National Policy Statement (Waste Water)

Simon Hughes Excerpts

Monday 19th March 2012 Commons Chamber

[Richard Benyon]

I think I got the gist of it. I will come on to cover the key points that were made by the Environment, Food and Rural Affairs Committee and to explain what the waste water national policy statement is. I think that I will address the hon. Gentleman’s points, but I am happy to let him intervene again.

In laying the waste water national policy statement before the House for approval and in having this debate, we are meeting a Government commitment to mirror the new requirements of the Planning Act 2008 that will be brought into effect next month under the Localism Act 2011. Those procedures are intended to make national policy statements more democratically accountable to Parliament.

The Government are committed to making the planning system more open, transparent and fast, and to ensuring that all those who want to get involved in the process can do so, whether it relates to an application to extend a property or to a project of national significance, such as the Thames tunnel. The abolition of the Infrastructure Planning Commission brings democratic accountability back into the determination of nationally significant infrastructure projects by giving decision-making powers back to Ministers, who are answerable to Parliament. Ministers will also have regard to recommendations made by the Planning Inspectorate.

National policy statements are a key component of a more open and accountable planning system. They will set out Government policy clearly on particular types of infrastructure of national significance, having been subject in draft form to both formal consultation and parliamentary scrutiny. National policy statements provide a framework for preparing, considering and deciding development consent applications. This national policy statement is therefore primarily for planning purposes and does not claim to be a complete statement of Government policy on waste water.

Effective waste water infrastructure is vital, because without suitable treatment, the waste water we produce every day would damage the water environment and create problems for public health, water resources and wildlife. The proper collection, treatment and discharge of waste water, and the correct disposal of the resulting sludge, helps to protect, maintain and improve water quality in the UK.

The criterion that we have used in the national policy statement for the demonstration of the need for nationally significant infrastructure projects is that the projects have been included in the Environment Agency’s national environment programme. The Environment, Food and Rural Affairs Committee recommended that that issue needed to be clarified and I believe that our approach now addresses its concerns.

In addition to establishing the need for waste water infrastructure, our national policy statement sets out impacts that will be relevant for any waste water infrastructure, including details on mitigating adverse impacts. Those are issues that the Planning Inspectorate and Ministers will have to have regard to when examining and determining applications.

The national policy statement does not describe how any waste water projects of national significance should be developed. I think that this addresses in part the point made by the hon. Member for Hammersmith (Mr Slaughter). How such projects are developed is up to the project promoter before they place an application for development consent, which from April this year will go to the Planning Inspectorate.

The waste water national policy statement details two proposed projects of national significance: the sewage treatment works scheme at Deephams in north-east London and the Thames tunnel. The justification for both developments and the consideration of alternatives to the Thames tunnel are fully explained in the document.

Currently, only the proposed upgrade of the Deephams sewage treatment works can be considered a potential nationally significant infrastructure project, as it meets the criteria in the Planning Act 2008 for waste water treatment facilities serving a population equivalent of 500,000 people. We will shortly lay a draft order before Parliament for its approval, to amend section 14 of that Act to enable a waste water transfer and storage project such as the Thames tunnel to be classed as a nationally significant infrastructure project.

London’s sewerage is under considerable pressure, due to a system that is close to capacity, changing land use in London and population expansion. That leads to frequent spills of untreated waste water containing sewage into the tidal reaches of the Thames, which has a negative impact on its water quality. Resolving that problem has been the subject of extensive and comprehensive studies, including the consideration of a wide range of alternative solutions, for more than a decade. As a result, the Government are satisfied that the development of the Thames tunnel, when compared with the alternatives, is the most cost-effective and timely solution to the problem of untreated sewage discharging into the River Thames. That is demonstrated in the waste water national policy statement.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

One of the arguments that the Minister has just made is that the proposed tunnel is the most cost-effective way of dealing with the problems in the Thames. Can he point me to any cost-benefit analysis that has happened in the last couple of years, since the initial study was made in 2006 and since the cost of the project has risen from £1.7 billion or thereabouts to £4.1 billion?

[Richard Benyon]

Like my right hon. Friend, I am concerned about the cost of the project. That is why my Department has instructed Ernst and Young to advise it in detail on the cost-benefit analyses that have been carried out to date, recognising, of course, that not far off a quarter of the estimated price is a contingency. It is important that throughout the process we are open about the figures that are arrived at. These matters concern not just his constituents and those of other London Members but 144 Members whose constituents pay Thames Water bills, of whom I am one.

I can assure my right hon. Friend that, as I said in last week’s debate, Ministers remain healthily sceptical about the cost of the project. We want to ensure that it provides value for money, and I am happy to tell him that cost-benefit analysis will be an ongoing process. I assure him that the alternatives that we have examined, which may be more attractive on the face of it, such as retrofitting sustainable urban drainage systems across London or separating clean water from dirty, cannot compare favourably with the cost of the tunnel. Indeed, one of the options that I have seen would come in at somewhere between three and four times the cost of the Thames tunnel scheme. I take the matter very seriously and will be happy to keep him informed of our progress.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am grateful for the opportunity to have this debate, but I am conscious that it must finish at 10 pm and that the Minister will want a few minutes to respond to the points made, so I will ensure that he has that opportunity.

I endorse much of what my hon. Friend the Member for Cities of London and Westminster (Mark Field) just said. I have taken an interest in this issue throughout my time as a Member of Parliament. The story began many years ago when a European Commission directive on urban waste water treatment focused attention on the fact that the Thames was non-compliant. It set a deadline for compliance: 31 December 2000. That deadline was clearly not met. The directive required that sewage—domestic, industrial and rain water run-off—should be collected and conveyed to plants for secondary treatment, and that overflows should be reduced and measures taken to limit the pollution of the tidal Thames and of the River Lee from sewage outflows.

The other directive to which colleagues have referred is the water framework directive. Compliance with the urban waste water directive is a precondition of compliance with the water framework directive, so there is external pressure on the UK. Just as with air pollution, unless we meet the directives’ requirements, we will be liable for fines resulting from action taken in the European courts. I have never doubted that—to use the shorthand cliché that my hon. Friend just used—something needed to be done, and I have always taken the view that the presumption should be that the tunnel is the best way forward. In the evidence I submitted to Thames Water’s first consultation, I said exactly that, in my answer to the second question:

“Like the government, I work from the presumption that the tunnel project is the best way forward, but I am aware that there are still arguments that it would be better to seek Sustainable Urban Drainage Systems and I would request Thames Water to carry out a final assessment of the alternatives to a tunnel before proceeding with the tunnel option. Constituents of mine are also concerned that alternatives should be considered one last time in case they provide an environmentally preferable option.”

By that stage, the draft national policy statement had been produced, and I am grateful to the hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, for her work and that of her Committee, on which she has reported this evening. I remind the House of what the Committee, in paragraphs 63 to 66 in particular but starting in paragraph 62, wrote. In paragraph 63, the hon. Lady and her Committee make it clear that

“other witnesses considered the needs case as set out in the draft NPS to be overstated”.

Those other witnesses included the Greater London authority which, the report reminds us,

“rejected the Government’s assertion that failure to adopt the NPS would result in failure by the UK Government to meet obligations in the UWWTD”.

The report states:

“The GLA argued that not having an NPS did not mean that ‘poor decisions will be made, it just means that decisions will not have a single source of policy advice to follow’.”

Paragraph 64 begins:

“Witnesses also had reservations as to the adequacy of the draft NPS’s sections on alternatives to constructing new infrastructure”,

and London Councils’ evidence is then cited. Paragraph 65 is clear:

“The brief sections in the NPS on the replacement of the Deephams Sewage Treatment Works and the Thames Tunnel are not sufficient to prove the need for these large-scale projects, in particular the multi-billion pound Thames Tunnel project which will have impacts over a period of years on the lives and livelihoods of people living and working locally. Nor do the sections on the alternative approaches sufficiently address all of the potential options for achieving desired outcomes such as improved water quality.”

In effect, in March last year, the Select Committee said, “Slow down, be careful, remember that the evidence isn’t all in one direction.”

In paragraph 66, the Committee recommended that

“Defra include in any justification of new waste water infrastructure projects full explanation as to how they will help to meet national and European environmental requirements. The Department should also provide more detail on the potential alternative methods of achieving environmental outcomes, such as improved water quality, which new infrastructure is designed to achieve.”

The Government read that, took heed of that, and revised the structure of their policy statement. As my hon. Friend the Member for Cities of London and Westminster pointed out, the two specific projects—Deephams and the Thames tunnel—were taken into the annexe, while leaving a rewritten section, notably in chapter 2. However, they did not change the presumption that in looking at the policy we are limited in our ability to raise questions about whether the Thames tunnel as it is currently proposed is the right option for London.

I want not only to make the obvious points that my constituents have made to me, and that my hon. Friend and parliamentary neighbour has made on behalf of his constituents and others, but to suggest a way forward that tries to square the circle and help us to get off a hook that we might otherwise find ourselves on. As I have said recently in debates on this issue in other contexts, since the first round of consultations, the arguments for a review have grown, first, because the cost has grown. The Minister has been very straightforward with the House, as he should be, in saying that he is sceptical about the cost. I am glad about that. An increase from between £1 billion and £2 billion to over £4 billion is considerable, given that the bills of water rate payers will be added to in order to pay for it.

Secondly, various other commentators, including Professor Binnie, have questioned the cost-benefit analysis mentioned by my hon. Friend the Member for Cities of London and Westminster. Whatever one thinks about its progeny, the Thames tunnel commission, on behalf of the boroughs of mixed political hue that commissioned it, made some strong points about looking at the alternative. My concern now is how we manage to reconcile those concerns with the Minister’s desire to make sure that space is given for the project to move forward. I am conscious that there is still a bit more procedural work to do in this place. Following the Localism Act 2011, we have to transfer the responsibility for major sewerage projects so that they are national infrastructure projects—I do not disagree that that should be the case—and then there is the planning process.

I would like to suggest a possible way forward. It could be argued that the reviews by Ofwat, the Selborne commission, Thames Water and others are inevitably coloured by the views of those who commissioned them—clearly, the Selborne commission must have behind it the interests of the six boroughs. I do not ask the Minister to give a definitive answer on this tonight but merely to reflect on what he has heard from around the Chamber. Before Thames Water draws up its final plans or submits any planning application, there is time in the coming months for a review panel of people who do not have a vested interest to do some urgent work and then report to those with a direct interest—Government, Parliament, the Greater London authority with its new Mayor and Assembly, and London Councils. The second consultation has just ended; I, like others, have given my evidence. We have not heard Thames Water’s response to that. There is an opportunity for a range of people to contribute before the last round of consultation by Thames Water is concluded.

There are other people who can look in from outside. The United Nations has an environmental programme office that looks at big projects around the world. The European Commission has an Environment Directorate-General. The Environment Agency clearly has a continuing interest. Of course, the Greater London authority has an interest. The Local Government Association is neutral politically, as is London Councils. The Consumer Council for Water and political parties might want to have an input. The National Audit Office might wish to have an input, because there is a major financial question about value for money—that is probably the biggest question behind all the concerns.

I will not seek to divide the House tonight. There is clearly consensus between Opposition and Government Front Benchers that the national policy statement should be approved. That follows the position of Labour Ministers who held the portfolio and it is the position of my hon. Friend the Minister and his colleagues. However, we should not go automatically from approving the statement to pressing a green button that sends us through a set of procedures whereby we cannot consider any of the factors again.

To conclude, I will put on the record the questions that I think need to be answered. I will literally list them. First, there are serious questions about what the environmental objectives are that the tunnel will achieve. Clearing up the river is fine as a general statement, but we need a bit more scientific analysis. Secondly, my hon. Friend the Member for Cities of London and Westminster asked why the argument appears to be about the huge amount of discharge—39 million tonnes—when that is not the correct figure any more, for reasons that we know about, and when most of the discharge is water, not sewage. That question needs to be addressed. Furthermore, of the rubbish that goes into the Thames, 90% is general litter and only 10% is sewage. Thirdly, there is a question whether the most sustainable way of dealing with drainage and sewerage in London is the largest of the tunnel options, which is a concrete tunnel. That would see us literally flushing perfectly good rain water down the drain. Lastly, I share my hon. Friend and parliamentary neighbour’s view that when the cost of the tunnel has nearly tripled from £1.7 billion to £4.1 billion, it is bizarre that the cost-benefit analysis seems to suggest that there will still be the same relative benefit.

I hope that the Minister hears our concerns. He has offered always to engage with those of us with a direct interest and whose constituents are greatly concerned. I hope that he will collaborate with those of us who want to ensure that, over the next few months, the questions are answered objectively and are given to Thames Water, the Government and the regulator before any final decisions for planning or public policy purposes are implemented. I accept that we have to cross this threshold tonight, and I will not prevent that. However, we need to know where we are going. Over the next six months, there is a huge amount of work to be done. I think that colleagues from all parts of the House and people outside the House would value that collaboration, and I hope that we can all agree that it should happen.