HL Deb 09 July 2003 vol 651 cc413-28

(1) In this section the Agency, the Authority, the Chief Inspector of Drinking Water and (if separately appointed) the Chief Inspector of Drinking Water for Wales and the Consumer Council for Water shall together be referred to as "the regulators".

(2) The Secretary of State, the Assembly and the regulators shall consult and cooperate with one another in those matters which affect the water industry and where there is or may be an overlapping or conflicting interest.""

The noble Lord said: My Lords, the amendment is an abbreviated form of the amendment that we moved on Report. The Minister greeted that amendment with the immortal words: This amendment is better than the previous one, but it is not quite there yet".—[Official Report, 24/6/03; col. 183.] The amendment is grouped with Amendment No. 36, which, I hope that the Minister will say, is the one that, he thinks, is "there".

I am not sure that the Minister's amendment is as broad in scope as ours, but, to the extent that it meets much of what we have asked for, I am grateful to see it. The Minister may wish to speak to it himself. I beg to move.

Lord Whitty

My Lords, the noble Lord, Lord Dixon-Smith, pre-empts me. Amendment No. 36 is intended to be an improvement on his amendment and to be more workable. It is directed at the same objective. The need for the regulators to co-operate with each other has been emphasised at several stages of the Bill's passage.

The point that I have made in qualification of that is that each regulator has distinctive duties. We consider that it is better that they use bilateral and multilateral memoranda, rather than having an all-embracing duty, as the noble Lord's amendment would impose. Our amendment will achieve the kind of co-ordination that the noble Lord and others have sought.

Baroness O'Cathain

My Lords, that is good news. It indicates that joined-up government—or joined-up agencies—is beginning to work. I thank the noble Lord.

Lord Dixon-Smith

My Lords, I am grateful to the Minister for his response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 [General functions of the Council]:

Lord Whitty moved Amendment No. 33:

Page 53, line 9, at end insert—


  1. (1) It shall be the duty of the Authority to consult the Council in relation to the exercise of each of its functions, except where—
    1. (a) the Council has indicated to the Authority (whether specifically or generally) that it does not wish to be consulted; or
    2. (b) the Authority considers that it would be clearly inappropriate to consult the Council.
  2. (2) That duty is in addition to any duty on the Authority to consult the Council which is provided for elsewhere."

On Question, amendment agreed to.

Clause 46 [Provision of information to the Council]:

Lord Whitty moved Amendment No. 34:

Page 53, leave out lines 26 and 27.

On Question, amendment agreed to.

Clause 51 [Enforcement of certain provisions]:

[Amendment No. 35 not moved.]

Lord Whitty moved Amendment No. 36:

After Clause 53, insert the following new clause—


  1. (1) This section imposes duties on each of the following—
    1. (a) the Secretary of State,
    2. (b) the Assembly.
    3. (c) the Environment Agency. And
    4. (d) the Water Services Regulation Authority.
  2. (2) It is the duty of each of those mentioned in subsection (1) to make arrangements with each of the others with a view to promoting, in the case of each pair of them—
    1. (a) co-operation and the exchange of information between them, and
    2. (b) consistency of treatment of matters which affect both of them.
  3. (3) That duty relates only—
    1. (a) in the case of the Water Services Regulation Authority, to its functions under the WIA relating to the regulation of water and sewerage undertakers and licensed water suppliers,
    2. (b) in the case of the Secretary of State and the Assembly, to their functions of the description referred to in paragraph (a), and to their functions under the WIA relating to the quality of water supplied by water undertakers and licensed water suppliers,
    3. 415
    4. (c) in the case of the Environment Agency, to its functions concerning water resources and water pollution so far as they relate to water and sewerage undertakers and licensed water suppliers.
  4. (4) As soon as practicable after agreement is reached on any arrangements required by this section, the parties must prepare a memorandum setting them out.
  5. (5) The parties to any such arrangements must keep them under review.
  6. (6) As soon as practicable after agreement is reached on any changes to arrangements under this section, the parties must revise their memorandum.
  7. (7) Parties to arrangements required by this section must send a copy of their memorandum (and any revised memorandum) to each person mentioned in subsection (1) who is not a party to the arrangements set out in it.
  8. (8) The Secretary of State must lay before each House of Parliament a copy of every memorandum (and revised memorandum) under this section."

On Question, amendment agreed to.

Clause 55 [Determination references under section 12 of the WIA]:

Lord Whitty moved Amendment No. 37:

Page 68, line 4, at end insert— ( ) For the purposes of subsection (3) above, where—

  1. (a) the question or matter referred to the Commission concerns the review of a price control imposed on the company holding the appointment; and
  2. (b) the Commission is to decide to what extent it is reasonable to take into account in its determination costs incurred or borne by the company in connection with the reference,
the Commission shall also have regard to the extent to which, in its view, its determination is likely to support the company's (rather than the Authority's) claims in relation to the question or matter referred to it. On Question, amendment agreed to.

Baroness O'Cathainmoved Amendment No. 38:

After Clause 59, insert the following new clause—



VOLUME In section 144B of the WIA (restriction on undertakers' power to require fixing of charges by reference to volume), in subsection (1)(c), after "prescribed" there is inserted— by—

  1. (i) the Secretary of State;
  2. (ii) the Secretary of State on application by a water undertaker; or
  3. (iii) the Secretary of State on application by the Environment Agency"."

The noble Baroness said: My Lords, the amendment would enable the Secretary of State to designate an area as an area of water scarcity. It would also enable the Environment Agency, as well as water companies, to apply to the Secretary of State for an area to be so designated.

sAs I said on Report, the Environment Agency accepts that real water savings from metering will come only when there is sufficient metering penetration to introduce innovative tariffs that dissuade high domestic use. The agency also recognises that large areas of the South East have unsustainable abstraction regimes. Therefore, we propose to give the agency a formal status in the process of making scarcity designations.

The Government support metering without using the word—I suspect that it is supposed to be an ugly word. In the Defra report, Directing the flow: Priorities for future water policy, published in November 2002, the Government identify the, prudent use of water resources and keeping its use within the limits of its 'replenishment' as a priority for water policy". However, the Government will permit the growth of metering only on a voluntary basis. Under current legislation—the Water Industry Act 1999—those occupying their home on an unmetered basis may choose whether to be metered and water companies may, but not must, install meters in new buildings.

The current situation in which free meter options are offered is ineffective as a demand management tool. Compulsory metering is much more economical than optional or selective metering, as I have explained many times. Water companies can carry out compulsory metering only when the area concerned is designated an "area of water scarcity". On Report at 24th June, I tabled an amendment to empower the Environment Agency, as well as the water companies, to make an application to the Secretary of State to have an area designated as an area of water scarcity. In reply the Minister argued that the amendment precluded the Secretary of State making the decision herself that there is an area of water scarcity. He said: One could conceive of a situation where it would be necessary for the Government to take the initiative, which the amendment would not allow the Secretary of State to do".—[Official Report, 24/6/03; col. 249.]

The new amendment seeks to address these points by enabling the Secretary of State to take the initiative. It also addresses the other points made by the Minister in relation to previous amendments by giving; the agency and the water companies equal status as applicants. I beg to move.

11.30 p.m.

Baroness Miller of Chilthorne Domer

My Lords, there is much merit to this amendment. At this stage, in this House, we are unlikely to go much further unless the noble Baroness presses her amendment. I hope that the Government in another place will give Members a chance to fully discuss the issue and, should charging by volume be agreed, the associated issue of what safety net there will be for people who are on low incomes, who have medical needs or who have large families. They will need some form of adequate safety net. There should be full discussion of those issues.

Lord Whitty

My Lords, we have some sympathy with what the noble Baroness says she is intending, but we have no confidence that this amendment achieves it. There may be a basic misunderstanding. If the purpose of the amendment is to change the process for designating the areas of water scarcity in order to introduce metering and other measures it is not appropriate to relate it to the previous Act. The provision for designation of areas of water scarcity is not actually in the primary legislation. The noble Baroness may argue that it should be—I am sure that the noble Baroness, Lady Byford, would argue that it should be—but it is not. It was in the prescribed conditions regulations. This amendment would not therefore change the process.

If the amendment has a more restricted intention it is not clear. The amendment could be read in two possible ways. It could mean that the Secretary of State should be bound by what the undertaker or the Environment Agency asks for. I do not think that that is the intention because we had that debate last time. But if it is for the Secretary of State simply to decide on the content of the regulations having due regard to the views of the Environment Agency or the undertakers, that is not very different from what exists at present. There may be some marginal advantage that the noble Baroness may see in making it explicit, but it is already the case that due regard must be taken of the views of those involved, including the undertakers, the Environment Agency, Ofwat, and others. So I do not think the amendment improves the situation.

The real problem with the amendment is that the noble Baroness seeks to make it easier to designate areas of scarcity, which is not really provided for in the existing legislation; it appears only under the regulations. No doubt, however, if the noble Baroness wishes to pursue the real intention of the amendment, she will inform her colleagues elsewhere. But this amendment will not achieve that.

Baroness O'Cathain

My Lords, first I thank the noble Baroness, Lady Miller of Chilthorne Domer, for her support. We are both of the same view that there is a problem with water scarcity and that the safety net must be in place for disadvantaged people.

If I have made a classic mistake in thinking that this provision was included in the legislation rather than set out in regulations, then I apologise. However, I was not aware that that was so. It is not a case of my being a Janus, looking in two directions at the same time. The whole point of the amendment is to address the importance of ensuring that we achieve the best possible management of scarce water resources.

I hope that I can take the hint, the coded message, from the Minister saying that there might be a warmer acceptance of the proposal in another place. At this point I certainly do not intend to divide the House, but I shall take the helpful suggestion from the Minister that I should get in touch with my colleagues in another place and hope that they may progress the matter there. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 [Water resources management plans]:

Lord Dixon-Smith moved Amendment No. 39:

Page 75, line 7, at end insert "which shall not be less than 25 years"

The noble Lord said: My Lords, this amendment and Amendment No. 40 relate to a significant matter which we have already debated in various forms; that is, the need for very long-term planning in the provision of water resources and in particular the need for long-term investment.

I can best illustrate this by citing two examples which may be coincidental. The first refers to the designs of the Minister's right honourable friend the Deputy Prime Minister for the Thames Gateway and Essex area to have another 200,000 houses. Unquestionably those houses can be provided and to my mind they can be supplied with water—but not, of course, from the existing provision of resources and arrangements.

I have before me a different study dealing with the expansion of Stansted airport. I cite it because it relates to Stansted, but the implications are probably similar, although they may vary somewhat in degree depending on where the airport decisions are taken. I say that because there may be a greater pool of existing housing at Heathrow, which would help. This study, a serious undertaking backed in part by the studies already completed in relation to airports in the South East, although it takes into account certain other factors, postulates that if Stansted 4—that is, Stansted airport with four runways—is constructed, it would give rise to 128,000 additional houses.

Of course this may be a classic example of joined-up government for once. It may be that the Minister's right honourable friend in another place was anticipating something when he came up with his figure, although he could not say why he had arrived at it. That would be a very fortunate coincidence. However, the Department for Transport has not yet taken any decisions on airports, so we have to assume that these may be separate matters.

This clause deals with the preparation and review of water resources management plans. The important point I seek to make in tabling this amendment is to add two paragraphs to subsection (7). The subsection states that: The Secretary of State may give directions specifying—

  1. (a) the form which a water resources management plan must take;
  2. (b) the planning period to which a water resources management plan must relate".
It is that last paragraph in particular that has me worried.

The planning period for approved development plans as they exist, or for the approved structure plans as they exist, takes us up to something like 2011. One more review period—another five years—will take us up to around 2015. But given all the time that it takes to prepare for public consultation, to obtain planning permission and to get structures into place, the planning period needed for a major water infrastructure development is probably in excess of 20 years.

I accept that we do not yet have a decision in regard to the airports in the South East—although one may be arrived at fairly soon. The Minister may well argue that I am baying at the moon, but you cannot begin to plan such major infrastructure developments—be it simply the housing issue to which his right honourable friend referred or be it the housing issue plus the airport issue—without getting involved in long-period development planning, particularly in regard to the water industry. People are beginning to discuss issues in relation to transport up to 2030. My 25 years do not take us as far as that but. if I have read the information correctly, the M25 is now being planned on that basis.

This is an important amendment. The Minister may be able to reassure me in his response that he has this kind of period in mind. I am prepared to accept that there may be a degree of uncertainty about some of these matters at the present time, but we know that really major development in the South East will occur. We do not make good use of our water resources in this country—as I have said before, we use quite a small proportion of the water which falls in England—albeit areas such as the South East, which are much more densely populated, have a more acute problem and make much better use of their water resources.

If the water problems are to be solved—I am absolutely confident in my own mind that they can be solved—we will need a long planning period in which to solve them. That brings me back to the issue of water resources management plans and ensuring that they are based on a sufficiently long period to enable us to deal with the major projects that are bound to go ahead as far as one can see. There may be some dispute about the scale and we may make a mistake with over-provision of water resources that may cost water consumers a little, but I have always argued that that will not matter half as much as if we fail to provide adequate resources and these developments are constrained or have to take place in an environment where water is severely restricted. That is a sufficiently strong argument for suggesting the 25-year period.

Amendment No. 29 is a small amendment which I thought the Minister could agree without thinking about because it would be rather convenient for him if he had it there. I beg to move.

Lord Whitty

My Lords, the noble Lord is right. Potential large developments such as the Thames Gateway and the various options on the airports will place huge requirements on water resources and need to be taken into account. But the first amendment is too rigid. It effectively states that the planning period, which currently is normally 25 years on a non-statutory basis, would never be less than 25 years. I believe that, in certain circumstances—partly because of the uncertainty of the future—we could need a shorter planning period in relation to a particular area or a particular development. I would not like to be tied down to that degree.

Moreover, the government amendment we have already discussed but not yet reached, Amendment No. 41, places on all statutory bodies a statutory duty to take into account water resources. That obviously includes all planning authorities, including government departments, involved with such large-scale developments. Therefore, the noble Lord's objectives will to a large extent be met by placing that duty under Amendment No. 41, which we will reach in a moment.

Lord Dixon-Smith

My Lords, if this was an earlier stage of the Bill, I would be very happy with that reply; I would say that I would take it away and study it and perhaps come back at a later stage. We do not have that happy option, however, so although I think I am reassured, the amendments are down in part to make sure that the point is taken, particularly by the Government. I think I have succeeded in that ambition at least. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 40 not moved.]

Lord Whitty moved Amendment No. 41:

After Clause 81, insert the following new clause—


  1. (1) In exercising its functions and conducting its affairs, each public authority shall take into account, where relevant, the desirability of conserving water supplied to premises.
  2. (2) In subsection (1), "public authority" means any of the following—
    1. (a) a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975 (c. 26)),
    2. (b) a Government department,
    3. (c) the Assembly,
    4. (d) a local authority (within the meaning of section 270(1) of the Local Government Act 1972 (c. 70)),
    5. (e) a person holding an office—
      1. (i) under the Crown,
      2. (ii) created or continued in existence by a public general Act, or
      3. (iii) the remuneration in respect of which is paid out of money provided by Parliament,
    6. (f) a statutory undertaker (being any person who, by virtue of section 262 of the Town and Country Planning Act 1990 (c. 8) is a statutory undertaker for any purpose), and
    7. (g) any other public body of any description."

On Question, amendment agreed to.

11.45 p.m.

Clause 89 [Water main requisitions: calculation of payments]:

Lord Whitty moved Amendment No. 42:

Page 99, line 29, leave out "an agreement under section 51A below" and insert "this Chapter"

The noble Lord said: My Lords, in moving Amendment No. 42, which changes the wording relating to self-laid sewers, I should like to refer to Amendments Nos. 43 and 46. Amendment No. 43 achieves three inter-related aims. It ensures that the undertaker and non-domestic customers can enter into agreements equivalent to the self-lay provisions, and in such agreements the undertaker can agree to make a declaration for the vesting of such water mains or service pipes. It allows the detailed provisions of the self-lay regime to apply to domestic supplies only.

Amendment No. 46 clarifies the prohibition in the Bill on the connection of pipes laid by parties other than the undertaker. The prohibition is that pipes cannot be connected to the undertaker's network unless the pipes concerned are vested in the undertaker. These are sensible precautions to bring self-lay provisions into the main network. I beg to move.

Lord Livsey of Talgarth

My Lords, I welcome the amendments, which relate to my Amendment No. 54. These proposals improve the situation considerably, and I welcome them.

On Question, amendment agreed to.

Clause 90 [Self-lay and adoption of water mains and service pipes]:

Lord Whitty moved Amendments Nos. 43 to 53:

Page 102, leave out lines 1 to 3 and insert— ( ) Subsection (1) above shall not apply in the case of water mains or service pipes which are to be used (in whole or in part) for the purpose of supplying water other than for domestic purposes, but—

  1. (a) nothing in this section shall prevent a water undertaker from agreeing apart from this section to declare any such water main or service pipe (or a part of it, as specified in the agreement) to be vested in the undertaker: and
  2. (b) such a declaration shall take effect as a declaration made under this Chapter."
Page 102, line 5, after "pipe" insert "to which subsection (1) above applies Page 103, leave out lines 36 to 41. Page 105, line 28, at end insert—


(1) Where a person (other than a water undertaker) constructs a water main or service pipe which is to be used, in whole or in part, for supplying water for domestic or food production purposes, no water undertaker may permit that water main or service pipe to become connected with its supply system unless it vests (to the relevant extent) in a water undertaker.

(2) In subsection (1) above, "the relevant extent" means the extent specified in the agreement for the vesting in the undertaker of the water main or service pipe in question.

(3) The prohibition imposed on a water undertaker by subsection (1) above shall be enforceable under section 18 above by the Authority."

Page 105, line 30, leave out "51C" and insert "51D"

Page 105, line 39, leave out "mentioned in subsection (2) above" and insert "specified for those purposes in the relevant vesting agreement."

Page 105, line 44, leave out "51A(11)" and insert "51D(1)"

Page 106, line 5, leave out "51A(11)" and insert "51D(1)"

Page 106, line 25, leave out "under section 51A above" Page 106, line 30, leave out "under section 51A above" and insert "to make such a declaration."

Page 106, line 34, leave out "51D(3)" and insert "51E(3)"

On Question, amendments agreed to.

Clause 91 [Requisition and adoption of sewers]:

Lord Livsey of Talgarth moved Amendment No. 54:

Page 108, line 19, at end insert— (5) The Secretary of State shall, within 2 years of the coming into force of this section, make regulations providing that the ownership of private sewers connected to the public system shall be transferred to sewerage undertakers or local authorities. (6) Regulations may not be made under subsection (5) unless a draft of the statutory instrument containing the regulations has been laid before and approved by a resolution of both Houses of Parliament.

The noble Lord said: My Lords, I make no apology for coming back to this issue. I welcome the correspondence I have had from the Minister as he is on the verge of carrying out a consultation. I tabled the amendment because it quantifies the situation on unadopted sewers. In fact, I would describe this as the unadopted sewers and cowboy builders' amendment. It underlines what a serious matter this is to many people throughout the country.

I shall quote briefly from a letter that I received from Councillor Ken Harris of Knighton on the Welsh borders. He describes the situation in the town, saying: The sewers in this particular part of the town consist of a pitch fibre system installed by the firm of Dorcas Engineering about 30 years ago. The firm went out of business about 15 years ago. The system was never adopted and the Water Authority—Severn Trent—maintain that they will never adopt such a system! In fact, one officer of the company 'threatened' me that if I created too much trouble over the problem, the Environment Agency could come in, close down the present system and force Severn Trent to install an adoptable sewer but at direct cost to the present residents. The Water Authority of the day when the system was installed declined to adopt it and subsequent Authorities right up to the present one—Severn Trent—have all followed the same line. The result is that no-one will accept responsibility. Should any problems occur, then no Authority, certainly not Severn Trent, will accept any responsibility. This despite the residents having continuously paid charges over 30 years ... Severn Trent, in their refusal to accept unadopted sewers, argue that it is not their responsibility to transport effluent to their treatment works. They say that the payments made by householders are only for the treatment of effluent when it reaches the Treatment Works. If this is the case, why do they accept responsibility for faults that occur in adopted sewers long before they reach the Treatment Works? Indeed, sums of money from householders have been asked for in certain instances that I know of to pay for that situation.

I do not want to pre-empt the Minister's consultation. However, I want to put it on record that I believe that a transfer of the unadopted sewers would address the question and would be the most satisfactory answer in this case, certainly from the point of view of strategy, pollution and the environment. There are other possibilities connected to management of systems, but not transfer of ownership, which is very important. Whatever comes out of the Minister's consultation, I hope that transfer will be the final solution. The issue of management is best resting with ownership in an integrated system. I would certainly advise this course when the time comes to make the final decision, and I believe that it would solve the problem.

Obviously, at this time of night, discussing such matters as sewers is not very desirable. We are nearly at midnight. None the less, I cannot underestimate the importance of the issue, and I am pleased that the Minister has written to me about his proposals for the consultation to take place. I hope that that is expedited very soon and that there will be a satisfactory outcome. I beg to move.

Lord Whitty

My Lords, I recognise the noble Lord's views. It is one of the main options on which we are proposing to consult, but he is doing what he said that he would not do: trying to pre-empt the consultation by inserting the amendment in the Bill. Indeed, there would be a number of consequentials in terms of funding and responsibilities that would have to be faced, were we so to do. I cannot accept his amendment, but I accept his contribution towards the consultation.

Lord Livsey of Talgarth

My Lords, I thank the Minister for that response. I believe that it is to the advantage of those who will be consulted to read the proceedings that have just occurred. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Farrington of Ribbleton moved Amendment No. 55:

Page 118. line 2, at end insert— ( ) in the paragraph relating to functions under section 67, for paragraphs (a) and (b) there is substituted— (a) for the making of regulations concerning water supplied using the supply system of a water undertaker, the function is transferred in relation to the supply system of any water undertaker whose area is wholly or mainly in Wales; (b) for the making of regulations concerning water supplied other than using the supply system of a water undertaker, the function is transferred in relation to Wales.",

The noble Baroness said: My Lords, Amendments Nos. 55 and 56 are technical and relate to the regulation of standards of wholesomeness of water. They make amendments to the order that transfers functions to the National Assembly for Wales. The aim is that licensed water suppliers should be regulated on the same basis as the undertakers whose systems they use. The National Assembly will continue to set standards for any water put into the public water supply system, whether by licensees or undertakers or any water undertaker whose area is wholly or mainly in Wales.

Paragraph (b) of Amendment No. 55 ensures that regulation of private water supplies, which is a local authority function, still follows national boundaries. I beg to move.

Lord Livsey of Talgarth

My Lords, as a Member from Wales I welcome the amendment. I am pleased to see that this work is being done.

On Question, amendment agreed to.

Baroness Farrington of Ribbleton moved Amendment No. 56:

Page 118, line 44, at end insert— ( ) in the paragraph relating to Article 2(c), at the end there is inserted "or any licensed water supplier using the supply system of any such water undertaker."

On Question, amendment agreed to.

Clause 99 [Specific transitional and transitory provisions]:

Lord Whitty moved Amendments Nos. 57 to 60:

Page 120, line 15, leave out second "the" and insert "an" Page 120, line 18, leave out "is hereby revoked" and insert "shall cease to have effect (so far as it applies to that abstraction) Page 120, line 19, leave out subsection (3) and insert— (3) Subject to subsection (4), the person who was the holder of a full licence which ceases (or ceases in part) to have effect by virtue of subsection (2), and who had been taken in consequence of that licence (or that part of the licence) to have a right to abstract water by virtue of section 48(1) of the WRA, shall be taken to continue to have that right for the purposes of Chapter 2 of Part 2 of the WRA. Page 120, line 22, leave out subsection (4) and insert— (4) A person shall cease to be taken to continue to have the right mentioned in subsection (3). for the purposes mentioned there, if during a period of—

  1. (a) four years, or
  2. (b) if the abstractions authorised under the licence (or relevant part of the licence) were abstractions planned to be carried out at intervals of more than four years, or for emergency purposes only, such longer period as the Agency may determine on the application of the person,
he does not carry out any such abstraction as would have been authorised by the licence (or relevant part of the licence) if it had still been in force.

On Question, amendments agreed to.

Clause 100 [Powers to make further supplementary, consequential and transitional provision, etc]:

Lord Whitty moved Amendment No. 61:

Page 121, line 16, at end insert— or who is a person who falls within subsection (3A). (3A) A person falls within this subsection if he satisfies the Environment Agency of the following—

  1. (a) that the nature of his operations, or proposed operations, requires him to make plans about the abstraction of water,
  2. (b) that before the coming into force of any provision of this Act he would not have required a licence under Chapter 2 of Part 2 of the WRA in respect of any such abstraction for which he had reasonably planned (or, if there has already been such an abstraction, he did not require such a licence in respect of it),
  3. (c) that following the coming into force of any such provision he does require such a licence in respect of it, and
  4. (d) that he has suffered loss or damage as a result of his having been—
    1. (i) refused a licence under Chapter 2 of Part 2 of the WRA in respect of that abstraction, or
    2. (ii) granted such a licence, but in respect of an abstraction of more limited extent than he had reasonably applied for,
and he applies for compensation before any deadline provided for in the regulations under subsection (1).

The noble Lord said: My Lords, Amendment No. 61 is tabled in response to amendments tabled by the noble Lords, Lord Howie and Lord Sutherland, and relates also to Amendment No. 62, tabled by the noble Baroness, Lady Byford. In some cases, abstractions brought under licence control by this Bill may not be granted an abstraction licence or may be granted a licence on restricted terms. Clause 103 allows us to make regulations covering the payment of compensation where loss or damages arise in such cases, but only where the abstraction was ongoing when the requirement for licensing came into force. This amendment extends the scope of compensation to encompass abstractions planned at the time when licensing is introduced as well as those which are ongoing.

Our amendment deals with this subject without confining the compensation arrangements to the quarrying and mining industries, as the amendments tabled by the noble Lords did at an earlier stage and as the amendment tabled by the noble Baroness largely does. I therefore hope that she will accept the amendment. I beg to move.

Lord Dixon-Smith

My Lords, the Minister has anticipated me as I anticipated him at an earlier stage. He has largely covered the points that we wish to make. His amendment goes over the same ground. It is very good to see it there and I thank him for it.

On Question, amendment agreed to.

[Amendment No. 62 not moved.]

Schedule 4 [Licensing of water suppliers]:

Baroness Farrington of Ribbleton moved Amendment No. 63:

Page 139, line 2, leave out "to (4)" and insert "and (3)"

The noble Baroness said: My Lords, Amendments Nos. 63, 65 and 66 are related to the competition provisions of the Bill and are minor technical amendments. Unless noble Lords wish to ask questions about the detail, I shall say no more about the amendments. I beg to move.

On Question, amendment agreed to.

Lord Dixon-Smith moved Amendment No. 64:

Page 139, line 37, at end insert— (c) conditions requiring the payment by the licence holder of sums relating to any of the expenses mentioned in section 39(3) of the Water Act 2003.

The noble Lord said: My Lords, under Clause 39(1), (2) and (3), the water undertakers are specifically bound to pay for, the expenses of the Council, and … the Authority, the Secretary of State or the Assembly in relation to … the Council".

No limit is set to those expenses. A general clause enabling the Secretary of State to require licensed water suppliers to make such a payment as she may direct is really a little inequitable. The costs should be shared between the water undertakers and it should be specified on the face of the Bill.

As this is the final group of amendments, although there are one or two still to be moved formally, I thank the Minister for his help and co-operation on the Bill. I cannot say that we on this side feel that he has conceded as much as he ought to have. If he were to say that he feels he has conceded more than he should have done, we might all feel happier. The Bill has involved a lot of hard work but it will leave this place a far better Bill than when it arrived. I am most grateful to the Minister for that. In the mean time, I beg to move.


Lord Whitty

My Lords, Amendment No. 64 is intended to ensure that licensed water suppliers are required to contribute to the cost of establishing and running the new consumer council for water. I thoroughly agree with that. However, new Section 17G(1)(b) in Schedule 4 to the Bill allows a water supply licence to include conditions that would require such payments to be made. I certainly expect this provision to be used so that licensed water suppliers contribute to the costs not only of the consumer council but also of Ofwat so that there is a level playing field with the undertakers in that respect.

In referring explicitly to the costs of the consumer council, the amendment may cast doubt over what payments are covered by new Section 17G(1)(b), including payments towards the costs of Ofwat. I believe that there is no difference between us on that, as on so many of the Bill's issues. However, I do not believe that the amendment is necessary.

As regards the noble Lord's more general remarks, I thank all noble Lords for their co-operation, particularly on this difficult day. Noble Lords have reached at least some understanding on the content of the Bill. Of course, I conceded far too much; I always do. I was not able to accept all the points that were made but some of them have, either directly or indirectly, certainly helped to improve the Bill.

Lord Dixon-Smith

My Lords, I am grateful to the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Whitty moved Amendments Nos. 65 and 66:

Page 144, line 24, after "share" insert "at such time and" Page 171, leave out line 43 and insert "first day on which all of the provisions of this Schedule and Schedule 8 are in force.

On Question, amendments agreed to.

Schedule 7 [Minor and consequential amendments]:

Lord Whitty moved Amendments Nos. 67 and 68:

Page 177, line 20, at end insert— In section 206 (making of false statements etc), in subsection (1), after "Act" there is inserted "or of section 5, 6 or 12 of the Water Act 2003". In section 217 (criminal liabilities of directors and other third parties), in subsection (1), after "this Act" there is inserted "or under section 6 of the Water Act 2003". In section 222 (Crown application), as substituted by paragraph 2(4) of Schedule 21 to the Environment Act 1995 (c.25), after subsection ( I 0) there is added— (11) This section shall apply in relation to sections 5, 6 and 12 of the Water Act 2003 as it applies in relation to the provisions of this Act." Page 181, line 3, at end insert—

"Environment Act 1995 (c. 25)

In section 6 of the Environment Act 1995, after subsection (3) there is inserted— (3A) Subsection (3) above shall apply to—

  1. (a) sections 5 and 6 of the Water Act 2003; and
  2. (b) such of the related water resources provisions as apply in relation to those sections by virtue of section (Application of certain water resources provisions to this Act) (2) of the Water Act 2003,
as it applies to the provisions referred to in that subsection." On Question, amendments agreed to.

Schedule 8 [Minor and consequential amendments: licensing of water suppliers etc]:

Lord Whitty moved Amendments Nos. 69 and 70:

Page 197, leave out lines 29 to 33. Page 209, line 24, leave out paragraph 51 and insert— (1) Section 219 (general interpretation) is amended as follows. (2) In subsection (1)—

  1. (a) in paragraph (a) of the definition of "customer or potential customer", at the end there is inserted "(other than a licensed water supplier)",
  2. (b) in the definition of "water main"—
    1. (i) after "water undertaker" there is inserted "or licensed water supplier", and
    2. (ii) after "of the undertaker" there is inserted "or supplier", and
  3. (c) in the appropriate place there is inserted—
"licensed water supplier" shall be construed in accordance with section 17B(9) above;". (3) After subsection (4) there is inserted— (4A) In this Act, unless otherwise stated, references to the supply system of a water undertaker are to the water mains and other pipes which it is the undertaker's duty to develop and maintain by virtue of section 37 above."

On Question, amendments agreed to.

An amendment (privilege) made.

Lord Whitty

My Lords, I beg to move, That the Bill do now pass.

Moved, That the Bill do now pass.—(Lord Whitty.)

Baroness Byford

My Lords, before we finally pass the Bill, from these Benches I should like to record our thanks for the hard work of the noble Lord, Lord Whitty, and the noble Baroness. Lady Farrington.

I did not table an amendment on the consolidation of water Bills. The noble Lord, Lord Whitty, indicated that he would recommend the matter to the commission which considers those issues. I hope that he will ensure that that happens if, indeed, it has not already. I thank the noble Lord and the noble Baroness for the courteous way in which they dealt with the Bill.

Baroness Miller of Chilthorne Domer

My Lords, from these Benches both I and my noble friend Lord Livsey would like to record our thanks to the noble Lord, Lord Whitty, and to the noble Baroness, Lady Farrington, and to the Minister's team for helping us to move from a Bill that was purely technical to one that now contains several principles: notably, conservation efficiency—on which amendments in various forms were moved by both the Conservatives and Members on these Benches—and the inclusion of the Water Framework Directive, which is a hugely important issue in terms of water management. I see that the witching hour has just struck, so with that I wish the Bill success in another place and look forward to receiving it back here in due course.

Lord Whitty

My Lords, my thanks go to both noble Baronesses for their contribution, for the great spirit in which this Bill has been dealt with and for their many constructive suggestions. I commend the Bill to the House.

On Question, Bill passed, and sent to the Commons.

Baroness Farrington of Ribbleton

My Lords, before moving that the House do now adjourn, may I place on record our thanks to all the staff, and particularly to the Hansard writers, who have been exceptionally co-operative this evening. We do take that cooperation for granted and we ought not to.