Elliott Review and Food Crime

Baroness McIntosh of Pickering Excerpts

Wednesday 2nd April 2014 Westminster Hall

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to serve under your chairmanship today, Dr McCrea, and to follow the hon. Member for Bristol East (Kerry McCarthy). I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing the debate, which is timely, as we await Professor Elliott’s final report. I welcome the Minister and the shadow spokesman, the hon. Member for Ogmore (Huw Irranca-Davies), and I thank the Minister for his well-spent time on the Select Committee for Environment, Food and Rural Affairs, and the contribution he made to its reports.

My hon. Friend the Member for South Thanet was right to focus on what is a new aspect of the area of crime we are discussing, and we should consider why there have not been any prosecutions to date. The Select Committee first reported in March 2012 on what we were told was a temporary ban on desinewed meat, which regrettably led to a loss of jobs at Newby Foods in my constituency and, I understand, at Moy Park in Northern Ireland. We concluded at the time that there was potential for adulteration and mislabelling, and the substitution of cheaper cuts of desinewed meat. It is a pity that our conclusions and the alarm bell that was rung were not responded to then.

[Laura Sandys]

Those early warning signs are the important issue for the Government. We need to ensure that when such things are seen to happen, they will trigger action from the FSA or DEFRA, which should work out the possible scenarios. Prices will be increasingly squeezed, and that will become more of an issue.

[Miss McIntosh]

As my hon. Friend has pointed out, scrutiny of the issues is split between more than one Department—the Department of Health and DEFRA in the present case. What is particularly galling is that desinewed meat is still produced from non-ruminants as Baader meat in other European member states. There should be the same rule throughout the European Union.

There have been several reports, including the Select Committee report to which the Minister contributed, as well as the Troop review, the National Audit Office review, an internal FSA review and now the Elliott review. We need definitive action now. As my hon. Friend the Member for Hexham (Guy Opperman) said, there was a remarkable short-term boost for local butchers and farm shops, and I hope that that will last.

To address the point made by the right hon. Member for Birkenhead (Mr Field), as well as by my hon. Friend the Member for South Thanet, people may eat cheaply by buying a roast and eating it in various forms during the course of the week. Frozen and processed foods, the real villains of the piece in food adulteration, are more expensive than buying fresh meat from the local butcher.

The interim Elliott review was so important because it looked at and pulled out the various conclusions of Select Committee and other earlier reports, bringing them all together and, in particular, highlighting issues such as slabs of meat in cold storage or the transporting of food over long distances, which we now know were often the cause of the problem, but had not previously been focused on. In responding, I hope that my hon. Friend the Minister will update us on where we are with labelling. In response to the Select Committee’s fifth report, on food contamination, the Government state:

“New labelling rules have just been agreed by the European Union and the Government must meet its legal obligations on implementation of these EU labelling regulations.”

That poses a particular problem for the Malton bacon factory, because what we are trying to do with one meat product, beef, perversely has implications for other products, such as pork. It would be helpful if the Minister updated us.

On the call for shorter supply chains, the complacency in the evidence that we heard in Committee was breathtaking. The supply chains were taken as read; they were not visited—not once every three months, not once every year and not even once in three years. We need reassurance from the supermarkets and the bigger food retail chains that that is now happening. Traceability and labelling go to the core of the issue: we must learn the lessons from BSE and keep our markets open. The European Union is, after all, our largest market for fresh meat, frozen food and processed food products.

The Elliott review is also important for highlighting the role of food testing, as commented on by the hon. Member for Bristol East and my hon. Friend the Member for South Thanet. The reduction in the number of food analysts and the closure of food laboratories is causing great concern throughout the farming community and in the profession.

[Huw Irranca-Davies]

The hon. Lady is making a good contribution. May I take her one step back? She made a point about the importance of the industry’s reputation domestically, but we also need to get things right because, with credit to the Government, work on the export market is very much predicated on the strong reputation of UK meat produce. We need to get that right, because it will drive our export market. If we get it wrong, the corollary is that we could be sacrificing some great balance-of-payments input for this country.

[Miss McIntosh]

The hon. Gentleman—I might dare to call him my hon. Friend—makes a powerful point. The key to everything is that there was nothing unsafe: it was fraud, adulteration and mislabelling. We may pride ourselves on the safety of food production from farm to plate. The long supply chain was the villain of the piece.

There is now more testing than ever, as the Committee has said. There had probably been a reduction in testing before, and the evidence we heard was that certain local authorities, which shall remain nameless, had not done any testing for a number of years. That is simply not on. Where retailers are testing, it is extremely important that they share the results with the Food Standards Agency and post them on their website, so that the consumer knows what is safe. We await the final report from Professor Elliott with great interest.

[Laura Sandys]

That is an important point about communicating with the consumer. If product has not met the required standard or there has been an infraction of trading standards, I would like to see retailers and suppliers across the board having that on their websites, telling consumers that there has been fraud or a problem.

[Miss McIntosh]

My hon. Friend’s point is extremely well made and I am grateful for it.

Turning to food crime and why there have been no prosecutions, the matter is about frozen and processed food more than fresh food. Questions have to be asked. Action on fraud is well led by City of London police, but in that instance—perhaps the Minister will respond—was it the correct body? We have to ask why there were no prosecutions. The Secretary of State at the time, and a previous Agriculture Minister, said that those who had perpetrated the crimes would be brought to justice and feel the full force of the law. Why therefore have there been no prosecutions? We need to bring those people to book.

My hon. Friend the Member for South Thanet mentioned the Dutch scenario, but I am taken with the Danish model—I declare an interest, because I am half Danish—of flying food squads descending on food producers, which has something to commend it. Professor Elliott may report more on that.

Leadership from the FSA is crucial, and the Select Committee asked questions about the scrutiny of food production, with the Government’s 2010 changes in particular potentially clouding the issue. I commend the acting FSA chairman, Tim Bennett, for his work in bringing stability to the area, but the fact that the vacancy has been left open for possibly more than a year raises issues. I urge the Government to speed up the process, because we need a permanent head of the FSA in place—someone who will be the front person should there be further issues, and who will implement the final conclusions of the Elliott report and the action for which the Government will undoubtedly call.

A worrying aspect is the split responsibility between the Department for Environment, Food and Rural Affairs and the Department of Health. In the Environment, Food and Rural Affairs Committee, we certainly expected to be doing the pre-appointment scrutiny, but we were bitterly disappointed to find that it fell to the Health Committee. There are questions about overall scrutiny and where responsibility for the FSA would be best placed. Greater scrutiny and transparency can only enhance its role.

I urge the Minister to report on the Department’s discussions in Brussels and to tell us about the initial reactions to the Elliott recommendations, in particular on putting consumers first; zero tolerance; where the Government think they will go on intelligence gathering; the idea of a two-tier lab service, with a national one reporting to a European one; and the other conclusions. Will the Minister also inform us where we are with the shorter supply chain? Will he reassure us that retailers are not taking the supply chain on trust and that there will be better traceability and labelling overall?

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

As always in these debates, I have many questions to answer and not a great deal of time, but I will do my best. I begin by congratulating my hon. Friend the Member for South Thanet (Laura Sandys) on securing the debate, which has provided us with an excellent opportunity to explore the interim report on the integrity and assurance of food supply networks and for me to update colleagues on activities since the discovery of horsemeat fraud in 2013.

As my hon. Friend pointed out, the horsemeat fraud incident last year inflicted considerable damage on our food industry and undermined confidence in our food. It was damaging to the retailers and processors involved, and that should drive home to all of them the reality that they have more to lose than anyone by cutting corners or allowing the integrity of our food supply chain to be compromised.

Food fraud is completely unacceptable. It is a crime. The competitive pressures of the marketplace, to which my hon. Friend referred, are no excuse for misleading consumers and committing fraud, so lessons must be learned by all involved. The Government take the threat of food fraud very seriously and want to ensure that lessons are learned. That is why we asked Professor Elliott to look into what could be done to protect the food chain and to restore consumer confidence following the horsemeat fraud scandal.

As all hon. Members here know, Professor Elliott published his interim report in December 2013. We should note that, in it, he makes it clear that UK consumers have access to some of the safest food in the world, so it is not all bad. However, there is no room for complacency. Professor Elliott sets out what he has identified as the key features of a national food crime prevention strategy. The interim report includes no fewer than 48 recommendations, which Professor Elliott has been discussing with the industry and the Government as part of the consultation process for the preparation of his final report. The Government have also been discussing the interim report with interested parties. My hon. Friend specifically asked whether we were discussing the issue with retailers and with industry, and I can confirm that we are. Whenever I have meetings with retailers, it is one of the issues on our agenda.

There are 48 recommendations, but we can break down Professor Elliott’s report into three key themes. First, he identifies a package of measures in relation to testing and enforcement. Secondly, a big part of his report is dedicated to responsibilities in the supply chain, both on retailers and on processors. Finally, there are issues relating to the co-ordination of Government efforts, the links between Government agencies and co-ordination between Government agencies and local authorities. Professor Elliott raises important issues relating to all three areas, and we will consider carefully the supporting analysis in his final report before making a formal response.

However, there is much that we are already implementing, and I want to spend a little time highlighting what has already been done. First, the Government have increased their funding to support local authorities’ co-ordinated programme of food sampling from £1.6 million to £2.2 million in 2013-14. The Food Standards Agency and DEFRA are helping to target local authority resources through greater central co-ordination of intelligence, by providing additional support for complex investigations, by making available some of the funding for additional training and through prioritised sampling to target delivery at areas of agreed national importance.

Secondly, an intelligence hub has been established in the FSA to improve its capability to identify and prevent threats to food safety and integrity, based on the approach to intelligence used by the police. City of London police is heavily involved in that. That intelligence hub approach, which brings together local authorities, the police, the FSA and other interested parties, is a key step towards improving co-ordination, the need for which was highlighted in Professor Elliott’s interim report and which many hon. Members have referred to today. My hon. Friend the Member for South Thanet also talked about the importance of information sharing, particularly with industry. We are working with industry to tackle some of the commercial sensitivities that can act as a barrier to information sharing. The FSA is doing some work to improve its access to industry information.

Thirdly, as my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) pointed out, the food fraud experienced last year was a problem at a European level, so we need action at a European level to tackle it. Despite famously being quite Eurosceptic, I am happy to tell the hon. Member for Ogmore (Huw Irranca-Davies) that we recognise the problem to be a European one, and that we need action at a European level. The new European food crime unit, which is being developed by the European Commission, will be an important part of that intelligence network. The FSA is working with the European Commission and with other member states to get the unit up and running as soon as possible.

Several hon. Members have talked about the importance of enforcement, and particularly pursuing convictions for the offences committed last year. My hon. Friend the Member for Thirsk and Malton asked why more had not been done. Action has been taken to try to secure convictions for the offences committed last year. Those investigations are taking a little longer than many people would hope, because they are quite complex and cross many national boundaries. A number of police authorities across Europe are involved: Dutch, Polish, Danish, Italian, French and our own. Because the crimes were committed on a pan-European level across borders, it is taking time to deliver those convictions.

[Miss McIntosh]

Is it not the case that the horse has bolted, to coin a phrase, and that those who have perpetrated the crimes will be long gone?

[George Eustice]

I do not accept that. Investigations are continuing at a number of sites across the UK. City of London police is co-ordinating the police forces for all the investigations. Five arrests have been made, and the announcement a couple of weeks ago by the Crown Prosecution Service of two cases being taken to court demonstrates that action is being taken to protect consumers from mislabelling and to tackle food businesses’ failure to ensure the traceability of the products that they supply.

The hon. Member for Ogmore talked about the penalties for committing food fraud crimes. The penalty for food offences can range from giving advice or a formal notice for very trivial breaches, such as if a mistake has been made on labelling, to criminal prosecutions for the most serious offences such as fraud. We should bear in mind that when it comes to fraud, it is possible to implement a prison sentence of 10 years. I think that there are sufficient penalties in our criminal law to tackle the most serious cases.

Several hon. Members have talked about the role of the industry, which is one of the key themes picked up by Professor Elliott. As I said at the outset, the food industry has the most to lose from a decline in confidence in the supply chain, and it has a responsibility to take a leading role. As of today, the industry has submitted more than 45,000 tests of beef products for horsemeat since the horsemeat scandal broke, and no new positives have been reported since the height of the incident. Retailers and processors have taken a thorough approach to testing. The tests are being carried out through the supply chain, not only by retailers but by processors, looking at the ingredients going into products in local convenience stores as well as large national retailers.

Food businesses and trade associations representing the whole food chain are also working with the FSA and Professor Elliott to consider how to make better use of audit and controls. Professor Elliott is keen to develop ways of achieving a more streamlined and effective auditing process.

Oral Answers to Questions

Baroness McIntosh of Pickering Excerpts

Thursday 27th March 2014 Commons Chamber

[George Eustice]

No, I do not agree with that. It was right to separate policy making from enforcement. The issue we had with horsemeat was not a failure of policy: it was a failure of enforcement. Since then, we have increased funding to £2.2 million to help to support local authorities to deliver the national co-ordinated food sampling programme. The Food Standards Agency is also developing a new intelligence hub to improve its capability in identifying and preventing threats, and to co-ordinate action across Government.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Professor Elliott confirmed the findings of the Environment, Food and Rural Affairs Committee that we have a severe shortage of public analysts and laboratories. He further found a gap in checks on cold-slab meats in cold storage and transportation. Can the Government act now, before the final Elliott report, to make good the testing by public analysts and public laboratories, and to address the other issues that Professor Elliott identified?

[George Eustice]

We will look carefully at the recommendation in Elliott’s final report, but the Food Standards Agency is working with industry and the European Commission to identify further targeted sampling programmes that could be carried out. As I said, we have increased the budget from £1.6 million to £2.2 million to help support local authorities. We have also introduced unannounced inspections of meat-cutting plants, and there have been more than 1,450 of those since 2013.

--- Later in debate ---

[Mr Paterson]

I think we have made it very clear. The commitment in the coalition agreement still stands and I have made it clear that a vote will come forward at an appropriate time.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T2. Partnership funding for projects such as the Pickering pilot “Slowing the flow” scheme is being attracted from public sector bodies and, to a lesser extent, internal drainage boards. Will the Minister tell us what private sector partnership funding there has been and why the major review of partnership funding, which was expected to be published in October, has been delayed?

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

The Chairman of the Select Committee on Environment, Food and Rural Affairs is absolutely right to point out the important contribution that partnership funding is making. We anticipate £148 million coming forward across this spending review period, which will enable schemes that otherwise could not have gone forward. The question of private sector funding is important and it has come forward in a number of schemes around the country, but if local authorities or other public sector bodies want to make a contribution too, that is an equally valid way of bringing forward schemes that are important to keeping local people safe. However, I am happy to write to her and discuss how the review of partnership funding is progressing.

--- Later in debate ---

[Sir Tony Baldry]

My hon. Friend will find that in other countries the system is different. For example, in Germany the state supports all the cathedrals and churches, whereas the Church of England has to fund all our cathedrals and all our churches itself. We have the stewardship of more grade I listed buildings than any other entity. If my hon. Friend wants to go to worship in the cathedral, he can always do that for free, but I do not think anyone would object to tourists who want to see the heritage of a cathedral having to pay a modest amount to see that and support it.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

5. How much money the Church Commissioners anticipate they will be able to distribute to dioceses across England to support their mission in 2014.

[Sir Tony Baldry]

The Church Commissioners support the mission of each diocese depending on its need. Each diocese generally receives between £1 million and over £3 million, but that covers only a small proportion of the cost of running the Church. We must never underestimate the importance of the generous giving of church congregations, which accounts for most of the rest.

[Miss McIntosh]

The village church is at the heart of rural life, and I am delighted to say that the Bishop of Knaresborough is joining us for a celebration of the countryside on Saturday. What is the split between rural and urban pay from the diocesan contribution? I ask because the costs of running rural parishes are extremely high.

[Sir Tony Baldry]

My hon. Friend is right to say that the parish church is invariably at the heart of English village life. It is difficult distinguishing between urban and rural dioceses, as many dioceses are very mixed. Her diocese of York receives between £2.5 million and £3 million each year. The dioceses with the greatest deprivation, Durham and Manchester, receive more than £3 million. We are trying to ensure that adequate financial support is provided by the Church Commissioners and the Church as a whole both to parishes in inner-city areas and to rural parishes serving important villages in her constituency, because the Church of England is a national Church which must reach every part of England.

Badger Cull

Baroness McIntosh of Pickering Excerpts

Thursday 13th March 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith).

I congratulate my hon. Friend the Member for St Albans (Mrs Main) on securing the debate, on leading it with her sterling contribution, and on showing such strength in such difficult circumstances. I absolutely agree with her that we have to learn to treat all animals, whether farm or wild, the same. We need to consider the implications of the economics of the case. I am sure that others will give more detail, but we have to recognise that the number of new cases of bovine TB is on the rise; it is doubling every nine years. In the 10 years to last November, 310,000 cattle across Great Britain were slaughtered, and last year, between January and November alone, 30,377 otherwise healthy cattle were slaughtered—an average of over 90 a day. In the last 10 years, bovine TB has cost the taxpayer £500 million, and there is an expectation that that will rise to £1 billion over the next decade.

[Stephen Lloyd (Eastbourne) (LD)]

rose—

[Mark Pritchard (The Wrekin) (Con)]

rose—

[Miss McIntosh]

I will take two interventions now, and then no more.

[Stephen Lloyd]

I appreciate that the figures are still high, but does my hon. Friend agree that a recent report shows that in 2013 there was a significant drop of 14% in the incidence of TB in cattle, and the rate that the disease is spreading also declined by 7% in 2013? The figures are going down.

[Miss McIntosh]

I stand by the figures that I have just given.

[Mark Pritchard]

Does my hon. Friend agree that animal welfare campaigners and farmers want to see healthy cattle and badgers, and that is why I welcome her preamble? Does she also agree that this Government should focus on vaccines, as the last Government should have?

[Miss McIntosh]

I will come on to vaccines.

I listened carefully to what my hon. Friend the Member for St Albans and the hon. Member for Penistone and Stocksbridge said. The House is very short of alternatives. If we are to have a mature, intelligent debate, the House and the public need to consider what the realistic alternatives are. The badger population was in decline and was given protection in the 1970s, for very good reason, but when we see the extent to which the population has grown and the implications for the spread of bovine TB, the position is very serious. I have two auction marts in my constituency, one in Thirsk and one in Malton, and the implications of the cattle restrictions generally are difficult for them.

I want to make a general point about the six-day rule. I understand the position with regard to the cattle restrictions relating to bovine TB that are in place in the south-west, and the need for a swift response to any potential animal disease. But, particularly at red cattle marts such as Thirsk, the operation of the six-day rule, as intensive and as regulated as it is, is having a negative impact. Many livestock producers will not take their cattle or sheep to mart—it is true that there are fewer pigs now—on the basis that they may not be able to obtain the price that they need and they will have to go to slaughter anyway. I hope that the Minister will look favourably at reviewing the six-day rule. It could be brought back swiftly if need be.

The sad fact, which has been demonstrated in today’s debate, is that not many of us living in Britain today have close rural roots. When a pilot cull was introduced in Ireland, it proceeded smoothly, effectively, clinically, and virtually without disruption. Do the Government have anything to learn from the conduct of the Irish cull? The fact that many of us now live metropolitan lifestyles leads, regrettably, to an increasing misunderstanding of animal husbandry and welfare issues.

In the few moments that I have left I want to commend to the House the work of the Environment, Food and Rural Affairs Committee on vaccination against bovine TB and the Government’s response. I am delighted to record that both Front-Bench teams were well represented on the Committee when it took evidence. We looked carefully at injectable vaccine for badgers, oral vaccine for badgers and oral vaccine for cattle. There are difficulties with each that we can rehearse this afternoon, but will the Minister update the House today on where we are, particularly with regard to reaching agreement in Brussels with our European partners and at home on each of those matters?

I pay tribute to the work of the Food and Environment Research Agency in Sand Hutton in Thirsk and Malton—

[Bill Wiggin (North Herefordshire) (Con)]

Will my hon. Friend give way?

[Miss McIntosh]

I am reaching a conclusion.

FERA is doing work on sterilisation. Oral contraception has been referred to, and the sterilisation of the badger population would be welcome, but it will inevitably have a cost implication. There are also questions about its practicality. It would make sense for the Minister to update us today on that work and to review its cost implications and practicality. That could be a real alternative. I was not aware of it until the Select Committee had the opportunity to visit FERA. Today’s debate is particularly timely as we consider the alternatives to produce a healthy cattle and a healthy badger population.

--- Later in debate ---

[George Eustice]

I will respond, Mr Deputy Speaker, because obviously the shadow Minister has an issue with the fact that we have received the report. We have indeed received it, and we are considering it. It was not our decision when the report was delivered to us; an independent expert panel decided that. It was not our decision to have this debate, nor did we get involved in the decision of the Backbench Business Committee to have the debate today, and nor is it the role of Labour Members to dictate when the Government should publish the report. Let me be very clear: we have always been clear that we will publish the report and then, when we have made a decision—we have not made any decisions yet—[Interruption.] No, I am not going to confirm that there will be a vote. I have discussed and debated this many times, and I am sure we will have many opportunities to do so again in the future.

[Miss McIntosh]

Further to that point of order, Mr Deputy Speaker. We have had a very well-mannered, even-handed and good-tempered debate, and I regret that we have had what the record may prove to be a vote on very erroneous grounds indeed. I would like to refer to this point of order when we have the record of the vote.

[Mr Deputy Speaker]

I will be quite honest: I do not treat what you have said as a point of order. There is no record of the vote as yet, and we will have to wait and see.

Managing Flood Risk

Baroness McIntosh of Pickering Excerpts

Monday 3rd March 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I welcome this opportunity to open this estimates day debate on managing flood risk. To put today in context, this is the day of the memorial service in honour of Nelson Mandela; it is a week after the visit by the German Chancellor, Angela Merkel, to address both Houses of Parliament; and it is a day on which the future of Crimea and the rest of Ukraine remains very uncertain. In its own way, though, what we meet to discuss today is equally international and portentous in its nature, as we have seen some of the most damaging storms, most likely emanating, we are told, from the Atlantic on the jet steam and causing immense damage in 2013-14.

I am delighted to welcome the Minister to his place. We were most fortunate to enjoy his company on the Select Committee on Environment, Food and Rural Affairs, and indeed that of the shadow Minister, when we adopted this report in July 2013. How prescient that report appears with hindsight. We have had record rainfall over the past two years, which has led to the most extensive flooding, cost the economy millions of pounds, and caused disruption and distress to householders and communities across the UK.

Additional capital funding for flood defences is welcome, since we are told that every £1 spent on flood defences to protect communities spurs growth and delivers economic benefits worth £8. However, we concluded that spending on flood defences has simply not kept pace with increasing risks from more frequent severe weather. The Chancellor of the Exchequer must ensure that investment increases by some £20 million year on year. We need that money over the next 25 years to protect homes and businesses better. Maintenance of these defences and the effective dredging of watercourses must be a priority.

[Sir Tony Baldry (Banbury) (Con)]

Will my hon. Friend give way?

--- Later in debate ---

[Miss McIntosh]

I should like initially to set out our overview before I take interventions.

The Committee welcomes proposals for a new Flood Re insurance scheme, to ensure that everyone is able to get affordable insurance. We are told that the scheme will be funded by a small levy of about £10.50 a year on all household insurance customers. The Committee insisted, during the passage of the Water Bill, that safeguards be introduced to keep the costs down. It would be interesting if the Minister confirmed whether the Prime Minister has asked for the band H and certain other exclusions to be brought into the review of Flood Re, as was reported over the weekend.

The Government is an insurer of last resort. We were told in evidence that, if there were a one-in-250-year event, such as the one that we have just seen, in the first two or three years of Flood Re coming into effect, the Government would take over as insurer of last resort. We were also told that, for the first two or three years of the Flood Re scheme, there simply would not be enough money in the pot to fund such claims against it. The House needs to understand the implications of that eventuality.

Delay by the Government and the insurance industry in agreeing the provision of affordable flood insurance has caused householders unnecessary uncertainty. The opaque cross-subsidy in the current statement of principles must be translated into a more transparent scheme with clear and robust governance arrangements. This debate provides a useful opportunity for the Minister to update the House on progress towards state aid approval in Brussels, because the last we heard was that had not been embarked upon, which seems to be leaving it late in the day. It raises other exclusions in addition to band H, such as why the cut-off year of 2009 was chosen, and why small businesses such as farms remain excluded.

With spending on the maintenance of defences and watercourses apparently at its lowest for many years, short-sighted reductions in revenue funding appear to threaten and undermine the benefits of capital investment in flood defences, but I firmly believe, as the Committee does, that we should not rely completely on Government sources, but should look at partnership approaches such as the Pickering “Slowing the flow” scheme in my constituency as well as measures by insurance companies.

[Sir Tony Baldry]

That is exactly the point that I wanted to make. We cannot necessarily expect the Environment Agency to fund the totality of flood defences. In Banbury, recently completed flood defences cost £17 million: £9 million came from the Environment Agency, but £8 million came from others, including the district council, Network Rail, Thames Water and local landowners. Many people have a role to play in contributing to making sure that flood defences work, not just the Environment Agency.

[Miss McIntosh]

My right hon. Friend makes a powerful point. I do not wish to detain the House too long, but I shall come on to look at that. The Government and the Minister have an opportunity to elaborate on this, but the House must be persuaded of the contribution that private bodies can make. The Select Committee has not been persuaded of that. Personally, I think that there are huge opportunities for water companies, but we need to amend the 2014 pricing review to allow that, so it would be useful to have an update. In addition, I should like to know whether the Minister believes that insurance companies will step up to the plate regarding infrastructure spending.

[Mr David Davis (Haltemprice and Howden) (Con)]

Although I understand entirely the argument about multiple sources of funding for many flood defences, some major defences—most obviously, in my case, and in the case of my hon. Friends the Members for Brigg and Goole (Andrew Percy) and for Beverley and Holderness (Mr Stuart), the Humber defences—are strategic and, by definition, have to be carried out by a major strategic authority. Under those circumstances, the 1:8 rule and the requirement for other funding do not work. Does my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) accept that strategic intervention should take place on a different scale?

[Miss McIntosh]

My right hon. Friend brings me to the core of my opening remarks.

We could argue the whole afternoon about how much each side has paid in capital funding over the past two strategic reviews. That argument over capital expenditure is worth having, to the extent that that expenditure has increased, but the Committee on Climate Change—I am sure that the shadow Minister, the hon. Member for Brent North (Barry Gardiner) will rehearse this—concluded that we have to spend some £20 million a year extra. The kernel of the argument is how we define revenue and how we define maintenance expenditure. We do not completely understand where the money is being spent.

[Several hon. Members]

rose—

[Miss McIntosh]

If I could make a little progress first, I will then take interventions.

There are a number of maintenance activities which the Environment Agency groups into four main areas. The first is operations: inspecting assets, providing utilities, and operating flood barriers and pumping stations. Some of those have passed from internal drainage boards to the Environment Agency, and have not been maintained since 2004-05. It is important to put that on the record.

The second maintenance activity is conveyance. The Committee was shocked to learn that only £30 million is spent each year in the whole of England and Wales on controlling aquatic weed, dredging, clearing screens and removing obstructions from rivers. We will never know whether regular maintenance and dredging on the Somerset levels by the IDBs or the Environment Agency would have prevented the traumatic flooding we have seen since last autumn and right through the winter.

The third activity is maintaining flood defences and structures, including carrying out inspections and minor repairs, managing grass, trees and bushes and controlling the populations of burrowing animals on flood embankments. My argument is that under the previous Government much of the regular maintenance work was simply not done by the Environment Agency because its political masters, the Government, said not to do it because of birds nesting. I argue that IDBs work with nature and dredge only at the right times of year.

The fourth activity is mechanical, electrical, instrumentation, control and automation—MEICA—meaning carrying out minor repairs to, and replacement of, pumps and tidal barriers.

[Mr John Redwood (Wokingham) (Con)]

Does my hon. Friend agree that many places, including Wokingham, experienced flooding because essential maintenance work on ditches, culverts, drains and small rivers, which are relatively low-budget items, had not been undertaken by the Environment Agency? In the previous year the Environment Agency spent £1.2 billion overall and massively increased its staff, but it did not have a penny to protect the people of Wokingham from the floods that have now hit them. Is it not a question of how we spend the Environment Agency’s budget?

[Miss McIntosh]

My right hon. Friend makes my case for me.

[Mr Jim Cunningham (Coventry South) (Lab)]

First, is the hon. Lady or her Committee satisfied with the responses of the various agencies in dealing with flooding? Secondly, is she happy with the level of staff employed by the Environment Agency?

[Miss McIntosh]

I think there is a coherent view across the House this afternoon that when IDBs, district councils and the flood levy from the regional flood committee contribute to the Environment Agency, it is not always clear what work is done. That is something we are here to debate this afternoon.

[Mr David Heath (Somerton and Frome) (LD)]

The hon. Lady said that we will never know what the result of dredging in Somerset would have been. I suspect that we would still have had flooding, but it would have started later, could have been removed quicker and would have been far less extensive. Does she agree that the initial ask we are making of the Environment Agency and the Government—the 8 km of dredging, which is the most crucial dredge—now needs to be under way? The maintenance dredging every year by local authorities and IDBs should not be confined to that area, but should look at other potential problem areas, such as the Great Bow bridge in Langport, and connecting Monks Leaze Clyse through to the River Sowy and the King’s Sedgemoor drain.

[Miss McIntosh]

I do not have my hon. Friend’s depth of knowledge, so I shall simply refer to Lord Smith’s evidence to our Committee. Page 16 states:

“Lord Smith stated that asset management spend would equate to £169 million in 2012-13, reducing to £146 million in 2013-14 and £136 million in 2014-15. He noted that there were some ‘pinch points’ in specific places such as on the Parrett and Tone rivers. He further noted that no additional revenue or operating funding was being provided to match the new £120 million capital funding announced in the Autumn Statement.”

I refer to the Committee’s conclusion, which my hon. Friend will be aware of, that there should have been some regular maintenance of the Parrett and the Tone well in advance of the floods last autumn.

[Chris Bryant (Rhondda) (Lab)]

I cannot speak to the situation in Somerset, but I hope that the hon. Lady would not advocate dredging in every situation. In the early 1990s and early 2000s, the local authority in my constituency sped up water flows higher up the valley, which led to a significant problem further down the valley. Surely we need a whole-valley answer.

[Miss McIntosh]

The hon. Gentleman will have listened carefully to the four headings that I set out—the different types of maintenance, of which dredging is a small part.

I turn to the flood defence maintenance funding for the coming financial years. It is with some sorrow that I see the reduction in the headline figures for flood defence maintenance, from £172 million in the financial year 2010-11 to £147 million for 2013-14. I hope that in discussing the supplementary budget, the debate will achieve one thing: an increase in maintenance from revenue funding and a more general grasp of the importance of maintenance in all its forms to preventing flooding in future. The Environment Agency’s £147 million maintenance funding for 2013-14 is allocated as follows, in accordance with the four maintenance categories that I rehearsed earlier. I repeat that there is only £30 million this year for clearing watercourses, normally referred to as dredging, which the hon. Member for Rhondda (Chris Bryant) mentioned. For operation there is £44 million, for structures there is £52 million and for mechanical electrical instrumentation control and automation there is £21 million.

The role of the Department for Environment, Food and Rural Affairs in climate change is narrow; it is about adaptation and seeking to increase resilience. However, it would help to allow the conveyance of water, to slow the flow with land management schemes upstream—dredging, desilting and other means—and to stop fast-growing willow coppice from blocking watercourses in order to allow the water to flow away in Somerset, Yorkshire and other areas across the country, to prevent flooding.

My Committee and I absolutely accept that there is no one-stop option that will prevent all forms of flooding; maintenance, as well as land management upstream schemes, has to be considered.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Lady recognise that there is incoherence at the heart of the Government’s policy on climate change and flooding? The Prime Minister said that money was no object when it came to the relief effort to clear up after floods, but less than two weeks later he was handing huge new subsidies to the fossil fuel industry; when those fossil fuels are burned, extreme weather events, including flooding, are made more likely. Does she agree with the commentator who said today that that is like promising to rebuild Dresden while ordering more bombers to flatten it again?

[Miss McIntosh]

I am grateful to the hon. Lady for giving me the opportunity to say that I believe that there is an incoherence in policy. We import woodchip at huge expense from the United States and other parts of the country to co-fire coal at Drax power station in Selby; I should be encouraging farmers in north Yorkshire and all around the country to grow fast-growing willow coppice trees to co-fire that power station. There are inconsistencies and incoherence in our renewals policy and we should visit those as part of our flood prevention scheme.

We have seen just about every type of flooding possible since autumn last year—coastal flooding, tidal surges, river flooding and overtopping, surface water flooding and, most recently, groundwater flooding. We know that all this has been the worst flooding incident in this country in 250 years, since 1766. This debate is the opportunity for the Department to share how the Government seek to adapt to more extreme weather events and how we are becoming more resilient and building more appropriately. Given what was asked at Communities and Local Government questions earlier, I am not sure that the House is entirely convinced that we are yet building in the most appropriate places—that is, not in areas that have something to do with flooding in their name or that act as functional floodplains.

[Richard Benyon (Newbury) (Con)]

In 2007, 55,000 houses were flooded in this country. My understanding is that this winter about 7,000 houses were flooded. That is a personal tragedy for every single one of those 7,000, but I am not sure how my hon. Friend can claim that last winter’s flooding was the worst for 250 years. We had the worst rainfall for 250 years, but in the context of 2007, the flooding was nowhere near that scale.

[Miss McIntosh]

It was the worst weather event that we have had. My hon. Friend’s intervention raises the very interesting question of why the Bellwin formula was not raised for the roads, bridges and houses that were damaged in 2012-13. He is right about the number of houses flooded. I think that more houses were flooded in the whole of the Yorkshire region in 2012-13 than were flooded in total this year. I supported the bid by North Yorkshire county council to increase the Bellwin limit and I will come on to that in a moment.

My hon. Friend also raises the very interesting question—this supports my argument—of where the funding will come from. I absolutely agree that most of the flood defences held and that many more houses would have flooded than was the case. The House should celebrate that, but where will the money come from to repair those flood defences that held this time but that will have been damaged by the sustained bashing from the storm?

[Mr Henry Bellingham (North West Norfolk) (Con)]

My hon. Friend will be aware that in Norfolk the vicious tidal surge of 5 and 6 December reached record levels along parts of the coast and in King’s Lynn in particular. Is she aware that the tidal defences held up remarkably well? There have been some breaches, which the Environment Agency repaired very quickly. Does my hon. Friend agree that managed retreat anywhere along the Norfolk coast would not be an acceptable policy under any circumstances?

[Miss McIntosh]

I will come on to the role that farmers can play. Ever since I was the MEP for the whole of the Essex coast for five years, I have not been a big fan of managed retreat and have never been persuaded that it is a good thing.

We should recognise the money that the Government have very generously provided. I believe it is £2 million for tourism and £10 million for farms, but it would seem that we need an extra £20 million year-on-year increase in flood management capital funding over the next 25 years to keep pace with the increasing flood threat. I look forward to hearing my hon. Friend the Minister’s response as to the Government’s view on why that might not happen.

Another great development would be more flexibility to transfer money between capital maintenance expenditure and activities. I also urge my hon. Friend the Minister to grab this opportunity to review either the Treasury Green Book or the Environment Agency’s point-scoring system. We heard evidence that the cost-benefit ratio for household protection schemes is 5:1, but that for all other assets it is 18:1. This is, therefore, a good opportunity to address that. During Prime Minister’s questions some two or three weeks ago, the Prime Minister said from the Dispatch Box that all flood funding was up for review. Did he mean a review of the scoring system, which is long overdue? Although it was visited in a modest way in 2010, I believe it should be reviewed from top to bottom.

We concluded that the current model for allocating flood defence funding to protecting property is biased towards urban rather than rural areas. In fact, our report argues that the Department for Environment, Food and Rural Affairs has failed to protect rural areas and that there is a risk to food security as more land becomes at risk of flooding.

I attended the National Farmers Union farming conference last week. The NFU states that 58% of the most productive land—that is, grade 1, farmed English land—is within a floodplain. Our report states that 14% of agricultural land in England and Wales is at risk of flooding from rivers and the sea. A drop in our food self-sufficiency raises a long-term question over ongoing food security.

[Mr Heath]

I am very pleased that the hon. Lady is making a point about the difference between rural and urban areas. There is a further complication when it comes to Somerset, in that people assume that it is a traditional floodplain, but it is not: it is reclaimed, inland sea. It is the great mere of Somerset. Therefore, all of the equations that would work elsewhere do not work when every single drop of water has to be pumped up and over to a river that is higher than the surrounding land.

[Miss McIntosh]

My hon. Friend makes his local case very powerfully, and I commend him for doing so.

How points are scored needs to be revisited. It is important to give a higher value for the benefits of agricultural land and of the protection of land to secure future food production. The big question is about ensuring that reduced regulation on farmers and landowners can allow them to remove vegetation from river banks. Now that we have had six months of the seven pilot schemes for the vegetation removal process, I would go so far as to urge the Minister to end the pilots and to roll out the process across the country, so allowing farmers to remove vegetation from their river banks.

I want to say a word about the role of internal drainage boards.

[Mr Speaker]

Order. Just before the hon. Lady moves on to the subject of drainage boards, may I gently say—I am listening to her speech with close attention, as I invariably do—that I am cautiously optimistic that she is approaching her concluding remarks? I say that not because of any lack of attention or interest on my part, but because several other Members wish to contribute to the debate, and I know that she will be as eager as I am to hear their contributions.

[Miss McIntosh]

Indeed. That is the purpose of the debate, Mr Speaker.

I am vice-president of the Association of Drainage Authorities. The Select Committee concluded that drainage boards are best placed to remove the vegetation and to carry out the maintenance that has been mentioned. Indeed, we are grateful that the Government have looked favourably on this opportunity to allow IDBs to use their local knowledge and resources, and to undertake more of the investment. We believe that there is a lost opportunity in relation to funding from private bodies that DEFRA—

[Andrew Percy (Brigg and Goole) (Con)]

Will my hon. Friend give way?

[Miss McIntosh]

I will stick to Mr Speaker’s strictures about reaching my conclusion sooner rather than later.

There is an opportunity to lever in more than 15% of contributions from other sources. Will the Minister tell us how the Government intend to do that? Do they intend to use common agricultural policy funds to encourage farmers to undertake flood prevention measures by rewarding them through EU agri-environment schemes or by paying proper compensation for flood storage, flood alleviation and other such schemes? Innovative funding should stretch to allowing water companies to invest through the price review, as I have said. I am a big fan of SUDS, and I believe that sustainable drains should be introduced by the autumn at the absolute latest. Most of Sir Michael Pitt’s recommendations have been adopted, but not, I note, those on ending the automatic right to connect and about sustainable drains.

I want to place on the record our commendation of the volunteers, flood wardens, police, fire, ambulance and Environment Agency staff and all those who responded to the floods.

There is scope for the Bellwin formula to be overhauled and reviewed radically. I have mentioned how the Yorkshire and the Humber region, particularly North Yorkshire, has not benefited from the formula. We recommend that the Bellwin scheme be amended to enable local authorities to secure central Government assistance to repair and reinstate roads and other infrastructure damaged by flooding. We also recommend a review of local authorities having to incur costs of at least 0.2% of its annual revenue budget to qualify for Bellwin funding to make it fairer by measuring the impact on the local community. I add that there should be a review of the cap on spending, which I understand hampers the ability of district and county councils to raise any further contributions towards a local levy.

Finally, we were told by the Association of British Insurers that this was a one-in-250-years event. It said that the cost to date has been £426 million, of which £14 million has already been spent. We welcome Flood Re, but there are too many unknowns. We need to know more about the cross-subsidy, what the final figure will be and—I repeat—from which budget the funds will come and what progress has been made on state aid should the Government act as an insurer of last resort for a similar one-in-250-years weather event. It is obviously extremely important that the military played a role in the recovery stage during the recent floods. However, the Government are silent over which budget is covering that military activity. It would be extremely helpful for the House to know that.

--- Later in debate ---

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

May I apologise to the House for my lateness? Unfortunately, I got stuck on a train from Newcastle for reasons I do not need to detain the House with. I will take as little time as I can so as not to abuse the position that I have been given in this debate.

I thank the Minister and the whole team for all their work—I am talking about the Prime Minister all the way down through the various ministries. I also want to thank Opposition Members too. The Leader of the Opposition visited my constituency. He was extremely magnanimous with his time and he did not, dare I say it, make a spectacle of himself. Unlike many Members, I welcome ministerial visits and Ministers seeing what is happening in the area. This Minister has been to the region more than most to chair a number of meetings.

We are putting together a report that will be given to the Prime Minister and the House later in the week. As the Minister knows, we must change the whole way that we deal with this problem. Members have expressed the hope that we never experience the same thing again, but as sure as night follows day, we will and we must be aware of that. It is as certain as death and taxes. It may not be the Somerset levels that are affected, but it will be somewhere. There must be fundamental change that crosses the political divide and that is agreed on by both sides of the House.

The one hurdle that we all have to overcome is the Treasury. It will try to stop us spending the money that is required to put in defences and the works that are needed to ensure that the flooding does not happen in the future. Members from across the House must make it clear to the Chancellor that we have to be given the money that we need. We are the sixth-largest economy in the world, yet here we are, unable to raise money to defend our own people from the most basic problem faced by man—certainly in my constituency—since prehistoric times, which is water. We manage it well. When my hon. Friend the Member for Newbury (Richard Benyon) was Minister he put in place a lot of changes to try to make the system work. Although I occasionally berated him in the local press, I respect him for his hard work. [Interruption.] I tried to do that without a smile and failed dismally. It is crucial that we take responsibility for the problem and say that each area will have to be defended properly.

[Miss McIntosh]

May I welcome my hon. Friend to the Chamber? I have a question that is vexing the House and other colleagues in Somerset. If we look at the whole management system of the Somerset levels, to what extent could the damage have been prevented if we had had both upstream flood management storage as well as regular maintenance and drainage downstream?

[Mr Liddell-Grainger]

My hon. Friend has hit the nail on the head. She is most astute. One of the problems is that we do not have the capacity to pump into the river below a certain level. I am talking about the area on the border between my constituency and the constituency of my hon. Friend the Member for Somerton and Frome (Mr Heath). What happened was that the river backed up. We could not get the water around. We have two points into the sea; one is through the River Parrett and the other is through the King’s Sedgemoor drain. Both are not able to take what we need to pump into them. Nearly 60 square miles of land are underwater, which really focuses our minds on the problems faced by our constituents. Although we have not lost many properties, it has devastated the tourism industry and many other things in the local area. My hon. Friend the Member for Tiverton and Honiton (Neil Parish) knows from his long experience of farming nearby how dangerous these areas can be.

The Minister has made it quite clear that local input is needed. The internal drainage boards and the local Environment Agency—I am not suggesting asking Lord Smith for one second, nor would I—have an enormous input to make, but that must be done in conjunction with local people. That is why the meetings that we have been holding in Sedgemoor or Somerton and Frome have been so important; we have been able to use that local input. I was rather worried when the EA sent John Varley, whom I have met a few times. I find him the most impossible man, although I am sure that my hon. Friend the Member for Newbury would disagree with me. It is obvious that a lot of people have others’ best interests at heart.

We must do three things. First, we must look at the Bridgwater barrage. That will cost an enormous amount of money, but it is vital. Secondly, we must look at the pump system.

--- Later in debate ---

[Richard Benyon]

I applaud the residents of Purley, because I have seen that approach work not only in my constituency but right across the country. The National Flood Forum has a cut-and-paste organisation for local communities to pick up and run with. It is a superb organisation with real knowledge and expertise. I know that the Department and the Environment Agency will also assist local communities in setting up a flood forum. The difficulty is that communities that have never been flooded will be flooded. I entirely agree with my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) that there will be new flooding, as we all know, and it is in those communities that we want lead local flood authorities to start getting voluntary action going, with flood wardens, parish councils getting involved and local communities setting up those sorts of organisations.

I am guilty of not responding to the second point my hon. Friend the Member for Beverley and Holderness (Mr Stuart) made, on whether we should introduce a statutory activity. I blow hot and cold about Pitt’s recommendation to create a duty on fire and rescue services to prepare and be equipped to deal with flooding. In my constituency over the past few weeks, we have seen Tyne and Wear fire and rescue service, Cheshire fire and rescue service, East Yorkshire fire and rescue service and many others, all coming through the centrally controlled asset management register, which brings precisely these sorts of assets to our constituencies when we need them, and they are still there today doing wonderful work. Something is happening, and perhaps more can be done.

[Miss McIntosh]

I pay tribute to my hon. Friend for the work he did as Minister. Is it a matter of regret to him that we still do not have sustainable drainage systems in place? Does he accept that one of Pitt’s core recommendations was to end the automatic right to connect and make IDBs, water companies and others statutory consultees on future planning applications?

[Richard Benyon]

I am sorry, Mr Deputy Speaker, but I was not aware that there was a time limit and will race through my final remarks.

--- Later in debate ---

[Barry Gardiner]

I have to say to the hon. Gentleman that the figures belie that. In 2011-12, there was a budget of £573 million; in 2012-13, £576 million; and in 2013-14, £577 million. The budget for 2014-15 is £615 million. Over the four-year spending period, the Government have allocated just £2.34 billion to flood defences, compared with £2.37 billion over the previous spending period. Those figures are not the ones that the Prime Minister used two weeks ago at Prime Minister’s questions, but they are the ones set out clearly by the independent Committee on Climate Change in its policy note on 21 January, used by the House of Commons Library in its briefing on flood defence spending and set out by the UK Statistics Authority just six days ago. They can even be corroborated on the website of the Department for Environment, Food and Rural Affairs in the correction it had to put out after the Secretary of State and the Prime Minister both “mis-spoke”. As the UK Statistics Authority reported last week, the flood defence budget has seen a real-terms cut of £247 million in this spending period. The Committee was absolutely clear about the risk from the reduction of flood defence funds. Last October, in their official response to the report, the Government said:

“In the context of the wider need to pay down the deficit, we believe this is an excellent outcome and demonstrates the priority this Government attaches to managing flood risk.”

Well, yes, it certainly does.

[Miss McIntosh]

Is the hon. Gentleman not falling into the trap that I referred to earlier? Successive Governments have been too focused on physical structures that may well fail and need to be repaired. We need to have a better balance between capital expenditure and the revenue maintenance expenditure and to look to sources of funding other than local or national Government.

[Barry Gardiner]

The hon. Lady will recall my own contributions to the report. I was very keen that we put far more reliance on green infrastructure, and I will come on to that a little later. She will know that the Committee’s report was absolutely clear about the importance of partnership funding. Of course she will recognise—I think she did remark on it in the House a few days ago—that the £148 million that the Government had originally included in their spending figures when Ministers mis-spoke on this issue has not in fact been produced. It was actually £67 million of partnership funding that has been produced, not the £148 million that they counted for the period.

--- Later in debate ---

[Dan Rogerson]

I can indeed clarify, as others have at the Dispatch Box, that the business support scheme, which is aimed at small and medium-sized enterprises in areas affected by the floods, will look at businesses that have been affected by the extreme weather, not just those that have been inundated directly. There is a fund for farmers who have suffered waterlogged fields to help restore those fields to farmable land as quickly as possible, along with £30 million for local authorities for road maintenance, which should help affected areas to recover.

We have to remember that, outside current events, flooding is disruptive to people’s lives in the long term, and planning and defending against flooding remain a long-term priority for DEFRA and for the Government as a whole. We are spending £2.4 billion over the four-year period between 2010 and 2014, compared with £2.2 billion in the previous four-year period. That means that we have investment plans to improve protection to at least 465,000 households by the end of the decade. Looking forward, we have made an unprecedented long-term six-year commitment to record levels of capital investment to improve defences: £370 million in 2015-16, and the same in real terms each year, rising to over £400 million in 2020-21.

[Miss McIntosh]

My hon. Friend is addressing the very point that the hon. Member for Brent North (Barry Gardiner) and I made, which goes to the heart of the argument. There have been delays from the Department, particularly in implementing sustainable drainage systems—that is not necessarily its fault—and the review of partnership funding has not yet reported. Will the Department look favourably at allowing more transfer from capital expenditure to revenue and maintenance expenditure, as the hon. Member for Brent North suggested? In the long term, there are opportunities for water companies and others such as insurance companies to contribute to both funding streams.

[Dan Rogerson]

The figures that I am setting out into the future are for capital spending, and we expect revenue amounts to be settled as budgets are introduced for each year. However, the points that the Chair of the Select Committee makes about seeking contributions from all those involved in water management are entirely valid. In her speech she spoke about water company investment in water management that goes beyond the “hardware” side of things and looks more at the softer side of managing water through land management solutions. Ofwat is considering what it does with totex—total expenditure. It is looking at expenditure across the piece, rather than just at capital—the sort of things that appear on balance sheets that, in the past, would have been the focus. I accept that many people want to change that, so the fact that Ofwat has allowed water companies to do more of that will be beneficial.

The right hon. Member for Exeter (Mr Bradshaw), who is not in the Chamber today, but who took part in the Westminster Hall debate, pointed out the involvement of South West Water, along with my Department, landowners and managers, in an initiative looking at how water can be retained on Exmoor, which has made a difference to the moor’s catchments. That is a good example of the sort of work that can take place. The Chair of the Select Committee often speaks about what is happening in her constituency with the “Slowing the Flow” project, which is working on land management solutions. She is absolutely right that we need to emphasise the economic importance of investment in flood defences and, indeed, in water management. If we can prevent flooding and take that blight away from land that could be developed successfully, that would make a big contribution. If we can avoid the impacts that hon. Members have discussed, we can make a huge difference to local economies.

Oral Answers to Questions

Baroness McIntosh of Pickering Excerpts

Thursday 13th February 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Whatever the cause, we are seeing extreme weather events and we need to do more between floods. Will the Department consider restoring the balance between building new flood defences, repairing and making good the existing ones and maintaining watercourses? May I ask, in the presence of the Leader of the House of Commons, whether it would be a good idea to have a national statement on adaptation and on climate change generally for this purpose?

[Dan Rogerson]

I pay tribute to my hon. Friend and her Committee for all the work they have done on flood defences—

--- Later in debate ---

[Dan Rogerson]

The clear commitment that the Prime Minister has made is on ensuring that we have the facilities ready to respond to the incidents we are covering at the moment, no matter where they are in the country.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T4. Our thoughts have to be with the flood victims at this time. Will the Minister update the House on the audit of existing sustainable drainage systems with a view to establishing what role they play in flood alleviation; and what help is being given to fishermen who are unable to fish at sea during the time of this flood event?

[Dan Rogerson]

My hon. Friend puts together two questions that cover areas for which both my hon. Friend the Under-Secretary and I are responsible. As she knows, I will table the regulations on introducing sustainable urban drainage later this year. I am happy to write to her about auditing existing provisions. My hon. Friend the Under-Secretary is visiting Newlyn soon to discuss with fishermen the problems they are facing.

--- Later in debate ---

[Sir Tony Baldry]

I much enjoyed my visit to my hon. Friend’s constituency. She is absolutely right. The church of St Peter’s in Broadstairs is an excellent example of a church that is a hub of the community, hosting local clubs and services to the elderly, as well as toddlers groups and young people’s clubs, and, as my hon. Friend says, organising popular tours of the village for visitors to Broadstairs. May I also draw the House’s attention to Holy Trinity Margate, which is another fantastic example of a church delivering almost 24/7 social action?

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

2. If the Church Commissioners will consider creating a Church of England relief fund for flood victims to which the public could contribute.

[Sir Tony Baldry]

Last Friday the Bishop of Taunton wrote to all parishes in the Bath and Wells diocese, giving details of how parishioners could both provide and access much-needed financial and practical support. On the wider question of a relief fund for flood victims, I think my hon. Friend was present on Monday when my right hon. Friend the Secretary of State for Communities and Local Government told me that a number of charities were offering help for flood victims and promised that the Government would do more to signpost those voluntary organisations to help people in distress.

[Mr Speaker]

I think we have time for the questions; it is hoped that we have time for the answers.

[Miss McIntosh]

When we had severe flooding in 2000, the then Archbishop of York, Lord Hope, created a Church of England relief fund, through which we were very humbled to receive not just national donations, but donations from Mozambique, which is a very poor country, but it wished to show solidarity. I hope my right hon. Friend will use his good offices to create such a fund through the Church of England, to which both national and international donors will be able to contribute, if they wish to do so.

[Sir Tony Baldry]

Every parish in flood-affected areas is, where possible and practical, giving help to those affected by the floods, including making churches available for people who have been evacuated, providing drop-in centres, visiting housebound people and delivering food parcels. On the question of an overall fund, there is a feeling that there are already a number of national funds available to help flood victims and that the Church setting up a further fund may confuse rather than help.

Flooding (Somerset)

Baroness McIntosh of Pickering Excerpts

Monday 3rd February 2014 Commons Chamber

[Mr Paterson]

I thank the hon. Lady for her questions. Cobra has met regularly since the Christmas period, and obviously the floods and levels were regularly mentioned. The first specific request was at last Wednesday’s Cobra, which was acted on immediately by Government agencies responding to Cobra.

The hon. Lady mentioned the six weeks. I described briefly the fact that I went down to Somerset the Sunday before last, had meetings on Sunday evening, meetings on Monday, and agreed, quite clearly, a plan, which had to be worked up in detail with the Environment Agency and with the internal drainage boards. That is a marked contrast with the previous Government, who sat on the Parrett catchment flood management plan way back in 2008 and did absolutely nothing about it.

We began dredging on key points. The hon. Lady goes on and on about DEFRA’s priorities. I boil DEFRA down to two simple priorities across a kaleidoscopic variety of activities: to grow the rural economy and to improve the environment. I cannot think of any activity that involves spending central Government money that better delivers those two key priorities than what we are doing on flood spending. That is why this Government will be spending £2.4 billion in the first four years of this Parliament compared with £2.2 billion in the last four years of the previous Parliament. The hon. Lady has to nod just once—just give one little nod—to confirm that Labour Members will back this Government’s growing spending plans on flood spending. For us, it is a priority; for them it is not. She has missed her chance, but there is still a chance. Will she please agree to match our increased spending plans for this Parliament?

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

These are sad days for the people of Somerset, but local heroes have emerged. We must not use the Environment Agency as a political football. We need to revisit the balance of spending between urban and rural areas. Will my right hon. Friend allow the internal drainage boards to retain their moneys to themselves before the maintenance of these watercourses and look for a scheme similar to that in my own constituency to store the water upstream if appropriate?

[Mr Paterson]

I thank the Chairman of the Select Committee for her question. She is absolutely right that there is a balance to be struck. The lesson in Somerset is that it is an extraordinary environment. It is completely artificial. It was first dredged by the Dutch before the time of Charles I, way back in the 17th century. Our criteria are not applicable in an environment where the rivers are, in effect, canals. We need to treat it as a unique environment and therefore bring in local knowledge. At the meetings I had last Sunday and Monday, it was very clear that this had to be a combined effort of the Environment Agency doing the dredging, and then, for future years, allowing locals to take over and come to their own arrangements. There will be close involvement of local councils and colleagues from the Department for Communities and Local Government to work out how that will be funded and organised.

Oral Answers to Questions

Baroness McIntosh of Pickering Excerpts

Thursday 9th January 2014 Commons Chamber

[Mr Paterson]

I am very grateful to the hon. Gentleman for his question, because it gives me the chance to tell the House, yet again, that the Government are spending more in this spending round than was spent by the previous Government and that we plan to increase the amount to a record £2.3 billion up to 2021. Thanks to the fact that we have galvanised local councils through the partnership funding scheme, there will be all sorts of opportunities for his constituents to work with him and his local council to access more funds for flood schemes.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is remarkable that the flood defences have held to the extent that they have during the battering that the country has taken. Will my right hon. Friend give a commitment to the House that he will review the budget for repairs to existing flood defences and look favourably on schemes such as the maintenance by drainage boards of the regular watercourses that protect farmland and other properties?

[Mr Paterson]

I thank the Chair of the Environment, Food and Rural Affairs Committee for her question. What she says about maintenance is absolutely correct. In November, it was found that 97% of the defences were in a good condition and would remain so within our existing budgets. I repeat again that we have made a clear commitment up to 2021. I would love to see the shadow Secretary of State stand up and say that the Labour party will back that commitment.

Rural Communities

Baroness McIntosh of Pickering Excerpts

Thursday 9th January 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I beg to move,

That this House has considered rural communities.

I am delighted to have secured this debate, and I should like to thank the Backbench Business Committee for giving us this opportunity to debate rural communities. I am honoured to represent what must be one of the most beautiful rural parts of the kingdom, so I feel particularly well placed to speak in the debate today. I should like to take this opportunity to thank all members of the Select Committee, past and present, and its staff for their help in preparing the report. When we started the inquiry, we were joined on the Committee by the hon. Members for Dunfermline and West Fife (Thomas Docherty) and for Brent North (Barry Gardiner), who have now been called to do greater things on the Opposition Front Bench. More recently, the Committee lost my hon. Friend the Member for North Cornwall (Dan Rogerson), who is now the Under-Secretary of State for Environment, Food and Rural Affairs. I am delighted to see him in his place today. We also lost my hon. Friend the Member for Camborne and Redruth (George Eustice) when he became the Under-Secretary of State for Environment, Food and Rural Affairs.

It is true that many in rural communities live in relative comfort and prosperity, particularly in my area, but there are also enormous challenges. There are pockets of rural poverty and isolation, as well as poor public services. Public services cost more to deliver in sparsely populated rural areas, where there is also a high concentration of the elderly population. All those factors represent a challenge to the delivery of public services. The extra cost of providing these services to rural communities is evident across the public sector, yet in 2012-13 rural local authorities received less than half of the per head funding that urban authorities received. If we look at areas such as education, we find that the Government are reducing local authorities’ flexibility to allocate extra funding to small rural schools with higher running costs. We urge the Government to recognise that the current system of calculating local government finance is deeply unfair to rural areas in comparison with their urban counterparts. I congratulate my hon. Friend the Member for North Cornwall, who is now a Minister in the Department and was one of the co-chairs of the Rural Fair Share campaign, whose work I would wish to recognise. The Committee concluded:

“The Government needs to recognise that the current system of calculating the local government finance settlement is unfair to rural areas”

in comparison with urban areas.

I wish to take the opportunity to highlight some areas where that is the case and go on to discuss them in more detail. The cost of heating homes and filling car fuel tanks in rural areas is very high, yet rural public transport is infrequent and, as we know, the bus subsidy is under threat. Off-grid households are currently prevented from accessing the same incentives and finance to improve their properties as are available to on-grid households. I am delighted to see that the Treasury is extending the ability of rural areas such as Thirsk, Malton and Filey to apply for rural fuel duty discount, and obviously we will look to make sure that the EU funding under the state aid rules criteria will apply equally across the board to such rural and sparsely populated areas as mine.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Lady on securing this debate and the Backbench Business Committee on allowing it. She is making an important point, because her community, like mine, has to make an application, which is not straightforward to do, and the criteria are not clear. I welcome the steps the Government have taken in other areas, but surely they should examine this issue, do this detailed work themselves and set the criteria so that rural communities across the United Kingdom can benefit from the rebate on fuel.

[Miss McIntosh]

Indeed. Obviously, the purpose of today’s debate, as the hon. Gentleman is highlighting, is the “Rural Communities” report and the Government response to it. We published our report in July and they responded in October. It is a source of disappointment that the Government are leaving it to rural communities to make their own arrangements; some will be better placed than others to do so.

Let me go back to the report’s highlights. We believe that school funds should revert back to varied lump sum payments going to rural schools according to their need. We also looked at the rolling-out of superfast broadband to rural areas, finding that it should be prioritised to those with the slowest speed. We urge the Department to impress upon BT that it must refocus its priorities. It is pointless giving those who have a fast speed an even faster speed; we believe that we should improve access for communities that have no, or extremely slow, broadband. We also urge BT to indicate which areas will be covered by 2015 under the rural broadband programme, thus allowing the areas that will not be covered to make alternative arrangements.

The Department is proceeding to “digital by default” when the next round of the common agricultural policy comes into effect, but we urge the Department to ensure that all rural areas will have fast broadband. We must ensure that the Department is able to provide the outlying farms that are too far from the cabinet and do not have fast broadband with paper copies of things in the interim. Incredibly, when I try to use my mobile phone at home in a rural area, I find that I do not have mobile phone coverage; voice not spots should also urgently be addressed.

[Mr David Heath (Somerton and Frome) (LD)]

My hon. Friend makes a crucial point about the so-called last 10% in rural areas, such as Devon and Somerset, where roll-out has taken place. Unless we achieve 100% accessibility for high-speed broadband, we will do an immense disservice to people in very rural areas. Does she agree that when those areas or properties are identified, the Government should make funds available to ensure such accessibility? We want not a bidding system or matched funding, which is not available in rural areas, but the Government to finish the job.

--- Later in debate ---

[Miss McIntosh]

I welcome my hon. Friend’s intervention, and I will come back and say more on that point.

The Department for Environment, Food and Rural Affairs must address the matter of higher than average house prices and the lack of affordable housing in rural areas. Allowing the rural economy to grow, overcoming barriers to growth and improving rural businesses’ access to finance should be among its top priorities. We ask local enterprise partnerships to address the needs of rural businesses, and we urge the Government to ensure that financial support is offered to the business sector. The business bank, the single local growth fund and other such funds are available to rural businesses. We recognise the needs of rural communities. Currently, deprivation, affordability and provision of public services need to be addressed.

Let me explain why we called for this report. In 2010, the Government abolished the rural watchdog, the Commission for Rural Communities, and replaced it with a beefed-up rural communities policy unit in DEFRA that operates as a centre of rural expertise, supporting and co-ordinating activity within and beyond the Department. It champions rural issues across the Government. We were told that the unit would play an important role in helping all Government Departments ensure that their policies are effectively rural-proofed before decisions are made.

Earlier this year, we commenced an inquiry into rural communities to assess how successful DEFRA and the new unit have been at championing rural issues across Government to achieve their target of fair, practical and affordable outcomes for rural residents, businesses and communities. Our findings led us to conclude that the rural communities policy unit faces a difficult task if it is to meet that ambition. Too often, Government policy has failed to take account of the challenges that exist in providing services to a rural population that is often sparsely distributed and lacks access to basic infrastructure.

I have mentioned the local government settlement and how rural communities pay higher council tax bills per dwelling yet receive less Government grant and have access to fewer public services than their urban counterparts. I will not go over all our conclusions in that regard, but the Government have, in part, recognised their misjudgment by announcing an extra £8.5 million efficiency support payment for one year only for the most rural councils. Some payments are as small as £650. As welcome as any extra funding is, that is clearly not the long-term solution to the problem of rural councils not getting their fair share. Regrettably, the Government rejected our call for the gap in funding between rural and urban councils to be reduced. We must and we will continue to press the case.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on this debate. In Cornwall, the reality is that we have higher than average council tax, lower than average earnings and less money spent per head in the rural areas than in the urban areas. Closing that gap by just 10% a year for the next five years would mean an additional £16 million of income for people in Cornwall. Does she not agree that the Government should push ahead with this idea of getting a fair share for rural areas?

--- Later in debate ---

[Miss McIntosh]

Indeed, and I, as an individual, am part of the rural fair share campaign. The reason for calling this debate is to lend support to that campaign, which goes to the heart of delivering public services in rural areas. I am grateful to my hon. Friend for allowing me to make that point.

Let me turn now to housing, another key part of the report. Parts of rural England are among the most unaffordable places to live in the country. Ryedale, in my area, stands out as the people working there earn less on average than those working in urban areas or in other parts of Thirsk, Malton and Filey. Rural homes are more expensive than urban ones. The average house price in the countryside is equivalent to 6.3 times gross annual average earnings, compared with 4.9 in urban areas. Potential first-time buyers are particularly hard hit by high property prices and are increasingly frozen out of rural areas. If we do not address those problems, the consequences for rural communities will be grave. If young people are priced out of rural areas, we lose the pool of labour for the local economy and the service sector, and demand for services, schools, shops and pubs will also decrease, making their existence less viable. Rather than addressing the problems on the demand side, we urge the Government to do much more to increase the supply of housing in rural areas.

We recommended that small rural communities should be exempt from the bedroom tax. In my area, there is a chronic shortage of one and two-bedroom homes. Until such time as we can rehouse those who wish to downsize, allowing larger families to move into larger properties, housing will remain a problem. Sadly, the Government rejected that recommendation. In their response, they suggested that those affected by the bedroom tax should simply work more hours to make up the shortfall or should move into the private sector. When I visited the food bank in my area, run by the local church, volunteers and the Trussell Trust, I found the story of one lady who volunteers there very affecting: she wants to work more hours for her employer, but the work is simply not there.

Regrettably, there are also planning issues—the elephant in the room that no one wants to mention. Whenever a planning authority in a nice area makes a proposal for social housing or smaller units, people always write to their MP—I do not think I am an exception in this regard—to say, “I know just the place for that development: at the other end of the village from where I live.” Until we can get over that barrier, we will have a smaller stock of social homes. The bedroom tax means that tenants are expected to move greater distances, away from friends, family and schools. We must have a policy that allows key workers to live in the areas where they perform a vital role. When the Minister sums up, will he explain what input his Department had into that policy from a different Department, and why he believes that it is suitable for rural communities that lack the variety and volume of social housing stock on which the policy depends?

Let me turn in more detail to rural broadband. It is crucial to rural businesses, allowing economic growth in rural areas and allowing rural businesses to compete with their urban counterparts. I have mentioned digital by default, and we must ensure that any new computer system the Government bring into effect is fit for purpose before it is introduced and that it reaches every farm on which the Department is relying to fill in a digital form. Rural communities and their businesses, schools and households have fallen behind their urban counterparts on broadband access. The roll-out of superfast broadband to 90% of rural areas will, I am sorry to say, be delivered late and it is unclear when the target to which we all aspire of universal access to basic broadband will be achieved.

It seems that some communities, including some in Thirsk, Malton and Filey—the Minister is living very dangerously there—might have to wait up to three years before they see any benefit. That is unacceptable, particularly as the Government are making ever more services digital by default, as I have mentioned. A recent and notable example is the new CAP deal, which will come into force in January 2015.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Lady agree that even in areas where it is claimed that there is decent broadband coverage, the reality on the ground is that there are so many not spots that many individual houses and farms still cannot get access?

[Miss McIntosh]

I am grateful to the hon. Gentleman, whose experience reinforces the point I am trying to make. We must ensure that universal access is prioritised over increasing speeds for those who already have an adequate service. Will the Minister therefore tell us the date by which all rural homes will have access to 2 megabit basic broadband?

The roll-out of broadband is being funded largely from the public purse, yet many constituents cannot find out whether they will benefit from improved broadband. The Committee insists that communities are told whether they will be covered by rural broadband so that they can seek alternative means if they are not. Some local authorities are now publishing projected coverage maps, but many are not.

The Government have committed to spending £300 million that they are receiving from the BBC on rural broadband. Some rural communities might be hoping that even if they are not included in the initial roll-out, they might benefit from additional funding. We need clarity, which is sadly lacking. Will the Minister therefore tell us how rural communities can find out whether they will benefit from extra funding?

With regard to rural communities going it alone, one source of funding might have been the rural community broadband fund, but last week disturbing reports suggested that it will be wound down in March and that much of the available funding will be returned to Brussels. It aimed to deliver £20 million in funding and to connect 70,000 homes, but so far—I hope that the Minister can correct me—only three projects have been approved, claiming less than £1 million in total, and they will connect just 2,500 homes. A member of the public behind a proposed broadband scheme in Dorset said last week that although funding existed, officials had made it impossible to spend and that therefore the rural community broadband fund was dead. Another member of the public said:

“The officials running it got so tied up in their own process it was impossible to deliver. This has happened because of the incompetence and ineptitude in central government.”

The need exists and the funding exists, so how has DEFRA managed to make such a mess of administering the rural community broadband fund that much-needed financial support might be returned to the European Union unspent? I hope that my hon. Friend the Minister will tell me that that is not the case, because that would be serious and regrettable.

I will briefly mention schools. There are concerns about school transport, the extent to which the pupil premium reaches rural areas and falling school rolls, which is partly the result of the lack of affordable housing, which I mentioned earlier. The problem with rural funding is not limited to the finance settlement. The Government are reducing local authorities’ flexibility to allocate extra funding to schools with higher running costs, a move that will affect smaller rural schools in particular. The Government are demanding that all primary schools receive the same level of lump sum funding, regardless of size, location or other circumstances. That also applies to middle and secondary schools. The recent Ofsted report on the achievement of the poorest children in education states:

“The areas where the most disadvantaged children are being let down by the education system in 2013 are no longer deprived inner city areas, instead the focus has shifted to deprived coastal towns and rural, less populous regions of the country”.

I hope that the Minister will use his good offices to liaise with his opposite number in the Department for Education to correct that situation. Will he today explain the benefits that will be gained by removing local authorities’ ability to target funding where it is most needed, and whether his Department was consulted on that?

I commend all the conclusions that I have not been able to cover, particularly those that look more closely at housing, the rural economy, community rights and transport; I briefly mentioned the bus subsidy. I commend the entire report and our recommendations to the House and to the Minister. Again, I thank the Backbench Business Committee for the opportunity for this debate.

I look forward to my hon. Friend the Minister summing up what steps his Department is taking to ensure that pockets of rural deprivation that might otherwise be overlooked in the official statistics are recognised across Government. I urge him to state what is being done to redress the balance between rural and urban spending and to ensure that we eliminate these pockets of rural deprivation. We look forward to receiving the review that the Government have ordered to be conducted by the noble Lord Cameron of Dillington. We are told in the Government’s response that the findings will be included in DEFRA’s annual report and accounts.

I leave the Minister with this question: is not the whole subject of rural communities worthy of an annual statement or update in its own right, giving the Department the opportunity to report to this place on exactly how rural policy is being co-ordinated through the rural communities policy unit?

--- Later in debate ---

[Miss McIntosh]

I thank everybody who has participated for their positive and constructive contributions to this excellent debate, which has demonstrated that this matter is not just to do with DEFRA but relates to all the tentacles of Government—it is multi-agency and multi-departmental.

I very much enjoyed the beauty contest as to who has the best constituency, but no one has yet come close to Thirsk and Malton. I fell into a trap at one point, so to save any grief in any quarters, let me say that of course I meant to refer to the spare room subsidy in the context of the importance of affordable housing.

I welcomed the contributions on the sheer cost of living and the fact that rural communities are under-represented and underfunded. The examples given show that we look to rural communities to give the sort of help we need, but we expect the Government to remove some of the barriers. I referred briefly to the fact that off-grid energy households have to be able to access the same incentives and finance to improve their properties and reduce their heating bills as those on-grid.

No one can doubt after today’s debate the importance of rural growth, and in particular broadband, to farming and other rural businesses. We would have liked the Government to keep to 9% modulation—I will just throw that into the mix—but 12% is still less than 15%.

We now have a better understanding of what it is like for those of us who live in and represent rural communities and a better idea of how best to meet the challenges. I hope we can persuade the Government and the Backbench Business Committee to hold an annual debate to give the Department the say each year as to how we are bringing rural communities to the heart of Government, and that policy formation, whichever Department is responsible for a particular policy, will reflect the needs of rural communities.

Question put and agreed to.

Resolved,

That this House has considered rural communities.

Water Bill

Baroness McIntosh of Pickering Excerpts

Monday 6th January 2014 Commons Chamber

[Hywel Williams]

Alas, I am not surprised at all by the complete lack of Labour MPs from Wales in the Chamber. They might still be celebrating, who knows?

In conclusion, if the coalition Government are unwise and refuse to accept the new clause and we are forced to press it to a Division, I expect the main Opposition party, which is also the Government party in Wales, to join us in the Lobby. After all, this is not just a Welsh test for the coalition Government. It is also a test for the Opposition in this place and for their friends in Wales of their consistency and commitment to the people of Wales. Are they serious about devolving power to Cardiff, or is this to be a case of echoing St Augustine: “Make me pure, but not yet”?

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Arfon (Hywel Williams), who moved his amendment so eloquently.

I want to speak in support of two little amendments that have been grouped under the heading “Regime of the water industry”. New clause 2 and amendment 12 have been tabled in my name and those of a number of colleagues on the Select Committee on Environment, Food and Rural Affairs. We followed the proceedings in the Public Bill Committee with great interest, but chose to bide our time until the remaining stages before we entered into the legislative process, having done what I thought was a welcome piece of work in the pre-legislative scrutiny of the draft Bill.

New clause 2 specifically considers the possibility of allowing a retail exit. It would empower the Secretary of State to make provision by regulation for the transfer of an undertaker’s assets and liabilities associated with its non-household retail business into a separate company. Regulations would be made in the normal way by statutory instrument and would make provision for any transfer to be subject to the approval of the Secretary of State and such safeguards as may be specified in the regulations. Amendment 12 would amend clause 80 by inserting the relevant section on retail exit.

We considered retail exit during the pre-legislative scrutiny. Inevitably, a number of companies may not necessarily fail but will regrettably have insufficient customers to allow them to stay in the market. New clause 2 and amendment 12 would simply recognise that impact and allow companies to function in what would be considered a normal competitive market. An exit clause such as we propose would facilitate new entrants, particularly larger ones, into the water and sewerage retail markets.

We recommended in our report during the pre-legislative scrutiny that the Bill should include such provisions to enable incumbent companies to exit the retail market voluntarily. It would be helpful to hear from the Minister whether he is minded to accept new clause 2 and amendment 12. During our inquiry, both regulators—Ofwat, which covers England and Wales, and the Water Industry Commission for Scotland—said that incumbent companies and, indeed, new entrants were united in calling for the Bill to include an exit route.

During the Public Bill Committee, Opposition Members proposed a new clause to allow incumbent companies to choose whether to provide to the retail or wholesale market only, subject to approval by the Secretary of State. Regrettably, the Opposition’s new clause was defeated in a vote. New clause 2 would have a different effect from the new clause proposed by the Opposition in Committee, as it would specifically enable companies to exit the retail market by transferring their retail contracts and liabilities—that is, their retail business—to a third party where they chose to do so. That would open up the market to new entrants who hold a retail authorisation, by allowing them to acquire whole retail businesses, rather than acquiring one contract at a time. That would allow economies of scale.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

The hon. Lady is without doubt an expert in these matters, given her role on the Select Committee as well as the all-party group. On the basis of the work done by her Committee, will she give the House a sense of the amount of interest in entering the market and the number of people involved?

[Miss McIntosh]

I am grateful to the hon. Lady for her good services to the all-party group, where we serve as fellow officers. We hear of many entrants, but obviously, until the law is in place, it is difficult to put a number on that. I am sure that my hon. Friend the Minister will have heard and can perhaps comment, as he is closer to the issue.

We suggest that if existing companies are unable to compete with new entrants who want to come in for very good reasons and lose customers as a result, it makes sense to allow an exit strategy. I personally feel that we heard no compelling evidence during the pre-legislative scrutiny of the draft Bill and during our consideration of the water White Paper to suggest that the reform should not include a retail exit strategy. That is why we feel honour bound to come forward for the sake of the Bill’s completeness.

New clause 2 would give all undertakers the power but not the obligation to transfer their non-household retail business to a different company. It would give the Secretary of State the power to make any such transfer subject to approval and any necessary safeguards to ensure an orderly exit from the market. I hope that the House will be able to support the proposals because much of the Bill is silent on these matters and we want to use the new clause and amendment to give it more teeth.

There are several arguments in favour of allowing such a retail exit. For example, an exit clause is needed to allow the market to function normally and competitively. Additionally, a company should be able to organise its business in the way it considers best in the interests of its customers and shareholders. An exit clause would facilitate new entrants, especially larger ones, into the water and sewerage retail market because they would not need to win one contract at a time. Without new clause 2, I understand that economies of scale would work against new entrants and either prevent them from entering the market or, at the very least, reduce the benefits that they could provide to new customers due to higher costs of entry. I hope that my hon. Friend the Minister agrees that the proposal is helpful and that he will be minded to accept it. It would not be in the interest of companies or their customers to force companies to stay in a market in which they have few or no customers.

The general thrust of the new clause goes to the heart of this group of amendments dealing with the regime of the water industry. We should learn from what has happened in Scotland. I understand that DEFRA has stated that it intends to create a market in which access is regulated—in other words, with the rules of entry clearly set out and adhered to by all market participants. The reverse side of the coin is that if the rules of entry are to be set out, the House would, I am sure, want rules of orderly exit to be set out. I am not saying that exit would happen in many cases, but it is important that such rules are on the statute book.

Following our pre-legislative scrutiny, we said that as much detail as possible should be set out in the Bill so that the House could consider it. It is wrong—I part company from my hon. Friend the Minister in this respect —to leave too much to regulations, given that many of us with a great interest in this subject will not be selected to serve on the Delegated Legislation Committees that consider them. As the Bill does not provide for retail exit, the strategy is too open. It could be argued that the Government’s approach is based on the premise that parties in the retail market should be left to negotiate among themselves about matters such as service and price, but that could be set out in the Bill.

Considerations of price, service levels and the ability to respond to difficulties go to the heart of why it is important to have a competitive market in England, as has been achieved in Scotland. There must be a way of policing a situation in which incumbents are simply slow in responding to requests for information or services from new entrants. It is important not only to facilitate the path for new entrants, but to allow for an exit strategy and to bring about a competitive market. The Bill is completing its remaining stages in the House today, but little is known about upstream competition. The Government are asking that we take an awful lot on trust, but it would be better if the Bill provided for a definite exit strategy, which is why I commend new clause 2 and amendment 12 to the House.

[John McDonnell (Hayes and Harlington) (Lab)]

I am pleased to follow the hon. Member for Thirsk and Malton (Miss McIntosh). I see in the national press that she has had a little local difficulty. I hope that she can resolve the matter, because she would be a loss to the House if she were not returned at the next election—unless of course she were replaced by a Labour Member.

I want to speak to new clause 14, which is in my name. It suggests to the House that before we move forward with further legislation, we stand back and look objectively at the performance of the water supply industry since 1989 when it was privatised. I am not part of this common agreement among some parties in the House that privatisation and competition have been a success and are the way forward. In fact, I deeply regret what has happened since privatisation.

--- Later in debate ---

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

May I take this opportunity, Madam Deputy Speaker, to wish you and all hon. Members a happy new year? I hope that all hon. Members have had a peaceful and enjoyable break and have returned refreshed and looking forward to this busy year.

Unfortunately, the festive period was not a happy experience for many households up and down the country. Many hon. Members spent a great deal of their recess dealing with the impacts of the recent weather events on their constituents. It is therefore appropriate that later we will discuss a series of amendments on the clauses that will help to provide support to many of those affected households. I look forward to having that debate in more detail, but for the moment I want to focus on the new clauses in the first group of amendments.

Last year, in his now infamous letter to water companies, the Secretary of State trumpeted water privatisation as

“one of the greatest success stories of privatisation.”

If one measures success by the payouts made to investors, it is without doubt a great success story. Let me echo the thoughtful remarks by my hon. Friend the Member for Hayes and Harlington (John McDonnell) and pick out a few examples of the dividends paid out since 1989. Severn Trent Water has paid out £6.2 billion in dividends, Thames Water has paid out £6.3 billion, the north-west’s United Utilities has paid out £7.3 billion, and Anglian Water investors have recouped some £6 billion. Overall, a staggering £40 billion has flowed into the pockets of investors. It is fair to say that many customers would not share the Secretary of State’s appreciation for his wonderful friends the chaps running the water companies.

Indeed, their view is shared by many of the coalition’s own MPs. I am disappointed that the hon. Member for Skipton and Ripon (Julian Smith) is not present. In last year’s excellent debate on the water industry he said that

“Yorkshire Water…is exploiting my constituents and people across Yorkshire.”—[Official Report, 5 November 2013; Vol. 570, c. 213.]

I do not know whether the Chair of the Environment, Food and Rural Affairs Committee shares that view of Yorkshire Water.

[Miss McIntosh]

Any company that is prepared to invest £1 million in improving the provision of water to Filey has to be congratulated, so I congratulate Yorkshire Water on that. Does the hon. Gentleman agree that this Government’s arrangements leave Yorkshire Water and other companies free to raise money on the markets in a way that otherwise would not be possible?

[Thomas Docherty]

I do not want to get sidetracked by a debate about the merits of privatisation—I think you would pull me back in line if I did so, Madam Deputy Speaker—but I will just point out to the hon. Lady that Scottish Water, which is owned by the state, has invested more per connected property, I think, than any of the English water companies, with the exception of South West Water, so I am not entirely convinced by her argument.

To go back to the comments made by the hon. Member for Skipton and Ripon, despite paying out hundreds of millions of pounds to investors, Yorkshire Water has paid next to nothing in corporation tax over the past few years. I am not singling out Yorkshire Water in particular—it is clear that its behaviour is no better or worse than that of any of its competitors. The problem lies with the culture of water companies themselves. They have behaved in an unacceptable manner towards their customers for too many years. It is clear that they have come to regard customers as nothing more than cash cows, and many have paid little or no attention to customer complaints. That is why we believe it is in the interests of hard-pressed customers that the industry be subjected to greater scrutiny.

New clause 11 in particular shines a light on the opaque world of the companies’ financial and business practices. This is not an unreasonable or overly bureaucratic requirement. For many years, water companies voluntarily produced reports such as those that the new clause would require of them; yet, strangely, in recent years they seem to have got out of the habit of providing that information to customers, the regulator and the Department.

It is also worth noting, before the Minister replies, that Ofwat’s Scottish counterpart, the Water Industry Commission for Scotland, requires Scottish Water to produce the relevant information on an annual basis. Therefore, we believe that this is not an onerous or bureaucratic requirement.

New clause 12 would require Ofwat to pay far more attention to the problem of affordability of bills. I am conscious that we will have a wider debate about affordability when we discuss the second group of amendments, but Ofwat’s current interpretation of its role as an economic regulator is far too narrow. Both household and business customers feel that they are an afterthought, and the new clause makes it clear that Ofwat must have due regard to the cost of bills when setting the prices in future review periods. Labour believes that during a time of unprecedented squeezes on household budgets, much more must be done to help hard-pressed customers. Our two new clauses are important measures that would ensure that water companies served their customers’ interests, not the other way around.

We will, unsurprisingly, support the Select Committee’s new clause 2 on retail exit if it is pressed to a vote. We welcome the fact that the hon. Member for Brecon and Radnorshire (Roger Williams) appears to have had a change of heart over the festive break. During the Bill’s Committee stage he did not vote in favour of Labour’s proposal, but we very much welcome his change of heart. If we do not get an opportunity to discuss the proposal today, we hope that the other place will note that even members of the Bill Committee have signalled that they believe, on reflection, that it is a sensible and worthwhile measure. I will not repeat the discussion we had in Committee, but I think it is fair to say that, based on the signatories to the new clause, the proposal has cross-party support, which we welcome.

We will also support the Government’s amendments. I am slightly surprised that they felt the need to table a series of amendments, but not as surprised, I suspect, as the Minister when he was informed by his civil servants. The Minister has told us many times that he is lucky enough to be half Welsh, so one would have thought that he would have noticed the impact on Wales of the new clauses tabled by the Government in Committee. I hope he will explain how that slightly embarrassing oversight occurred.

We hope we will have an opportunity later this evening to press our new clauses to a Division. We welcome the spirit in which this first part of the debate has been conducted and I do not wish to detain the House any further at this point.

--- Later in debate ---

Brought up, and read the First time.

[Miss Anne McIntosh]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 7—National affordability scheme—

‘(1) The Secretary of State must, by order, introduce a National Affordability Scheme for water.

(2) The National Affordability Scheme must include an eligibility criteria, determined by the Secretary of State, in consultation with—

(a) the Water Services Regulation Authority; and

(b) the Consumer Council for Water.

(3) An order under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.’.

New clause 8—Billing information: affordability—

‘Any company providing water services to a residential household must include on its bills—

(a) details of any tariffs provided by that company;

(b) a recommendation of the lowest possible tariff for each residential household; and

(c) information regarding eligibility criteria and how to make an application for assistance under Water Sure.’.

New clause 9—Provision of information to water companies: landlords—

‘(1) The Water Industry Act 1991 is amended as follows.

(2) After section 207 (Provision of false information) there is inserted—

“Provision of information to water companies: landlords

Where a water company does not have information about a resident in a property that is using water, if the occupants of that property are tenants, the landlord must, on request, provide to the water company contact details for the tenants.”.’.

New clause 10—Water companies: recovery of losses—

‘(1) The Secretary of State, or the Authority, may prohibit losses to a water company due to non-payment of bills from being recovered through charges on customers.

(2) This section comes into force on the day after the Secretary of State has laid before Parliament a report setting out how water companies have failed to take action on these matters,’,

Amendment 9, in clause 80, page 124, line 1, at end insert—

‘(e) section [Provision of benefits information].’.

[Miss McIntosh]

I wish to consider new clause 3 and amendment 9, which seek to address legislation already on the statute books in the Flood and Water Management Act 2010. I remind the House that the cost of bad debt to each household in England is approximately £15 per annum, and in times of great hardship and a period of austerity, which the Government are dealing with through the actions we continue to take, it is incumbent on the Government to consider every opportunity to defray the costs to each household in that regard.

New clause 3 seeks to provide benefits information by allowing the Secretary of State to regulate to

“make provision about the disclosure of benefits information about occupiers”

to water and sewerage companies in connection with the revised part of the Water Industry Act 1991. It goes on to state that

“‘benefits information’ means information which is held for benefit entitlement purposes by the Department for Work and Pensions.”

Amendment 9 would make the consequential change to the current clause 80, to allow the provision of benefits information. I sat where the hon. Member for Dunfermline and West Fife (Thomas Docherty) is currently sitting and followed the passage of the Flood and Water Management Bill as closely as he is following the passage of this Bill. I have been very taken with the idea of trying to reduce bad debt in this way. Recently, I was most fortunate to receive a written answer from the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Hemel Hempstead (Mike Penning), who helpfully told me that at present the legislation does not permit the transfer and provision of benefits information by the Department for Work and Pensions in the way I wish. He did not say it could not be done; he said only that the current law does not permit it. We are where we are.

[Mr John Redwood (Wokingham) (Con)]

To help the House, will my hon. Friend explain what kind of information she would like to see transferred and how it would help?

[Miss McIntosh]

I hope that my right hon. Friend will bear with me as I take the House through it.

In the Environment, Food and Rural Affairs Committee report on the draft Bill, we reiterated our previous recommendations that the Department should implement without delay the existing provisions of the Flood and Water Management Act 2010 on bad debt, to which I have referred. In our view, it is unacceptable for honest customers to be forced to subsidise those who can pay but refuse to pay their water bills. To answer my right hon. Friend’s question, the specific provision is section 45 of the 2010 Act, which introduces new section 144C to the Water Industry Act 1991. That is what we propose in new clause 3, which would require landlords to arrange for information on their tenants to be provided to water companies.

Instead of implementing the existing bad debt provisions, the Government currently rely on a voluntary approach, whereby landlords share information on tenants on an online database set up by the water companies. Before I go further on the voluntary approach, it might be helpful to ask my hon. Friend the Minister this question: what is to prevent a customer who happens to be a tenant from marking on their electricity bill the fact that they have no problem with it being made known to the electricity company and the Department for Work and Pensions, whichever works best, that they are in receipt of benefits? The Environment, Food and Rural Affairs Committee was fortunate to enjoy the company of the hon. Member for Dunfermline and West Fife for a time. I am sure he remembers our exchange, but the Committee has great difficulty in understanding what the problem is for the Government—either the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs—in permitting that flow of information.

The House will recall the tragic case of an elderly couple who sadly passed away because they could not afford to pay their utility bills for heating. No one had informed the electricity company of that fact. I believe that what is good for electricity companies—in law, such information can be provided to those utility companies —should be equally good for the water companies, which are also utility companies. They should have access to the same information.

A close reading of proceedings in Committee shows that Water UK acknowledged the new database for landlords and tenants, but claimed that

“experience has shown that a voluntary approach simply does not work.”––[Official Report, Water Public Bill Committee, 3 December 2013; c. 15, Q19.]

It gave the example of Northumbrian Water. It has had an easy-to-use website for landlords to provide information for two and a half years, yet only 7% of all rented properties have been registered. That is a problem and this is a matter of some urgency. The Government need to press ahead—the House would support that.

In Committee, the Opposition tabled a new clause that would have meant landlords providing contact details of their tenants to the water companies, but it was voted down. The Environment, Food and Rural Affairs Committee produced a report on the water White Paper—we have worked hard on the issue and I hope we have made a positive contribution. My hon. Friend the Minister nods because he, too, was a member of the Committee when we adopted the report. I find myself in good company this evening. The report recommended that DEFRA work with the Department for Work and Pensions to ensure that all means-tested benefits claimants are given the option to consent to the sharing of their data with their water company for the purposes of help with affordability issues.

I and hon. Members who have put their names to new clause 3—a number are members of the Environment, Food and Rural Affairs Committee—believe that there is a difference between electricity and gas bills and water bills. If people do not pay their heating bill, their supply can be cut off, whereas if people do not pay their water bill, the water company is simply not permitted to turn off the supply of clean water going in or prevent waste water—sewage—going out, for reasons of hygiene and good health.

--- Later in debate ---

[Dan Rogerson]

I thank my hon. Friend for his intervention. He is absolutely right to point out that what is proposed is a new bold national scheme built on profits that might or might not go up or down in accordance with the markets and through the price review process. Although I accept that the intention of the hon. Member for Dunfermline and West Fife is, as always, to be helpful, I feel that his scheme could use a little work and I therefore urge my hon. Friends to resist it should he seek to press it to a vote.

Let me move next to new clause 8, also tabled by the hon. Gentleman. It would place a legal requirement on water companies to include information in their bills about the WaterSure scheme, but, as I have said—I provided information to this effect to the Committee—all water companies already do so voluntarily. He made a point based on anecdotal evidence. I would be happy to see that evidence and I am sure that he will want to share it with us, but I think we should base our policy making on the evidence provided to us, and the Consumer Council for Water has been quite clear that companies provide such information to customers.

In addition, new clause 8 would place requirements on water companies to provide information about tariff structures and the lowest available tariff, a point picked up on by my hon. Friend the Member for Sherwood (Mr Spencer). The proposals simply fail to reflect the realities of the water sector as opposed, for example, to the energy sector. Water companies do not have complex tariff structures. The sole choice for the majority of household customers is whether to pay according to the amount of water they use through a metered tariff, which is particularly prevalent in areas such as my own, or according to the rateable value of their home through an unmetered tariff. The cheapest option for each household will therefore depend on the location of the property and the amount of water used by the household.

Many smaller households with low water use can benefit from a meter. Water companies are required to fit a water meter free of charge on request and they also advise customers on whether they might benefit financially from the installation of a water meter. A further point to bear in mind about the operation of WaterSure is that it caps the bills of eligible customers at the average of the metered and unmetered bill for the area. That could, in effect, put the bills of some eligible customers up and it is therefore not surprising that they have chosen not to apply for WaterSure.

There is no evidence, in my view, that further regulation is required in this area. As I have noted, all companies already include details of WaterSure in their household bills and they also all provide details of the support available to any customer struggling to pay their bill. Legislation to require the companies to do something that they are already doing voluntarily would be redundant.

The Consumer Council for Water works closely with the companies on the format of their bills. Its expert advice, as we discussed in Committee, is that one of the biggest risks in using water bills as a means of communication with customers is information overload. I do not, therefore, consider the new clause to be necessary.

Let me turn next to new clause 9, also tabled by the hon. Gentleman. We discussed an identical clause that he tabled in Committee. Section 45 of the Flood and Water Management Act 2010 already enables Ministers to introduce secondary legislation that would require landlords to provide water companies with personal details about their tenants or become liable for paying the bill. That was a point that the Chairman of the Environment, Food and Rural Affairs Committee was keen to emphasise, given her involvement with the passage of that Act.

Following extensive consultation with the industry and with landlords’ organisations the Government took the decision that a voluntary approach would be more suitable. During consultation, landlords argued that the additional regulatory burden would be disproportionate as they are not the source of the problem we are trying to tackle. At the same time, the evidence provided by the water sector to support the case for additional regulation was not sufficient to make the case for additional regulation of millions of small and micro-businesses.

The Government simply do not believe that more regulation is always the answer. As we discussed in Committee, good practice in tackling bad debt is not applied consistently across the water sector. The hon. Gentleman quite rightly took great pains to point that out. The significant variation in performance between companies tells us that the focus should be on driving better standards across the sector rather than regulating landlords.

One reason we do not propose to bring forward the bad debt regulations on landlords is that we do not wish to endorse the argument that performance on bad debt is not within the control of water companies. We think there is more that the companies can do to collect their debts and we want them to focus on that rather than look to the Government to solve the problem for them.

Of course, the real drivers of company performance are the incentives and penalties set by the regulator so I am pleased to be able to report that Ofwat has changed its approach to bad debt in the methodology it is using for the 2014 price review. The new approach will enable it more effectively to bear down on the costs of bad debt. It is doing so by insisting that the companies demonstrate that any increase in bad debt is genuinely beyond their control and that they have taken all available steps to control it. Unless they can prove that that is the case they will not be allowed to include it in customer charges. We are already seeing our focus on the industry’s taking responsibility for tackling bad debt bear fruit. As I mentioned in Committee, the industry is working with landlords’ organisations to establish a new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily.

[Miss McIntosh]

I am most grateful to my hon. Friend for giving way, but before he concludes his remarks he must say what the Government object to as regards the 2010 Act. I do not personally subscribe to the data protection argument if someone is genuinely in need.

[Dan Rogerson]

The Chair of the Select Committee is quite right that I have yet to respond to that aspect of her argument and I will seek to do so, I hope to her satisfaction, once I have made my closing remarks on new clause 9.

The industry is working with landlords’ organisations to establish the new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily and that approach has the support of Water UK and the main landlords’ organisations. The new database will launch in March next year and I believe that it should be given time to work. For those reasons, I believe that new clause 9 is not necessary.

--- Later in debate ---

[Dan Rogerson]

I am seeking to point out that there are a range of benefits and a range of circumstances for people. The hon. Gentleman highlights one benefit. Of course council tax benefit no longer exists in this country in the format that it does in Scotland, as we have now moved over to local council tax forms of support, so there is a different system, which would not necessarily translate across. The hon. Gentleman is keen always to learn the lessons of Scotland, but some of these things do not apply simply, given the different frameworks following the devolution settlement.

We place emphasis on locally designed social tariffs developed in close consultation with the customers who will ultimately foot the bill, as opposed to crude, centrally imposed eligibility criteria. Although I very much thank hon. Members for their new clauses and understand their aspirations in tabling them, I would urge my hon. Friends to resist them.

[Miss McIntosh]

We have had a fruitful debate, but I express my disappointment that my hon. Friend the Minister has not seen fit to take a simple measure that already exists on the statute book and is not intended to be regulatory. He will, of course, have opportunities in the future to appear before the Select Committee that I chair and that will give him plenty of opportunity to explain at greater length why he is unable to support these new clauses. It is my fervent wish that such new clauses might perhaps find their way on to the notice paper in another place. However, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 4

Sustainable drainage and automatic right to connect

‘The Secretary of State shall by order made by statutory instrument implement the provisions of section 32 and Schedule 3 of the Flood and Water Management Act 2010, and any other provisions as the Secretary of State considers appropriate in connection with the coming into force of those provisions, no later than the end of the period of one month beginning with the date on which this Act is passed.’.—(Miss McIntosh.)

Brought up, and read the First time.

[Miss McIntosh]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following: new clause 5 —Abstraction reform—

‘(1) The Secretary of State shall by regulations make provision to introduce a reformed abstraction regime.

(2) An abstraction regime under subsection (1) must—

(a) be resilient to the challenges of climate change;

(b) be resilient to the challenges of population growth; and

(c) better protect the environment.

(3) An abstraction regime must be introduced no later than the end of the period of seven years beginning with the date on which this Act is passed.

(4) Regulations under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the instrument has been laid before and approved by a resolution of both Houses of Parliament.’.

New clause 6—Onshore oil or gas activities—effect on water environment—

‘In Part 1 of Schedule 5 of the Environmental Permitting (England and Wales) Regulations 2010 there shall be inserted after paragraph 13 the following—

“Onshore oil or gas activities—effect on water environment

13A (1) Without prejudice to the operation of Regulation 35(2) and paragraph 5(1)(d) of Schedule 10 and of Regulation 35(2) and paragraph 7(j) of Schedule 20, the regulator shall refuse an application for the grant or variation of an environmental permit or for the transfer in whole or in part of an environmental permit if—

(a) the regulated facility to which the application for or transfer of the environmental permit relates is to be carried on as part of an onshore oil or gas activity; and

(b) the regulator is not satisfied that the applicant or the proposed transferee has made or will make adequate financial provision for preventing or mitigating pollution of the water environment, by ensuring all of the following—

(i) operation of the regulated facility in accordance with the environmental permit;

(ii) compliance with any enforcement notice or suspension notice or prohibition notice or mining waste facility closure notice or landfill closure notice which may be served on the applicant or transferee by the regulator under these Regulations;

(iii) compliance with any order of the High Court which may be obtained against the applicant or transferee under Regulation 42 for the purpose of securing compliance with any of the notices listed in sub-paragraph (ii).

(iv) compliance with any order of any court issued under Regulation 44 against the applicant or transferee; and

(v) recovery by the regulator of its costs upon any exercise of its power against the applicant or transferee under Regulation 57;

(c) for the purpose of this paragraph ‘onshore oil or gas activity’ means any activity for the purpose of exploration for or extraction of onshore oil and gas;

(d) for the purpose of this paragraph ‘adequate provision by way of financial security’ means financial provision which is sufficient in value, secure and available when required.”.’.

New clause 13—Unlawful communications—

‘(1) Section 109 of the Water Industry Act 1991 (sewerage: unlawful communication with public sewer) is amended as follows.

(2) Omit subsection (1)(b).

(3) In subsection (2)(a) after “close”, insert “or redirect”.

(4) In subsection (2)(b) omit “from the offender”.

(5) At the end add—

“(4) The expenses are recoverable from—

(a) the offender; or

(b) the owner of the drain or sewer.

(5) A person who obstructs a sewerage undertaker in exercising a power under subsection (2)(a)—

(a) commits an offence; and

(b) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.”.’.

Amendment 2, in clause 21, page 62, line 19, after ‘undertakers’, insert ‘and highway authorities’.

Amendment 3, page 62, line 22, after ‘undertaker’, insert ‘or a highway authority’.

Amendment 1, page 62, line 23, at end insert—

‘(2A) Highways authorities must include in schemes for the construction of new roads, drainage systems with a specification designed to decrease the risk of flooding of public sewerage systems.’.

Government amendments 55 to 57.

Amendment 5, clause 51, page 107, line 5, after ‘premises’, insert ‘and small businesses’.

Amendment 6, page 107, line 7, after ‘premises’, insert ‘and small businesses’.

Amendment 8, clause 53, page 107, line 37, after ‘made’, insert

‘which shall include the occurrence of a 1 in 200 year loss scenario’.

Government amendment 58.

Amendment 7, clause 69, page 119, line 37, at end insert ‘“small businesses”.’.

Amendment 10, clause 80, page 124, line 1, at end insert—

‘(f) section [Sustainable drainage and automatic right to connect].’.

Amendment 11, page 124, line 1, at end insert—

‘(g) section [Abstraction reform].’.

[Miss McIntosh]

I shall try to keep my remarks brief, but this is the first occasion that I can remember when there has not been a parliamentary week between the completion of the business of the Public Bill Committee and consideration on Report and Third Reading. I should therefore like to pass on my thanks not only to the Committee staff who have accommodated our being able to table amendments in a timely fashion, but to all those involved in the House service who have enabled us to have amendments before us to debate this evening.

I shall go through the new clauses and amendments first and then give the reasons for them. I, along with a number of members of the EFRA Committee, have thought it fit to assist the Government yet again, and I hope that we have more success with this round. Anyone who knows me even remotely will know that I am becoming a compulsive obsessive on sustainable draining systems and that I will never pass over an opportunity to discuss SUDS. So, under new clause 4, we seek to introduce the sustainable draining system, which is woefully late. It was already given statutory powers under the Flood and Water Management Act 2010, and in new clause 4 I link that to the end of the automatic right to connect.

I should like to pay tribute to a great Yorkshireman, Sir Michael Pitt, who after the surface water flooding of 2007 attempted to get on to the statute book under the 2010 Act—the then Government’s legislation—the end of the automatic right to connect. I would go further with substantial developments than I have had the opportunity to do here. I should personally like Yorkshire Water and other water companies, as well as drainage boards, to be given the right to be statutory consultees on major new developments on the same basis as that enjoyed by the Environment Agency following the 2010 Act.

[Thomas Docherty]

It is worth pointing out that local authorities in Scotland place great emphasis on the opinion of Scottish Water, which is, indeed, treated as a major statutory consultee when local authorities are making decisions about developments.

[Miss McIntosh]

As a non-practising Scottish advocate, I would always say that the Scottish legal system has a great deal to commend it, but Scotland needs to remain part of the United Kingdom to allow us to benefit from that.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

That is for another day.

[Miss McIntosh]

Indeed, that is a different argument.

I shall give our reasons for new clause 4 in a moment. Abstraction reform forms the basis of new clause 5, in which we would return to what was in the White Paper, where the Government waxed lyrical on abstraction regimes. We particularly call for the abstraction regime to be introduced no later than the end of the period of seven years beginning on the date on which the Bill is passed and comes into legal effect.

Amendments 2 and 3 would insert into clause 21 the relevant language of “undertakers” and “highways authorities”. I am attracted to amendment 1, tabled by my hon. Friend the Member for Sherwood (Mr Spencer), and look forward to his speaking to it in due course. Amendments 5, 6, 7 and 8 would include small businesses in the flood reinsurance scheme, for reasons that I shall give in a moment.

[Sheryll Murray (South East Cornwall) (Con)]

Does my hon. Friend agree that the Flood Re clauses will help the people whom the Minister and I met in Looe last Saturday who were unable to get insurance because of repeated flooding? Flood Re will give them the opportunity to obtain realistically priced insurance.

[Miss McIntosh]

Our thoughts are obviously with my hon. Friend’s constituents who were sadly inundated during the recent flooding. I look forward to hearing further from her during the debate, as well as the Minister’s response.

Amendments 10 and 11 are consequential amendments to clause 80 arising from new clauses 4 and 5.

Before I explain why the amendments and new clauses are important, I should point out that we have seen three types of flooding in the past three or four months. The most recent examples have been of coastal flooding, but the Yorkshire and East Anglia coasts suffered tidal surges before Christmas to devastating effect; more than 80 houses were evacuated at Filey in my constituency and a number more in Whitby. However, we have become more accustomed to surface water and river flooding, and surface water flooding has been on the increase, and has become more of a problem, since 2007.

I want to hear from the Minister why SUDS have been delayed. The latest we heard was that there was an implementation date of April 2014. People have been trying to convince me that Brawby in my constituency suffered in 2013 not from flooding but due to surface water running off from fields and roads into the combined sewerage pipe, which then spilled water from the sewerage system back on to the road. In that case, the water did not go into anyone’s house, but at Castlegate in Malton when exactly the same thing happened—water ran off the road into the combined sewers—water then entered a house.

The missing link is an audit of existing SUDS and an examination of future SUDS when major developments and roads are built. However, from my experience, and given what we heard during the statement on the floods, there is a further problem to deal with. If water runs off a highway, it is the responsibility of the county council, the unitary council or the Highways Agency itself. However, if that water then runs into the combined pipes, it suddenly becomes the water company’s problem, although what has happened is not its fault. I hope that that unacceptable situation can be addressed through the measures that I and other members of the EFRA Committee have tabled, or through amendment 1, which was tabled by my hon. Friend the Member for Sherwood. If fields are saturated, as is the case at present—it was the situation in my constituency between September 2012 and March 2013—highways authorities must take responsibility and create a SUD to take the excess water. I accept that such a process would involve cost, but I applaud the Government’s approach on partnership funding, so we could look to public sector partners, or be more imaginative by looking for private sector partners, such as local businesses that might be interested in investing. However, we cannot allow a situation to continue in which surface water running off a road becomes the responsibility of a water company and thus forces it to take preventive measures, given that the highways authority—whichever one it might be—should accept responsibility for it.

The EFRA Committee’s report following our pre-legislative scrutiny of the draft Bill highlighted concern about the delayed implementation of the provisions on sustainable drainage systems in the Flood and Water Management Act 2010—it is now four years since that Act was passed. The Committee also criticised a lack of urgency on improving the management of surface water in its report on the water White Paper, so I hope that my hon. Friend the Minister will be able to clarify what has been happening and why the process seems to be so complicated. As the Committee has not been convinced that the Department’s work to improve the management of surface water has involved the urgency that constituents throughout the country would expect, new clause 4 would require the Government to implement the relevant provisions of the 2010 Act within a month of the Bill being passed.

--- Later in debate ---

[Thomas Docherty]

Hear, hear!

[Miss McIntosh]

It is always a delight to be supported by the hon. Gentleman.

The current system for managing abstraction of water from rivers and aquifers was introduced in the 1960s, and does not effectively address the severity of pressures on water resources caused by increasing demand from a growing population and an increasingly varied climate. The current system does not help abstractors to trade water effectively or provide an incentive for them to manage water efficiently. The current weaknesses in the system mean that it could start to constrain economic growth, reduce the resilience of the water supply and lead to environmental damage.

I note that the reasons and need for abstraction reform are acknowledged and discussed in the Government consultation “Making the most of every drop”, which was published last December. When my hon. Friend the Minister replies, will he address the issue of why there was so much emphasis on abstraction and resilience in the water White Paper, and why we lost that emphasis in the draft Water Bill and, to a certain extent, in the Bill before us this evening?

The detail of a new abstraction regime will need to be developed following the end of the Government consultation, which was launched on 17 December. Following the conclusion of that consultation, which will not be until March, DEFRA will have to produce legislative proposals and secure space in the highly charged legislative programme before a new regime can be introduced. Once again, these amendments are intended to be entirely helpful and constructive.

During the Committee stage, the Opposition tabled a new clause to provide that upstream reform may not be implemented until new primary legislation on the licensing of abstraction has been passed, and five years has expired to allow for its implementation. Sadly, that proposal was voted down.

New clause 5 would require the Secretary of State to introduce a reformed abstraction regime within seven years of the Act being passed—by 2021. That was on the basis of the evidence that we received, and we believe that that is the most accurate and cost-effective timetable for all the parties involved.

The abstraction reform must be resilient to the challenges of climate change, or extreme weather conditions, and population growth and better protect the environment. Those high-level requirements are entirely in line with the key commitments regarding abstraction reform in the water White Paper.

Let me turn now to upstream and abstraction reform. In our pre-legislative scrutiny report on the draft Water Bill, the Select Committee called on the Government to make clear in the Bill the key principles that underpin the introduction of upstream reforms. Further work needs to be undertaken to establish how upstream reforms can be introduced in a way that will preserve investor confidence, ensure that customers do not face increased bills and maintain resilience in the sector. I was extremely pleased to see the emphasis on resilience in the water White Paper.

Upstream reform aims to encourage upstream competition. I am talking about the input of raw or treated water into a water company’s network or the removal of waste water or sewage for treatment. Clause 1 unbundles all the existing licensing structures so that new entrants can sell raw or treated water into an incumbent’s network. It also looks at the wholesale authorisation to input water into a part of the system. The Environment Agency’s statistics show that on average, between 2002 and 2011, only 45% of the annual total of water licensed for abstraction in England and Wales was actually abstracted. Therefore, if all of this unused but already licensed water was abstracted, there could be a significant deterioration of the environment. We hope that when the Government look at abstraction and upstream reform, they will bear these thoughts in mind.

One other aspect of upstream reform and abstraction that the Government should consider is, very topically, the role of water companies and other private sector companies in flood prevention and in protecting homes and businesses from floods. The Minister will be familiar with the work of his Department in the Natural Environment White Paper, which looked at a project known as ScaMP—Sustainable Catchment Management Programme—involving United Utilities in Cumbria. Surely there must be much more scope for the type of partnership approaches we have seen in Pickering where the first soil of the reservoir will be dug tomorrow.

I will conclude my remarks by looking at flood insurance. Amendments 5, 6, 7 and 8 seek to amend clauses 51 and 53. The Select Committee took a lot of evidence in relation to Flood Re and the potential for reinsurance companies. Given how deeply wedded the Government are to Flood Re, I hope that they have not closed the door completely on reinsurance. In summing up this debate, perhaps the Minister will inform us how the state aid application to the EU Commission in Brussels is going to enable Flood Re to come into effect according to the Government’s timetable.

Clause 51 and the amendments we propose to it would have the effect of bringing small businesses within the ambit of Flood Re. There is considerable doubt and anxiety that small businesses will not be covered under the new Flood Re proposals. The impact that flooding can have on small businesses is clear. In 2001 and 2005, a dental practice in my constituency was flooded twice and the dental chair and all the computer equipment had to be replaced each time.

[Roger Williams]

I am sure that many Members will have a deal of sympathy for my hon. Friend and her concern for small businesses. I guess that the difficulty in getting this into legislation will be how to define a small business. Perhaps she has some ideas on that.

[Miss McIntosh]

Like my hon. Friend, I merely shadow DEFRA so I do not have the definition to hand, but I am sure that the Federation of Small Businesses will have a definition. I think it is generally deemed to be a business that has fewer than 50 employees, though many small businesses employ five or fewer or are often a single employee. The example I cited was that of a small dental practice with two or three dentists. The knock-on effect on an independently run, stand-alone dental practice of fitting, for the second time, a new dental chair and computer equipment goes beyond what would normally be expected. The knock-on effect on the insurance premium and excess for that dental practice was considerable and, possibly, unaffordable.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Is it the hon. Lady’s understanding that not only would small businesses and micro-businesses in commercial premises not be covered by Flood Re, but people who run businesses from their own homes would find it almost impossible to get insurance under the arrangements as they stand?

[Miss McIntosh]

I welcome the hon. Gentleman’s intervention, but I believe that homes generally are covered. Our Government have persisted with his Government’s arbitrary choice of 2009 as the relevant year, although this is a new Bill and we have a still relatively new coalition Government. I was very taken by what the hon. Member for Stoke-on-Trent North (Joan Walley) said in a previous debate about 2009 having been plucked from the air as an arbitrary date, and many people will not realise that homes built after 2009 on a floodplain are simply not covered by insurance. One of the purposes of tonight’s debate is to entice the Government to seek a different year—it could be 2013 or 2015, but let us be imaginative.

[Sheryll Murray]

Will my hon. Friend clarify the difference between an insurance policy that covers a business premises and one that covers a private home? Insurers, and the Association of British Insurers, would probably find it difficult to distinguish if we were to include small businesses, but because her amendment is well intentioned, I am sure that she will be able to clarify her differentiation.

[Miss McIntosh]

I am sure that the Minister will be well aware of the point that my hon. Friend is trying to make. There is great concern among the farming community that farms may be excluded whereas the farm house may be included. I commend my hon. Friend’s knowledge, because she worked in the insurance industry for a time. We need to know whether farms and people working from their own homes are going to be included, and what the position will be for small businesses, because this could put them out of business in some of the areas that we have seen flooded over the past two years in repeat flooding incidents. It has also been brought to my attention, although, unfortunately, too late to have tabled an amendment, that there is concern that blocks of flats—leasehold flats—may be excluded from this arrangement. That may be news to the Minister as well, but before Third Reading he might like to ponder whether such blocks will be excluded.

Our amendments to clause 51 address concerns relating to the exclusion of small companies such as charities and, as I have mentioned, farms under the new Flood Re proposals in the Bill. Any business based in a property that is primarily a residential one, and on which the occupier therefore pays council tax, would fall within the Flood Re scheme. Any business based in premises used primarily for business will not be covered. It is extremely important that we understand these issues. For the first time that I can remember, under the Flood Re scheme, once it is up and running, the Government will be added as an insurer of last resort if in the three years before the fund has built up we suffer an exceptional one-in-a-thousand-year incident.

In the Public Bill Committee, the ABI stated that Flood Re is not the solution for small businesses and that there is not a sufficient evidence basis for providing insurance cover for small businesses. The Federation of Small Businesses is concerned that small businesses that have affordability problems will not be covered, other than in respect of the insurance premiums or excess that they might seek to defray. Although they do not pay council tax, they do pay business rates and therefore could be rated in a similar way to household customers under Flood Re. There remain a lot of known unknowns with Flood Re as to why a council band rate has been chosen and which particular band rate has been opted for, but that is a separate debate. If there is a lack of evidence, further investigations and monitoring should be conducted with regard to small businesses and how they might cope with sourcing flood insurance in the free market.

Our amendments to clause 53 would have the effect of ensuring that insurance companies cover for any liability in excess of a one-in-200-year loss. Our amendments seek greater clarification of the Government’s role in this scenario of a one-in-200-year loss, and, in particular, how the taxpayer would be protected. As I have mentioned, the Government will, for the first time, be the insurer of last resort. In later years, after the fund has built up, I do not believe that that will be a problem, but we are seeking the Minister’s reassurance about what the implications will be in respect of the first three years. In Committee, the Minister confirmed that there is no Government liability for Flood Re and that the Government have made it clear that Flood Re is not guaranteed above the one-in-200-year level, so he might just like to revisit that and clarify the point.

Our amendment 8 would put the Government’s commitment in the Bill and create certainty for all concerned as to who will assume the additional liability. A one-in-200-year loss scenario would be the total value of claims from households reinsured through Flood Re that, during the course of a year, actuaries would not expect to be exceeded in 99.5% of years. Expressed in a different way, that would mean that the actuaries would be 99.5% confident that the limit would not be exceeded in any one year. It is important to note that that is not the same as a one-in-200-year flood event; the ABI has estimated that this would mean flooding six times worse than that experienced in 2007. Obviously, neither the Minister nor the insurance industry will yet be able to say what the cost of the recent floods has been, but I hope that he will see fit to lend his support to our amendments, and I commend them to the House.

[Joan Walley]

I am fortunate to follow the hon. Member for Thirsk and Malton (Miss McIntosh), who speaks with the greatest authority on these subjects, as I am sure everyone in the Chamber would agree. I particularly share her concern about drainage and surface water, and I agree with the points she made earlier about the need to ensure that highways authorities also have statutory duties, so that we can deal with this issue in a joined-up way. The debate on this group of provisions is important because we have had pre-legislative scrutiny by the Environment, Food and Rural Affairs Committee of the draft Water Bill and subsequent debate in that Committee. When the Minister addresses the various comments that have been made, we will see the extent to which the Government are listening to what Parliament is saying about the amendments. There may not necessarily be agreement on all of them; I am talking about the amendments that seek genuinely to try to improve matters on the whole issue of water. We have an opportunity to put in place legislation that is fit for purpose, so I hope that improvements will be made.

--- Later in debate ---

[Dan Rogerson]

In the time available I shall seek to respond to as many points as I can. The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), has been a strong advocate of and campaigner for sustainable drainage over many years, and the Government are pressing ahead and implementing the requirement to secure approval for sustainable drainage systems for new developments under schedule 3 to the Flood and Water Management Act 2010. Regrettably, it is looking increasingly unlikely that we will be in a position to ensure that the scheme comes into force this April, which was our preferred date for implementation as stated previously. I accept that that will be a great disappointment for the hon. Lady and other hon. Members, but I remain committed to introducing the legislation at the earliest opportunity. I plan to lay the relevant affirmative regulations by April, to underline the Government’s commitment to addressing flood risk.

I share the hon. Lady’s frustration that the process has been so protracted, but we are working with developers and local government to develop the processes, standards and guidance that are an integral part of a new SUDS approvals and adoption regime, rather than just imposing them. That takes time, but it is time well spent if the end result is an approach that is fair to all parties and successful from the outset because local government and developers are fully prepared to take on their respective new responsibilities.

Amendments 1, 2 and 3 address flooding on highways or that caused by the run-off from highways. The causes of flooding can be complex and it is difficult to make a general statement about them. There are already legislative powers to ensure that highway surface water drainage does not pollute or flood, and section 100 of the Highways Act 1980 enables the local highway authority to take action related to the drainage of highways—for example, it can construct drains or erect barriers on the highway or adjoining land to divert surface water into an existing drain.

The majority of new road drainage systems are not connected to the public sewerage system. Typically, they discharge under designated conditions, either to a watercourse or a storage pond with controlled exits to a watercourse, or alternatively soak into the ground in a designed manner. A decision to connect new highway surface water to a combined or foul public sewer can be made only subject to an agreement with the receiving water authority. There is no automatic right to connect new highway drainage to the public sewerage system. We recognise, however, that in some cases local flooding may be exacerbated by drainage from existing highways, and as I have said, the 2010 Act places a duty on lead local flood authorities to develop a local flood risk management strategy for their area. I hope hon. Members will be reassured by that.

Let me seek to address the points raised by the Chair of the Environment, Food and Rural Affairs Committee about flood insurance, and amendments 5, 6 and 7, which relate to small businesses. Flood Re has been specifically designed to recreate the current cross-subsidy in the domestic home insurance market. There is little evidence that the same type of cross-subsidy applies in the commercial insurance market, and the majority of business insurance policies are already priced to risk. A recent English business survey of more than 9,000 businesses in England found that fewer than 1% of businesses had experienced difficulty getting property insurance in the last year due to the risk of flooding, and that no businesses had been refused insurance cover due to such a risk.

As outlined by the Association of British Insurers in its evidence session, businesses tend not to face the systematic issues that householders experience. We must also remember that Flood Re is funded through a levy on all household insurance policies. We have deliberately set that at £10.50, which the ABI estimates is the same as the current cross-subsidy. Widening Flood Re to include small businesses would significantly increase costs. We do not want someone living in a council tax band A property, for example, to subsidise the cost of insuring a private company that potentially earns up to £1 million a year. I am also mindful of the need to comply with state aid rules. Government intervention to support business would be carefully scrutinised and at greater risk of rejection—I know the hon. Lady is familiar with that issue.

On flood insurance and amendment 8, which was tabled by the same group of hon. Members, we are clear that we are talking about a one-in-200-year annual loss, not a one-in-200-year flood event. If Flood Re is legally responsible for claims above a one-in-200-year level, the cost of the liability could be prohibitive. Likewise, if the Government took on a liability beyond a one-in-200-year level, we could expose the taxpayer to extremely large and unpredictable costs. In such a catastrophic situation, many more homes than would be insured by Flood Re are likely to be affected. That is why the memorandum of understanding says that the Government of the day would work with Flood Re and representatives of the insurance industry to decide how any available resources should be distributed to Flood Re customers if flooding exceeds such a level.

Government amendment 58 is a technical one. On the issues raised by the hon. Member for Stoke-on-Trent North (Joan Walley), the Chair of the Environmental Audit Committee—we discussed them in Committee—the Government remain convinced that the existing provisions would be helpful enough in terms of the checks on companies’ financial probity and their technical ability. However, she rightly raised issues that could be addressed following Lord Krebs’s intervention in his letter. I am pleased to hear her calling for things such as betterment, meaning better quality reinstatement, and more information to customers, for which Lord Krebs has also called. Many hon. Members would like to include that in discussions with the ABI.

On misconnections, the hon. Member for Edmonton (Mr Love) is aware that local authorities currently have the power. We are not convinced that giving the power to companies would be helpful. His points are on the record and it is right that the Government take account of what he has said. I am happy to talk to him in future to see that we get the right response.

There is only a very little time for me to respond to all the points hon. Members have made on abstraction. My predecessor as Minister, my hon. Friend the Member for Newbury (Richard Benyon), has rightly said that there is agreement in the House that we want progress. Action is taking place under the existing regime—the Environment Agency has changed 77 licences since 2008, returning around 75 billion litres of water per year—but we need to go much further. That is why we are consulting. The process is under way and will lead to legislation, hopefully with the support of all parties, to reform that complicated system. However, we need to do that properly. I do not believe it is appropriate to do it in the way suggested in the new clause.

Finally, Government amendments 55 to 57, which I have tabled, seek to clarify the resilience duty. We want to make it absolutely clear to hon. Members that we are covering environmental sustainability. I hope the changes we are making to the resilience duty will reassure hon. Members who believe that we need to elevate the sustainable development duty that we are looking at environmental resilience as well as social and economic resilience.

[Miss McIntosh]

We have had a good debate on Flood Re. The Environment, Food and Rural Affairs Committee wanted to flag up the point that the proposals do not reflect the value for money of other aspects of Government policy.

We have also had a good debate on abstraction, but the jury is out. The Bill would be a retrograde step if there is a severe drought between now and whenever the Government introduce provisions.

Obviously, both personally and on behalf of the Committee, I am disappointed that the SUDS provisions will not be in place. The House would wish to record its disappointment and the fact that, if the regulations will be introduced only in April, there is time before those who must apply them are in a position to do so.

However, mindful of the opportunities that hon. Members have had to debate the matter, and that the Bill must continue its passage, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.



New Clause 7

National affordability scheme

‘(1) The Secretary of State must, by order, introduce a National Affordability Scheme for water.

(2) The National Affordability Scheme must include an eligibility criteria, determined by the Secretary of State, in consultation with—

(a) the Water Services Regulation Authority; and

(b) the Consumer Council for Water.

(3) An order under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.’.—(Thomas Docherty.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Miss McIntosh]

We have had a good debate today. I welcome the Bill and thank all those involved in preparing it, including my right hon. and hon. Friends. Obviously, a lot of work remains to be done to it in the other place, and we will watch those developments with interest.

I welcome the introduction of retail competition. The Select Committee would like to have seen the primary duty of sustainability in preference to resilience. I believe that too much detail has been left to be fixed at a later stage. I enjoyed the comment from my hon. Friend the Minister on not wanting to rely too much on regulation, because just about every clause calls for implementing regulation to be drafted. We will leave that conundrum with him.

Competition is to be welcomed. It should lead to greater efficiency. In particular, I hope that both the current 2014 price review and the competition provisions permitted following the Bill will lead to more innovation, not least following these weeks of sustained and considerable flooding across the country. I applaud the Government’s search for a partnership approach and for more private enterprise funding for flood prevention measures. I hope that the water companies will step up to the plate in that regard and that other private sector companies might help to fund schemes from which they might benefit.

I believe that there are still opportunities to write other provisions into the Bill before it receives Royal Assent, not least with regard to the partnership approach to flood prevention measures, which has been mentioned this evening, but also for increasing the amount of maintenance that can be done by internal drainage boards. We await the results of the pilot schemes, whereby DEFRA is allowing landowners to permit their own maintenance to be done on the watercourses locally, to see whether that scheme can be rolled out.

It is a joy to me that tomorrow we will see the Pickering pilot project in my constituency reach its final phase with the cutting of the first sod of earth, which will enable the reservoir to be built. It is a great disappointment for me personally, as I am sure it is for many in the country, that the sustainable drainage systems, which are left over from the Flood and Water Management Act 2010, will still not be on the statute book by April this year. SUDS, on their own, will do a huge amount to prevent surface water flooding from entering sewerage systems through the combined sewage pipes that we have heard so much about today and that can cause sewage spills on to roads and, regrettably, into homes and other properties.

Perhaps the most innovative aspects of the Bill that are to be welcomed are those relating to flood insurance. I commend Flood Re, but I hope that the Minister will have listened carefully to the concerns that have been raised today, not least from the Select Committee. We expect to see the same respect and acknowledgment of value for money in that as in other schemes. We will be looking to see that that is confirmed as we go forward.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My hon. Friend praises the SUDS system, but will she take into account, and ask our hon. Friends on the Front Bench to take into account, the fact that we may be building up considerable liabilities for ourselves in future if SUDS systems are inadequately designed by developers who have clever consultants and local authorities do not have the expertise to vet whether those systems are adequate in the type of floods that we are seeing at the moment?

[Miss McIntosh]

My hon. Friend will have an opportunity to read our proceedings tomorrow and see the debate that we have had on SUDS. For reasons that the Minister has not rehearsed in full, the SUDS regulations will not be on the statute book by April. I am sure that there are very good reasons for that, including those that my hon. Friend raised, but I do believe that SUDS will have a substantial role to play.

If the flood insurance system leaves out leasehold flats, that will be a matter of concern.

[Dan Rogerson]

I am grateful to my hon. Friend for giving way on this point, as I did not have the opportunity to deal with it on Report. I assure her that householders living in those sorts of properties would have access to the contents aspects of flood insurance if they were council tax payers.

[Miss McIntosh]

That will be very welcome news. As I said, I was alerted to this problem after the time for tabling amendments had expired.

What we have seen this week and saw in the weeks running up to Christmas shows the scale of the challenge that we face. I welcome the all-party approach that we have seen across the House today and in Committee, which I was not at liberty to participate in. That is a very good basis on which the Bill can go forward from this House, and I commend it to its future stages.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Flooding

Baroness McIntosh of Pickering Excerpts

Monday 6th January 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I add my congratulations to the Environment Agency and the emergency services, including the lifeboat crews and coastguards who rescued those who put themselves at risk? It is noteworthy that the flood defences held firm and protected the properties that the Secretary of State has highlighted. Will he commit to reviewing his Department’s maintenance budget to ensure that the flood defences that held will have proper maintenance? Will he allow drainage boards to use their own engineers to ensure that the main water courses are kept clear in the future, as the Select Committee on Environment, Food and Rural Affairs has recommended? Will he give the House some examples of imaginative partnership approaches, such as the Pickering pilot project, which is building a reservoir, starting tomorrow, to keep Pickering safe from future floods?

[Mr Paterson]

I am grateful to the Chairman of the Environment, Food and Rural Affairs Committee for her supportive comments. Emphatically yes, we want spending on maintenance to continue. That is why I added a further £5 million to that budget for 2015-16. For further information, although there was a 1% reduction in budgets across DEFRA, I have not passed that on to the flood budget. Again, that shows our absolute determination to protect flood schemes. My hon. Friend is absolutely right to praise partnership schemes. I have been around the country to look at tremendous projects, and only today I was on the Thames where there are prospects of extending the Jubilee river scheme that would require partnership spending by six local councils.