Water Industry (Financial Assistance) Bill

Lord Wigley Excerpts

Tuesday 27th March 2012 Lords Chamber

[Lord Wigley]

My Lords, I will speak briefly. I am sure that many noble Lords will be aware that water can be an inflammable substance in Wales. I realise that the immediate purpose of the Bill is fairly narrow, as the Minister described. Nevertheless, the Long Title states that this is a Bill:

“To make provision for the giving of financial assistance … in connection with the construction of, and the carrying out of works in respect of, water … infrastructure”.

That is a much broader purpose, as the Minister hinted. In the Second Reading debate in the other place, the Parliamentary Under-Secretary of State, Richard Benyon, stated that,

“the powers in the Bill are appropriately drafted. Although we currently have no plans to use those powers other than to assist South West Water customers and in relation to the Thames tunnel, we heard many calls today … for us to legislate … to invest in new infrastructure to help make the country more resilient to droughts in future”.—[Official Report, Commons, 6/3/12; col. 746.]

Clearly, that is part of the general strategy of the Bill, although it leads through to another piece of legislation, and no doubt we will cover other aspects of that. The wider considerations cannot be ignored.

Before considering these wider aspects, I note that the water rebate being facilitated by the Bill is, as currently envisaged, an England-only benefit. That is fair enough: no doubt the argument is that the National Assembly will handle any such question in Wales. If that is the line taken by the Government, the immediate question arises of whether the National Assembly will get a Barnett-consequential payment that will allow it to consider helping beleaguered Welsh Water ratepayers in similar circumstances.

In December, the Environment Secretary, Caroline Spelman MP, said that one idea that continued to be discussed was piping more water from Wales to England. That was at the launch of the Water for Life White Paper. I am very much aware that the Mayor of London, Mr Boris Johnson, also suggested—in 2010—moving water supplies from Wales and Scotland to areas of shortage in the south and east of England. Apparently he favours taking water from reservoirs in Wales, via the Severn and the Wye, to link to the Thames and the Trent. One has been made very much aware in recent weeks of the problems facing drought areas in southern and eastern England.

As I understand it, people in the parched east and south-east must look for new sources of water supply to meet domestic, agricultural and industrial needs. However, we in Wales had some very difficult experiences over the past half-century with such matters—in particular the manner in which the Tryweryn Valley was drowned and the village of Capel Celyn submerged to provide a source of water for Liverpool. There was immense hostility to the scheme. When Liverpool Corporation pressed the Bill to facilitate the drowning of the valley, every Welsh MP bar one voted against it, but it was passed. To make things worse, the price of water in Wales then became significantly higher than it was in cities like Liverpool and Birmingham that got their water from Wales. At one time, the price was three times higher. That puts into context what is now proposed for south-west England. I have every sympathy for people there because we, too, had these problems.

I raise the issue now to suggest that if there is any likelihood of English water companies looking again towards Wales—and one understands that they may need to because of their circumstances—there should be a firm undertaking from the start that fair recompense should come to Wales for the water abstracted directly or indirectly for such purposes. I will go further and suggest that the UK Minister should now open a dialogue with Welsh government Ministers with a view to establishing an understanding on any such water transfers that will be fair to everyone.

A leading Welsh economist, Professor Dylan Jones-Evans has stated:

“Wales has got the water. The issue now is who owns that resource and whether Wales is getting a fair price for it as if it was selling any other commodity, product or service”.

Of course, Professor Jones-Evans was a Conservative candidate in a recent election to the Welsh National Assembly. The Welsh Environment Minister, Labour AM John Griffiths, has also spoken in similar terms. He stated:

“Our view is that in Wales we have a very important resource in our water, and that it must be recognised as such. In any future negotiations or developments, we would obviously want to get full value for that very important water resource”.

Apparently, Severn Trent Water has set out proposals that will allow water companies to trade water from one region to another. Severn Trent Water operates in Wales, but I ask whether it is in any shape or form answerable to the Welsh public for its policies or activities of that sort.

I have a proposal for the Minister: before this issue becomes polarised and attitudes get antagonistic, the UK Government and Welsh Assembly government Ministers should get together to discuss a financial model that will make it worth while for Welsh authorities, local and national, to be partners in any such developments so that they take a positive attitude towards facilitating solutions that may be of mutual benefit. A modest scheme of payment for water abstracted from Wales could be really beneficial to communities in Wales that need to maximise their resources and very often do not have such resources at hand. This Bill may be modest, but it could foreshadow significant developments, and I appeal for a positive attitude from Her Majesty's Government.