Water Bill

Lord Oxburgh Excerpts

Monday 27th January 2014 Lords Chamber

[Lord Oxburgh (CB)]

My Lords, I have various interests to declare, which I shall do during the course of my remarks, but in so far as water metering has been mentioned, and we have to be very careful about these things these days, I should declare an interest as a director of the company that designs, builds and supplies water meters that telemeter their output to wherever it is needed.

At this stage in the debate, many of the more attractive foxes have been shot, and there is not much point in revisiting the corpses, which have been well worked over. It is clear that we are in a changed situation. Climate change will bring us less predictable and probably more intense weather episodes and we have the problem of growing urbanisation.

I, too, welcomed and applauded the White Paper and I am a little disappointed, for reasons that have been rehearsed, over the content of the Bill that we have today. Indeed, many of the points raised in the White Paper were foreseen in the report of the Science and Technology Committee some years earlier in its investigation most ably chaired by the noble Earl, Lord Selborne.

Today, I will restrict my remarks to three fairly high-level points. First, a number of noble Lords have referred to the question of the interface between the range of regulatory bodies involved in the areas of water provision, water discharge and flood containment. It would be of use to the whole House during further consideration of the Bill if the Minister were to agree to concisely put down, perhaps in a note in the Library, the present view of the responsibilities of the agencies involved and the accountability between them. One thinks immediately of Ofwat, the Environment Agency, the Drinking Water Inspectorate, Defra itself and, certainly in the discharge of water, the whole range of organisations involved in sustainable urban drainage systems—SUDS, as referred to by the noble Earl, Lord Selborne—and other related matters. It is hard to find this in a coherent and consistent manner at the moment.

I turn now to the question of a high-level, long-term national water strategy. I am not clear where the responsibility for that lies. I have searched the websites of the various regulatory bodies and Defra in vain to find an answer. I may have simply looked in the wrong places and not found it, but it is clear, to me at any rate, that we need a long-term strategy to deal with the challenges of climate change and increasing urbanisation. We need to be looking at a range of possible future scenarios for 25 or more years ahead. We may indeed find that the resilience criteria need to be changed and that more major infrastructural developments are needed as we understand climate change better. The reason for doing this now is that infrastructure developments are extremely slow to build. It is a long, slow business.

It is also worth pointing out that because moving water is expensive, the first solution to water problems should be sought within each catchment area. This does not mean that there ought not to be water transfer around the country. However, it is likely to be an expensive solution if done on any large scale. It does mean that we have to look hard at local solutions, and these have to start, as many have said, with reducing waste and leaks, or other deficiencies.

Beyond that, desalination has to be considered. The plant built by Thames Water in the Thames estuary is an example. To declare an interest, a company of which I am a director is providing the desalination plant with renewable energy. In many urban situations, however, as the Minister pointed out, particularly those located away from the sea, the solution may well lie in regenerating and purifying sewer water to potable standards. In this way a city could make an approach to being water self-sufficient. There is of course, as the noble Lord, Lord Redesdale, has pointed out, a serious energy penalty. Enhanced storage of water will also have a role to play.

A good example of both long-term strategic thinking and a resilient system is Singapore. Again I have to declare an interest, having for some time co-chaired the Public Utilities Board’s advisory committee on water and environment. Singapore now has what are described as four taps: water imported from Malaysia by pipeline, rainfall water from its own catchments, water from desalination, and so-called new water produced by the reprocessing and purification of waste water. The outcome of this long-term strategic programme is a resilient system implemented by private companies.

Finally, I shall say a few words on R&D. The UK water industry has had a poor record in recent years. Investment in water R&D has given a number of countries, some of them small, major positions in the international water industry—an industry that will necessarily grow with the world population and with the increased expectations of that population for higher living standards. Two examples of small countries that have built international reputations in water science and technology are the Netherlands and Singapore. For our part, we have had a regulatory regime imposed by Ofwat that made significant investment in long-term fundamental research virtually pointless, and indeed impossible. I understand that Ofwat has now changed its policy, but there is a lot of ground to make up. A second problem is that, with the investor profile described partly by the noble Lord, Lord Whitty, but also in the recent document by the New Policy Institute, the UK water companies tend to be seen simply as reliable and steady sources of income rather than as companies that should explore new technology that might lower costs, let alone earn from their R&D.

It is sufficient to say that at the most recent major international water meeting that I attended there were nearly 1,000 companies exhibiting their products. Among them I found only three from the UK, all concerned with pipelines. I have already drawn attention to the energy cost of purifying water to potable standards. This is now largely done with reverse osmosis membrane technology. The challenge is to devise membranes that will have lower energy demands. Singapore is one of the global leaders in this field. This is one example but there are a host of other examples of useful and applied research where this country has little or no presence, meaning that we are simply going to be followers.

The relatively small R&D capacity of UK water companies means that many do not have the competence in-house to be an intelligent customer for new technology and, as a consequence, tend not to use or exploit new technologies. That means that they will not be able to achieve the efficiencies and consumer price reductions that are urgently needed.

Water is set to become a major issue in this country. Although we have some companies that are forward-looking, many are not. To cope with the challenges of climate change and population, we need a well regulated and well run industry that is technologically sophisticated and aware. It is not clear that we have it today. This Bill is good as far as it goes but we shall need another.