---

Water Management: S&T Report

My Lords, I offer my congratulations, and those of your Lordships' House, to the noble Lord, Lord Crisp, on his maiden speech. The noble Lord has had a distinguished career in the National Health Service, and he has a wealth of knowledge and expertise that will benefit us all. As chief executive of the NHS, he managed the first half of a 10-year plan. Sometimes we lose perspective of the sheer size of the NHS and the job involved. At one point, it employed 3 million people—the biggest employer in Europe; some 60 million potential customers; the largest civilian IT project in the world; and an accumulative five-year budget, approaching £0.5 trillion, which is bigger than the GDP of most medium-sized countries. Your Lordships’ House will be a better place with the noble Lord, Lord Crisp, among us, and we welcome him. I, too, express my thanks to the noble Earl, Lord Selborne, for the inspired way in which he chaired this sub-committee. He did what a good chairman should do—he defined the project right from the start, kept his eye on the ball and pulled us back when we were straying from the point. I very much enjoyed being part of his team, and I believe that we have produced a magnificent report. I also thank two other people—Professor Ashley for his knowledge, his incisiveness and his skill in formulating this report, and Tom Wilson, our Clerk, who kept us all in good order and who played a crucial role in developing the topic as we progressed. We certainty got our timing spot on. We reported to your Lordships’ House just before the Summer Recess; at a time when water and drought were on everyone’s mind. Here in the south east we were banned from watering our gardens and from washing our cars. It appears that we were only days away from additional powers being granted to several water companies. Like many other noble Lords, I, too, had to suffer the indignity of being ribbed and teased by foreign friends who simply could not believe that London had a water problem. And to be frank, I still cannot believe it. My family has a house in Umbria in Italy. We have a large garden and a swimming pool that evaporates throughout the summer. The summers are hot; the rain is infrequent; yet our property is irrigated and the squirters go on every other night. Our water comes from the mains and a well, and there is not even a hint of a water usage ban. The Select Committee spent a week in another hot country—Australia. We saw a nation versed in water conservation where from childhood everyone understands that water is a precious commodity. But even after six years of drought in the Sydney region, people are still permitted to water their gardens, albeit between 10 pm and 4 am. There they succeed, even in that arid climate, in making their beautiful gardens look like gardens in Surrey. So when my friends tease me, I am shamefaced to admit that in my city—the greatest city in Europe—with its reputation for grey skies and constant rain, we face a major crisis in our water supply. I ask myself why? Is it because it does not rain enough? Well, that has to be partially true. Is it because of climate change? Well, that, too, has some relevance. Is it because of regulation and government interference? Well, it would be nice to say yes to that, but it cannot really be the answer. Or is it because of mismanagement? Of course, the sad reply is yes, it is. The title of this report refers to water management, but my interest has been in water managers. We visited some brilliant water companies. Yorkshire Water in this country turned a disastrous situation into one for which it has twice been awarded the prize for the number one public utility in the country—and it shows. Water leakage in the Yorkshire region has been reduced dramatically. If you travel around Yorkshire you do not see road-works caused by burst water mains. And why not? Because there the company deals with such incidents on an emergency basis. That is somewhat different from the chaos that happens in this capital city. We visited Yarra Valley Water in Melbourne, which is right at the cutting edge of using and reusing water, where office buildings have their own reprocessing units, and townships where grey water is recycled to provide a stunning environment. The Melbourne water authorities should be studied by all UK water utilities. Finally, we visited Sydney Water where drought has become a permanent way of life, yet where people have learnt to live successfully with it and to adapt to the problem. The Australians showed us how they recycle water and how they have persuaded their population to install new and efficient shower-heads and dual flush toilets, and encouraged almost universal use of rain butts to collect roof and garden run-off. Australia makes every drop of water count. There is a common thread that draws together each of these successful Australian and British water authorities. Unsurprisingly, it is good management—business managers who have clear vision, precise guidelines and a determined focus on meeting their targets. How lucky they are, and how unlucky are we who live in London and the south east. I am by nature an inveterate capitalist and a serial entrepreneur to boot. I understand how business works. I understand very clearly the relationship between risk and reward. In my days, I have enjoyed some reasonable successes, but I have also suffered some pretty painful failures. I know the rules of the game. But Thames Water, and some of the other water companies in the south of the country, leave me speechless. They seem to play by different rules. The worse the service gets, the more they are rewarded. They under-invest. They have the highest percentage of leakages in the UK. They are slow to fix burst water mains and a third of the water simply disappears. Yet I and millions like me have been banned from watering our gardens. They have achieved record profits and they pay their top management outrageous salaries; yet I and millions like me have to pay inflated bills to compensate for their mismanagement. They are now up for sale and private equity companies are circling them like vultures, offering their shareholders billions upon billions; yet I and millions like me have been made to feel like criminals if we use a hose to wash our cars. Thames Water is a shambles. And do not let any of us fall for the bleating about its legacy of ancient pipes and sewers. Its inability to repair emergency leaks with any sense of urgency is ample testimony of a company that is badly managed and oblivious to its customers’ requirements. What is the solution? Perhaps competition. We should be able to buy our water from other authorities much the same as we can buy electricity from other electricity companies. Having ranted about Thames Water, may I be permitted to raise one hobbyhorse not quite on the theme of water management, but not quite off it either? I am just about to come to the end of my stint on your Lordships’ Select Committee on Science and Technology. I have loved every minute of it and I thank your Lordships for appointing me. I have served on at least six Select Committees. I believe that this Select Committee has done some magnificent work. We have called on the very highest level of witnesses and have travelled far and wide in our investigations. We have produced excellent work, which we have submitted to your Lordships’ House. But what happens after our submissions? The reports go off to government and we wait for a reply, which eventually comes. In my experience, in every case, the Government’s reply has been underwhelming and—dare I say?—grudging. Or at least that is how it feels. Take this particular report: we have been staggered by the poor quality of the Government’s unenthusiastic response. This highly talented sub-committee has prepared an excellent report on an important subject. We have made a series of well-reasoned recommendations, and what is the response? Nothing—nothing that we did not know, and nothing that we had not considered. Would it not be wonderful, just for once, if they were to say, ““We think the committee has made a valid point and would like to pursue it further””? To me, it feels like the departments regard the Select Committee investigations as a total pain in the neck: an intrusion and an inconvenience, interfering with the very busy and, I am sure, important schedule of the officials concerned. This report on water management was a clear case in point: an uninspired response to an excellent report. This House deserves better.