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Water Management: S&T Report

My Lords, in beginning my response on behalf of the Government, I congratulate the noble Lord, Lord Crisp, on his maiden speech. It is no mean thing. It is some five years since I gave mine and, listening to two maiden speeches today, I was thinking back to those days. I took lots of advice as well—in a slightly different situation, it is true. Once it is over, however, you feel a lot better about it, and it gives you that extra confidence to get stuck in. That is to be welcomed, and the noble Lord is certainly a welcome addition to this House with his vast life experience. I have a set piece I want to do, and I will do my best to respond to individual comments. I must say, however, as part of the history and themes, two comments were noteworthy. One was from the noble Lord, Lord Oxburgh, who was the only one to mention that we have basically been dining out on the Victorians for so long, in the way that he did. We have been living on a legacy, with an endemic lack of investment and infrastructure in this country over decades. The other was the contribution of the noble Lord, Lord Broers, who has probably forgotten that he once gave me a little tour of some of the research work in Cambridge—before I got the sack through John Smith having come up with a different way of funding higher education—for which I was ever grateful. He mentioned the public understanding of both science and infrastructure and how things work: where your food comes from, how water comes out of the tap or the fact that the lights come on when you flick the switch. That is absolutely crucial and something we are lacking in this country. There is a lot of work to be done there. There has been a general lack of welcome to the Government’s response to the report, which I reject. Nevertheless, a lot of positive points have been made. There is no question that it has been a very useful debate for the Government. The issues raised in the report need answering in a practical way with action, rather than just ministerial Statements. It is important, because the report will stand the test of time for a while. There is no question that it is a comprehensive report. I pay tribute to the chairmanship of the noble Earl, Lord Selborne, and his introductory speech. We have made our formal response, which is in the public domain on the Select Committee’s website. When the sub-committee began its inquiry in July last year, the drought in the south east had entered its ninth month. The droughts continued up to and beyond the publication of the report on 6 June. We are now planning for the possibility of a third dry winter and the drought stretching into next year, using the tools that the Government have put in place. The overarching view of the Select Committee’s recommendations, expressed in its report, is that the existing system of water management is dispersed and unclear. We consider that assessment unfounded, and that the water management measures we have introduced will secure a sustainable use of water both now and in the future. A bit of history, now, for which I apologise, but it is important to get these things on the record. Since 1997, one of the Government’s priorities has been to establish a transparent and coherent regulatory system that promotes and supports the sustainable use of water in the short, medium and long term. We have, and continue to put in place, measures to ensure that companies plan adequately for drought and for long-term water resources needs. The provisions of the Water Act 2003 have facilitated a range of important changes to further the sustainable use of water resources, including modernising the abstraction licensing system, making water company drought plans and water resource managementplans a statutory requirement and promoting water conservation. The Act has strengthened the voiceof water consumers through the creation of the Consumer Council for Water, introduced improvements to the regulatory system and increased the opportunity for competition in the supply of water. In October 2005, it became a statutory duty for water companies to prepare and maintain drought plans. The first set of statutory plans has been submitted to the Secretary of State and the National Assembly for Wales. In response to the point raised by the noble Lord, Lord Livsey, it will be for other people to answer why the committee did not visit or mention Wales. We do not yet know whether we will have a third dry winter. The Met Office winter outlook shows an even chance of wetter or drier-than-average conditions—that is called hedging your bets—which makes the provision of drought plans of critical importance in planning for the various possible rainfall scenarios. Drought plans detail how water companies intend to balance their duty to maintain public water supplies with the need to avoid or minimise any potential damage to the environment. Water resources management plans will become a statutory requirement in April 2007. The plans describe how each company aims to achieve a sustainable supply-demand balance for the public water supply over a 25-year period, take account of the best available projections for planned new house build and consider the implications of climate change. An important consequence of making drought and water resource management plans a statutory requirement is that water companies will now have to complete a public consultation on their draft plans and respond to any representation received before publishing their final plans. We established the Water Saving Group last year, fulfilling a government manifesto commitment. The group brings government, regulators and the industry together to promote the efficient use of water in households. It meets every six months to drive progress on its ambitious action plan, consisting of five work streams to be completed within two years. Each work stream is led by a different organisation, with Defra additionally having a co-ordination role. Good progress is being made. Important research on customers’ perceptions and attitudes to water and its use was commissioned this summer by the Consumer Council for Water, and its findings will underpin the group’s future work. Waterwise is undertaking projects to fill identified gaps in the evidence base on water-demand management, including pilot projects with water companies. The Environment Agency is working on a definition of water-stressed areas and on targets and benchmarks for water efficiency. Ofwat is developing a good practice register of water efficiency projects and is looking at the possibility of providing incentives to developers to install water-efficient devices by linking the infrastructure charges that developers pay to buildings’ level of water efficiency. Defra is leading on work on the policy and regulatory framework. A water meeting was held by the Secretary of State for the Environment and the Minister for the Environment on 1 June with representatives from across the water industry to discuss the provision of water resources over the short, medium and long term. A further meeting is planned for early December to review progress on the issues discussed at the meeting. There was unanimous agreement at the water meeting that a national water grid was not feasible due to its disproportionate and unjustifiable cost for the environment and for water bills compared with its possible benefits. That view was endorsed in the Environment Agency report, Do we need large-scale water transfers for south east England?, which was published in September. It estimated that to build five pipelines carrying 1,100 megalitres of water per day from the northern Pennines to London would cost up to £15 billion, with a unit cost of £8 million to £14 million per megalitre per day of supply capacity. That is at least four times the unit cost of building new reservoirs to increase supplies locally. So, like the committee—unlike my noble friend Lord Howie—we agree that a national grid is not viable. My noble friend mentioned oil, but oil is pumped and is of course much more valuable than water, and the economics are very different. I have expressed a personal view—