In England and Wales, the Environment Agency has a statutory duty to manage water resources, and it has a 25-year forward-looking strategy, entitled “Water Resources for the Future”. Water companies also produce 25-year water resources plans to reconcile supply and demand. In April 2007, the production and maintenance of these plans by companies will become a statutory requirement under the Water Act 2003.
I am grateful for that answer. The Minister will be aware that just yesterday, Thames Water admitted that, for the third year on the trot, it has missed its leakage reduction target. At the same time, it announced a 31 per cent. increase in its profits. Will the Minister tell the House today what is being done to make sure that the regulator is taking the necessary steps to ensure that increased water charges to consumers are not just put into increased dividends, but used to increase spending on dealing with leakages?
I do not know whether the hon. Gentleman was not listening a moment ago when I clearly said that Thames Water’s leakage rates are unacceptably high. As I also said, that is, in the first instance, a matter for the regulator, and we expect the regulator to want to assess Thames’s returns and decide on appropriate action. The regulator has powers under the Water Act 2003 to fine a company up to 10 per cent. of turnover. I have to point out, again, that the Conservative party voted against that Act, which would have meant those powers not being available.
Given that we understand that water metering would reduce water consumption by 15 per cent., and given that the average consumption per household is between 140 and 170 litres per week, what can we do, aside from taking personal responsibility by reducing our own consumption, to ensure that the Government give a lead nationally to the water companies, businesses and households? What is the target? What is the objective? Where will we get to if Government policy is followed?
As a Government, we believe that water metering has the ability to reduce water demand. Research suggests that water savings of something like 10 per cent. can result from metering, which is why the water savings group that I chair and which includes representatives from the industry, the Environment Agency, Ofwat and consumer groups is looking closely at what more can be done on metering. We do not think that universal compulsory metering is the right way to go, but in areas of water stress there is a strong case for looking at metering, and that is what the Government are considering.
I remind the hon. Gentleman that Anglian Water has a good record on leakage rates. It is supplying the same amount of water as it supplied in 1989 to 20 per cent. more customers, so it has done a lot about water efficiency.
Of course, water companies need to be involved in the planning process. The Water Act 2003 enables them to be statutory consultees on regional spatial strategies and local planning applications. It is important that the voices of water companies and of the Environment Agency are heard in planning applications, and that is taken into account in the process at the moment.