Motion made, and Question proposed, That the sitting be now adjourned.—[Jonathan Shaw.]
There is a certain irony in our having this debate while it is raining outside. Perhaps that illustrates the problem we have in trying to get to grips with this serious matter.
Although I have criticisms to make today, not all of them are laid at the Minister’s door. I am the first to acknowledge that much of the present regime originated under the previous Conservative Government. I shall be critical on the issue of housing and planning, but I do not hold him responsible for everything that happens on this matter.
There is a complexity in that my constituency is straddled by two water companies. Perhaps that has drawn my attention to the random way in which certain measures are being introduced by different water companies at different times. The north of my constituency uses Thames Water Utilities while the south of my constituency uses Sutton and East Surrey Water, of whose activities the Minister will be well aware. I have good relations with both companies. They keep me well informed and I believe that their management is thoroughly competent. I shall discuss the operations of the companies a little later.
The background to the debate is that the south-east is experiencing a drought. There are plenty of estimates about which year the drought is the worst since; I have heard that it is the worst since 1995, 1974, 1933 and 1922. Whichever is correct, the situation is bad. The present shortage of rain started in November 2004, and there have been two dry winters since. In the 19 months up to the beginning of this May, only four had above average rainfall. During those 19 months, there was only 80 per cent. of the normal rainfall in the south-east, compared with 95 per cent. in the UK as a whole. However, October 2004 and, as we well know, May 2006—the two months straddling that period—were very wet, with rainfall of about 180 per cent. of what we would expect. If that is taken into account, rather worryingly, we are talking about the driest period for only 11 years—since 1995.
During that period, river flows have also been below average, although the Environment Agency says that the situation is getting worse. Groundwater levels in southern England are below average. Reservoirs in southern England were in the 83 to 88 per cent. full bracket at the beginning of May. The figure for the rest of the UK was 95 per cent. That is the shortage of water in that region. Two other factors are involved—demand and leakage—to which I shall return.
The response of the Government, the water companies and the agencies, through the regime that prevails, was to introduce bans and orders. That is the correct response. Use must be restrained, because if there is no water, there is no water, and we must accept that.
However, the application of some of the orders is bizarre. There have been a number of different interpretations of how a hosepipe ban is introduced. In any event, as far as I can tell, such bans have been largely ignored. Will the Minister examine the situation with micro-irrigation systems? As he is well aware, under a hosepipe ban, someone may use a watering can to water their garden, but a micro-irrigation system is technically banned although it is more efficient. Will he review that point?
There is also the question of why royal parks are exempt from a hosepipe ban. If there is a shortage of water, there is a shortage of water, so we are not talking about something we can juggle. In my judgment, a royal park has no greater priority than a garden in Croydon, South. We are all grateful to Alice Miles of The Times—I am sure that the Minister has seen the article—who exposed the hypocrisy that No. 10 is technically a royal park and seems to be getting round the hosepipe ban by having a tank of undefined size to water the garden there. If No. 10 can do it, why cannot my constituents do it? I do not expect the Minister to march into No. 10 and demand a halt, but the issue should be examined.
That deals with hosepipe bans, but as we all know, Sutton and East Surrey Water has introduced a drought order and Thames Water Utilities is about to do the same, and that represents a more draconian approach to the matter. Royal parks will be exempt under the drought order. Why will Thames Water Utilities be introducing its drought order so late in the day? It will be introducing it at the end of the one of the wettest months that we have ever had. What had changed from the situation at the beginning of that month by the end of it? The situation surely cannot have been worse. What decision could not have been made at the beginning of May that was able to be made at the end of it? I do not believe that there has been more rainfall in central London than in south London.
In the meantime, the top end of my constituency is subject to a hosepipe ban and the bottom end is subject to a drought order. That means, for example, that car washes may operate in the north of my patch but not the south. There are five golf courses in my constituency. In the north, they may be watered, but not in the south. There is no difference in the situation of the areas, in that they all use the same river basin and they are in the same water catchment area. The patchwork fragmentation of the water regime in the south-east needs to be examined. What is effectively an economic distinction is artificial. We should return to that. Let us not forget that we are not just talking about golf courses. Tennis clubs and bowls greens also face difficulties.
The public are sceptical. Imposing a drought order is a serious matter. Car washes may still operate under a drought order if they use less than 23 litres per car. How on earth can we persuade the public to save water at home if they see a car wash operating during a drought order? If the argument is that we must look after businesses, we must recognise that a darn sight more people are employed in a golf course than in a car wash. Golf courses are big business.
We need a coherent regime and water efficiency strategy, and not patchy implementation throughout the south-east. If we were to look at a map—the Environment Agency’s map is as good as any—of the water companies in the south-east, we would see that there is a complete fragmentation. As we looked north up through the country, we would see that the areas are large and are built primarily around the river basins, such as those of the Trent, Severn and Thames. Why is there a patchwork in the south-east? Well, that is how things are set up. The most fragmented regime is in the areas of worst drought. As I said, I have high regard for the management, but the fragmentation of the regimes is not in the public interest.
I am sure that the Minister is aware that the water framework directive is coming over the horizon. It is one of the few decent bits of European legislation. The UK is obliged, by 2009, to develop a river basin management plan. This is a unique opportunity to review the strategy and to introduce much more co-ordinated measures than we have had in the past.
May I turn to the question of demand, housing and planning? London, of which Croydon is a part, is expecting to have 800,000 new houses by 2015. The south-east is growing by 1 per cent. per annum in respect of demand for water. The Government say that there is no problem in supplying the planned housing expansion with water, and they point to a figure of an increase in water demand of 0.1 per cent.
The excellent report of the House of Lords Select Committee on Science and Technology described planning of water supply and water management as one of the foremost domestic policy challenges of the day. Paragraph 4.40 refers to the Government’s approach and states:
“Whilst we welcome the Government’s belated attempts to consider the likely impact of increased housing growth upon water use, we are completely unconvinced by the figures produced. Not only is the methodology flawed, but the findings are produced in such a way that even the Minister with responsibility for water issues misinterpreted them. The Government must be more transparent about the fact that their housing growth plans will have a very significant impact on water use in south east England, and focus on ensuring that the necessary preparations are made.”
The report continues in paragraph 4.47:
“It is worrying that the housing growth plans have not in many cases been factored in to the water companies' long-term plans, due to the way in which Government have initiated the planning.”
That report has no side to it—I am not being patronising, but the Lords produce good reports which tend to be non-political—but it goes on to discuss the need for proper consultation. When the Commons Environmental Audit Committee was chaired by my neighbour, my hon. Friend the Member for East Surrey (Mr. Ainsworth), it said that it was dismayed that water companies had not been properly consulted. That point was picked up by the Lords Committee in paragraph 4.19 of its report, which says that Werner Boettcher, who is not a lackey, but managing director of Thames Water,
“told us that there had been ‘very little consultation with water companies or the water industry’. He added, ‘we have a statutory duty to provide [a] supply of water and the question has not really been asked, where is the water actually coming from?’…Similarly, the company's written evidence stated that ‘the issues were not necessarily related to ‘if’ water could be supplied/managed, but ‘when’…What appears to be missing is a thorough understanding and explanation as to how…land-use planning and water resources planning interact and what the Government policy for this is’.”
Further to the point that my hon. Friend is making about water demand, may I draw the Minister’s attention to paragraph 8.18 of the Lords report, which states:
“It is regrettable that the ODPM failed sufficiently to consult the water industry directly—or to give due consideration to the water management implications—when formulating the Sustainable Communities Plan”.
My hon. Friend is aware that there is a proposal to build 4,000 houses in East Grinstead in my constituency, thus doubling the size of the town—increasing it by 47 per cent. by 2016 without any consultation with the water companies. That will require 6.75 million litres of extra water a day. That is hardly a sustainable development and I wholly endorse the point that he is making. Does he agree that people in East Grinstead who want more affordable housing and know that development is necessary are deeply worried about the sustainability argument and the water, infrastructure and everything that goes with building a modern sustainable society?
My hon. Friend makes the point very well indeed and is far from alone among my Conservative colleagues who tend to have constituencies in the south-east. A substantial number of people have that opinion.
It is not convincing for the Minister to say that the Government have looked at the matter and are satisfied. The body of opinion is that it has not been properly assessed and evaluated and he should go back and look again at the matter. If he is right—I do not believe that he is—the public need to be convinced and persuaded.
Leakage, which is primarily a problem for Ofwat, has been falling. It was 23 per cent. 10 years ago and is now down to 16 per cent. That has been achieved through the pricing mechanism, but in many cases pressing down on prices by Ofwat may have inhibited investment. Sutton and East Surrey Water has been under such a tight regime that although it is currently meeting its water leakage targets, it will take 200 years to replace the infrastructure at the rate that is allowed at present.
Thames Water has, famously, not hit its leakage targets and has failed to do so over the past four years. In my judgment, that is a big test for Ofwat. If Thames Water fails again—it looks as if it may—what fine will Ofwat impose on it when the public are having to make sacrifices? Thames Water has not been fined to date.
I congratulate the hon. Gentleman on securing this timely debate, and I apologise that I cannot stay to make a contribution, because of a pressing session of the Select Committee on Defence.
On leakage, does the hon. Gentleman find it scandalous that 1 billion litres of water—one third of Thames Water’s output—have been lost while it has made record profits? There should be plenty of money to reinvest if Ofwat—this is the case he is making—provided the proper regime for that.
The hon. Lady makes the point well. I have no difficulty with the water company making profits and was heartened by the Minister’s response a couple of weeks ago to a Labour Member who attacked the water companies on an urgent question. However, the matter is in Ofwat’s hands and perhaps the Minister will discuss that with it.
The test for Ofwat is whether it will impose fines on water companies that are missing their leakage targets. That is bound to affect the public’s response. They are asking themselves, “Well, if we’re losing so much water through leakages, what’s the point?”
It is worth noting that the Law Society, for example, is about to be fined £250,000 by its regulator for having missed targets in its first year and looks as though it will not make its targets this year and will be fined £750,000. If regulators want to dispel the notion that they are a soft touch—Ofwat is beginning to get that reputation—they must act.
Water efficiency and conservation is growing in importance. The UK average water consumption is about 150 litres a day, in contrast with Austria, Germany and the Netherlands which use 125 litres a day. The Environment Agency said that to be sustainable—this is the point that my hon. Friend the Member for Mid-Sussex (Mr. Soames) made—that needs to be reduced to 110 litres a day. That is a remarkable statement by the Environment Agency and assumes a number of changes in the approach of households. How will that be achieved?
When Baroness Young of Old Scone—that is a good Labour title—who is the chief executive of the Environment Agency gave evidence to the House of Lords she simply said that there will have to be greater focus on water efficiency and a much higher level of water penetration to achieve lower demand. She also said that we need acceleration in mains replacement, a new reservoir and greater use of desalination. Those are all important points, but why are they coming out of the mouth of the head of the Environment Agency, which is just a talking shop and comes up with strategies but has no powers? The problem needs Government action and the Minister must pull together many loose ends and work with the companies to achieve the objectives that we all want.
There have been several occasions—I do not have the details with me, but can obtain them for my hon. Friend—when Ministers in the House of Lords have given strong assurances that developments will not take place without adequate water supplies being in place. I am afraid that that assurance looks highly unlikely in parts of the south-east.
Again, my hon. Friend makes powerfully his point that the strategy I am urging the Minister to take up does not yet exist.
Water metering must be a key tool of water conservation. Those who do not have water meters have absolutely no incentive whatever to save water. There is simply a reliance on appeals for restraint. People must be responsible for their own actions, and they must be responsible for the water that they consume. I urge the Minister to consider introducing a plan for compulsory metering. Some 75 per cent. of the country is not metered. I know that it is a political hot potato, but in the present climate, if hon. Members will forgive the pun, the mood is for reconsidering water metering. I have installed a meter in my house, and I actually save money, so it is not quite the ogre that it is made out to be. It could go a long way towards reducing demand.
On the issue of a national grid, it is quite easy in the present situation to say, “Why can’t we ship water from one side of the country to the other?” Having considered the idea over the past few days, I am persuaded by the argument that it would definitely be a bigger job than one might think. Immense volumes of water would be needed to supply water from one side of the country to households on the other. Indeed, to make it work, one would in effect need a canal system. Therein lies a possible answer, but that is for another day.
A grid would also introduce an element of competition, and that is really the matter to which the Minister must apply himself. It is worth noting that Thames Water’s drought order does not apply throughout its entire area. It says that it could move water from one side to the other but there are problems. There is not that much more water on one side compared with the other; and there are technical questions, because the water on one side is different from the water on the other, and machinery is geared for a certain type of water. That, again, would cause a problem for a national grid.
I want to ensure that the hon. Gentleman is aware of an organisation called Waterwise. I am chair of the all-party water group, and tomorrow we are having a meeting entitled, “Is the Country Running Dry? The Need for Efficient Water Resource Management in the UK”.
Yes I have. I looked at that and at what the all-party water group is doing. I find it encouraging—I hope the Minister does, too—that there is a growing consensus about the need to act, to be efficient, and to revisit the water strategy and the question of planning.
On desalination, Thames Water has made an application for a site on the Thames but the Mayor of London is blocking it on the ground that it uses up too much energy. Again, technology must come into play to analyse how we can run such plants using less energy. A thought came to my mind: I gather that the new generation of nuclear power stations run at a temperature so hot that one could actually run a desalination plant on the back of them. [Interruption.] My hon. Friend the Member for Bexhill and Battle (Gregory Barker) may laugh, but it is a source of heat that would otherwise go into the atmosphere, and it is not beyond the wit of man to harness that heat for the common good.
In summary, there are many loose ends and much to be done, and only the Government can pull those loose ends together. It is not enough to leave it all to the water companies, and what is needed is a thorough review of water management strategy.
I am very grateful to you, Mrs. Humble, and I propose to speak briefly. I hope that you and the Minister will forgive me, but I have to leave for a sitting of the Standards and Privileges Committee at 10.25 am.
In support of my hon. Friend the Member for Croydon, South (Richard Ottaway), I want to speak about linking development with water resources in my constituency. My contribution is intended neither to be as parochial as it sounds, nor to make a constituency point, because what I have to say affects many other constituencies in the south of England. The Minister knows that, because he is wrestling with problems that are not of his making and have existed for a long time, but they are being exacerbated by the Government’s policies.
The point that I really want to make to the Minister concerns the fact that in about 1999 I became aware of plans that might lead to the building of a substantial number of new houses in the south-east. There is clearly a requirement for more affordable housing and for other housing in the south-east—nobody disputes that—but the sheer scale of the proposals is critical for us. He might know that more houses have been proposed in the Gatwick diamond, incorporating Mid-Sussex, Horley, Horsham, Reigate and Crawley, than there are in Milton Keynes. However, the Gatwick diamond does not have the special infrastructure that Milton Keynes has been accorded, so the infrastructure development is impossible. It is impossible to build such a great number of houses merely on the basis of developers’ contributions, and without the Government’s support for the infrastructure. It is not a matter for argument today, but water is an important part of infrastructure.
When I heard about those plans in about 1999, I wrote to the hon. Member for Sunderland, South (Mr. Mullin), who was a Minister in the then Department of the Environment, Transport and the Regions, to warn him about them and to explain some of the difficulties. I went to see South East Water, which was then managed by a remarkable woman, Margaret Devlin. She, sadly, has now left her post as managing director to emigrate to New Zealand. Given the scale of the problem that she faced, I do not blame her. She is an outstanding woman, and she did a very good job. The Minister knows her, and she is a loss to the water industry.
I went to see Mrs. Devlin to discuss openly with her the extent of the Government’s consultation with the water companies on the sheer scale of the proposals for my constituency and elsewhere in the south-east. She told me, and I must say that I was surprised, that the water companies were not official consultees. On 26 May 2000, after I had been to see her, she wrote to me, and said:
“South East Water firmly supports sustainable development and has regular contact with East and West Sussex Planning departments on future development plans. However, until water companies become statutory consultees of housing development, it is difficult to see how such planning can be truly sustainable if no account is taken of water resources availability.”
“I make no apology for emphasising the need for water companies to be statutory consultees on housing development. It is important to understand that the request to become statutory consultees in the planning process is not driven by a desire to block development, rather to assist in ensuring that all factors are considered in respect of location, water resources and the environment.”
Subsequent to that meeting, Mrs. Devlin sent me the interesting points and the brief that Water UK submitted to the Environment, Transport and Regional Affairs Committee’s 1998 inquiry into those matters. Inter alia, Water UK recommended:
“Water companies should be made statutory consultees in the planning process to reflect their statutory obligation to supply”.
It made a number of other important points, too. The Government decided to pay no attention to those recommendations. Their response, as set out by Mrs. Devlin in a letter to me dated 16 March 2000,
“was that as the current informal arrangements work reasonably well, the need does not exist to formalise the role of the water company in the planning process. The key issue here is that whilst informal arrangements can and do work, more often than not by the time the water company enters the planning process it is usually to receive confirmation of the planning details.”
I wholly support all the points made by my hon. Friend the Member for Croydon, South, who knows a great deal about the subject and has made a number of important strategic points. Mine is a strategic point, too, but it is linked to a local point. The Government cannot go on willing the scale of development planned without matching the infrastructure to make it happen. The issue is not just water, but hospitals, roads, schools, care for the elderly and everything else; all those things are increasingly underfunded. In the south-east, the Government have stripped money from the shire authorities to give it to the north. At the heart of the matter lies the Government’s policy of sustainability.
I shall end with only a slight jibe at the Government’s expense—tendered, of course, with immense respect, affection and admiration. After my exchanges with Margaret Devlin, I tabled a question for the heroic Deputy Prime Minister, asking him to define sustainability. It was not for urgent answer; the usual space of time was given. The departmental answer was that I would get a reply “in due course”. In other words, the Department did not have a clue what sustainability meant. Three weeks later, I got an answer—a detailed letter—explaining to me what sustainability means. Some of what was in that parliamentary answer has not survived through to today; because of the sheer scale of the developments proposed, the Government’s new definition of sustainability has had to be thrown out of the window.
Part of the definition of sustainability is the prudent use of natural resources, and so say all of us. The Government must will the way, and must enable us to cope with the level of housing and development proposed for my part of the world. There are proposals for East Grinstead and elsewhere in my constituency, where we need housing, and where young people desperately need to be able to buy affordable housing. However, there is also the question of how they are to travel on roads already gridlocked, and there are hospitals already under great pressure with tremendous deficits. The hon. Member for Hove (Ms Barlow) knows all about that, given where she comes from. The proposals are, by the Government’s own definition, unsustainable.
All that I ask of the Minister, who has a proven record of being reasonable, rational and sane on such matters, is to give us some understanding and some hope that the Government will consider with the greatest care the points being made by colleagues from across the south-east. They are not anti-development; I was distressed that when I went to see the Minister for Housing and Planning at the Department for Communities and Local Government, she was extremely aggressive with a delegation from the south of England, which included my right hon. Friend the Member for Horsham (Mr. Maude), and my hon. Friends the Members for Chichester (Mr. Tyrie), and for Arundel and South Downs (Nick Herbert). She suggested that we were just anti-housing, and were simply nimbys, but we are not. We want the housing, and we know that we have to have it, but we want it to be proportionate and to scale, and we want sustainable resources that will be used in a sensible and prudent manner.
Again, I apologise, Mrs. Humble, for the fact that I have to go at 10.25, but I shall read with great interest what the Minister says. I am grateful to my hon. Friend the Member for Croydon, South, for allowing me to take part in this debate.
I congratulate the hon. Member for Croydon, South (Richard Ottaway) on securing this debate on an important issue. The problem, as he said, is stark, and statistics suggest that, in some places, ground water levels and river flows are the lowest on record. We have been experiencing drought since November 2004, broadly, and the Environment Agency says that rainfall has been much lower during that period than during the drought of 1974-76. In some places, rainfall is at its lowest since the 1920s, as the hon. Gentleman said. There has been some respite, due to the traditional English summer solution—May was the wettest that there has been for some time—but that provided only partial respite from the drought.
Clearly, there is a possible connection to the progress of climate change, and what were once extreme environmental phenomena—such as heat waves and floods—are increasingly becoming the norm. The impact on communities and businesses is major, and will get worse with climate change. It will certainly get worse in the south-east and other parts of the country where enormous increases in housing are proposed.
I sympathise with the hon. Member for Mid-Sussex (Mr. Soames) on trying to get a definition of sustainability out of the former Office of the Deputy Prime Minister. I tried, too, and I was on the Select Committee on the Office of the Deputy Prime Minister. I did not get a comprehensible answer, either. The ODPM’s approach to housing supply came overwhelmingly from the Barker report, which was a very clever report, I am sure, but was commissioned by the Treasury, and was asked an essentially one-dimensional question about how to tackle house prices through housing supply. I am sure that Kate Barker is a clever woman, but she gave an essentially one-dimensional reply, which was that one would have to increase housing supply by a great amount to make a difference. She was given no particular environmental remit. The lack of consultation on policies that emerged from the Department formerly known as the Office of the Deputy Prime Minister—its lack of consultation with the water companies has been pointed out—demonstrates the lack of environmental impact assessments in the whole post-Barker process.
I was struck by the House of Lords Science and Technology Committee report; buried in page 121 of it are comments from Professor Adrian McDonald, who points out that Kate Barker’s report says:
“The analysis suggests that the additional housing supply needed to reach the Government's ambition of 200,000 net additions per annum within a decade would result in a marginal increase in water use.”
Professor McDonald comments:
“This assertion of a very minor increase in water demand is at odds with every other forecast that has been made and with the plans of all water companies in the south east. As yet it has not been possible to trace the origin of the statement to a verifiable item of scientific analysis.”
He mentions an earlier report, commissioned by the Department for Environment, Food and Rural Affairs, that asserted that
“over the next ten years a huge increase in the demand for water in the south east is forecast.”
The newly named Department for Communities and Local Government needs to do some serious thinking on the environmental impact of the numbers of houses that it proposes for the south of England. I hope that it will look again at those numbers and consider different ways of tackling the issue of affordability, perhaps by thinking about household size and the availability of credit, so that it has a less one-dimensional approach.
On our response to water supply crises, we have various tools at our disposal. The Government approach has essentially been one of regulation and restriction up to now, but all the numbers suggest that the trends are now all in the wrong direction. Let us consider first leakage numbers. I should praise the Government a little; I am not entirely sure what Water UK is—from the name, one can only tell that it has something to do with water and is British—but the Government-introduced report by Water UK is extremely useful in giving us statistics on what is going on in the water industry. Strangely, Water UK has quite different numbers on leakage from Ofwat. The Minister might look into that inconsistency.
Water UK reports that, from the water industry’s total output of about 18,000 megalitres per day, there is a loss of about 5,000 megalitres per day. The comparable figure from Ofwat for the same year is only 3,649 megalitres per day, so there is some inconsistency there. Both the Ofwat and the Water UK reports show a consistent trend since 1999-2000 of an annual increase in water leakage since 1999-2000. According to Ofwat’s figures, from a level of 3,243 megalitres per day in 2000-2001, leakage has increased each year to reach 3,649 megalitres per day. According to Water UK’s figures, it has consistently increased from just over 4,200 megalitres per day in 1999 to over 5,000 megalitres today in 2003-04. The trend is clearly going in the wrong direction.
Ofwat’s response to that trend strikes me as remarkably complacent. It talks of an economic level of leakage, but it does not appreciate the potential impact of the trend going in the wrong direction. There are good guys and bad guys in its analysis of the water companies. Companies such as Wessex, Yorkshire and Dwr Cymru are clearly going in the right direction in tackling leakage and appropriate action is being taken, but companies like Severn Trent and Thames Water are going in the wrong direction.
The charts included in the Ofwat report show that Thames Water’s long-term target for reducing water leakage by 2010 is, in terms of litres per property per day, way above the highest number for any other water company today. Thames Water is a case apart. In Government jargon, it is in need of special measures, or a turnaround team. It needs drastic action and, given its profit levels, it seems inappropriate for it to continue to have such a poor record and such unambitious targets set for tackling leakage.
Demand management is going in the wrong direction as well, according to Water UK’s report. It shows that in the last year for which there are figures, domestic water demand was still increasing, from 149 litres per person per day in 2002-03 to more than 150 litres in 2003-04, and that non-domestic demand is also increasing. Strangely, it shows a slight reduction in total water consumed, which I am slightly confused by, but there is clearly still a problem in demand management. The comparison with approaches to climate change and carbon emissions is quite striking. Part of the solution lies in big infrastructure by tackling leakage and distribution problems, similar to the distribution problems to be tackled in energy supply. There are the big technological fixes—the George Bush approach—such as desalination plants and the like, but I am somewhat sceptical of those.
As in energy efficiency, a large part of the solution must lie in water efficiency and micro-scale solutions to water demand. The House of Lords report includes recommendations relating to what is euphemistically described as “black-water recycling”. It includes examples from Australia of localised black-water recycling. It acknowledges that the “yuck factor” has to be overcome in this respect, but says that there is more to be done provided that—I am reassured by this— sufficiently expert plumbing exists to prevent the confusion of water supplies.
We must also consider the greater use of grey-water recycling and rainwater capture. Even the House of Lords Science and Technology Committee is relatively unambitious about that. It suggests extending the remit of the Energy Saving Trust and the Carbon Trust to water, which seems a slightly strange solution. Grants are available for the microgeneration of energy, through what was the clear skies programme and is now the low-carbon buildings programme, but no similar grants are available for rainwater capture technology for householders. I know about that because I am trying to do it myself. There might be potential in the long term to create a resource management agency that takes on the function of the Energy Saving Trust and the Carbon Trust, perhaps incorporating water, which extends to other areas of resource management with ecological implications, such as the use of nitrogen. The Government should be ambitious in this area.
Regarding water efficiency and reducing our “water footprint”, various demand methods are available. The only one used at the moment is the emergency measure—an example of failure—of moving from hosepipe bans to drought orders. Such measures are introduced when all other systems have failed. It is a shame that we have ended up in this situation, but we have done so in many parts of the country. I agree with the hon. Member for Croydon, South: it is important that such measures are applied fairly. There should not be exemptions for royal parks and people should not be able to use water for car washes and swimming pools while the livelihoods of people working in horticulture suffer because of their inability to use water.
We must encourage metering. I support moves to encourage strongly the use of water metering nationwide, and perhaps we might consider alternatives to water rates even for those houses that do not have water metering. For instance, each house could have a home water efficiency rating operating on a different basis to water rating, which uses the rateable value of the house in 1973—an increasingly bizarre basis on which to base water rates. We should encourage a greater understanding of the “water footprint” and impact of water use by households. For instance, Friends of the Earth has suggested that estate agents might quote water ratings so that people buying a house might have a sense of what its “water footprint” is.
The hon. Gentleman makes some hugely important and very technical points. Does he agree that all the information is available, that the knowledge is there and that there are people who know about it? The water companies know all about the matter, they know—by and large—what they need to do and many of them would like to do it. Unless the Government listen to the water companies about the availability and supply of water, unless there is consultation in the true meaning of the word—when the Government and councils consult on planning applications where the water is discussed—and unless the points made in such consultations are listened to, we are heading for a disaster in planning.
I agree with the hon. Gentleman up to a point. Certainly, it is important that water companies are part of the consultation process and are statutory consultees. I entirely support his points in that respect. However, my point is that it is not only a question of big infrastructure and big companies. As with energy efficiency and microgeneration, there is an important dimension to the process that can operate at household level as a matter of individual and community responsibility, and the Government should encourage such activity.
That process could lead to something like the environmental labelling of white goods. When people buy white goods in their local store, they can examine the energy efficiency of those products, so why can they not look at their water efficiency as well? A labelling scheme could show the water efficiency of such goods. Ultimately, we also have to talk about—as the House of Lords report does—catching up with people who are not paying their fair share. The report draws attention to the unacceptably high number of people who are not paying their water bills but who can afford to do so. That is another obvious area for Government action.
We must also consider the new building regulations. There has been much pressure, which I support, to make the code for sustainable building mandatory. It should include the requirement for microgeneration technology to be used, but why not also include rain water capture of grey water systems, too?
The debate has highlighted the fact that when we are talking about Government action on the environment, it is more than a question of carbon. There are other impacts that our lifestyles, society and economy have on the environment. I was struck by one of the submissions made to the House of Lords Science and Technology Committee, which seems to have gone slightly unnoticed in some of the recommendations, from Milton Keynes Friends of the Earth. Its response to trends in household size and the detrimental impact that they have on housing, land use and water use was not to ask how we accommodate such trends, but to ask whether we can challenge them. Can Government methods and policies be deployed to challenge the trend in household size and encourage greater occupancy levels in domestic properties?
All in all, we need a joined-up approach from the Government to water and to the environment in general, but the current trends do not give great evidence of that joined-up approach being implemented.
I congratulate my hon. Friend the Member for Croydon, South (Richard Ottaway) on securing this important and timely debate. It is, perhaps, typical that on a day on which we are debating drought and water shortages, the heavens should open and it should pour with rain.
We should not forget that although we face the threat of below-average rainfall over a period of two years or more and the long-term challenge of climate change, we are also likely, with the incidence of drier, even hotter summers, to face increased flooding, because our weather patterns are changing. We are having longer, drier periods, and short periods of intense rainfall. That is dangerous, because when the land dries out and bakes, its ability to soak up rainfall is undermined, particularly when it comes suddenly and in great amounts. As a result, in the summers—possibly this summer—there will be an increased incidence of flooding. That is a real possibility in London if we have storms through the summer during a prolonged period of overall dry weather. Weather patterns are confusing, and we must not allow ourselves to be lulled into thinking that just because we get rain every now and again, that is the solution. The problem is much more complex and long term.
The tone of the debate, which was set by my hon. Friend, has been constructive. There is great concern outside the House, and there is a large degree of anger in the south-east at the Government’s housing plans. Overall, people are very reasonable: they know that the weather is one of the few things that they cannot blame on the Government. However, the Government’s insistence on building millions more homes in areas that already suffer from water stress seems perverse to many people. No more new homes should be built until a proper assessment has been made of the availability of water. Indeed, such assessments should be made a condition of planning consent, and all new homes should have water-saving installations fitted as standard.
Many of my points have been touched on already in the debate. My hon. Friend the Member for Mid-Sussex (Mr. Soames) spoke powerfully and with great authority about the overwhelming numbers of new homes proposed for the Gatwick triangle. He is a formidable champion for his constituents, but he also spoke sensibly about a much wider problem which affects more people than just those in his community. He is absolutely right: the owners of those new homes, particularly if they are affordable homes, will not thank the Government if they find, when they move into them, that the area is subject to acute water pressures, stress and shortages, to say nothing of the other strains on social and physical infrastructure. I simply cannot understand why the Government have been so resistant to water companies becoming statutory consultees. I hope that the Minister will update us on that.
That is not just a problem in the Gatwick triangle: the Thames Gateway is one of the areas that is most prone to flooding, yet has one of the scarcest water supplies. That is a real conundrum for the Government to solve, and we look to the Minister for a more sophisticated answer than those that were forthcoming from the ODPM.
If I had to summarise the approach of Labour Governments to water since they came to office in 1997, the first thing that I would say is that they have had a lack of long-term strategic thinking. Water is not a laissez-faire industry: the private sector is dominant, but the Government are ultimately responsible for drawing up and having ownership of the 25-year plans, but we hear little of those plans, which are sketchy and underpowered. New as the Minister is to his job, I would like to hear more about his vision for the long-term direction of the UK water industry in those 25-year plans, and what personal input he will have into shaping those plans so that they are fit for the 21st century.
The second feature that has characterised the Government’s approach is a general lack of ambition to grip the complex problems. A few weeks ago, I had breakfast with the chief executive of Skanska, which is one of the UK’s largest engineering contracting firms. He told me that he was amazed that people are prepared to accept what the water companies say about their ability to make repairs and to progress with updating leakages. He said that it simply is not true that they can go only so far so fast, or that their best is the best that can be achieved. He talked about infrastructure building, in relation to cost, speed, the convenience with which works can be done and the disruption necessary to the public in built-up areas when renewing pipeworks and large infrastructure projects. He compared what his company does in the private sector for many of its clients, particularly in the gas and electricity sectors, with the relatively mundane progress that the water companies are making. What is the Minister going to do to stretch the water companies, challenge their assumptions and encourage them to go further and be more ambitious? What are those companies doing to introduce best practice in contracting and engineering to ensure that the solutions that they are implementing are the most effective for the 21st century?
The third element to the Government’s approach is a lack of national aspiration to match best practice in water consumption to patterns across the rest of Europe. As the hon. Member for Cheltenham (Martin Horwood) said in his thoughtful and sensible speech, a great deal of which I wholeheartedly agree with, water consumption has grown significantly, almost horrifically, in the past 20 years, particularly in the south-east. Our record compares poorly with developed economies elsewhere in Europe, particularly Germany, which has a much better record than we do for saving water. It uses approximately one third of the water per consumer that the UK uses. Why? The answer is that it has far better, much more effective and widespread rainwater harvesting, and widespread utilisation of practical measures such as dual-flush loos. That sounds a bit mundane, but lavatories account for about 25 per cent. of total household demand for water, certainly according to the figures that I have seen for 1997-98. I believe that the figures for the UK have grown since then.
In contrast, according to Ofwat, this year, privatised water companies are losing 3.6 billion litres a day, which is up to 500 pints per home. So, we are not encouraging householders to be more prudent with their water use; we are falling far behind what other countries are able to do with sensible, non-panic measures, and at the same time, the water companies are losing huge amounts of water. That sends a poor signal to the water user.
The German Government have also succeeded where we have failed in raising public awareness of using less water per se. Each person in the south of England uses, on average, 160 litres of water a day—an increase of almost 50 per cent. on 25 years ago and about 10 litres each above the national average for water use. Yet the south-east is the most water-stressed area of the country. We need to work out—and we look to the Government to work out—a joined-up, broad-based water strategy. Those are the sorts of thing that should be happening and that we should be familiar with in a 25-year plan that attends both to the responsibilities of the water companies and to the education of consumers, so that we can begin to change consumer habits. I do not mean that that should happen in a panicky way or as a knee-jerk response, but that we should have a long-term plan to change consumer behaviour.
I shall discuss the issue of the private sector versus the public sector. At the time of the privatisation of the water industry, 15 or so years ago, there was some controversy—particularly in Parliament—but there was also, in the water industry generally, a great deal of excitement and the beginning of a new can-do attitude; it was shaking off the old, municipal public sector administrative ethos. That sense of excitement and expectation gave rise to a huge influx of new investment. Since privatisation more than £55 billion of private sector money has come in to fund large-scale projects. Yet the sense of excitement seems to have been lost. The Government accepted privatisation, but, rather than embracing the possibilities, they seem at ministerial, Government and public policy level grudgingly to have accepted the status quo. They display little ambition and few ideas about how the private sector can best be harnessed and utilised for the benefit of the consumer. I should like to hear from the Minister, as he is coming new to the job, about his vision of how the private sector and public policy can work more effectively hand in hand to grapple with the long-term challenges.
Other hon. Members have mentioned the excellent House of Lords Science and Technology Committee report, and I want to refer to two or three of its conclusions in particular. The Committee recommended:
“There should be wider stakeholder engagement, by means of new regional boards consisting of environmental and consumer interests as well as Ofwat representatives. These boards would determine how resource development, leakage reduction, network renewal and demand management could most appropriately be balanced in each area, with the resulting plans guiding Ofwat’s funding decisions.”
I think that, again, that reflects what I was saying about a lack of holistic, joined-up vision at the top of the water industry. I should be interested to know how the Minister proposes to respond to the first point made by the House of Lords Committee.
The Committee also recommended:
“Ofwat and the Environment Agency should take a realistic approach to the essential development of new resources.”
“To enable the water companies to undertake the necessary long-term planning for new resources, we call on Ofwat to agree indicative water prices for each company for up to 24 years into the future.”
The hon. Member for Cheltenham was right when he said that we must address the issue of Ofwat’s having put so much emphasis on keeping down the cost of water that it is perhaps jeopardising the long-term value of the water industry. We must be prepared to take a broader look at the costs of investment if the water industry is to be fit for purpose in the 21st century. I detect from this morning’s short debate a great deal of consensus, which should make it easier for the Government to tackle difficult issues such as metering and the possibility of water bills increasing in the longer term, to fund investment. However, we shall not have confidence about companies pushing for increases if there is no strategy at the top of the water industry to which everyone can sign up.
Another point that the hon. Member for Cheltenham made was also dealt with in the House of Lords report, which stated:
“Ofwat and the Environment Agency must also work together to ensure that water companies maximise their promotion of water efficiency, and have the necessary resources to do so. We also recommend that the remits of the Energy Saving Trust and the Carbon Trust be extended to cover water efficiency.”
Like the hon. Gentleman, I question whether using those two agencies for water is the best way forward, but the idea that there should be a comparable model for the water industry, taking a holistic approach to consumer education, public information and private sector strategy, is extremely valuable. A water saving trust that could be the repository of grants, information and strategic thinking would be very welcome. That holistic approach is sorely lacking in the water industry.
Finally I discuss once again the issue of development, particularly in the south-east. However we discuss the water industry in the country and whatever reasonable, sensible, consensual discussion we try to have about the long-term challenges that face the industry and about the direction that the Government are taking, the public will never sign up to increases in their water charges or to the idea of getting used to using less water or taking more sensible measures in the home if they feel that the Government are turning a blind eye to the most important issue affecting water demand—massive house building in the south-east. It is essential that the Government not only listen, but demonstrate that they are listening to communities in the south-east who are desperately concerned about that.
Whether the development is on a small scale of a few hundred houses at parish, village or town level, or whether it is the much larger developments that the Deputy Prime Minister is championing in Milton Keynes, the Gatwick triangle or the Thames Gateway, it is essential that the Government should be able convincingly to demonstrate that they are listening to the water industry and environmentalists, and that the homes being built are sustainable not just in name but in nature. So far no one in Parliament has been convinced that the Government’s sustainable homes programme is anything but a good brand for a dodgy product. I look forward to hearing what the Minister has to say.
It is a pleasure to serve under your chairmanship today, Mrs. Humble—and to see it raining outside. I congratulate the hon. Member for Croydon, South (Richard Ottaway) on securing this Adjournment debate on water shortages, which is a matter of significant public concern, particularly in the south-east.
We can all agree on the importance of providing a sustainable water supply system capable of meeting the essential needs of consumers and industry now and in the future. That requirement has been highlighted by the current drought in the south-east, which the Environment Agency considers to be the worst for 30 years and which, if we have a hot, dry summer, could be the most severe for 100 years.
One of the Government’s earliest initiatives on coming to power in 1997 was to hold a water summit, which produced a 10-point plan for action. That plan included actions to reduce leakage, improve water conservation and efficiency and review the abstraction licensing system and drought management. It might help hon. Members if I were to go through some of the framework that has been established under the Water Act 2003. I think that that will answer some of the questions that have been raised in a helpful and constructive debate.
The 2003 Act has facilitated a number of important changes to further the sustainable use of water resources, promote water conservation, strengthen the voice of water consumers and increase the opportunity for competition in the supply of water. The Act makes the provision and maintenance of water company drought plans, which were previously prepared voluntarily, a statutory requirement, and legislation to bring that about was passed in October last year. Drought plans need to balance a water company’s duty to maintain public water supplies with the need to avoid or minimise any potential damage to the environment. They contain various actions that water companies may introduce, depending on the length and severity of the drought. Those actions range from hosepipe bans to drought orders to restrict non-essential uses of water during a drought. Before publishing their final plans, water companies are required to complete a public consultation on their draft plans and to respond to any representations that they receive.
In discussing drought plans, the hon. Member for Croydon, South asked several questions about potential anomalies with hosepipe bans. At the 1 June meeting between the water companies, the Consumer Council for Water, Ofwat and the Government, we jointly agreed to review the scope for hosepipe bans. I appreciate the difficulties that the hon. Gentleman faces, given that there are two different regimes in different parts of his constituency, but I am sure that he will appreciate that both the companies must respond to the different specific circumstances that they face.
In the south-east, most water companies are following their drought plans and have imposed hosepipe and sprinkler bans. As hon. Members will be aware, the Secretary of State has granted drought orders to Mid Kent Water, Southern Water and Sutton and East Surrey Water further to restrict non-essential uses of water. Thames Water has now announced that it is to apply for a drought order. As with the other drought order applications, the company’s case and any objections received will be given careful consideration before a decision is made.
Perhaps it would be appropriate to comment on some of the points that the hon. Member for Croydon, South made about Thames. Obviously, it is for Thames Water itself to decide whether it needs to apply for a drought order. It needs to act on its plan in the light of its perception of water resource issues, and it has now judged that this is the right time to apply for a drought order. We have had several meetings with Thames in recent weeks to discuss its water supply situation.
The hon. Gentleman also asked about imposing fines on Thames Water for leakage. As he will be aware, it is for Ofwat, as the economic regulator, to take action if Thames fails to meet its leakage targets. I should just say, however, that Thames tells me that 3,000 of its 10,000 pipe miles in London date from before 1850, so it faces specific circumstances with regard to leakage. None the less, the company itself has admitted that its leakage rates are unacceptably high, and it is right that there should be a strong focus on its meeting its leakage targets.
I mentioned that I had met the chief executive of Skanska, who has huge experience of large-scale engineering and contracting projects. He was extremely critical of the rate of progress on the technology that Thames is deploying. What has the Minister done, apart from simply taking Thames at its word, to look at the other contracting and engineering options to test the case that Thames is making to him?
I would be interested to hear more about the discussions that the hon. Gentleman has had with Skanska. As the hon. Member for Croydon, South said, there is some quite good management across the water industry, but we need to continue to see whether there are new technologies. Ultimately, it is for the companies and the regulator to agree companies’ investment plans and the most efficient way of implementing them. However, if there is strong evidence that there are better and more effective ways of implementing companies’ resource plans, the Government will be interested to hear further details.
While hosepipe bans and restrictions on the non-essential use of water might be unwelcome, the cost to a water company, and ultimately to its customers, of avoiding the need to have such controls during a prolonged drought would be very high. It is far more cost-effective, and potentially less environmentally damaging, to manage demand and impose restrictions to conserve water through the use of hosepipe bans and occasional drought orders and permits. That is the basis on which the regime works.
During the current drought, it is particularly important that water companies are seen to be doing all that they can to reduce leakage. Leakage reduction is vital across the system, and most companies in England and Wales are operating at the leakage levels set by the economic regulator Ofwat.
Before the Minister moves off the issue of hosepipe bans and drought orders, let me point out that there has been a great deal of comment in the press about the anomalies involved in the various hosepipe bans and drought orders and about people’s concerns at the various ridiculous rules and regulations, which simply do not seem fair and do not reflect the reality of how we live our lives in the 21st century. Does the Minister believe that there is now a strong case for examining all the complex rules and regulations involved in drought orders and hosepipe bans so that we can come up with a fair, simple set of up-to-date regulations that everyone can understand and sign up to?
I cannot quote Water UK exactly, because I have handed its report to the Official Report, but it says that leakage trend rates, which have been increasing, as I said, for the past five or six years, indicate that the economic level of leakages has now been reached. That suggests that, in some ways, we have reached the end of that indicator’s useful life and that we need to go beyond it to look at the environmental importance of reducing leakages and reversing the upward trend. Does the Minister accept the need to reverse that trend?
My understanding is that leakage is projected to fall further. By 2010, the targets plan for a further reduction of 7.6 per cent., compared with 2004-05 levels, so there is pressure to reduce leakage rates. However, we will, as I said, want to keep leakage rates under review, taking into account costs, technology and international best practice.
I was going to comment on the current system of hosepipe bans and regulations, and, indeed, the hon. Member for Bexhill and Battle (Mr. Barker) encouraged me to do so. There is a case for looking at the system, because there are anomalies in it, some of which were highlighted by the hon. Member for Croydon, South. At our 1 June meeting with the water companies, we agreed that we would want to review the operation of hosepipe bans and the regime, and it is important that we continue that work for the long term so that the general public can feel confident that a fair system is in place.
I move on to the comments that the hon. Member for Croydon, South made about the construction of a national water grid. He will be aware that the idea has been examined and raised many times over the past 30 years, but it has pretty much always been decided that it would be nothing like economically sustainable. Water is a heavy liquid, and the cost of pumping it around the system is significant We should bear in mind that there have been substantial improvements in connectivity between water companies over the past few years, particularly in the south-east. Networks have improved, but not to the extent that the establishment of a national grid is feasible at the moment, and that is the overwhelming consensus of the water companies, the Consumer Council for Water, Ofwat and the Environment Agency.
Since the 1999 periodic review, water companies have prepared 25-year water resource plans. Until recently, they were not required to, and did so only on a voluntary basis. The 25-year plans describe how each company aims to achieve a sustainable supply-demand balance for the public water supply. They are updated annually by companies and reviewed by the Environment Agency for consistency with its own 25-year national and regional water resources strategies.
The big change is that the provision of water resources management plans is to become a statutory requirement under the Water Act 2003. A consultation on proposed regulations relating to the process ended in April this year, and the responses received are being considered. Our aim is for the new regime to come into force by next April.
Like drought plans, water resources management plans will be subject to public scrutiny and consultation. The plans are designed to reflect the best available information on the consequences of climate change, an issue to which the hon. Member for Cheltenham (Martin Horwood) referred, and to ensure that the latest research is factored into them on an ongoing basis.
The plans should also reflect the Government’s “twin track” approach to managing water resources, which is based on demand management, developing sustainable resources where they are needed and the implications of demographic change and increasing pressures for housing on the demand for water resources. I shall explain in detail how the system is supposed to work.
The Government recognise that there are concerns that their plans for significant new house building in the south-east might have an adverse impact on supply and demand for water in that area. That additional demand should be factored into water companies’ water resource plans, and it is important for those plans to be updated as more detailed information on housing numbers and locations is provided, to ensure that resources are available to meet any increase in demand. As a Government, we want a two-way dialogue between water companies and planning bodies to ensure that that happens.
During this debate, we have perhaps missed the point that the water companies are statutory consultees on regional spatial strategies and local development frameworks, and that the planning bodies will be statutory consultees on water resources plans. That is an important step forward. However, a question is left in my mind about how individual planning applications should operate, and there is at least an arguable case that significant planning applications should have very clear inputs from the water companies, and that those inputs should be taken into account as part of the planning process.
I am not sure that the water companies themselves would want to be statutory consultees for every planning application, but the fact that they are statutory consultees to the local development framework and the regional spatial strategies is an important and significant point.
I completely accept the Minister’s point and am glad to hear that he is considering the issue, certainly in respect of the larger applications. However, I should like to take him back to my previous point: he probably has to consult more water companies in the south-east than in the rest of the country. That fragmentation concerns me. On the map, one sees that South East Water is separated physically from itself by Southern Water, and then it starts again; then it is over on the Isle of Wight. There is an absolute patchwork of economic interests—all well run; I do not belittle that. Is there some way of putting that lot together into a more cohesive unit?
I appreciate the hon. Gentleman’s point, but we are talking about private companies. If the market decides that there is a more efficient way to allocate those resources, market forces will be expected to drive further consolidation in the industry, subject to the normal concerns of regulations and competition. I would expect that to happen.
I make the point back to the hon. Gentleman that there have been significant improvements on connections between companies’ networks. Water sharing between water companies is going on to meet variations in demand. To that extent, the market is deciding that, where it is sensible to join up, that should happen.
The current and future long-term water resources plans identify a range of options for meeting the supply-demand balance. Supply side options include new reservoirs and desalination plants; both are identified in the plans of some companies and will need proper appraisal for the future.
As the hon. Member for Bexhill and Battle said, the additional demand for water from new development will depend also on the extent to which water efficiency measures are incorporated into the new buildings. The Department for Environment, Food and Rural Affairs and the Department for Communities and Local Government will undertake a joint consultation on options for further regulation to secure improved water efficiency in homes and buildings.
The hon. Member for Croydon, South said that the Government should lead on water efficiency. As he will be aware, in October 2005 we established a water saving group to encourage the efficient use of water in households and help ensure the long-term sustainability of the water supply. The group’s action plan has five different workstreams dealing with targets, the evidence base, best practice, education and policy. I chair the group that includes the Department for Communities and Local Government, the Environment Agency, Ofwat, the Consumer Council for Water, Water UK and Waterwise. Each workstream is led by a different organisation, and a great deal of work is going on.
A number of hon. Members raised the issue of water metering, which has been actively considered by the water saving group. Increased water metering can contribute to helping achieve a sustainable long-term water supply and demand balance. Currently, there is water metering in about 28 per cent. of households and, as part of the work of the water saving group, we are looking at ways to enhance the rate of metering in water-stressed areas.
A number of hon. Members mentioned the House of Lords Science and Technology Committee report, which was published last Tuesday following a 10-month inquiry into water management in England and Wales. It is wide-ranging and makes a number of recommendations on improving water management. I do not have time to go into a number of the points raised in this debate, but I should say that as a Government we are doing much to address such issues as the labelling of white goods and the use of grey water, mentioned by the hon. Member for Cheltenham. Perhaps I can write to hon. Members to outline our views. Our response to their lordships will be published in due course.
In conclusion, it is clear that to achieve the sustainable use of water resources, we need to introduce a combination of measures—when necessary, through regulation—to balance supply with demand, including the promotion of best practice and advances in technology. A partnership between the Government, the water regulators, the water companies and communities is required, all working together to ensure that there are sufficient supplies of water to meet demand, both now and in future.