansley, referred. It is a once-in-a-generation opportunity to modernise the water industry and deliver resilient water supplies. The Government are grateful to Sir Jon and the commission for their work and will carefully consider their findings and recommendations, including those that the noble Lord, Lord Lansley, referred to.

We will provide a full government response to the commission’s report in the autumn, setting out our priorities and timelines. The Government will introduce root and branch reform to revolutionise the water industry. Working in partnership with water companies, investors and communities, the Government will introduce a new water reform Bill to modernise the entire system so that it is fit for decades to come. I hope that the noble Lord, Lord Lucas, is therefore reassured that the proposed new clause is unnecessary, and I kindly ask him not to move his amendment.

Amendment 62, introduced by the noble Lord, Lord Gascoigne, on behalf of the noble Baroness, Lady McIntosh, is not necessary. It is a probing amendment to encourage the consideration of measures to facilitate the construction of small reservoirs. The Government are already encouraging building both small and large reservoirs. That improves resilience to climate change, sustains food production and water security and supports economic growth.

Reservoir safety legislation does not prevent new reservoirs being constructed but does ensure that structures are well built and maintained. The streamlining of the planning system will make them quicker and easier to build in the future. However, it is important that new reservoirs do not pose flood risks for local communities by being built in the wrong locations and that existing reservoir dams are structurally safe.

Reservoirs that store water above ground level pose risks to life, property, businesses and the environment, and could cause economic disruption to local communities if the dam structure were to fail. These risks are managed through reservoir safety regulations. Reservoirs that store water below ground level do not pose the same risks and so are out of scope of the reservoir safety regulations. Current advice to farmers and landowners who wish to build reservoirs is to consider options for non-raised water storage. The Government intend to consult in the autumn on proposals to improve reservoir safety regulations, including making the requirements more tailored to the level of hazard posed and bringing some smaller raised reservoirs in scope. These proposals do not alter the need for more reservoirs, nor prevent new ones being built. They are to ensure that reservoir dams are structurally sound and that flood risks for communities down stream are effectively managed.

I appreciate the interests of noble Lords in tabling these amendments. However, for the reasons I have set out, I kindly ask the noble Lord to withdraw the amendment.

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[Lord Hendy of Richmond Hill (Lab)]

My Lords, in respect of lane rental schemes, the Government are committed to reducing disruption from street works and improving the efficiency of our road networks. Lane rental is an important tool to help highway authorities reduce the impact of works taking place, but it is important to recognise that such schemes may not be suitable for every area. Many local authorities do not experience the level of congestion necessary to justify the administrative and financial burden of operating such a scheme. However, the Government recognise the value of empowering local leaders and that is why we have consulted on devolving approval powers for lane rentals to mayoral combined authorities. We will be publishing the results of the consultation and next steps in due course. So I kindly ask the noble Lord, Lord Jamieson, to beg leave to withdraw his amendment.

I thank the noble Lord, Lord Moynihan, for speaking to the amendment on litter. I agree with him that we must find the best way of tackling this problem. I know that the amendment has been tabled in that spirit. At present, National Highways is responsible for the collection of litter on England’s motorways, but there are other roads—trunk roads and A roads—where National Highways is responsible for the maintenance but local authorities are responsible for litter collection. The question is therefore whether we should relieve local authorities of those duties and transfer them instead to National Highways.

That sounds like a simple solution, but it is in fact a little more complicated. The collaboration methodology works well: for example, National Highways looks for opportunities to enable litter collection to take place safely when roads are closed for other reasons, such as resurfacing or maintenance. Those partnership arrangements provide the best way of tackling litter on the strategic road network, and we encourage and expect National Highways and local authorities to work closely together on them.

I also thank the noble Lord, Lord Jamieson, for tabling the amendment on extending the guarantee period following road reinstatement. He and I both recognise that high-quality reinstatement is highly desirable. It is important to note that, under the existing Specification for the Reinstatement of Openings in Highways guidance, the guarantee period begins only once the reinstatement has been completed to the required standard.

In 2023, a performance-based inspection regime was introduced that means that utility companies with higher defect or failure rates are subject to more frequent inspections and, as they pay for each inspection, this creates a strong financial incentive to maintain high standards. We are closely monitoring the recent changes in Scotland, where the guarantee period has been extended to six years, to assess whether that leads to improved standards, before considering any changes in England. For the reasons outlined, I kindly request that noble Lords do not press their amendments.

Finally, my noble friend Lord Liddle will now have reached the end of his journey to Carlisle, and I celebrate the noble Lords who have come on the journey for this part of the Bill by remaining in the Chamber. I wish all those who have stayed this long a happy and restful recess.

[Lord Jamieson (Con)]

I thank the Minister for his reply. I look forward to seeing more on the rollout of the lane rental scheme to mayoral authorities, but I ask, as we do not yet have mayoral authorities right across the country, whether he could extend it to all authorities. I also look forward to the review of the practice in Scotland and hope that we will move to a five-year guarantee here. With that, I beg leave to withdraw my amendment.

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[Lord Jamieson (Con)]

My Lords, I also thank the noble Baroness, Lady Coffey, for tabling this amendment, which is pertinent, as has just been mentioned, given the announcements this week, including that Ofwat will be abolished. The future of water regulation is clearly in flux. We on these Benches seek clarity on the way forward. I look forward to hearing the Minister’s response.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I apologise: I prematurely terminated the journey of this part of the Bill. I will seek to be very brief.

The Government are committed to ensuring effective planning, development and management of water infrastructure. To that end, the Secretary of State for the Environment, Food and Rural Affairs formed an Independent Water Commission. We oppose the amendment put forth by the noble Baroness, Lady Coffey, to transfer Ofwat’s planning, infrastructure and development functions to the Secretary of State because it would pre-empt the results of the independent review. As mentioned, we will provide a full government response to the commission’s report in the autumn, setting out our priorities and timelines, and the Government will therefore introduce root and branch reform to revolutionise the water industry. I ask the noble Lord to withdraw the amendment on behalf of the noble Baroness, Lady Coffey.