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Flood and Water Management Bill

My Lords, I hope that we can treat this as a quiet oasis. On a day of great excitement, we can at least have the therapy of engaging ourselves in this Bill, which, along with all noble Lords, we welcome. Amendments 98 and 99 concern the regulation of the provision of infrastructure. Under the proposals in Clause 35, providers of services, such as water companies, would not be able to bid for a large-scale infrastructure project. I understand the reasoning behind this but I would like to probe the mechanics further. We are dealing with large, often complex and expensive construction projects where, if I have understood the Government’s thinking, should things go belly up, if I might use that phrase, there is a risk that customers all the way down the supply chain will suffer—for example, through higher prices for their water supply. I have some sympathy for that position but we should be careful not to exclude the very companies that have the skills, the expertise and the experience from participating in the work at which they might be very good. Surely there is also a risk that if a major infrastructure provider is not able to tender a bid for a project because it is a service provider, the work may have to be done by a company or companies with less skill and experience. The risk of project overruns, escalating costs and expensive mistakes would therefore not be diminished. What protection is there for consumers in a scenario such as that? Does the protection lie in a contractual cushion so that the losses are absorbed at a level above the consumer? If that is so, could a contract involving a service provider doing its own construction not be framed in a similar way, perhaps guaranteed through the involvement of Ofwat? I am happy to hear the Government’s no doubt exhaustive research into this area, but I am also wary of losing the skills of water companies that would, if everything goes according to plan, make the process easier, quicker and cheaper in order to protect against a worst-case scenario where everything goes wrong. Is there a more flexible approach? Amendment 98 is therefore an explicit requirement to apply these new provisions only to cases where the Minister considers that there is a significant risk to consumers, which would perhaps catch only the most complex of cases. Amendment 99 would allow water and sewerage companies, and companies associated with them, to bid in the tendering process. I hope to explore with that how the accumulated expertise of these companies can be harnessed to facilitate the construction of major infrastructure projects. I beg to move.