Water Bill

Debate between Roger Williams and Joan Walley

Monday 25th November 2013 Commons Chamber

[Joan Walley]

I am grateful to the hon. Gentleman for his intervention, and that is exactly the point I am making: our water policy needs to take into account the whole issue of mitigation to prevent such situations, but it also needs to be adaptable. The adaptation that we need requires huge amounts of investment and a whole new, collaborative approach to planning. The Bill has been brought forward by DEFRA, but as the Energy and Climate Change Committee has pointed out, it is the problems associated with climate change that are bringing about flooding, and we have to find new ways of dealing with them urgently. It has taken much too long to deal with outstanding flooding insurance claims. Importantly, it is a question not just of how we deal with individual claims and of having an insurance system in place, but of how we deal with all the associated disruption.

As we approach the European elections—I am sure that many of us here will be thinking about what Europe has done for us—how do we ensure that water supply and management fits within the context of the European water framework directive? We have a fundamental disconnect at the heart of water policy which the Bill could actually put right. As my hon. Friend the Member for Garston and Halewood said, the Bill is a wasted opportunity. The water companies, regulated by Ofwat, supply water, but at a local level there is little meaningful collaboration, accountability, transparency or resource, as has been mentioned, to ensure that we have in place what is needed to meet the requirements of the water framework directive.

The directive has two key objectives: an environmental objective, based on the premise of preventing further deterioration and achieving “good status” in all waters; and a managerial objective aimed at creating integrated water management at the river basin level to ensure overall co-ordination of water policy. Here, I want to make a plea to the Government and to DEFRA on behalf of the Environment Agency. The agency needs to be fully resourced for its task of leading the framework directive, in order to enable it to identify significant water management issues, to develop measures to address these at the river basin district level, and to develop and publish the plans for implementing these measures, known as the river basin management plans.

Given the length of time it takes to get legislation on to the statute book, equipping the Environment Agency to work within the framework to carry out its responsibilities needs to be looked at in parallel with the Water Bill before us. Let me give an example of the current unsatisfactory position. When the Government set up the Canal & River Trust in 2012, they committed to a new structure for the canal network which included the navigational waters—some 2,000 miles of canals and river navigations in England and Wales. These rivers were to be handed over to the trust to ensure certainty and long-term funding through the trust arrangements. However, we now know that the Chancellor has reneged on this commitment, and the plans have been put on hold. I am grateful to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson), for agreeing to meet me to discuss this issue, as I believe it is vital that this transfer take place and be fully funded.

There is a further concern, which was touched on in an intervention from my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller). Through clause 12, Ofwat is to be given the power to intervene in private supplier agreements with water undertakers, with the apparent intent of assisting smaller private water suppliers in their commercial relations with undertakers. Not surprisingly, the Canal & River Trust is alarmed that Ofwat will therefore be able to vary or terminate water sales agreements at the request of the undertaker and without the agreement of the trust. I heard the Secretary of State’s rather complacent reply to my hon. Friend’s intervention, and I hope that, when the Under-Secretary replies, he will tell us what specific, constructive discussions he will have with the trust on this issue, so that we can make amendments to the Bill that will safeguard delivery of the trust’s charitable objectives when the Bill’s legislative passage is completed.

There is uncertainty about other aspects of the Bill, as well. The Bill is all about the economics of, and very little about the environmental and social aspects of, water policy. It mirrors the assumptions that lay behind the changes to the water industry proposed back in 1987, rather than looking at the assumptions we need to make today for the future. Here, I would like to give credit to the former Environment Minister, the hon. Member for Newbury (Richard Benyon), who only last week in the press disclosed how close we were to drought just before the 2012 Olympics. There are also many other factors that point to the need for long-term planning.

We need to take account of the work of the Natural Capital Committee, which is looking to embed the value of natural capital in the national accounts and policy making as soon as possible. We must also recognise the need to look for a credible long-term plan to restore our natural capital, and recognise the work of the Committee on Climate Change. Reference was made earlier to the adaptation sub-committee report, which highlights the need to incentivise efficient water management and to have a price for water that better reflects its scarcity. Of course, there are also the risks associated with water flooding. All these factors point to the need for a much wider, all-encompassing approach to water than the one the Bill provides for.

We should also address the issue of Ofwat having a primary sustainability duty. Its role of granting new water supply licences and overseeing bulky supply agreements should include consideration of the sustainability of water sources. There is common agreement that, without such a duty, we will see over-abstraction, over-licensing and greater environmental damage to our already overstressed river systems. We have heard the Secretary of State’s response to concerns about fracking. He has stated that all the protection and regulation that we need is already in place. However, the proposal for financial guarantees in relation to pollution that my hon. Friend the Member for Garston and Halewood outlined will be vital, and I hope that they will be incorporated in the Bill as it completes its passage through both Houses. I know from the initial meeting that the Minister kindly organised recently that there is widespread concern among many organisations, including the WWF, the Royal Society for the Protection of Birds and the Angling Trust, about the need for a primary sustainability duty, not only on resilience, to be incorporated in the Bill. Will the Government table an amendment on sustainable development? Will the Minister tell us how he intends to deal with this issue?

I want briefly to broaden the debate. Following the discussions that I have had with many different experts in the industry, I do not believe that we should be carrying on with business as usual. Instead, we should be gearing up to a different set of policies designed for the 21st century. The confluence of the various factors I have mentioned means that we should be taking a more fundamental step change in how we invest in improving the environment and safeguarding our water supplies.

I would like to see far more local governance arrangements that would fit with the river basin concept, involving not just water companies but local councils, farmers and other organisations working together on a risk-based approach. I should mention that some water companies are starting to think outside the box. I refer the House to a recent document published by Severn Trent Water, “Changing Course through the sustainable implementation of the Water Framework Directive”. We need much more collaboration of that kind, but the Bill does not really give it to us.

I want to mention the work that I have been doing in my constituency to bring all the different partners together. This has culminated in an application for European funding under the Life Plus programme, which would enable us to implement measures that would prevent pollution in the River Trent. We need to see much more of that kind of approach. Water efficiency should also be promoted.

The Bill will promote greater competition, but what will it do to challenge traditional kinds of capital investment? We should be looking into different kinds of investment. Expensive engineering solutions are not always the way forward, even though the water companies depend on capital value for the returns that they make. If the Government can be persuaded to introduce an obligation for sustainability into Ofwat’s powers, Ofwat could look at a return on revenue expenditure, too. We need to look at the kind of investments involved. The Bill could enable Ofwat to take a much more proactive role in vetting companies’ proposals for investment.

I would also like to see the dividends paid out to water company shareholders managed differently. Yes, money is needed for investment in water management, but it would be so much better if the profits could stay in the business and be reinvested, rather than global private equity companies that do not necessarily have a long-term commitment to our river basins paying out massive returns—well above what we can earn in interest from our bank account—to shareholders.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Lady is describing the model used by Welsh Water, a not-for-profit company that is responsible to its customers, rather than to shareholders.

[Joan Walley]

Indeed. One difficulty is that we are looking at the provision of water for the whole of the United Kingdom, despite the different administrative arrangements that have been put in place by the Parliaments in the different Administrations. The way in which the money is reinvested in Wales is hugely beneficial. As I have said, we should be thinking outside the box in regard to how we incentivise the necessary investment in our water industry.

Natural Capital (England and Wales)

Debate between Roger Williams and Joan Walley

Monday 21st October 2013 Commons Chamber

[Roger Williams (Brecon and Radnorshire) (LD)]

I, too, congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this evening’s debate. I thank the right hon. Member for Meriden (Mrs Spelman) for speaking so knowledgeably about this issue; she was responsible for seeing much of what we are discussing tonight come to fruition.

The coalition agreement stated:

“The Government believes that we need to protect the environment for future generations, make our economy more environmentally sustainable, and improve our quality of life and well-being.”

Following on from that, the Government published the White Paper, “The Natural Choice: securing the value of nature”, a recommendation from which led to the setting up of the natural capital committee to provide independent advice to the Government on these important matters.

It was done against the background of a previous century in which the world population had increased by 50%; there was a fortyfold increase in industrial output; and an increase of 16 times in the amount of energy used, greatly increasing emissions from sulphur and carbon. The natural capital was obviously put at risk by such a great increase in activity, and no policies were in place to ensure that it could be sustained and maintained.

Let me draw a comparison between us getting to grips with the concept of natural capital now and what happened at the first Rio conference when the issue of sustainability was first put forward. It was difficult at that time to get people to understand what was really meant by that concept, and I think we are still wrestling a little with it at the moment. Sometimes the interpretation of sustainability is used to promote a particular argument or project that we might wish to advance.

I was in a little chapel in Bryn Pont in Pontfaen in my constituency last night, where the Breconshire young farmers were having their harvest festival. They took the service themselves, being wonderfully able people. As I listened, I was thinking that, because of their role in land management and land ownership, they will be the people on whom much of this responsibility will fall. I wondered how they would grasp this concept of natural capital.

I am sure that the people in the committee who wrote the report are very able and that they followed fully the academic rigour and, indeed, the financial accuracy necessary for such reports. However, I think that the committee has a little way to go when it comes to explaining the subject to other people. It will be advising the Government on policy, but unless people understand and can align themselves with that policy, it will be extraordinarily difficult for them to deal with it. For example, the report offers the following:

“Definition of natural capital asset: Define the component of natural capital under consideration, the temporal and spatial scales being considered and the relationship between the natural capital asset and the services it provides, directly or in conjunction with other assets”.

I am not sure how that can be translated into user-friendly language. What I am sure of is that a great deal of work will be required to enable people to associate themselves with the project.

We have been given an example of the way in which natural capital can be used to assess the effect of a particular development, and then to offset it by replicating an environment or ecosystem that may have been damaged by that development. I think that the concept has a great deal to offer. I know that the Secretary of State for Environment, Food and Rural Affairs is particularly interested in using offsetting to allow economic development to take place in areas where it has been problematic in the past, and I attended a debate in Westminster Hall during which the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—who is responsible for planning—spoke about developments in national parks and how they could be facilitated. However, I think that we must approach the process with considerable caution, because it is sometimes almost impossible to replicate ecosystems that have been damaged by development. It may work in some instances, but in others the environment will be so pristine that it will be impossible to replicate it elsewhere.

Mention has been made of the value of children and young people who have experience of the countryside and take part in activities there. On Saturday night I attended the first showing in Wales of a film called “Project Wild Thing”, which explained how we could encourage young people and give them opportunities to make the most of their experience in the countryside. There is also a National Trust programme entitled “50 things to do before you are 11¾”. I shall be sending a copy to my grandson, who has already undertaken one or two of the recommended activities. If we ensure that our natural capital can be maintained, it will greatly benefit the development and health of our children.

[Joan Walley]

Does the hon. Gentleman agree that it is important for all Members to do their utmost to arrange screenings of “Project Wild Thing”, which was launched by the Royal Society for the Protection of Birds in the House of Commons last week?

[Roger Williams]

I certainly do. It is a very inspiring film. People will interpret it in many different ways, but I am sure that every way in which it is interpreted, and implemented, will enable children to benefit from it.

I think that the development of the concept of natural capital will be of considerable use to the Government when they are setting policy. However, one Member said that while it was some use if implemented nationally, it would be of greater use if implemented internationally.

Some 12 of the 13 recommendations in the Committee’s first report are process recommendations—they are about the way this should be approached—but the 13th recommendation is about agriculture. It recommends that the common agricultural policy should be radically reformed and that as much of the pillar 1 money as possible should be moved to pillar 2. I think that many of us would agree with that, but it depends on what the pillar 2 projects are. Also, it would be entirely inappropriate for policies to be implemented in this country while we have a single market that would put our farmers at a disadvantage to those on the continent.

There is a graph in the report showing the wheat yields in this country. They have increased from about 1 tonne an acre to about 3 tonnes or more. Sadly, however— and chillingly in some respects—there have been reductions in wheat yields in this country in the last two years. For those two years we will be net importers of wheat, whereas we have been a wheat exporter in the past.

We talk about farmers delivering public services. I think the greatest service the farming community can deliver is a sustainable supply of food at an affordable price. There is therefore a balance to be struck between food being produced by farming and the protection of the environment.

This concept will be very useful and very informative for the Government in delivering their policies, but we need to show that the public understand the concept as well, and are able to engage with it.