EUC Report: EU Freshwater Policy

Lord De Mauley Excerpts

Wednesday 5th December 2012 Lords Chamber

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Lord Berkeley]

My Lords—

[Lord De Mauley]

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

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

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

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

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