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PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES Public Bill Committee WATER BILL Eighth Sitting Tuesday 17 December 2013 (Morning) CONTENTS NEW CLAUSES under consideration when the Committee adjourned till this day at Two o’clock. Written evidence reported to the House. PUBLISHED BY AUTHORITY OF THE HOUSE OF COMMONS LONDON – THE STATIONERY OFFICE LIMITED £6·00 PBC (Bill 082) 2013 - 2014 Members who wish to have copies of the Official Report of Proceedings in General Committees sent to them are requested to give notice to that effect at the Vote Office. No proofs can be supplied. Corrigenda slips may be published with Bound Volume editions. Corrigenda that Members suggest should be clearly marked in a copy of the report—not telephoned—and must be received in the Editor’s Room, House of Commons, not later than Saturday 21 December 2013 STRICT ADHERENCE TO THIS ARRANGEMENT WILL GREATLY FACILITATE THE PROMPT PUBLICATION OF THE BOUND VOLUMES OF PROCEEDINGS IN GENERAL COMMITTEES © Parliamentary Copyright House of Commons 2013 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 311 Public Bill Committee17 DECEMBER 2013 Water Bill 312 The Committee consisted of the following Members: Chairs: †MR JAMES GRAY,MRS LINDA RIORDAN † Burrowes, Mr David (Enfield, Southgate) (Con) † Penrose, John (Weston-super-Mare) (Con) † Cryer, John (Leyton and Wanstead) (Lab) † Percy, Andrew (Brigg and Goole) (Con) † Docherty, Thomas (Dunfermline and West Fife) † Phillipson, Bridget (Houghton and Sunderland (Lab) South) (Lab) † Evans, Chris (Islwyn) (Lab/Co-op) † Rogerson, Dan (Parliamentary Under-Secretary of † Glass, Pat (North West Durham) (Lab) State for Environment, Food and Rural Affairs) † Glindon, Mrs Mary (North Tyneside) (Lab) † Spencer, Mr Mark (Sherwood) (Con) † Hollingbery, George (Meon Valley) (Con) † Williams, Hywel (Arfon) (PC) † Lewell-Buck, Mrs Emma (South Shields) (Lab) † Williams, Roger (Brecon and Radnorshire) (LD) † Morris, Anne Marie (Newton Abbot) (Con) † Murray, Sheryll (South East Cornwall) (Con) John-Paul Flaherty, Committee Clerk † Offord, Dr Matthew (Hendon) (Con) † Parish, Neil (Tiverton and Honiton) (Con) † attended the Committee 313 Public Bill CommitteeHOUSE OF COMMONS Water Bill 314 Economically, water companies are rather peculiar Public Bill Committee creatures in some ways. They are monopolies, or near monopolies, and they depend on historical investments such as reservoirs and sewage works. The cost of many Tuesday 17 December 2013 of those investments has been written off, because of age or privatisation. Nevertheless, those investments (Morning) have been made and continuing investments need to be made in the future. I see the hon. Member for Arfon in his place, and it [MR JAMES GRAY in the Chair] would not be appropriate to miss an opportunity, in looking at water from a Welsh perspective, to say, Water Bill “Cofiwch Dreweryn”, which means, “Remember Treweryn”. I am sure the Minister heard that many times when he was in Aberystwyth. Treweryn was the New Clause 23 village that was flooded in the 1950s to provide water for the people of Liverpool. The decisions on that PRIMARY DUTY OF SUSTAINABLE DEVELOPMENT matter were made here in Westminster, not at a local level. I believe that all but one of the Welsh MPs sitting ‘(1) Section 2(3)(e) of the Water Industry Act 1991 is omitted. at the time voted against that proposal. (2) In section 2(2A) of the Water Industry Act 1991, there is inserted— Some of these issues have a historical context as well, “(e) to contribute to the achievement of sustainable but they are primarily economic. The Elan valley in my development”.’.—(Roger Williams.) constituency was flooded 100 years ago to provide Brought up, and read the First time. water for Birmingham. I am told that, such is the fineness of the engineering, the water goes from the Elan valley to Birmingham without any pumping at all. 8.55 am The sole force moving that water is gravity. Roger Williams (Brecon and Radnorshire) (LD): I Huge investment needs to be made to provide water, beg to move, That the clause be read a Second time. to deal with sewage and to upgrade the water quality of our rivers, lakes and coastal areas. For that reason, The Chair: With this it will be convenient to discuss most water companies for most of the time are cash- new clause 32—Primary duty of sustainable development negative. They require continuous investment and the (No. 2)— cost of that depends on interest rates and the credit rating of those companies seeking to attract that investment. ‘(1) Section 2 of the Water Industry Act 1991 (General duties with respect to water industry) is amended as follows. Ofwat has to take into account a lot of environmental (2) In subsection (2A)— duties as well. We have heard about over-abstraction. (a) omit the “and” at the end of paragraph (c); Some elements in this Bill will help there, in that it will be able to revoke or vary abstraction licences without (b) after paragraph (d) insert “; and paying compensation to the people who held those (e) to contribute to the achievement of sustainable licences. I hope that those powers will be used, because development.”. they are important if we are to improve the quality of (3) In subsection (3) omit paragraph (e).’. our waters and rivers. There is the even larger environmental Elevates Ofwat’s sustainable development duty from a secondary duty aspect of how we deal with our sewage; how we ensure to a primary duty. that it is treated in a way that all the water that comes out of the sewage works is of a high enough quality not Roger Williams: It is always a pleasure to serve under to damage our environment. Then there is the social your chairmanship, Mr Gray. As we come to the close aspect of water companies and the provision of drinkable of our consideration of the Bill in Committee, we have water at a cost that is affordable to those who need it. a few remaining new clauses to consider, including new clause 23, which would promote Ofwat’s duty of sustainable development to a primary duty. Ofwat has a difficult 9am job. It has three primary duties: to protect the interests Water is not an unregulated business. Some would of the consumer by promoting competition—that say that it is almost over- regulated. It has three regulators. competition will hopefully be greater after the Bill is Ofwat is the overarching environmental regulator. The passed—wherever appropriate, to ensure that the companies Environment Agency is the overarching environment properly carry out their functions and to ensure that the regulator and the Drinking Water Inspectorate is in companies can finance their functions. some ways a social regulator which ensures that what is The term “sustainable development” is misconstrued delivered through people’s taps is of good enough quality in some ways. People believe that if Ofwat had a to keep people healthy. The greatest advances in public primary duty of sustainable development, environmental health have come about as a result of providing decent considerations would trump all other considerations, drinking water and sewerage systems. That investment but it is far from that. The classic definition of sustainable has been very worth while for a very long time. development is something that ensures that the economic, What holds those three regulators together and gives social and environmental aspects are considered together them coherence is sustainable development. I recently and that there is balance in determining how developments picked up a briefing note from the Department for take place and how operations are carried out. The Environment, Food and Rural Affairs entitled, “Sustainable water industry is very involved in all those aspects. Development and Resilience Duties”. I appreciate that 315 Public Bill Committee17 DECEMBER 2013 Water Bill 316 resilience is another duty that is being introduced in the ensure that sufficient care is given to making sure that Bill. I should like to read a little bit of the document as when we are planning long-term requirements for water it makes as good a case for sustainable development use we think about not just economic criteria and and for Ofwat having that as a primary purpose as I resilience but how sustainable our water use is. have heard. It states: One or two Members in the margins have asked me “The founding principle of sustainable development is that the what is the difference between resilience and sustainability, three ‘pillars’ of the economy, society and the environment are all so I would like to clarify that. If I can oversimplify it interconnected. In the context of the water sector, this makes slightly, resilience is about ensuring that the system can sustainable development equally central to the work of the economic survive a shock, such as a flood that overwhelms the regulator as it is to the work of the environmental and quality regulators. Our long-term economic growth relies on protecting infrastructure, whereas sustainability is about the long-term and enhancing the environmental resources that underpin it, and vitality of how we abstract water from the ground, paying due regard to social needs.” process it and make it available to customers. Those are The key sentence is this: important nuances. “Sustainable development is central to everything that Ofwat does and must be fully embedded throughout its regulatory John Cryer (Leyton and Wanstead) (Lab): I am interested decision making.” to hear my hon. Friend’s thoughts on whether increasing That is a really good case for making sustainable sustainability is compatible with increased competition. development a primary duty for Ofwat. It will bring Should there be increased competition within the water coherence between it and the other regulators.