§ Mr. Peter AinsworthTo ask the Secretary of State for Environment, Food and Rural Affairs what estimates she has made of the potential cost(a) to businesses and (b) to public funds of implementing the EU water framework directive 2000/60/EC. [27139]
§ Margaret Beckett[holding answer 14 January 2002]: The implications of the directive are set out in the regulatory impact assessment (RIA) "First Consultation Paper on the Implementation of the EC Water Framework Directive (2000/60/EC)" which was published jointly by the Department of the Environment, Transport and the Regions and the National Assembly for Wales in March 2001. A copy of the consultation paper is in the House of Commons Library.
1160WCosts to businesses and public funds
The estimated overall costs' in the regulatory impact assessment were dominated by the cost of making improvements to water status (£1.9 billion to £9.0 billion), which were broken down into: improvements to point source discharges by sewerage undertakers (£0.9 billion to £4.2 billion); improvements to point source discharges by industry (£0.3 billion to £1.2 billion); reductions in pollution from diffuse sources, particularly agriculture (£0.6 billion to £2.9 billion); improvements to river habitats (£90 million to £440 million); and, alleviation of low flows (up to £240 million).
It is not yet possible to make an estimate of the effect on water charges to domestic and commercial customers of water and sewerage companies. This will be dealt with as part of the periodic reviews of water prices carried out by Ofwat. These reviews will also provide the opportunity to ensure that the most cost-effective combination of capital investment and other measures is built into water companies' programmes alongside regulatory measures delivered by the Environment Agency.
The costs of habitat restoration and low flow alleviation projects, and urban run-off, may fall on the regulatory bodies, water companies, local authorities and landowners. However, it is not currently possible to estimate the extent and distribution of such work.
The administrative, planning and monitoring costs were assumed to fall principally on central Government and Government agencies, with small administration costs falling on local authorities and the water companies. The estimated cost of administrative arrangements was £3 million, for the planning process £13 million to £20 million, and for additional monitoring and assessment approximately £94 million.
A revised regulatory impact assessment will be needed, once an overall package of implementing regulations has been prepared for consultation, later this year or early 2003.
1 The figures quoted were the net present value of costs incurred between 1998 and 2040. The choice of the year 2040 did not relate to the actual expenditure period but because it was 30 years after the deadline in the Commission's original proposal for achieving the directive's objectives. Thirty years is a widely used asset life for pollution control equipment.