Water Abstraction (Hansard, 20 April 2000)

§ Mr. Meacher

Within the next two weeks, my Department will publish "Economic Instruments in Relation to Water Abstraction: a consultation paper". Copies will be placed in the Library of the House on the day of publication. The paper will say that the Government take the view that economic instruments may be applied to water abstraction in the following way:

(a) abstraction charges should remain limited to recovery of the Environment Agency's water resources management costs, but should be increased to the extent necessary to meet licence curtailment compensation costs when, but not before, these are incurred, thereby providing incentive for low-value users of water to reduce their licences voluntarily;
(b) trading in licences should be encouraged in such a way that it delivers environmental benefits together with economic gains, within the regulatory requirements of the abstraction licensing system as it will be following the changes which the Government announced on 31 March 1999, Official Report, column 756-57, and which it will bring forward in a forthcoming Water Bill;
(c) the Environment Agency should actively encourage abstraction licence trading with a general presumption that trading may be possible in most areas, and in particular by:

ensuring that its licensing administrative processes operate speedily and efficiently, making full use of e-mail and other electronic means;
clearly identifying, within its Abstraction Management Strategies, the scope for trading and any unavoidable limitations to particular types of trades;
establishing an Internet site on which prospective buyers and sellers can record their interest in trading; and by
requiring trading prices and other details of completed trades to be placed on the same Internet site.

The Government will consider this view further in the light of responses to the consultation paper and will announce their firm intentions in due course.